Legislature(2005 - 2006)SENATE FINANCE 532
05/05/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB105 | |
| HB16 | |
| HB381 | |
| HB484 | |
| HB399 | |
| HB377 | |
| HB426 | |
| HB13 | |
| HB334 | |
| HCR30 | |
| HB426 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 105 | TELECONFERENCED | |
| += | HB 16 | TELECONFERENCED | |
| + | HB 13 | TELECONFERENCED | |
| + | HB 381 | TELECONFERENCED | |
| + | HB 426 | TELECONFERENCED | |
| += | HB 484 | TELECONFERENCED | |
| + | HB 334 | TELECONFERENCED | |
| + | HB 399 | TELECONFERENCED | |
| + | HB 377 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HCR 30 | ||
4:46:02 PM SENATE CS FOR CS FOR HOUSE BILL NO. 426(HES) "An Act relating to cooperation of insurers with the Department of Health and Social Services; relating to subrogation, assignment, and lien rights and notices for medical assistance claims; relating to recovery of medical assistance overpayments; relating to asset transfers and income diversion by medical assistance applicants; relating to assets and Medicare enrollment as they affect medical assistance coverage; relating to home and community-based services; relating to medical assistance applications for persons under 21 years of age; requiring a report by the Department of Health and Social Services; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. 4:46:25 PM REVENIA MOSS, Staff to Representative John Coghill, introduced the bill as an attempt to ensure that those receiving Medicaid services are truly in need of such assistance. The bill endeavors to remedy "abuses" identified within the system, such as the exclusion of a stepparent's income when calculating eligibility for the Denali KidCare program. Federal Medicaid guidelines permit this type of "abuse", thus necessitating legislative action. The issue of Denali KidCare eligibility would be addressed during future legislative sessions upon receiving input from the Department of Health and Social Services. 4:47:44 PM Ms. Moss noted that this bill incorporated some of the "fixes" for Medicaid developed by the Office of the Governor. 4:48:12 PM Ms. Moss discussed Sec. 11, page 9 of the bill, which directs the Department to prepare a report for the legislature delineating recommended changes to reduce medical assistance expenditures for mental health treatment facilities, both in- state and out-of-state. Currently, a child placed in a treatment center outside of Alaska will become eligible for Denali KidCare after 30 days. This often occurs when an insurance provider refuses coverage of what is considered an unnecessarily high level of treatment. When coverage is denied, Denali KidCare is activated to provide assistance. The Department is requested to assess the cost and level of treatment within these facilities, and determine if the KidCare program is paying for treatment services above the level needed by its patients. 4:50:17 PM Ms. Moss identified another objective of the legislation as increasing parental accountability by encouraging or requiring parental participation in the payment of health care for children. The bill also seeks to maximize third party resources. 4:50:28 PM Ms. Moss spoke to an application requirement in Sec. 7, page 7 of the bill. This would require that any child under 18 years of age must be enrolled for Denali KidCare by their parent or legal guardian. The intent of this stipulation is to ensure that parents assume responsibility for their child's medical treatment. She exampled the case of a 15-year old runaway who is enrolled in Denali KidCare by her 20-year old boyfriend, unbeknownst to the girl's parents. 4:51:47 PM Ms. Moss addressed Amendment #2, which she informed was a consolidation of Amendment #1. It would conform the committee substitute to a recent Supreme Court decision in the Alborn case, which made the previous language unconstitutional. The amendment retains as much of the Department of Law's original language as possible while still complying with Federal law. 4:52:56 PM [NOTE: Amendment #1 was not distributed.] Amendment #2: This amendment deletes and inserts language to AS 47.05.070(b) amended in Section 2 on page 2, line 26 to read as follows. (b) When [IF] the department provides or pays for medical assistance for injury or illness under this title, the department is subrogated to not more than the part of an insurance payment or other recovery by the recipient that is for medical expenses provided by the department. [THE RIGHTS OF THE RECIPIENT OF THAT MEDICAL ASSISTANCE FOR ANY CLAIM ARISING FROM THE INJURY OR ILLNESS AND TO THE PROCEEDS OF AN INSURANCE POLICY COVERING THE INJURY OR ILLNESS TO THE EXTENT OF THE VALUE OF THE MIDICAL ASSISTANCE PROVIDED. A RECIPIENT OF MEDICAL ASSISTANCE OR THE RECIPIENT'S ATTORNEY MUST NOTIFY THE DEPARTMENT IN WRITING OF ANY ACTION OR CLAIM AGAINST A THIRD-PARTY PAYOR IF MEDICAL ASSISTANCE WAS PROVIDED BY THE DEPARTMENT TO TREAT AN INJURY OR ILLNESS FOR WHICH THE THIRD PARTY MAY BE LIABLE.] Notwithstanding the assertion of any action or claim by the recipient of medical assistance, the department may bring an action in the superior court against an alleged third-party payor to recover an amount subrogated to the department for medical assistance provided on behalf of a recipient. This amendment also deletes subsections (b) and (c) from Sec. 47.05.071. Duty of a medical assistance recipient., added by Section 3, on page 3, lines 13 through 23. The deleted language reads as follows. (b) A medical assistance recipient may not compromise or resolve an action or claim seeking payment for or related to an injury or illness for which care or services were provided or received under the medical assistance program against an insurer, entity, or other person without first providing notice to the attorney general's office of the facts and circumstances giving rise to the action or claim and the asserted basis for supporting the action or claim. (c) A medical assistance recipient may not receive payment from any source on account of or related to care or services for which medical assistance was received unless the recipient has received written consent of the attorney general's office and has paid the department reimbursement of the amount of medical assistance provided or paid. This amendment also inserts language following "party" to subsection (b)(1) of Sec. 47.05.071 on page 3, line 27. The amended language reads as follows. (1) assign to the department the applicant's rights of payment for care and services from any third party to the extent the department has paid medical assistance for care and services. This amendment also deletes subsection (b)(3) of Sec. 47.05.071 on page 3, line 31 through page 4, line 5. The deleted language reads as follows. (3) assign to the department the applicant's right to the applicant's permanent fund dividend and agree to sign a new assignment each year; the department shall use the assignment obtained under this paragraph to obtain reimbursement or enforce repayment when a recipient does not pay to the state reimbursement received from a third party for care or services provided or paid by the medical assistance program or fails to satisfy a lien perfected under AS 47.05.075 This amendment also replaces "may be" with "is" in the language of subsection (c) of Sec. 47.05.072. Duty of attorney for medical assistance recipient., added by Section 3 on page 4, line 28. The amended language reads as follows. (c) An attorney who represents a medical assistance recipient shall give the attorney general's office 30 days' notice before any judgment, award, or settlement is satisfied in an action or claim by the medical assistance recipient to recover damages for an injury or illness that has resulted in the department's providing or paying for medical assistance. This amendment also deletes subsection (d) of Sec. 47.05.072 on page 4, line 31 through page 5, line 10. The deleted language reads as follows. (d) Except for payments under AS 23.30, an attorney representing a medical assistance recipient who has received care or services for the injury or illness provided or paid for by the medical assistance program shall maintain any lump sum settlement or judgment paid in connection with the action or claim in a trust account or deposit the proceeds into the registry of the court until any lien perfected by the department under AS 47.05.075 is satisfied or, if a lien has not been filed under AS 47.05.075, 60 days from the attorney's receipt of the proceeds. This amendment also deletes subsections (a) and (b) from Sec. 47.05.073. Judgment, award, or settlement of a medical assistance lien., added by Section 3 on page 5, lines 15 through 21. The deleted language reads as follows. (a) An action or claim brought by a medical assistance recipient or an attorney who represents the medical assistance recipient against a third party or insurer may not be compromised or discharged without the express written consent of the attorney general. (b) A judgment, award, or settlement that requires or results in the compromise of a lien under AS 47.05.075 may not be entered into or granted by a court without the express written consent of the attorney general. This amendment also inserts "for medical costs" and deletes "full" preceding "repayment" to subsection (c) of Sec. 47.05.073 on page 5, line 22. The amended language reads as follows. (c) A medical assistance recipient may not maintain any rights to payment for medical costs as a result of a judgment, award, or settlement of an action or claim for which another person may be legally obligated to pay without first making repayment to the department for costs of past medical assistance services provided to or paid for by the medical assistance recipient that relate to that action or claim. This amendment also deletes "full" preceding "repayment" from subsection (d)(1) of Sec. 47.05.073 on page 5, line 31. The amended language reads as follows. (1) making repayment to the department for costs of past medical assistance services provided to the medical assistance recipient related to that action or claim This amendment also deletes subsection (e) from Sec. 47.05.073 on page 6, lines 4 through 10. The deleted language reads as follows. (e) The department's recovery under a subrogation right, assignment, or enforcement of a lien shall be applied to the entire payment made in satisfaction of judgment, award, or settlement. This amendment also deletes "or give written consent related to" following "discharge" and deletes "or consent" following "discharge" from subsection (g) of Sec. 47.05.073 on page 6, line 11. The amended language reads as follows. (g) the attorney general may only discharge a medical assistance lien under AS 47.05.075 if the discharge complies with federal law. Co-Chair Green offered a motion to adopt the amendment and objected to receive an explanation. AT EASE TO 4:55:49 PM 4:56:21 PM STACIE KRALY, Chief Assistant Attorney General, Statewide Section Supervisor, Human Services Section, Civil Division, Department of Law, explained the amendment as it related to the Supreme Court ruling and subrogation claims in the Department. AT EASE 4:57:19 PM / 4:57:40 PM Ms. Kraly outlined the changes proposed in the amendment. 5:01:33 PM Co-Chair Green withdrew her objection and the amendment was ADOPTED without further objection. 5:01:40 PM Amendment #3: This amendment deletes subsection (d)(2) of Sec. 47.05.073. Judgment, award, or settlement of a medical assistance lien., added by Section 3 on page 5, line 22. The deleted language would have allowed a medical assistance recipient to hold in trust funds received in a judgment, award or settlement for the purpose of maintaining public assistance or medical assistance eligibility only with the express written consent of the attorney general and after repayment of past benefits was made to the Department of Health and Social Services. The deleted language reads as follows. (2) obtaining the express written consent of the attorney general. Co-Chair Green moved for adoption. Ms. Kraly explained that the amendment was needed to make the bill consistent with the aforementioned Supreme Court decision. There was no objection and the amendment was ADOPTED. 5:03:20 PM Ms. Kraly informed that the provisions under Sections 2 and 3, as amended, would comply with the recent Supreme Court Alborn decision by identifying and characterizing how the State could allocate funds recovered under third-party lien and subrogation scenarios. The system created under these provisions should prove beneficial to the State. 5:04:13 PM Ms. Moss assured that the bill's sponsor had been working closely with the Department of Law, the Division of Insurance, insurance companies and trial attorneys to produce an ideal bill. 5:04:43 PM KEVIN HENDERSON, Division of Public Assistance, Department of Health and Social Services, addressed Sections 5 through 7, and indicated the Department's desire to ensure that people who were able to pay for some or all of their medical care assumed that responsibility. Mr. Henderson explained that Section 5 would provide the Department the authority to garnish the Alaska Permanent Fund dividend (PFD) of an individual recipient if they were found to have violated the eligibility rules. The same section contains a provision providing for the reimbursement of service expenses paid in the event that the individual who received those services was ruled ineligible through a hearing process. 5:06:37 PM Mr. Henderson continued to Section 6, which addressed annuities. When an individual seeks long-term care services through Medicaid, the Department would investigate that person's financial history prior to their becoming a Medicaid participant to identify possible transfers of assets or "hidden money" that a person could make inaccessible for the purpose of qualifying for Medicaid. Annuities are used in other states to circumvent Medicaid eligibility rules, and this provision would ensure that annuities were treated similarly to other financial holdings. 5:07:58 PM Senator Olson asked how an annuity held by more than one person would be affected if only one of the individuals was seeking assistance. 5:08:15 PM Mr. Henderson replied that he would verify, but surmised that the provision would apply only to annuities purchased by an individual. 5:08:32 PM Mr. Henderson spoke briefly to Section 7 (j) and (k), which addressed rights and procedures of who could apply for Medicaid on behalf of minor, as discussed previously. Mr. Henderson then discussed subsection (l) of Section 7, which he identified as a new requirement made possible by a "loosening" of federal policy. The change in federal policy allowed the State to mandate that any person eligible for Medicare must first apply and enroll in that program before receiving benefits under Medicaid. While most people over 65 years of age already apply for and receive Medicare benefits, some individuals under the age of 65 with certain disabilities also qualify for this program, which is entirely funded by federal monies. Although not many people under 65 qualify for Medicare, those who do usually have very costly medical conditions and this provision would allow the State to utilize federal funds before expending State dollars. 5:10:14 PM Mr. Henderson characterized subsection (m) as a "technical" provision, which acted to "embrace" the federal requirements of the Deficit Reduction Act of 2005. It relates to the transfer of assets for less than fair market value, and would lengthen the "lookback" period for transfers to five years. It would also impact the "penalty period," or the period of Medicaid ineligibility, by allowing the penalty period to begin at the time of application, not at the time of transfer. Mr. Henderson continued that the bill would allow the Department to consider multiple transfers as one, and imposes some restrictions on the use of "life estates". 5:11:55 PM Mr. Henderson identified subsection (n) as a new policy, also part of the Deficit Reduction Act, but made broader by the proposed legislation. The new federal Medicaid eligibility rule that applies to long-term care requires the State put a "cap" on the equity value of a home. While nothing would preclude an applicant from taking a second mortgage on their home or managing their assets in other ways, if the equity value was over $500,000 the applicant would not be eligible. The federal rule applies to long-term care only, but the provision in this bill would apply to almost all services. 5:13:02 PM Senator Stedman asked if the change in the "lookback" period from three to five years would have an impact on pending applicants. 5:13:15 PM Mr. Henderson responded that the provisions of this bill would have an effective date of July 1, 2006. Transfers made prior to that date would fall under the current three-year time limit. 5:13:50 PM Senator Bunde asked for an explanation of the fiscal notes. 5:14:20 PM JANET CLARKE, Assistant Commissioner, Department of Health and Social Services, noted five fiscal notes accompany this legislation. Additionally, she reviewed a spreadsheet titled "SCS CS HB 426 Medical Assistance/Ins Cooperation" dated May 5, 2006 [copy on file] depicting savings to the State's Medicaid program, and relating them to each section of the bill. Ms. Clarke informed that the fiscal notes assumed that regulations would not be implemented until April 1, 2007; therefore savings for FY 07 were calculated at 25 percent, for a savings of $1,074,200 in general funds and a total savings of nearly $2.6 million. For FY 08, the first full year the bill would be in effect, savings were projected to be nearly $5.1 million in general funds and in excess of $10.9 million in total savings. Ms. Clarke shared that the provisions of Section 7, subsection (l) of the bill would generate the largest amount of savings. That section contains the requirement that those eligible for Medicare must first enroll in that program before receiving Medicaid benefits. 5:17:02 PM Ms. Clarke commented that the other savings accomplished by this bill, such as subrogation and garnishment of PFDs, are less significant but would contribute to the overall cost reduction. Ms. Clarke categorized Section 6 as "cost avoidance" rather than savings. She anticipated realized savings for the Medicaid program and urged the Committee's support of the bill. 5:18:46 PM DONNA MCCREADY, Alaska Action Trust, appreciated efforts made by legislators and support staff. She suggested that the word "full", located on page 5, line 31 should be deleted as it had been elsewhere in the bill to make the legislation compliant with the Supreme Court ruling. Ms. McCready also cautioned that Section 6 (f)(1) seemed to require the State to receive all trust or annuity assets remaining at the death of an individual, up to the amount of medical assistance paid. She was concerned that federal Medicaid law would not permit the State to take those assets in certain circumstances, such as in the case of a surviving spouse or a child under the age of 21. That provision of the bill could create a liability for the State if such action is not permissible under federal Medicaid law. 5:22:11 PM Ms. McCready was similarly apprehensive of Section 9, which repealed AS 47.05.070(e). This statute allowed the State to waive its subrogation rights in the event of "undue hardship" for the recipient. In accordance with federal Medicaid law, the State is, in some cases, required to consider undue hardship. Rarely does the State waive subrogation rights, but federal law requires such consideration. Repealing the statute could create conflict with the federal law, and she recommended against doing so. 5:23:38 PM Ms. McCready raised a "practical consideration" on page 4 line 26, subsection (c), which specified that an attorney representing a medical assistance recipient must give the attorney general's office "30 days' notice before any judgment, award, or settlement may be satisfied" in an action or claim. She opined that this requirement would be "counterproductive" to the State. She offered the example of an attorney who was in trial when the defendant offered a settlement to her client. The attorney would be required to make an immediate decision without being able to provide the State 30 days' notice. Upon reaching a settlement, funds could be transferred to a trust account within a couple of weeks. The attorney is required by law to separate funds and hold them safe for those parties that may have valid claim or lien, such as the State of Alaska. The 30 day notice requirement could result in an unnecessary delay in the distribution of funds without providing any additional protection. 5:27:21 PM Ms. McCready referred members to page 4, subsection (b) (3), which added new language to the existing law to require a recipient of medical assistance submit an application for all available third party resources that may be able to provide services or reimbursement. In the case that the only third party resource available may be a person who has caused harm to the recipient, the provision could require the medical assistance recipient to file a suit against the other person. This would not only increase the amount of litigation in the state, but also pose risks to the recipient, such as filing fees and the possibility of a judgment issued against them. She suggested the provision include a clarification of intent that it would not require a recipient to file a civil or other legal action to fulfill that obligation. 5:29:21 PM Co-Chair Green directed parties to continue their efforts on the bill, and indicated her desire to bring the bill back before committee. The bill was HELD in Committee. [NOTE: This bill was heard again later in the meeting.] 6:26:43 PM SENATE CS FOR CS FOR HOUSE BILL NO. 426(HES) "An Act relating to cooperation of insurers with the Department of Health and Social Services; relating to subrogation, assignment, and lien rights and notices for medical assistance claims; relating to recovery of medical assistance overpayments; relating to asset transfers and income diversion by medical assistance applicants; relating to assets and Medicare enrollment as they affect medical assistance coverage; relating to home and community-based services; relating to medical assistance applications for persons under 21 years of age; requiring a report by the Department of Health and Social Services; and providing for an effective date." [NOTE: This bill was heard earlier in the meeting.] 6:26:57 PM Co-Chair Green announced additional amendments had been prepared to address concerns expressed earlier in the meeting. Amendment #4: This amendment inserts language to subsection (b)(3) of Sec. 47.05.071. Duty of medical assistance recipient., added by Section 3, on page 4, line 9. The inserted language reads as follows. A medical assistance recipient is under no duty to file a civil or other action in order to reimburse the state for the cost of care or services. Co-Chair Green offered a motion to adopt the amendment and objected to obtain an explanation. Ms. Moss noted the amendment would add language to page four, line nine to clarify that the term "application" would not require a medical assistance recipient to file a lawsuit to seek reimbursement from a third-party. Co-Chair Green read the language, as amended. Ms. Moss advised that the State would be permitted to file a lawsuit on behalf of the recipient, but the recipient would not be required to do so themselves. Co-Chair Green removed her objection to the adoption of the amendment. Without further objection the amendment was ADOPTED. 6:29:28 PM Amendment #5: This amendment changes the language of subsection (c) of Sec. 47.05.072. Duty of attorney for medical assistance recipient., added by Section 3 on page 4, following line 25, to read as follows. (c) An attorney who represents a medical assistance recipient shall give the attorney general's office notice within 30 days of any judgment, award, or settlement in an action or claim by the medical assistance recipient to recover damages for an injury or illness that has resulted in the department's providing or paying for medical assistance. Co-Chair Green moved for adoption and objected to obtain an explanation. Ms. Moss explained that the amendment modified language in the bill that required an attorney representing a medical assistance recipient give the attorney general's office 30 days' notice before accepting a settlement or judgment in a case. The amendment addresses concerns raised by attorneys who believed the 30 day notice requirement would result in unnecessary delays in the distribution of funds. 6:30:06 PM Co-Chair Green understood the amendment would change the requirement of 30 days' notice before an action was taken to notice within 30 days of the action. Ms. Moss affirmed. 6:30:24 PM Ms. Moss remarked that concerns over Section 9 were discussed at length. Ms. Kraly reviewed the concerns. She understood that federal Medicaid law did not require an "undue hardship" waiver for a subrogation issue, as it did in other matters. Ms. Kraly qualified her position by reminding that the State is required to abide by federal Medicaid requirements. If such a waiver requirement existed, the State would have to provide for that through the regulatory process. 6:31:58 PM Ms. Moss announced that Alaska would be the first state to pass legislation to comply with these new federal regulations. 6:32:18 PM Co-Chair Green added that substantial discussion had occurred in regards to improving efficiency and accuracy in developing legislation to implement the new federal Medicaid requirements. Although no formal action was taken, the amendment was ADOPTED, per the intent of the Committee 6:32:41 PM Amendment #6: This amendment deletes the specification of "full" repayment in subsection (d)(1) of Sec. 47.05.073. Judgment, award, or settlement of a medical assistance lien., added by Section 3 on page 5, line 31. The amended language reads as follows. (1) making repayment to the department for costs of past medical assistance services provided to the medical assistance recipient related to that action or claim Senator Hoffman noted earlier testimony indicated that the word "full" should be deleted. 6:32:55 PM Ms. Moss acknowledged that the omission of the word "full" had been discussed. The amendment to omit it had been overlooked. Senator Hoffman understood that the word "full" had been omitted in Amend #2, page 3, line 3, and suggested the same deletion on page 5, line 31. 6:33:45 PM Ms. Kraly agreed there had been an oversight, and "full" should be deleted as indicated by Senator Hoffman. Co-Chair Green clarified the amendment . Co-Chair Green offered a motion to adopt the amendment, as amended. There was no objection and the amendment was ADOPTED. 6:35:01 PM Co-Chair Wilken offered a motion to report SCS CS HB 426(HES), as amended, from Committee with individual recommendations and accompanying fiscal notes. Without objection SCS CS HB 426(FIN) was MOVED from Committee with fiscal notes from the Department of Health and Social Services: #1 for $0 from the Department of Health and Social Services, Behavioral Health RDU; #2 of $51,700 for the Public Assistance RDU; #3 of ($83,100) for the Senior and Disabilities Services RDU; #4 of ($2,734,900) for the Health Care Services RDU, Medicaid Services component; and #5 of $190,300 for the Health Care Services RDU, Medical Assistance Administration component.
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