Legislature(2013 - 2014)SENATE FINANCE 532
04/02/2013 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB13 | |
| SB88 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 48 | TELECONFERENCED | |
| *+ | SB 88 | TELECONFERENCED | |
| + | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 13 | TELECONFERENCED | |
SENATE BILL NO. 88
"An Act authorizing the state bond committee to issue
certificates of participation to finance the
construction and equipping of residential housing to
serve the Anchorage campus of the Alaska Native
Medical Center; and authorizing the Department of
Administration to enter into a lease-purchase
agreement for the benefit of the Alaska Native Tribal
Health Consortium."
3:13:37 PM
HEATHER SHATTUCK, STAFF, SENATOR PETE KELLY, stated that SB
88 authorized the Department of Administration to enter
into a lease purchase agreement with the Alaska Native
Tribal Health Consortium (ANTHC) for construction and
equipping of a residential housing facility to be located
on the Anchorage campus of the Alaska Native Medical Center
(ANMC). The Department of Health and Social Services and
the Alaska Tribal Health System are partners in providing
community health care services throughout Alaska.
Ms. Shattuck stated that ANMC provided comprehensive
medical services to 143,000 Alaska Native and American
Indian people across the Alaska Native Tribal Health Care
system. Patients who need medical services beyond their
local health clinic's capacity are referred to ANMC for
specialty care services. Two years ago ANTHC and the
Department of Health and Social Services began identifying
ways in which working together could result in Medicaid
cost savings for the State while providing a more robust
array of services offered within the tribal health system.
The State of Alaska manages the Medicaid Program.
Ms. Shattuck explained that the Federal government and the
State split the cost of services for most Medicaid patients
50/50. However, if the Medicaid patient is an Alaska
Native/American Indian and receives services in a tribal
facility, the State is reimbursed 100 percent of the cost.
The additional 50 percent reimbursement rate resulted in
significant savings to the State's Medicaid budget. A key
element in providing these health care services is housing.
Families who travel to Anchorage for services must have
housing to have meaningful access to care. When the new
hospital was built at the Tudor Road campus in 1997, it
included a 54 semi-private room facility adjacent to the
hospital, the Quyana House. As demand increasingly exceeded
the current 110 bed capacity, the ANTHC began contracting
with local hotels to provide for additional rooms. Even at
increased cost, this still did not meet the demand. Senate
Bill 88 addresses the critical need for patient housing by
authorizing $35 million in State Revenue bonds for
construction of a 170-bed residential housing facility with
sky bridge access to ANMC.
Ms. Shattuck stated that it is not surprising that housing
is an integral part of ANMC's plans to increase services in
the following areas: Maternal Child Health/NICU expansion,
Operating Room Expansion, Endoscopy, Telemedicine Delivery,
Advanced Radiology Services, Ophthalmology, ENT, General
Surgery, Urology, Emergency Services, and Physical Therapy.
Patients who have housing on campus will receive services
at ANMC rather than another healthcare facility in the
area. Those who are Medicaid eligible will save the State
General Fund dollars.
Ms. Shattuck announced that SB 88 anticipates state General
Fund Medicaid savings of approximately $8.8 million per
year. This number is likely to increase over the next 10
years due to increased utilization for all health care
services provided to Alaska Natives/American Indians. The
identified cost savings exceed the amount needed to pay
debt service on the bond. It is a solid investment for the
State and a good partnership outcome for the Alaska Native
Tribal Health System.
3:17:33 PM
Co-Chair Meyer commented that he appreciated the
possibility of cost savings related to the bill. He
understood that the premise of the bill was to provide
long-term housing on the campus for the hospitals in
Anchorage. Ms. Shattuck agreed, and furthered that there
would be a sky bridge that would connect the housing
facility with the hospital, in order to avoid the use of
taxis on inclement weather days.
Vice-Chair Fairclough wondered how it was determined that
$8 million was a fair number related to the number of
people. Ms. Shattuck responded that in FY 12, Alaska paid
Providence and Alaska Regional $29 million for Alaska
natives to receive care that could have been provided at
ANMC. She furthered that the Consortium hoped that, with
improved access, throughput, and efficiencies, they could
save the $8.8 million which would translate into a 30
percent increase for those that would receive care at ANMC.
Vice-Chair Fairclough shared that she was the former
executive director of Standing Together Against Rape
(STAR), and had worked with people who chose to go to other
medical providers for personal reasons. She wondered what
degree of certainty was available to determine if those
people would choose to be treated at ANMC.
Co-Chair Meyer remarked that the project was a Certificate
of Participation (COP), and asked for further explanation
on the funding of the project.
3:22:20 PM
WILLIAM STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES (DHSS), explained that it was not known
whether or not an individual would choose ANMC. He stated
that when a tribal member is brought into Anchorage, and
boarded at a hotel, that individual would tend to seek
treatment where they feel inclined. He felt that housing an
individual near ANMC, they would obtain easier and
accessible treatment.
Vice-Chair Fairclough felt that one-third was a
conservative estimate, and appreciated that conservative
estimate.
Co-Chair Meyer wondered if the facility contained 150 beds.
Commissioner Streur replied that the facility would contain
170 beds.
Senator Bishop wondered if part of the savings would be
because of the lack of contracting line. Commissioner
Streur responded that the $8.8 million was only related to
health care cost savings.
Senator Bishop commented that the project seemed like a
smart option.
3:26:45 PM
Co-Chair Kelly requested more information regarding savings
related difficult pregnancies. Commissioner Streur asked
for more clarification.
Co-Chair Kelly remarked that he had conversations regarding
savings related to difficult pregnancies. Commissioner
Streur responded that the project would allow for early
term pregnant women for prenatal services, would increase
the chances for a normal delivery and a healthy baby.
Co-Chair Kelly surmised that much of the prenatal care
occurred at Providence. Commissioner Streur responded in
the affirmative.
Co-Chair Kelly queried the per-night cost for a stay at
Providence versus at ANMC. Commissioner Streur agreed to
provide that information, but stressed that the high costs
were related to the length of time in the neo-natal
intensive care unit.
Senator Dunleavy wondered if there was a study for the
hotels in the area related to the impact on their business.
Commissioner Streur responded that he was unaware of any
such study.
Co-Chair Meyer wondered if the fiscal note was prepared by
DHSS. Commissioner Streur responded in the affirmative.
Co-Chair Meyer noted that the fiscal reflected a savings
for DHSS, with a fund source of federal receipts. He asked
for more information on the fiscal note. Commissioner
Streur explained that the fiscal note was a zero fiscal
note, because the federal receipts would be offset by
increased federal receipts to offset the general fund (GF).
3:31:59 PM
ANGELA RODELL, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, introduced herself.
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, introduced himself.
Co-Chair Meyer requested information related to the COP.
Mr. Mitchell responded that the COP was more complicated
that past COPs, because of the complex partnerships. He
explained that there would be a ground lease established on
the property, with a sky bridge to ANMC, and a parking
garage built adjacent to the parcel property. He stated
that there would be a facility lease for the structure. He
explained that the two leases would be granted to a trustee
bank, that the state appoints. That trustee bank would then
lease the facility back to the state, and the lease
payments would be fractionalized into $5,000 blocks of
participation in the lease, and sold to third party
investors at varying interest rates, depending on how long
the money is given. He stated that payments made under the
lease would be matched by the trustee and the repayment of
those investors over 15 years.
Co-Chair Meyer wondered who would own the building after
the 15 years. Mr. Mitchell responded that the state would
own the facility during the term of the lease, and after 15
years ANTHC would own the facility.
Vice-Chair Fairclough surmised that the stated would issue
the COP bonds, the state would make the payments on the
bonds, and the state would turn over ownership to ANTHC.
Mr. Mitchell responded in the affirmative.
Co-Chair Kelly stated that the payment for the bonds came
from the 100 percent Medicaid match. He furthered that the
delta from the 100 percent match came for these particular
patients, rather than the 50 percent for a "normal"
Medicaid patient.
Mr. Mitchell noted that the DOR fiscal note had an
estimation of $415,000 needed to issue the COPs for rating
agencies, bond council, financial advisory services, and
other required services in order to structure and issue the
publicly offered debt. He explained that the bill
contemplated $35 million from the proceeds of the COPs for
the project. He stated that the DOR fiscal note indicated
that $415,000 would come from the COPs to pay for the cost
of issuance. He felt that it was common at the local level
for general obligation bond issues, and the additional
funding was realized by selling the bond at the premium.
Vice-Chair Fairclough wondered why the funding method was
chosen for the facility construction. Mr. Mitchell
responded that COPs were often used in building
construction.
3:38:23 PM
Vice-Chair Fairclough queried the estimate of the cost of
the sky bridge. Ms. Rodell replied that the cost was
included in the $35 million, was did not know what portion.
Vice-Chair Fairclough queried the actual cost of the
project without the debt service. Mr. Mitchell replied that
$35 million was the amount of the COP, which was the
project fund deposit. He furthered that there could be an
additional interest earnings on the project fund of
$150,000, which was the state's anticipated contribution.
Vice-Chair Fairclough surmised that there was 2.75 interest
rate calculated for 15 years included in the package. She
felt that there ought to be a lower estimate than $35
million, because the state was paying an outside entity for
the project. Mr. Mitchell responded that the total payments
would be estimated $42 million, after the interest
differential. Ms. Rodell furthered that the other
alternative was cash, so there would be a 1 percent
earnings estimate on GF.
Mr. Mitchell stressed that the project was not proposed by
the administration.
Senator Hoffman shared that there were two other assisted
living projects in Bethel and Kotzebue that focused on
Medicaid cost savings to the state that were funded
completely with cash. He stressed that the long-term
savings for those centers and the proposed project would
occur exponentially.
3:43:05 PM
VALERIE DAVIDSON, ALASKA NATIVE TRIBAL HEALTH CONSORTIUM,
testified in support of SB 88. She stressed that the ANTHC
had a positive impact on the native communities across the
state. She stressed that Alaska benefited from various
types of care that ANTHC provided, including immunizations.
She shared that ANTHC was often the only medical provider
in rural Alaska. She shared that ANTHC was not solely
geared toward natives. She stated that the Veterans
Administration entered into agreements with the tribal
health organizations in Alaska, recognizing that the
Veterans Administration would also benefit by having the
tribal health systems provide services, so they would not
be required to build infrastructure in rural Alaska. She
stressed that the state did not build the additional
infrastructure in Alaska, because the tribal health systems
provided the health care. She shared that the average
village size in Alaska was approximately 300 people, so
sometimes services were limited beyond the local
community's capacity to provide care. When that occurred,
patients were referred to one of six regional hospitals
located throughout the state: Barrow, Bethel, Dillingham,
Kotzebue, Nome, and Sitka. She stressed that those
hospitals provided incredible services, but there were some
services that required people to be transferred to
Anchorage to ANMC. She shared that more than half of the
people that receive services at ANMC travel from outside
Anchorage in order to access health care services. She
shared some stories of patients who benefitted from health
care at ANMC.
Vice-Chair Fairclough supported the concept of the bill.
She queried the construction cost. Ms. Davidson replied
that the cost of construction and facilitating would be $35
million. She furthered that the cost of the sky bridge
would be $2 million.
Vice-Chair Fairclough wondered if a contractor had been
selected. Ms. Davidson responded that a contractor had not
yet been selected.
Vice-Chair Fairclough wondered if the project would fall
under the state procurement code. Ms. Davidson stated that
she was not comfortable responding to that question.
Vice-Chair Fairclough expressed was not sure why the
project was using borrowed funds, rather than using capital
funds.
Co-Chair Meyer responded that there was an anticipation of
savings to the operating budget over the 15 year period,
without needed to provide $35 million immediately.
3:57:22 PM
LINCOLN BEAN, CHAIR, ALASKA NATIVE HEALTH BOARD, ANCHORAGE
(via teleconference), spoke in support of SB 88. He stated
that the Alaska Native Health Board was a statewide
organization, which represented 25 health providers that
deliver health care in nearly every community in Alaska.
When needed care was beyond the local assistance, the
patients were sent to Anchorage.
FLORA RODDY, SELF, FAIRBANKS, testified in support of SB
88. She shared a story about her grandson's health issue.
She remarked that the project would provide necessary
assistance to many individuals, like her grandson.
Co-Chair Meyer CLOSED public testimony.
4:02:58 PM
Co-Chair Kelly stressed that the native population
currently received a 50 percent Medicaid reimbursement,
when they receive care at non-tribal hospitals. He stated
that it was important for those natives to receive care
from the tribal hospitals, in order to receive 100 percent
Medicaid reimbursement. He stated that SB 88 could provide
significant savings in the Medicaid budget.
Co-Chair Meyer agreed with Co-Chair Kelly, and asked for
more information regarding the financing of the project.
Ms. Rodell responded that there were discussions regarding
maintaining savings, and capturing the identified
population. She stated that the housing mechanism could
benefit the system. She furthered Commissioner Streur was
skeptical of the amount of savings, so there were
significant estimate decreases, and how much money could be
leveraged into a bond transaction.
Co-Chair Meyer wondered if it was a good time to invest.
Ms. Rodell replied that there were currently historically
low rates.
4:10:03 PM
AT EASE
4:10:10 PM
RECONVENED
SB 88 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| BUSINESS PLAN version 03.27.13_Final.pdf |
SFIN 4/2/2013 1:30:00 PM |
SB 88 |
| SB 88 Sectional Analysis.docx |
SFIN 4/2/2013 1:30:00 PM |
SB 88 |
| Austerman & Stolze.HB 30.ACLU Review.2013-02-12.pdf |
SFIN 4/2/2013 1:30:00 PM |
HB 30 |
| HB 30 -- Sponsor Statement.PDF |
SFIN 4/2/2013 1:30:00 PM |
HB 30 |
| HB 30 History and Summary of Changes.PDF |
SFIN 4/2/2013 1:30:00 PM |
HB 30 |
| HB 30 Sectional Analysis.PDF |
SFIN 4/2/2013 1:30:00 PM |
HB 30 |
| HB 30 Sunset in Texas.PDF |
SFIN 4/2/2013 1:30:00 PM |
HB 30 |
| SB 88 Sponsor Statement.docx |
SFIN 4/2/2013 1:30:00 PM |
SB 88 |
| SB 88 Leters of Support.pdf |
SFIN 4/2/2013 1:30:00 PM |
SB 88 |
| SB 88 Letters of Support 2.pdf |
SFIN 4/2/2013 1:30:00 PM |
SB 88 |