Legislature(1999 - 2000)
04/22/1999 06:05 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 106 "An Act relating to decisions by the commissioner of health and social services to remand certain health facility payment decisions back to the hearing officers; and amending Rule 602, Alaska Rules of Appellate Procedure." SENATE BILL NO. 106 "An Act relating to decisions by the commissioner of health and social services to remand certain health facility payment decisions back to the hearing officers; and amending Rule 602, Alaska Rules of Appellate Procedure." SENATOR ROBIN TAYLOR requested that the bill be moved to the amendment process. Senator Wilken noted that Rick Solie was on teleconference and had a limited time to testify. RICK SOLIE, Representing Fairbanks Memorial Hospital, Fairbanks, (Testified via Teleconference), voiced his concern with SB 106. He noted that it was the intent of the Alaska State Hospital and Nurses Association (ASHNA) to work in a dual track with the legislation, which would move the legislation, but at the same time work with the departments to discuss the appeal process and timing. Mr. Solie stated that Fairbanks Memorial Hospital's concern is that issues can be resolved within the working group in a timely fashion. Mr. Solie suggested that it would make more sense to focus on efforts outside of the Legislative process, such as addressing the backlog of appeals. Mr. Solie advised that ASHNA has concerns with the amendments, particularly Amendment #1. [Copy on File]. He referenced the report submitted to Committee members from Donna Herbert, a consultant, identifying the difficulty in establishing a flat rate. [Copy on File]. Mr. Solie continued that Amendment #2 was reasonable and not of great concern to his organization. [Copy on File]. Additionally, Amendment #3 addresses the backlog of appeals. He reiterated that his comments were in opposition to Amendment #1. DAN HOUGHTON, Alaska Regional Hospital, Anchorage, (Testified via Teleconference), stated that he was available to answer questions. He stated that he would support passage of SB 106 in its present format. ELMER LINDSTROM, Special Assistant to Commissioner Perdue, Department of Health and Social Services, stated that the Department is opposed to the proposed legislation. He noted that the rate appeals process is cumbersome and costly. The Department believes that the reasons for those problems is that the appeals process is "lost" because the underline rate setting system is obsolete. The existing rate setting system is expensive and those costs are largely based on a federal mandate which has since been appealed. He noted that there are budget negotiations still in process requiring $15 million dollar reductions to the Medicaid budget. Mr. Lindstrom concluded that the existing system preserves the status quo and the existing system insulates a portion of the budget more entirely than anything else he is aware of. TAPE SFC-99 #107 Side A Mr. Lindstrom stated that the bottom line is that if the State is concerned about reforming the system, the issue should not be distracted. He referenced the letter in members packet dated April 19th by Commissioner Perdue regarding the appeals issue at Bartlett Regional Hospital. He reiterated that the Department could not accept the underlining premise of SB 106. Senator Phillips asked if Providence Hospital had any appeals current at this time. Mr. Lindstrom replied that there are a number of facilities that have appeals every rate every year. Of the forty appeals that are outstanding, one issue accounts for twenty of the appeals. Senator Phillips voiced a conflict of interest as he is employed by the Providence Health Care System. He asked to refrain from voting on the amendments and the bill. Senator Leman asked if the Department could recommend any changes for the current "archaic" system in place. He questioned the opinion of Commissioner Perdue on an amendment that he had recommended. Mr. Lindstrom agreed that there was need for legislation to change the current system. A big portion of the problems is imbedded in State laws resulting from federal mandates. He deferred the question regarding the amendments to Mr. Lively, Deputy Commissioner. Senator P. Kelly pointed out that some of the ASHNA Hospitals are in support of the legislation. Mr. Lindstrom replied that he could not speak for all the facilities, however, there have been some facilities that have never appealed a rate. He believed that Fairbanks would fall into that category. Mr. Lindstrom spoke to the problems with the proposed legislation. On the facilities side of the Medicaid budget, the ability to actively manage the cost control is very limited. There are only two elements, one on the front end and the certificate of need process and the second is the ability to some degree to oppose policy and issues reflected in the appeals payments process. Those are the only tools that the State has. He emphasized that this bill would essentially remove one of those tools. JAY LIVELY, Deputy Commissioner, Department of Health and Social Services commented on Amendment #1 in response to questions from Senator P. Kelly. Mr. Lively pointed out that the Department has focused mostly on the details of the appeal process. He commented that the amendment would charge the Department to go back to determine how current rates are set and then create an alternate system that would be less cumbersome. Senator Wilken referenced Page 2, Line 16 and asked the recommendation of the Department regarding the most reasonable amount of time. Mr. Lively responded that the Department would like to see between 120 and 180 days. Co- Chair Torgerson interjected that 120 days was not a reasonable number. He acknowledged that 30 days might be too "tight". LORAINE DERR, Representing the Alaska State Hospital and Nursing Association (ASHNA), Juneau, spoke in support of the legislation and stated that the problem is that in the appeals process, there is no finality. The basis of the bill puts finality to the process. ASHNA would like to see the process have some sort of completion. Co-Chair Torgerson explained that he agreed with the bill and the way it was written, however, he believed that the legislation does not address the heart of the problem. The legislation does solve the problem in how quickly it could move to court, however, the underlining problem is that there is no agreement on what qualifies an eligible reimbursement. Senator Donley MOVED to adopt Amendment #1. Senator Wilken OBJECTED. Senator Wilken pointed out that there are many hospital officials that are uncomfortable with Amendment #1. Co-Chair Torgerson stated that the bill would not be moved out of Committee if Amendment #1 failed. Senator Adams commented that it was his preference to work on the bill in Subcommittee. Senator Taylor disagreed with comments made by the Department regarding the legislation and the amendments. He commented that he would not object to Amendment #1 which would allow the benefit of finality for legislative consideration. Co-Chair Torgerson urged the various factions to come to the table and create a working document. He acknowledged that the Legislature does not have the expertise to undertake the challenge at this time. Senator Wilken asked if the new rates would be included in the report. Co-Chair Torgerson commented that there would be a report provided with the rates, subject to appeal. He advised that it was his intent to create language, which would remove all the appeals. Senator P. Kelly commented that Amendment #1 should be made into a separate bill rather than incorporated into the legislation. Co-Chair Torgerson stated that he was not willing to make that change. A roll call vote was taken on the motion. IN FAVOR: Donley, Green, Leman, Parnell, Torgerson OPPOSED: Adams, P. Kelly, Wilken, Phillips The MOTION PASSED (5-4). Co-Chair Parnell MOVED to adopt Amendment #2 which would insert language on Page 2, Line 17, "unless the facility requests a delay", and Page 2, following Line 25, inserting a new subsection: "At the request of any party, the department may offer a process of voluntary mediation". There being NO OBJECTION, it was adopted. Senator Leman questioned if Amendment #3, 1-LS424\G.7, Bannister, 4/21/99, would be beneficial to the proposed legislation. [Copy on File]. Senator Leman MOVED to adopt Amendment #3 and asked to hear from the Department. Mr. Livey responded that Amendment #3 would provide any appeal that is remanded back to the hearing officer by the Commissioner after April 20th but before the effective date, would also be subject to the 30-day rule. Senator Taylor questioned the retroactive date and the effect that the amendment would have on the legislation. He commented that he was not concerned with passage of the amendment. Senator Leman WITHDREW Amendment #3 with the understanding provided by Commissioner Perdue from an earlier conversation that the Department would work diligently to achieve finality. There being NO OBJECTION, it was withdrawn. Co-Chair Torgerson commented that the bill would be HELD in Committee in order to work in more detail with the Department on the fiscal notes. Co-Chair Parnell requested a brief discussion on the fiscal notes. He noted the three temporary positions requested in the fiscal statement. Mr. Lindstrom commented that new hearing officers would be needed to deal with the backlog of outstanding appeals. He emphasized that the most effective way to resolve the backlog of appeals would be to grant an additional hearing officer position and the additional resources for the Department of Law and the Department of Health and Social Services Commissioner Office to address the concern. Co-Chair Torgerson requested a check of the length of time between the 30-60-90-day comparison and the fiscal impacts that each would bear. Senator Taylor commented that he would oppose any additional changes to the fiscal note. Mr. Lively responded that 120 days would be a more acceptable amount of time. SB 106 was HELD in Committee for further clarification on the fiscal notes. TAPE SFC-99 #107 Side B ADJOURNMENT The meeting adjourned at 8:45 P.M. SFC-99 14 4/22/99 p.m.