Legislature(2005 - 2006)SENATE FINANCE 532

01/19/2005 02:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Location Change --
*+ SB 10 PARENTAL LIABILITY FOR CHILD'S DAMAGE TELECONFERENCED
Heard & Held
*+ SB 22 MEDICAID COVERAGE FOR BIRTHING CENTERS TELECONFERENCED
Heard & Held
          SB 22-MEDICAID COVERAGE FOR BIRTHING CENTERS                                                                      
                                                                                                                                
RICHARD BENAVIDES,  staff to Senator Davis,  advised that Senator                                                               
Davis is  the primary sponsor  of SB 22.  He said the  bill would                                                               
add  birthing centers  to the  definition of  health facility  in                                                               
statute  so that  Medicaid could  reimburse them.  It also  would                                                               
create a  cost savings  to the  state when  it comes  to facility                                                               
reimbursement. He continued:                                                                                                    
     According  to  a  check  that we  did  last  year,  the                                                                    
     average  cost of  a natural  birth from  four different                                                                    
     hospitals  in  Anchorage,   Fairbanks,  and  Juneau  is                                                                    
     approximately  $3,667.  And  conversely,  the  facility                                                                    
     fees  for  three  different birthing  centers  averages                                                                    
     approximately  $1,400.   So  there  is  a   savings  of                                                                    
     approximately 3 percent.                                                                                                   
                                                                                                                                
CHAIR DYSON interrupted  to clarify the costs, and  also that Mr.                                                               
Benavides was just talking about the facility charges.                                                                          
                                                                                                                                
MR. BENAVIDES answered yes, but  the bill gives families that are                                                               
covered by Medicaid  the added option of using  a birthing center                                                               
for delivery. He maintained that  birthing centers have long been                                                               
recognized as  providing a positive,  safe, friendly,  and family                                                               
oriented  experience. He  said they  feel it  would be  a win-win                                                               
situation.                                                                                                                      
                                                                                                                                
CHAIR DYSON asked specifically:                                                                                                 
     Nothing we are doing here  would change who is eligible                                                                    
     for the  Medicaid, it only,  and by  implication anyone                                                                    
     who is  Medicaid eligible  is going to  pay one  or the                                                                    
     other. So,  it's not increasing  the population  of the                                                                    
     people who would be  getting Medicaid reimbursement for                                                                    
     their  birthing  services,  it's  only  adding  another                                                                    
     (which  you  represent  is often  better)  and  cheaper                                                                    
     option. It has been represented  to me that some people                                                                    
     who are  Medicaid eligible, when they  are making their                                                                    
     choices,  when they  realize that  the birthing  center                                                                    
     option  can't get  reimbursed,  and  they have  limited                                                                    
     funds,  feel  they  are  being  forced  to  choose  the                                                                    
     hospital option  because of this  problem that  you are                                                                    
     trying to solve. Is that correct?                                                                                          
                                                                                                                                
MR. BENAVIDES affirmed that Chair Dyson understood the bill.                                                                    
                                                                                                                                
SENATOR GREEN asked where the fiscal note was.                                                                                  
                                                                                                                                
CHAIR DYSON said the fiscal note was zero.                                                                                      
                                                                                                                                
LAURA GORE identified herself as  someone who has been affiliated                                                               
with birth centers  in Anchorage for approximately  10 years. She                                                               
stated that a  lot of their clients have to  choose hospitals due                                                               
to finances  although it is  not what  they want. Over  the years                                                               
she has  seen an increase in  people who can't afford  to use the                                                               
birthing  center. She  stated that  operating  a birthing  center                                                               
takes a  certain amount of  staff and they  require reimbursement                                                               
to keep operating.                                                                                                              
                                                                                                                                
3:24:45 PM                                                                                                                    
CHAIR DYSON asked for questions.                                                                                                
                                                                                                                                
KAREN BROWN, co-owner  of the Geneva Woods  Birth Center affirmed                                                               
that  they are  seeking  birth center  reimbursements so  clients                                                               
could have more choices.                                                                                                        
                                                                                                                                
3:25:26 PM                                                                                                                    
SHARON EVANS,  Mat-Su Wifery, offered  her support for  the bill.                                                               
She reported  that currently  Medicaid pays  facility fees  in 12                                                               
states.  She  maintained  that birth  center  facility  fees  are                                                               
substantially lower  than hospital facility fees.  She said birth                                                               
centers   offer  safe,   cost  effective   alternatives  to   the                                                               
escalating maternity  care fee seen  throughout nation. If  SB 22                                                               
were  adopted,  the state  would  allow  needy families  to  have                                                               
access to the same options  for birth as families with insurance.                                                               
She maintained  that by adopting  SB 22,  the state would  save a                                                               
large amount of Medicaid funds.                                                                                                 
                                                                                                                                
SENATOR   GREEN  questioned   whether   the  federal   government                                                               
participates in states where Medicaid is available.                                                                             
                                                                                                                                
SHARON EVANS replied each state pays on it's own.                                                                               
                                                                                                                                
3:27:18 PM                                                                                                                    
JUDY DAVIDSON,  owner/operator of  Mat-Su Midwifery,  thanked the                                                               
legislators  for the  excellent  midwifery  standards in  Alaska.                                                               
Birth centers  have proven to be  cost effective and moms  are at                                                               
lower risks  when attended  by the  same midwife.  Many insurance                                                               
companies  recognize the  lower  cost  of the  care  and pay  100                                                               
percent of birth center fees  while hospital fees are normally 80                                                               
percent covered.                                                                                                                
                                                                                                                                
SENATOR  GREEN said  she  read a  HESS  report summary  regarding                                                               
number  of  births  in  Alaska  over the  last  few  years.  Home                                                               
delivery was going  up and birthing centers were  going down. "Do                                                               
you know why that is," she asked.                                                                                               
                                                                                                                                
MS. DAVIDSON answered they haven't seen  that in her area. In her                                                               
experience, more  than three-fourths  of their clients  are birth                                                               
center deliveries and one-fourth is  home delivery. She said home                                                               
deliveries are  traditionally about 1 percent  of the population.                                                               
In Alaska, since they now  have seven birth centers, rates should                                                               
go up.                                                                                                                          
                                                                                                                                
SENATOR GREEN  said she read  there was  a trend away  from birth                                                               
center births and more toward  home deliveries. She asked if that                                                               
was possibly because of rising health care costs.                                                                               
                                                                                                                                
MS. GORE  said she has seen  two birth centers in  Anchorage that                                                               
closed down due to financial  reasons. Both facilities did a fair                                                               
amount of deliveries.                                                                                                           
                                                                                                                                
3:30:55 PM                                                                                                                    
JACK   NIELSON,  Department   of  Health   and  Social   Services                                                               
representative, stated the department is  neutral on the bill but                                                               
they had a few items to  consider. The bill adds birthing centers                                                               
to the list  of health services that Medicaid is  required to pay                                                               
by statute  to be established  based on reasonable  costs related                                                               
to patient care  incurred by the facility. The  bill doesn't seem                                                               
to  add birthing  centers  as a  Medicaid  service authorized  by                                                               
state law to  be offered by the program. That  list of authorized                                                               
services  is at  the  end  of Alaska  Statute  47.07.030. If  the                                                               
authorization  to cover  birthing centers  were in  all three  it                                                               
would  make  it  absolutely  clear  that  they  can  cover  using                                                               
Medicaid and  it would help  in dealing with a  potential federal                                                               
issue that they might have.                                                                                                     
                                                                                                                                
There is  a question  whether birthing  centers are  an allowable                                                               
Medicaid service that the federal  government will participate in                                                               
financially.   Although  some   states   have  obtained   federal                                                               
participation in  the past, the  federal criteria are  not clear.                                                               
There  is need  to define  the  federal guidelines.  The type  of                                                               
federal approval that is gained  could also guide the methodology                                                               
to calculate payment  rates for the birthing  centers. Until they                                                               
have  written approval  from the  federal  agency, they  wouldn't                                                               
know for sure  the answer to some of the  federal type questions,                                                               
he said.                                                                                                                        
                                                                                                                                
3:34:03 PM                                                                                                                    
In 2004 there  were 10,000 births in Alaska, 50  percent of which                                                               
were Medicaid.  Overall, 2 percent  were in birthing  centers. He                                                               
said other  factors would include  that birthing center  fees are                                                               
lower  than  hospital payments.  He  referred  to a  departmental                                                               
independent study  showing at least  a 22 percent savings  when a                                                               
person  chooses  a birthing  center.  They  should also  consider                                                               
costs from  transferring a  patient from a  birthing center  to a                                                               
hospital, if it's needed. The  department believes there would be                                                               
no overall cost increase.                                                                                                       
                                                                                                                                
CHAIR DYSON asked Mr. Nielson  for his comments in writing. Chair                                                               
Dyson announced  they would take  SB 22  up again once  the costs                                                               
were  researched more  thoroughly. He  encouraged the  sponsor to                                                               
work  with  Mr. Nielson  to  get  contingency language  regarding                                                               
failure of the federal government to fund the charges.                                                                          
                                                                                                                                
3:37:15 PM                                                                                                                    
CHAIR  DYSON  asked  Mr.  Nielson   whether  the  department  had                                                               
completed the regulations for birthing centers.                                                                                 
                                                                                                                                
MR. NIELSON  advised there  are some regulations  set but  he was                                                               
not qualified to answer.                                                                                                        
                                                                                                                                
SENATOR  DAVIS asked  Mr.  Nielson  whether it  would  be a  cost                                                               
savings if the federal government picked up the funds.                                                                          
                                                                                                                                
MR. NIELSON answered the state would  be paying 10 percent of the                                                               
bill  rather than  50 percent.  Again, he  said, the  independent                                                               
study showed 22  percent savings. The federal  match for Medicaid                                                               
for 2006 is around 50 percent.                                                                                                  
                                                                                                                                
CHAIR DYSON held SB 22 in committee.                                                                                            
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair Dyson adjourned the meeting at 3:40:22 PM.                                                                              

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