Legislature(1993 - 1994)
03/24/1993 01:30 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
The only order of business to come before the committee was SSSB 5 (MEDICAID FOR CERTAIN DISABLED CHILDREN). SENATOR ELLIS, sponsor of the measure, said there's something wrong with a system that pays for institutional care but won't help a family that wants to care for its loved one at home. This bill has become known by many of the parents and advocates for Medicaid waivers and options as the Brianna Hurley bill. Brianna is a two year old girl that was born with cerebral palsy and her parents have tried very hard to keep their daughter at home, not institutionalize her, and keep the family together. Unfortunately, it has broken up a marriage and financially devastated the family. Senator Ellis said the fact is that the federal and state government will pay to institutionalize a child costing up to over $100 thousand a year, but is unable or unwilling to provide support in the home to keep the family together. Project Choice offers a great deal of hope for a change in the Medicaid law. He said there is money in the budget to achieve that change and so the state is moving forward. Senator Ellis said SSSB 5 is sort of a backup or safety net to take care of those kids that don't need all the services that a waiver would provide. He said a waiver may not take care of all the people in the state that need it. Senator Ellis said while waivers offer more services, they are limited in the number of people who can receive them. We can help people's lives and positively impact the budget by having options kick in, after the department has experience with the Medicaid waivers, for those families that aren't able to be served by waivers. Options offer fewer services but everyone who is categorically eligible can qualify for an option, and not everybody needs all the services provided under waivers. There is a very strong concern that not everyone will be served with waivers and that not every family is appropriately served by waivers. Number 080 BRENDA TRUMBLE, Klawock, pointed out that during the last legislative session the bill made it through the whole committee structure, but didn't make it to the floor for a vote. She said she has an eleven year old boy, Logan, who has cerebral palsy which was a result of a DDT immunization at five weeks old. He is developmentally disabled. Ms. Trumble said her family feels very fortunate to receive care such as respite care, etc. Ms. Trumble explained that three years ago her husband left employment of fourteen years and started his own business called "Wood Marine." He markets Sitka spruce for musical instruments in the lower 48 and Europe. Ms. Trumble said her family was covered by Blue Cross before the child was born, but when her husband changed employment, they were able to buy health insurance, the COBRA option, for eighteen months. She explained that in order to obtain Medicaid coverage for her son, they had to totally devest themselves of all their resources and get below the poverty level severely limiting their business opportunities. She said they had to get rid of their life insurance, they couldn't have anything in retirement, they could't even have a burial plaque. Ms. Trumble said they are currently trying to maintain health insurance for the rest of the family which costs $478 per month and the price is rising. The only way out of the situation is to put their child in foster care or institutionalize him, which is against everything she believes in. Passage of SSSB 5 would guarantee that no Alaskan family would have to fall as hard as her family has. Number 140 LAUREL PUTNAM, mother of four children, testified from Anchorage. She informed the committee that her fourth child was born two years ago. He had complications at birth, he was stillborn and it took approximately seventeen minutes to resuscitate him. Because of brain damage, he suffers from cerebral palsy and profound mental retardation. Ms. Putnam said prior to the birth of her son, her husband was employed and they had an insurance policy. He was laid off from his job, but they were able to hold the COBRA plan for eighteen months. She said her husband was able to find employment, but because of their child's pre-existing condition, he was not able to be insured under that policy. Since they no longer had insurance, they had to place their child in a foster home. She said there needs to be a safety net for those children yet to be born. It is important to have a program that is adequate for the child. A waiver will be great for some children, but SSSB 5 will be better and more cost effective for children. There are a number of families in this situation and due to technology there will be more families in the same situation in the future. Ms. Putnam said if they placed their child in Our Lady of Compassion Center, it would cost $7,000 per month. She said last year her son was fairly healthy and he was able to avoid hospitalization. By keeping him at home, the bill came to under $60 thousand per year. It is much more cost effective to have her son at home than in an institution. Ms. Putnam urged passage of SSSB 5. Number 200 KAROL LIBBEY, testifying from Anchorage, explained she works with several families that have medically involved children. Some of them are served by Medicaid. She said some of the families are having to compromise their family economic situation severely to receive the Medicaid coverage. This can compound the issues of the medically fragile child by imposing limitations whereby the family is unable to get employment that would adequately support them and support other children in the family. Ms. Libbey said it is not unlikely to see depression in families where they feel such a limitation in what they are able to do if they provide what is needed for the medically fragile child. Ms. Libbey urged support of the legislation. Number 233 ELAINE HURLEY, Mother of Brianna Hurley, explained Brianna has a terminal brain disease which causes a severe amount of brain damage and disabilities. Brianna needs 24 hour care. She said last year she lobbied very hard for HB 34, which is the same bill as SSSB 5. It passed the House and two committees in the Senate, but never made it to the floor for a vote. Ms. Hurley said last year she was married and her husband had a job but ended up quitting to provide Brianna with Medicaid. She said it is cost effective to keep the children in the home and not break up families. She urged support for the bill and passage this year. Number 270 CHRISTINE CULATON, from Juneau, was next to testify on the measure. She informed the committee she has a daughter, Cortney, who is eight years old and is a medically complex child. Ms. Culaton said her daughter was forced into institutionalized care and an out of state placement because the State of Alaska could not meet her needs with Medicaid. She said her insurance and income were too high to access the Medicaid system and they weren't willing to impoverish the entire family in order to meet Cortney's needs. Currently, Cortney lives in a foster care placement in Juneau. She was de-institutionalized under OBRA 89. The State of Alaska had a very difficult time finding a foster placement for her daughter. They searched for over a year to find a family that was willing to help provide the additional support that her family would have readily given her had they been able to access Medicaid for her. It costs the state more money to provide services or to find out of state or institutionalized placements than it does to provide the families with basic Medicaid services. Ms. Culaton said the families that she deals with in Alaska primarily do not place their children in foster care but, in fact, impoverish the entire family and access every service under AFDC. It is not cost effective to not implement options for those families that will not be eligible for waivers. She said due to preexisting condition clauses and unaffordable insurance, these families cannot continue to be forced to separate or to live at the poverty level and have it be acceptable to the state. Ms. Culaton urged passage of SSSB 5. There being no further testimony, CHAIRMAN RIEGER closed the public hearing. He indicated there is a proposed amendment by Senator Ellis. He asked Senator Ellis to review the ramifications between options and waivers. SENATOR ELLIS said waivers which are applied for under Project Choice can continue to be applied for if the department's operating budget requests are approved. He said the state is asking the federal government for waivers of which there will be a limited number. Under waivers, the department can offer families more services such as respite care, etc., but they are limited in the number of people who can receive them. Senator Ellis said the legislation is structured as sort of a backup. It only kicks in, if necessary, 180 days after the department has the waiver program going. Options offer less services such as just a medical component but more people can qualify. He said everyone can qualify who is categorically eligible. Under the waivers, there will still be families forced onto AFDC. Senator Ellis said the department can give a more technical definition as to the difference between waivers and options. JOHN SHERWOOD, Program Coordinator, Project Choice, Division of Medical Assistance, Department of Health and Social Services, explained a waiver is a waiver from the federal government for certain Medicaid restrictions. It allows the department to offer services that they couldn't normally offer under the Medicaid Program. The waivers allows the department to offer certain home and community based services for individuals who otherwise would qualify for care in institutions. At the same time, the same eligibility standards can be used for people who would be in institutions. That is how waivers expand Medicaid eligibility. What the option does for children is it allows the department to apply that same income standard to children without a waiver and without offering some additional services. He said there are some small technical difference between the two. CHAIRMAN RIEGER questioned the meaning of page 3, lines 4 and 5, "...to be individuals with respect to whom a supplemental security income is being paid." MR. SHERWOOD said that wording means that the individuals would be treated as if they qualified for supplemental security income which is a federal program for the aged, the blind, and the disabled. If you are eligible for supplemental security income, you are eligible for Medicaid. That means you would be treated as if you were in a class of persons who are eligible for Medicaid. Most Medicaid eligibility is tied to your eligibility to another program such as AFDC. CHAIRMAN RIEGER questioned the meaning of the language on page 3, lines 28 through 31, "Sec. 2 AS 47.07.030 is amended by adding a new subsection to read: (c) Notwithstanding (b) of this section, the department may offer a service for which the department has received a waiver from the federal government if the department was authorized, directed, or requested to apply for the waiver by law or by a concurrent or joint resolution of the legislature." MR. SHERWOOD said that is language which authorizes the department to offer services under a waiver that isn't listed in section (b). He said he believes section (b) is the statute that lists the services which are covered and not covered. SENATOR SHARP said there has been testimony that there are children in institutions because the families are at the poverty level. He said he assumes that the state is paying 50 percent of Medicaid for that. He asked Mr. Sherwood how many people would be eligible to come back under the program described in the bill. MR. SHERWOOD said there are children in institutions, but it is difficult to say if they would be released from institutions. He indicated that he would check on the exact figures, but his recollection is that there were 16 individuals in ICFMRs who where under the age of 18. There are 9 individuals in nursing facilities and there are many children in hospitals for a short length of stay, but there were only 5 who were in for more than 100 days. SENATOR ELLIS indicated that there are also several children in foster care who would go back to their parents and families. CHAIRMAN RIEGER indicated he still has concern with Sec. 2. He said he would like to have a better explanation of why it is in the bill and what it does. Number 446 DIANA RHOADES, legislative staff to Senator Ellis, said the drafter of the bill, Terri Lauterbach, informed her that the department really didn't have the authority to officially apply for the waivers but they went ahead and applied for the waivers anyway. She said a law must be passed directing the department to apply for any service that the legislature hasn't approved. The legislature didn't pass a law but passed a Project Choice Resolution. The wording is a technical way to clear up that the department may offer this service under a resolution rather than a law. CHAIRMAN RIEGER said he understands the explanation for the application of waivers that have occurred up to now. He said he is concerned with how this fits in with the prioritization of medical assistance. He said it seems that the language could bypass the prioritization process that the legislature goes through of saying what priority status the services are in. He said he can see where the legislature could pass a resolution, next year, asking the department to look into a waiver for another thing. Inadvertently, it could be put ahead of the service that is in the bill. SENATOR ELLIS said a question had been posed to him as to why it was put at the bottom of the priority list where it would be the first to go if funds are not appropriated for the full range of Medicaid services. He said if you decide to prioritize it and put it above other services, you would make enemies. Senator Ellis said he does understand the concern. He suggested maybe tightening up the language on page 3 to make it more expansive. Number 530 MS. PUTNAM informed the committee that in order for a waiver to take effect, the Division of Medical Assistance has the right to apply for a waiver without having an enactment of law. In order for the option to occur, the legislature has to enact a law. At that time the Division of Medical Assistance can check the appropriate box that would allow an option to go into effect. That is why Sec. 2 needs to be included in the bill. CHAIRMAN RIEGER suggested adding the wording "prior to January 1, 1993" on page 3, line 31, after "legislature." MR. SHERWOOD explained Sec. 2 refers to offering services. The option that the committee currently is discussing is not a service option. It is an eligibility option. Under the option, people wouldn't be offered any additional services. Therefore, the language shouldn't apply to the option in the bill. Number 560 ELMER LINDSTROM, Special Assistant to Commissioner Mala, Department of Health and Social Services, said the position of the department and the administration remains that there isn't the need for specific statutory authority to enter into waivers under the Medicaid Program. Four waivers have already been approved by the federal government and will be implemented beginning July 1, 1993. He said he isn't aware of any problems that would arise by including the language in the bill. He said he doesn't want the committee to think that the administration would feel precluded from going forward in the future with waiver applications and not having the authority to do so in statute. Number 571 SENATOR ELLIS indicated he had a proposed amendment on page 3, line 25, after "are" delete the rest of the sentence and replace with "either not available to them or are inappropriate for them under this chapter." The amendment makes the point that waivers currently being applied for under Project Choice would not be appropriate for all families. It would be up to the department to decide as to whether the option is appropriate. He moved Amendment #1. CHAIRMAN RIEGER objected for the purpose of discussion. He asked how the amendment would work and why it is necessary. Senator Ellis referred to respite services, which is available under a waiver but isn't available under an option, and said there may be somebody that might be able to give an experience of a service under a waiver that is inappropriate for that family. He said you can serve a family thorough an option which is potentially less expensive than a waiver as it is a lessor range of services. TAPE 93-30 Number 001 SENATOR SHARP asked if Amendment #1 is the amendment referred to in the fiscal note. SENATOR ELLIS said he was told that the fiscal note has changed and indicated he wasn't sure of the answer. MR. SHERWOOD referred to page 3, Sec. (D), and said the federal government does not waive the requirement that the department offers an option to someone. If the option is in the books, they would receive that option regardless of whether a waiver was available to them. The department does not waive the client's right to be covered under an optional group when they get a waiver. Mr. Sherwood said if the option is enacted, people are entitled to it whether there is a waiver space available or not if they qualify. The option always comes first and they can make the choice of whether they want the waiver. Number 020 MS. CULATON explained that many families access services through the public school system and do not need duplicated services through Health and Human Services other than the medical component. That is a good example of someone who would just need an option. The school district provides OTPT speech and other related support services under special education. At age three the children go into the public school system. So some families just need the medical component and not the other services offered under a waiver. An optional service would give them the Medicaid coverage for the medical condition. Ms. Culaton said many school districts contribute a good portion of support services through the district program. MR. SHERWOOD said he doesn't believe the fiscal note would change if Amendment #1 is adopted. The client would still have the right to the optional coverage whether or not the additional language is added or not. Number 040 CHAIRMAN RIEGER asked if there was an objection to adopting Amendment #1. Hearing no objection, the motion carried. At 2:20 p.m. a recess was taken while the committee awaited the arrival of Terri Lauterbach. At 2:30 p.m. Chairman Rieger called the meeting back to order. CHAIRMAN RIEGER referred to language on page 3, line 28 through 31 and asked why the language has been included in the bill. He also asked what the effect will be on future legislative requests for the department to investigate waivers or options. He asked if the language would allow such a waiver or option to take a precedence ahead of other things on the optional services list. TERRI LAUTERBACH, Attorney Legislative Legal Counsel, Legislative Affairs Agency, explained that Sec. 2 of SSSB 5 ratifies a past practice that the department has already been doing. They have been applying for waivers from the federal government to offer services allowed under federal waivers, and they offer those services even though they haven't been authorized by the legislature. Ms. Lauterbach said the statute that is amended by Sec. 2 says that the department has to offer things that are mandatory under federal law. The bill says "the department may offer only the following optional services," and the legislature has laid out what those optional services are. Ms. Lauterbach said the new subsection (c) would ratify what the department has already been doing and would let them continue to do it in the future. She noted that it wouldn't do anything to the priority listing. In order to offer something that the federal government allows under waiver, it would seem that there needs to be a statute to authorize the department to do that. That is why Sec. 2 is in the bill. CHAIRMAN RIEGER said if next year the legislature authorizes the department to pursue another waiver for a service and they would commence offering that service and if money is tight and not all the services can be provided that are listed on the optional list of priority medical assistance list, would the law require the department to follow AS 47.07.035 about how they would reduce those services so that the waivered service that the department has started in effect would be the last to go because the statute says that the others have to go first in the following order. MS. LAUTERBACH said she believes so. Sec. 2 could be amended to achieve a different result so that a waivered service could be the first to go. CHAIRMAN RIEGER asked what difference there would be if the words "prior to January 1, 1993" were added to Sec. 2. MS. LAUTERBACH said if there wasn't a strict understanding with the department that they couldn't do it in the future, she would expect them to keep doing what they have done in the past. Chairman Rieger said his concern is that anything that is offered as a waivered service under Sec. 2 ends up being automatically top priority. Ms. Lauterbach said the bill is ratifying something that is already occurring. It is not giving the department new authority. Chairman Rieger asked Ms. Lauterbach if in Sec. 3 a reference could be made to waivered services. Ms. Lauterbach said a general reference could be made to any service offered by the department under a waiver from the federal government that they were not directed to get by the legislature. It could be added as "(1)." Number 167 Chairman Rieger asked Mr. Lindstrom if he had a comment. MR. LINDSTROM said he believes that the Project Choice waivers are the only waivers that the department has ever sought or contemplates seeking at this point. He said he doesn't think it would be possible or conceivable for the current administration or for any future administrations to go forward with a waiver without being in close contact with the legislature and seeking their advice. Number 200 CHAIRMAN RIEGER said he had a proposed amendment. In Sec. 2 after "legislature" add a sentence which would say "The department shall annually submit to the legislature its recommendations about where a service offered under this subsection should be placed on the priority list in AS 47.07.035." He asked Ms. Lauterbach if it would address the problem. MS. LAUTERBACH said if you don't put a time deadline on the department to do that, it would address the problem. Chairman Rieger moved Amendment #2. He asked if there was an objection to the motion. Hearing no objection, Amendment #2 was adopted. Number 255 There being no further discussion on the legislation, SENATOR MILLER moved to pass SSSB 5, with amendments and accompanying fiscal notes, out of the Senate HESS Committee with individual recommendations. Hearing no objection, the motion carried.