Legislature(2001 - 2002)
03/15/2002 01:36 PM Senate HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 345-SCHOOL SERVICES FOR DISABLED STUDENTS
MR. GREG MALONEY, Director of Special Education for DOEED,
explained that SB 345 allows school districts the opportunity to
capture more Medicaid funds for support services provided to
students with disabilities that are Medicaid eligible. The
services include medical needs, school psychology, counseling,
occupational therapy, physical therapy, speech and language
pathology and other services for which school districts are now
responsible but for which resources are not always adequate.
MR. MALONEY gave the following background of SB 345. Medicaid
provides assistance for low-income individuals with medical
issues. Medicaid has not always been associated with education
but since the passage of the Individuals with Disabilities
Education Act as amended in 1997 (IDEA '97), it was incorporated
as a payer of first resort. Since IDEA '97 took effect, a number
of cases have required schools to provide more medical services.
The medical services costs are typically expensive and put quite
a burden on school districts. The purpose of SB 345 is not to put
a process in place, but to give DOEED and the Department of
Health and Social Services (DHSS) the green light to go forward
and explore how such a program could work. He noted this bill
will help the state to capture significant resources; he expects
almost $8 million to be captured of which about $4 million would
be directly available to school districts. SB 345 will not
require significant general fund contributions - the only cost
will be for DHSS staff support to help implement the Medicaid
system. Once SB 345 passes, DOEED would continue to work with
DHSS, school districts and other stakeholders to design a system
that is easily managed, easily audited and provides the necessary
resources.
MR. MALONEY said that many states have already implemented
similar legislation. Alaska can learn from mistakes other states
have made so that this program does not become a burden on the
department but captures significant resources for school
districts.
1:46 p.m.
MR. BOB LABBE, Director of the Division of Medical Assistance,
DHSS, said he shares Mr. Maloney's view that this is an
opportunity to provide additional funding to the schools through
the federal portion of the Medicaid program at no additional cost
to the state. He cautioned, however, such a program will create
a significant workload. He implemented a similar program in the
State of Oregon in the late 1980s and learned from experience
that trying to bring a medical program into an education setting
requires that a number of issues be addressed. Clear policies,
good audit trails, and a system that is not burdensome on the
day-to-day work of the educational staff is necessary. DHSS and
DOEED are seeking, in SB 345, the authority to work on a design
that will be efficient and effective and allow the state to
capture the maximum dollars with the lowest amount of overhead to
the districts. He advised that there will a need for ongoing
quality assurance because these programs are subject to federal
and state review. He held that SB 345 provides a source of
revenue when school districts' costs are increasing. He noted the
working group has met with the federal agency about putting
together a plan.
CHAIRWOMAN GREEN asked what process a school district will use to
implement this program that will stress the fact that if the
federal portion falls off, the funds will not become a State of
Alaska obligation.
MR. LABBE said the working group envisions that each school
district would have the option of participating and would sign a
provider enrollment agreement. One condition of participation
would be that districts would submit actual, individual claims
for individual children and provide matching funds to DHSS for
those expenditures. DHSS would pay the bill and receive the
state's matching share from the districts. Districts will have
additional administrative costs, maintain and submit records, and
determine whether a student is Medicaid-eligible.
MR. MALONEY said the cost of special education nationally, right
now, is estimated to be about $50 billion. The federal share of
paying for those services is about 16 percent, or $8 billion. In
this time of shrinking resources, SB 345 provides an opportunity
to capture additional federal resources that schools can use to
provide services without adding more burden to the state. It will
not solve the problem but will help. In talking to his
counterparts in other states, he learned the Medicaid piece has
become a significant portion of budgets in those states. SB 345
will also provide salaries for professionals that are hard to
find in Alaska, such as speech pathologists, school psychologists
and other related service providers.
MR. MALONEY said if SB 345 passes, DOEED and DHSS would work with
a consultant, with the Governor's Council on Disabilities and
Special Education, and with other stakeholders in the system to
come up with a process that is not overly burdensome but results
in a significant capture of funds. He believes the additional
services that can be offered will be worth the effort.
CHAIRWOMAN GREEN asked if the process became a matter of routine
after the program was in place for several years in Oregon.
MR. LABBE said there was an ongoing need for quality assurance.
One concern he has had is that the Office of Inspector General
recently did an audit of a district in Oregon that may result in
penalties. Because of high staff turnover, people will
continually have to be trained. The Oregon department of health
converted its policy role of development into a quality assurance
role and sent a person out to inspect records and make sure all
was working okay. He said that with health care issues, new
technologies create questions about what is covered and what is
not. He maintained there will be initial costs for staffing and
to pay a contractor to change computer systems to process claims.
CHAIRWOMAN GREEN indicated that this program is voluntary so no
district will have to participate. She asked if districts with a
larger population are likely to participate without too much
thought while smaller districts will need more help as a program
such as this could have a major impact on personnel and budgets.
MR. LABBE said designing a system that is administratively simple
is key because if a full time position is necessary to handle
billing for one or two children, it won't be worthwhile.
MR. MALONEY said currently DOEED collects some Medicaid funds for
schools through a time survey, allowable under the administrative
portion of Medicaid. That will not change. He said as a new
system is developed, the rural school districts will be
represented in terms of how they can take advantage of this
system. Some states have third party billing systems or a third
party non-profit agency do the billing. In some small districts
in Alaska, a number of services are farmed out to other agencies
for the sake of efficiency.
SENATOR WILKEN noted that, according to the sponsor statement, 42
other states have already done this. He asked what happened in
Alaska that suddenly allows us to do that.
MR. MALONEY explained that a few years ago a study called
"Educaid" was done by a consultant from Oregon. That study was
about the current Medicaid system. The consultant determined that
with the available resources, funding available to districts and
a number of other factors, the best way to use Medicaid funds was
to use the time survey, which was then put in place. Since then,
with the advent of IDEA '97, there has been more allowance at the
federal level for incorporating Medicaid funds into special
education services and budgets.
SENATOR WILKEN asked if this process began with IDEA '97.
MR. LABBE clarified that a Supreme Court case in the mid 1980s
directed that state Medicaid agencies could not deny payment for
services provided to a child on an IEP solely because that child
was in the school setting. He noted that Mr. Sherwood worked on a
plan in the early 1990s but there was no interest in pursuing it
at that time. DHSS got involved in 1996 at the time when
consultants around the country were estimating this would cost
"zillions" of dollars. He said that over the last year there has
been renewed interest.
SENATOR WILKEN asked if the districts will have to submit lists
of eligible students and allowable services to DHSS.
MR. MALONEY said the student will have to be Medicaid eligible
and that certain services will be allowable.
SENATOR WILKEN stated:
"It says that [for] each dollar expended for these
covered services, the district would receive $1.50 so
for every dollar spent you get a 50 percent investment
so why the premium, why isn't it dollar for dollar -
why do you make $1.50 for every dollar spent?"
MR. LABBE said that basically Medicaid would be paying for
services that are already being provided with school funds only.
Districts will have to cover the match portion but then get the
federal portion. Right now the federal portion amounts to about
60 percent. He noted Mr. Maloney's point that this program will
allow districts to provide services that are inadequately funded
is a good one.
After some discussion about the amount that districts will be
reimbursed from Medicaid, SENATOR WILKEN pointed out that the
sponsor statement is incorrect as it appears that the district
will be reimbursed 160 percent when it will be reimbursed for the
federal portion, which is about 60 percent.
CHAIRWOMAN GREEN asked if transactions are traded or whether
checks are actually transferred.
MR. LABBE said the district would be expected to submit a claim
that would be processed and DHSS would write the district a
check. After that, DHSS would submit a claim to the federal
government - that claim rolls up all of Alaska's Medicaid
expenditures, it is not an item by item submittal.
CHAIRWOMAN GREEN apologized to those who wished to testify on the
school funding bill from the Mat-Su LIO and said she did not
realize they had been waiting. She then took public testimony on
SB 345.
2:11 p.m.
MS. JOAN FRANZ asked when a child receives occupational therapy
within a school district and the district bills for the service,
what will happen in terms of services when the school district
uses a school function model. She explained that the occupational
therapist's role in a school district is limited compared to that
of an occupational therapist in private practice, rehabilitation
agency or in a hospital setting. She asked if that child could
also use the Medicaid funds to cover other services that the
district will not offer because it is limited to a school
function model.
MR. MALONEY said the money captured from Medicaid would go to the
district and the district itself would be responsible for
providing the services required for any student covered under an
IEP. If the district contracts services for an occupational
therapist, those costs, presuming the district and/or
occupational therapist was enrolled as a provider, could be
captured back or claimed under Medicaid. He advised that the
district may also choose to hire an occupational therapist to
provide that service. It will be an administrative decision on
the part of the district as to how it will provide the
occupational therapy.
MS. FRANZ repeated the role of an occupational therapist in a
school is limited by the school function model therefore the
occupational therapist would not provide a lot of the services
that an occupational therapist in another setting would provide.
She questioned whether receiving services through the school
district will limit that child from receiving comprehensive and
rehabilitative services that Medicaid was originally designed to
cover.
CHAIRWOMAN GREEN said she does not believe the current system
will change, so that if a child can receive services from the
district, that will continue, and if the child receives services
from a private entity, that will continue. The only thing that
will change is that the school district can bill Medicaid instead
of using foundation formula money. She asked Mr. Sherwood to
address the question.
MR. JON SHERWOOD, Division of Medical Assistance, said if a child
currently receives any other medical service outside of the IEP
and is authorized to do so, SB 345 will have no effect.
CHAIRWOMAN GREEN said her concern is that children might not
receive the full gamut of occupational therapy services they may
need because a child could not receive the private services from
an occupational therapist within the school district.
CHAIRWOMAN GREEN said she believes her earlier answer holds, that
the child will continue to receive whatever he or she is
receiving now.
MS. FRANZ said that is her hope because the educational model
limits what kinds of services a child can receive in a school
setting as compared to the services a child could receive
elsewhere.
MR. MALONEY said that nothing in the bill would prohibit that and
the definition actually broadens the definition to include
students with disabilities. He added that school districts are
required to perform complete evaluations under IDEA '97 and
whatever services are required to allow the student to make
progress on the general curriculum should be provided. He said
he hopes there is not a big difference between what is being
provided in each setting and, if there is, that is something
DOEED can help the parent learn more about.
MS. FRANZ said there has been a big difference, in her
experience, because of the definition of what services are
considered to support a child within an educational setting as
opposed to the child's medical needs.
CHAIRWOMAN GREEN asked Ms. Franz to contact Mr. Maloney to
discuss the matter.
MS. FRANZ said that equipment ordered through Medicaid for a
child is usually custom fit for that child and belongs to that
child. She asked how that will work through the school district.
MR. MALONEY said that specific regulations speak to ownership.
Generally, if the school purchases equipment, it remains the
property of the school unless there is a specific need to use the
equipment at home.
MS. PAULINE BENNETT GANNON, an occupational therapist speaking on
her own behalf, told members that the school function model of
occupational therapy focuses on the child's ability to be in the
school while therapy services are secondary. She noted that the
idea of charging Medicaid for school services has come up before
and she believes at one time, DHSS looked at having school
districts provide more medical services. She thought the plan was
to do a pilot project to see how that would work. She pointed
out that typically, when one bills for Medicaid services, for
intense, individual therapy that doesn't lend itself to groups.
One focus of IDEA '97 is to incorporate students with
disabilities into the classroom using special education staff.
She said she is not sure the same types of services are being
provided and could be charged to Medicaid. [Portions of Ms.
Bennett-Gannon's testimony were indiscernible due to transmission
problems.]
TAPE 02-19, SIDE B
MS. BENNETT-GANNON questioned whether this bill will expand the
role of schools beyond education.
CHAIRWOMAN GREEN repeated that school district participation will
be voluntary and that this bill will simply provide another
method of funding.
MR. MALONEY emphasized that SB 345 will allow for a process that
will include stakeholders throughout.
SENATOR WARD moved SB 345 from committee with individual
recommendations and its accompanying fiscal note.
CHAIRWOMAN GREEN announced that with no objection, the motion
carried. She then took a brief at-ease.
CHAIRWOMAN GREEN called the committee back to order at 2:28 p.m.
and turned the gavel over the Vice-Chair Loren Leman. The
committee took up SB 346.
| Document Name | Date/Time | Subjects |
|---|