Legislature(2019 - 2020)BUTROVICH 205
01/27/2020 01:30 PM Senate HEALTH & SOCIAL SERVICES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB96 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 96 | TELECONFERENCED | |
HB 96-PIONEERS' HOME AND VETERANS' HOME RATES
1:32:10 PM
SENATOR WILSON announced the consideration of COMMITTEE
SUBSTITUTE FOR HOUSE BILL NO. 96(FIN), "An Act relating to
Alaska Pioneers' Home and Alaska Veterans' Home payments."
He stated his intention to hold the bill.
1:33:12 PM
At ease
1:34:32 PM
CHAIR WILSON reconvened the meeting.
1:35:08 PM
REPRESENTATIVE ZACH FIELDS, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 96, delivered a PowerPoint on HB 96. He
reviewed slide 2. HB 96 has three goals: maintain Pioneer Homes'
commitment to Alaska's elders; stabilize revenue and improve
financial sustainability of Pioneer Homes; and provide certainty
and predictability to residents and department.
REPRESENTATIVE FIELDS reviewed slide 3, Committee Substitute for
House Bill 96:
• Adjusts rates for inflation since 2004
• Adds Levels IV and V to be consistent with Agnew Beck
Report and SB74
• Allows for the Pioneer Home Division's suggested
index, Social Security Cost of Living Adjustment
• Passed 35-4 in House of Representatives
He added that HB 96, which passed the House, acknowledges that
costs increase over time. Before the recent steep rate increase
for Pioneer Home residents, the rates had not kept pace with
inflation for several years. HB 96 would add Levels IV and V,
consistent with the Agnew Beck Report, and Senate Bill 74, the
legislature's broad look at Medicaid reform in 2016. Further,
adding Levels IV and V is important for an aging population with
additional needs for dementia care.
1:37:07 PM
SENATOR BEGICH asked if he could give the rationale for the
original rates and for changes made in House Finance. He asked
whether the sponsor was comfortable with those changes.
REPRESENTATIVE FIELDS replied he is supportive of the rates as
addressed by the House Finance Committee, which are a bit more
modest than the ones he introduced. However, the rates directly
line up with inflation-adjusted rates since 2004. As the bill
went through the House State Affairs and Health and Social
Services Committees, there was strong support from the public
for keeping rates at an inflation-adjusted level and having a
predictable trajectory for the future.
REPRESENTATIVE FIELDS reviewed slide 4, Pioneer Homes:
Background:
• Established in 1913
• Originally created as home for indigent men as
Territory of Alaska grew and aged
• Expanded throughout the 20th Century: there are
currently homes in Sitka, Fairbanks, Palmer,
Anchorage, Ketchikan and Juneau
• Population in 2019 was 592
• Rates currently adjusted by regulation
• 2004-2018 Inflation rose 30%, but rates only rose 15%.
In 2019, rates rose as high 140%
He said many generations of Alaskans worked to expand the
system, including a colleague in the House who helped the Palmer
Pioneer Home get certification as a veterans' home. That effort
is important for a state with the highest per capita population
of veterans in the country. This bill provides an opportunity to
provide additional stability since rate increases have been
irregular and, in some cases, dramatic. If the problem is that
rates were not keeping pace with inflation, he would argue the
state overcorrected with steep rate increases.
REPRESENTATIVE FIELDS reviewed the bar graph on slide 5, which
shows that many Pioneer Home residents are private payers. These
residents pay a significant portion of the cost of their care,
but not the entire amount. Since the rate increase, the number
of private payers has declined. One issue he and the House
Finance considered was how to maintain a healthy payer mix to
provide financial stability for the homes and to ensure that
incoming residents are representative of Alaskans.
REPRESENTATIVE FIELDS shared the proposed levels of care and
costs on slide 6:
Level I: $2,976/mo
Level II: $5,396/mo
Level III: $7,814/mo
Level IV: $8,500/mo
Level V: Rate to be determined by the Department to
reflect the cost of care for services listed and
complex behavior management
• Rates serve as base starting point, adjusted for
inflation from 2004
• Rate increases may be annual, and will be capped
at the most recent Social Security Cost of Living
Adjustment
• Allows rates to more consistently track
inflation-based increases in cost of care
He noted that under this bill, Level V costs are not capped
because those complex behavioral health needs will be provided
in a physically separate part of the Pioneer Home. Those costs
will not be paid out of pocket because the costs are so high.
This fits in with the broader attempt to control health care and
Medicaid costs, and save money for the state. When the
behavioral health wings are operational, it should allow some
people at the Alaska Psychiatric Institute (API) to be housed at
the Pioneer Homes. That could save the state a significant
amount since the cost of housing people with complex behavioral
health needs at the Pioneer Homes would be less expensive. The
Agnew Beck report reviewed the Pioneer Homes' role in a broader
attempt to find financial stability for the state's health care
system.
1:41:33 PM
SENATOR VON IMHOF asked what per person maximum amount will
Medicaid pay regardless of acuity.
REPRESENTATIVE FIELDS answered that the Medicaid rate for
eligible recipients at the Pioneer Homes is the Residential
Supportive Living (RSL) rate of $162.70. There is a potential of
an RSL acuity add-on of $359.58. He understood that no resident
has received the RSL rate. The state will receive all the
federal receipts under HB 96 and the department's currently
enacted rates. Thus, the Pioneer Homes will not lose potential
federal revenue by adopting a more modest set of rates.
SENATOR VON IMHOF asked if that is a daily rate.
REPRESENTATIVE FIELDS answered yes, that the $162.70 is a daily
rate.
SENATOR VON IMHOF asked for the total monthly amount to compare
it to the Level II rate of $5,396 per month or the Level III
rate of $7,814.
REPRESENTATIVE FIELDS answered it is $4,881 per month.
SENATOR VON IMHOF pointed out that Level III or IV residents
would have a gap. The gap could be filled by private insurance,
the resident's private income, or by state funds. She asked what
incentive the Pioneer Homes has to accept residents at Levels
III and IV versus Levels I and II where most of the cost is
covered.
REPRESENTATIVE FIELDS replied that as the bill progressed
through the House, the Alaska Pioneer Homes' director testified
that the Pioneer Homes admit Alaskans without considering their
ability to pay. As far as he knows, that is not in statute but
is long-standing practice.
SENATOR VON IMHOF said she would like assurance that the Pioneer
Homes will accept all levels of care. She would guess that there
is probably a waiting list for all levels of acuity. Her only
concern is that with a finite number of beds for Levels III, IV,
and V, nothing will keep costs from going up faster than the
Medicaid daily coverage. She asked how to make sure the gap does
not widen more than the CPI [Consumer Price Index] each year.
REPRESENTATIVE FIELDS responded that the question begs a broader
look at the financial situation with the Pioneer Homes. The
state has an interest in providing a mix of individuals, some of
whom are self-pay. Inevitably some will not be self-pay and some
will be on 100 percent payment assistance, particularly as these
residents progress toward higher levels of care and are forced
to liquidate their savings. There is a question about rates for
individuals and the population composition in the Pioneer Homes.
A mix is good for the financial situation for residents and for
the Pioneer Homes. He related his understanding that the Pioneer
Homes were once certified as nursing homes. Now most of them do
not qualify because of the physical constraints of the older
buildings, such as doorway widths. Renovating them to make them
eligible for the much higher nursing home reimbursements would
be a significant capital expense. Whether the department could
consider nursing home reimbursement for certain homes that may
be newer to capture federal funds is a good question.
1:47:05 PM
CHAIR WILSON acknowledged the presence of Senator Gray-Jackson.
1:47:14 PM
SENATOR GIESSEL asked whether the reimbursement rate was for
Medicaid or Medicare.
REPRESENTATIVE FIELDS answered that the reimbursement is the
Medicaid RSL, Residential Supported Living rate.
SENATOR GIESSEL related her understanding that residents
typically receive Medicare, that some have private insurance and
their own assets. When these residents can no longer meet their
costs, it is necessary for them to go on Medicaid.
REPRESENTATIVE FIELDS reported that in February 2019, 451 of 496
licensed beds were filled. The higher number of residents he
cited earlier is because of turnover in those beds. As of
February 2019, 51 percent of people were private pay, 20 percent
were on Medicaid waiver at the RSL rate, and 29 percent were on
state-subsidized payment assistance. He deferred to the
department for Medicare figures.
SENATOR GIESSEL said she would hold the question for the
division director.
SENATOR BEGICH asked if anyone has done an analysis on whether
capital projects to enable Pioneer Homes to receive nursing home
rates would pay for themselves.
REPRESENTATIVE FIELDS said he had asked about the broader
question of nursing home rates, but he has not asked that
specific question about return on investment. He thought it was
a worthwhile question to follow up on.
SENATOR BEGICH replied that he has struggled with the dramatic
increases in the governor's budget. About 51 percent of the
Pioneer Home's residents are private payers. If the state wipes
out the private payers' ability to cover their costs relatively
early on, that means 100 percent of the cost will end up being
the state's burden because these residents will not be evicted.
REPRESENTATIVE FIELDS answered that is correct.
SENATOR BEGICH asked what analysis of has been done on the
impact of those rates. He related his understanding that this
bill will allow those private payers to continue to pay when
patients become more in need of services, so that burden
wouldn't fall entirely on the state.
REPRESENTATIVE FIELDS responded that it is accurate to assume
that doing the right thing for Alaska's elders and helping them
stay in the Pioneer Homes is in the financial best interest of
the Pioneer Homes. He noted that he asked former Legislative
Finance Director David Teal, who provided testimony in House
Finance on this issue, to answer questions members may have.
1:51:46 PM
SENATOR GIESSEL related that married couples are financially
affected when one spouse needed to be in the Pioneer Home. The
couple's assets can be rapidly depleted leaving the non-Pioneer
Home resident destitute. She asked if he has considered that
issue, so that these couples will not have their assets drained.
REPRESENTATIVE FIELDS said the tragic stories he heard in his
district were a primary motivation for introducing this bill.
Senator Giessel was right that the committee could consider how
payment assistance affects a married couple versus a single
person. The legislature does not want people to become homeless
or not be able to care for their kids. He has heard from
constituents with one spouse in the Pioneer Home while the other
is at home caring for their children.
REPRESENTATIVE FIELDS reviewed slide 7, Complexity of Care:
Current Levels
Level I: Services include housing, meals, emergency
assistance, recreation, home activities
Level II: Services include all Level I services plus
Medicaid administration, health related services,
staff assistance, incl assistance with daily living,
supervision, reminders. (Non-night shift)
Level III: Services include all services of Level I
and Level II, with 24- hour hands-on assistance
provided.
Proposed Levels Level I: Services include housing,
meals, emergency assistance, and recreation
Level II: Services include Level I services and
medication administration, health related services,
and intermittent assistance with activities of daily
living
Level III: Services include Level I and Level II
services as well as extensive assistance with
activities of daily living
Level IV: Services include Level I, II, and III, as
well nursing services for 24 hours a day, and
intermittent behavior management
Level V: Services include all those included in Levels
I-IV, as well as extensive behavior management
The department is moving from three levels of care to five,
consistent with the direction under Senate Bill 74. Since the
average age of Pioneer Home residents has increased
significantly, the percentage of residents who have dementia has
increased, which means a higher level of care is needed. The
homes are evolving to meet that need.
REPRESENTATIVE FIELDS referred to slide 8, Rates and Impacts.
This slide consisted of bar graphs comparing rates predating the
recent rate increase, the current rates including the recent
rate increases, and the proposed rates under HB 96. He said the
blue bars represent rates before the rate hike, the orange bars
represent the new rates, and the green bars represent the rates
under the [CSHB 96(FIN) version 31-LS0646\S]. The green bars are
inflation-adjusted 2004 rates, he said.
REPRESENTATIVE FIELDS pointed out that slide 8 includes a copy
of an Anchorage Daily News article with the headline, "Pioneer
Home residents and families struggle with 'heartbreaking'
decisions after rate increase." He said 16 Level I residents
decided to leave after the rate increases.
SENATOR VON IMHOF noted that the orange bars are the monthly
rates enacted last year and the green bars are the proposed
rates. She asked for the costs of operating the homes.
REPRESENTATIVE FIELDS answered that the department has stated
that the Pioneer Home costs are the same as the orange bars.
SENATOR VON IMHOF asked if the fiscal note represents the
difference between the green and orange bars.
1:57:05 PM
REPRESENTATIVE FIELDS said he believes that is correct.
SENATOR VON IMHOF asked how the legislature can determine that
the new monthly rates of $11,185, $13,333, and $15,000 represent
the cost that does not inflate each year and that it is giving
the state good value. She said she didn't know if that would be
a comparison to other Pioneer Homes in the state, Pioneer Home-
like facilities in the Lower 48, or a comparison over time.
REPRESENTATIVE FIELDS replied the next slide that references
regional comparisons might address that.
SENATOR BEGICH asked if the fiscal note reflects the difference
between a capped and uncapped rate. The $15,000 amount is a
capped rate under the existing scenario, but under the uncapped
rate that limit wouldn't be there. The department might simply
be projecting higher fiscal costs without knowing them.
REPRESENTATIVE FIELDS said there was considerable discussion in
House Finance about how real the fiscal cost is and how much the
department will actually collect. He concluded that there is a
considerable uncertainty about how consumers react to prices
that are well above market levels. He would defer to the
department and Mr. Teal for further discussion.
SENATOR BEGICH said that is the crux of it for him. He
discovered some minor discrepancies in the fiscal note that
still amount to a few million dollars.
1:59:48 PM
CHAIR WILSON noted that the committee could ask Acting Deputy
Commissioner Lasley for a brief explanation about the fiscal
note.
REPRESENTATIVE FIELDS, in response to Senator von Imhof's
question about value, said the Pioneer Home is not the cheapest
assisted living situation. However, experience has shown that
Alaskans value the quality of care and sense of community in the
Pioneer Homes and will pay more for it. However, demand is not
utterly elastic in terms of how much more people would be
willing to pay. The Pioneer Home's value is more than the
typical assisted-living facility that people might contemplate
sending their parents to out of state. The comparison of long-
term costs in the Pacific Northwest shows that if the rates
under rates in HB 96 were enacted, it would not be underpricing
the private market for assisted living in Alaska or the region.
People will still pay a premium for that higher level of care.
Pioneer Homes do not provide enough beds to distort the market.
He related that about 450 or 500 people a year represents a
small percentage of statewide long-term care beds.
CHAIR WILSON pointed out that Alaskans pay the most for health
care cost in world. Some can argue that the Pioneer Homes
provide the types of services a skilled nursing home facility
does. He asked whether the rates tied to the cost of living
reflect increases in health care costs from 2004 until today.
For some residents, the Pioneer Home is assisted living, but for
others it is a skilled nursing facility.
REPRESENTATIVE FIELDS reviewed slide 9, Cost of Long term Care
in Pacific Northwest, Long Term Care Cost Comparison - 2019
Genworth. He said he thought the cost of health care in Alaska
has grown faster than the cost of long-term care in the Pioneer
Homes. Alaska has controlled per capita Medicaid since 2015. The
legislature passed Senate Bill 74, trying to contain Medicaid
costs and drive down uncompensated care. In turn, those cost
savings are passed on to private insurers, including the state.
The state has seen better coverage of the population at large
leaving the state to carry less of the uncompensated care
burden.
SENATOR VON IMHOF said the chart [on slide 9] shows that nursing
homes cost more than assisted living homes in any location, but
the cost of nursing homes in Anchorage and Alaska appears to be
two to three times as much as in Seattle and Portland. She
acknowledges the need for nursing homes, but these facilities
are significantly more costly in Alaska. She asked what it will
mean if Pioneer Homes move into the nursing home field. She and
asked where people currently get nursing home assistance.
2:05:05 PM
REPRESENTATIVE FIELDS replied he is not suggesting that the
Pioneer Homes provide a concentration of a higher level of
acuity care. He expressed concern that the bill will
inadvertently provide a higher level of care for a higher
percentage of the population, which could put the state in a
risky financial situation. He acknowledged some percentage of
Levels I and II payers is good for the homes. The Pioneer Homes
provide some care that could potentially qualify for nursing
home levels of reimbursement. If so, the state could obtain more
revenue. However, after reviewing the costs, one could conclude
that the department has controlled the costs since the Pioneer
Home rates are not nearly as high as nursing home rates. Still,
it is hard to compare because the Pioneer Homes serves some
assisted living residents and a significant percentage of people
would need to seek nursing home care outside of Alaska if the
Pioneer Homes were not an option. The diverse population makes
it hard to compare, he said.
SENATOR BEGICH asked why there is such a difference in cost.
Nursing homes costs in Seattle are about $13,000, and $11,000 in
Portland, but private nursing home care in Anchorage and Alaska
is $30,000. He asked if the cost in Alaska was due to a narrow
market, and so higher premiums are charged, or whether there are
actual costs. That goes back to Senator von Imhof's earlier
question about cost versus the market. He said he does not want
Pioneer Home prices to match inflated market prices. He asked if
any analysis has been done.
REPRESENTATIVE FIELDS deferred to Director Lasley for additional
background on the [2019] Genworth report. He said he primarily
reviewed the assisted living costs on the graph because Pioneer
Homes fall under that category. He wanted to be sure that the
chart did not distort the market by radically underpricing
assisted living facilities.
REPRESENTATIVE FIELDS presented slide 10, Social Security Cost
of Living, which showed the percentage of cost-of-living
adjustments since 1975. "That really adds up over time," he
said. That will provide a steady trajectory to capture cost
increases and provide predictability for residents and the
department.
REPRESENTATIVE FIELDS turned to slide 11, CSHB 96. He summarized
his presentation by stating that HB 96 provides stability for
residents and the department, ensures timely and predictable
rate increases, and updated levels of care to reflect an aging
population with higher levels of dementia. He noted that the
bill gives the department the flexibility to raise rates without
using the lengthy regulation process. That process had
discouraged the department from adjusting rates to keep pace
with costs. The bill also provides residents and their family
members peace of mind when making tough decisions about where
and how to take care of their elder family members.
CHAIR WILSON invited David Teal to the table.
2:09:38 PM
DAVID TEAL, representing self, Juneau, Alaska, noted that he was
the former Director of Legislative Finance, but he was speaking
as a private citizen at the request of the bill sponsor.
Legislative Finance had concerns about the lack of data,
particularly financial data of Pioneer Home residents and those
on the waiting list. That prompted the concern that the fiscal
impacts might be too optimistic. He said that large rate
increases at Level I, which is for little or no assistance,
means that those people at Level I have options, including
staying in their apartment or at home. Legislative Finance was
concerned that it was possible that some self-paying residents
might opt to leave the Pioneer Homes looking for a cheaper place
to stay. Legislative Finance had no idea how many might do so,
but based on the information that Director Lasley provided,
Legislative Finance estimated that the savings projected by the
governor were perhaps $5 million too aggressive.
MR. TEAL said there is a request for additional funding in FY
2021 because Level 1 residents have elected to leave. If these
residents are replaced by people who cannot fully pay, then the
program receipts will not materialize.
MR. TEAL said Legislative Finance did not consider any personal
aspects, but strictly reviewed whether the fiscal projections
made sense. Given the lack of data, Legislative Finance was
concerned the administration was too optimistic about cost
savings. He said he has not kept up with the governor's bill so
he has nothing to say about the rates. There is currently more
data available, but he does not think it is sufficient to make
good revenue or cost projections.
SENATOR BEGICH asked about the graph on slide 9 that compares
the cost of long-term care in Pacific Northwest. He noted that
assisted living rates include Levels I and II and some Level III
rates. He asked where the $7,126 figure for the cost of assisted
living at Pioneer Homes was derived.
2:15:44 PM
TRISTAN WALSH, Staff, Representative Zach Fields, Alaska State
Legislature, Juneau, Alaska, answered that slide 9 was produced
by the [Division] of Pioneer Homes and refers to the enacted
rates put into place in August.
REPRESENTATIVE FIELDS added that the Pioneer Home assisted
living cost in the graph was the average of Levels 1, II, and
III and the Pioneer Home nursing home cost was the average of
Levels IV and V to try to approximate the assisted living care
costs versus what is more nursing home costs.
SENATOR BEGICH said those are not the rates in the bill, which
are slightly lower.
REPRESENTATIVE FIELDS replied correct.
MR. WALSH presented the sectional for CSHB 96 Version 6:
Section 1. This section amends AS 47.55.020(b), the
statute regarding admission to a Pioneer Home, to
raise the amount of monthly income a resident may keep
for incidental expenses from $200 to $500. This
section also makes conforming changes to reflect new
language added in Section 5 of this bill.
MR. WALSH added that Section 1 was an amendment that was offered
in the House Finance Committee.
Section 2. This section amends AS 47.55.020(d), the
section of statutes relating to payment assistance, to
raise the amount of monthly income a resident may keep
for incidental expenses from $200 to $500. This
section also makes conforming changes to reflect new
language added in Section 5 of this bill.
Section 3. This section amends AS 47.55.030(a) the
section relating to payment by a resident, with
conforming language that reflects Section 5 of this
bill.
Section 4. This section repeals and reenacts AS
47.55.030(b), which charges the Department to adopt
regulations regarding a monthly rate for Pioneer Home
residents, to reflect changes made in Section 5.
Section 5. This section amends AS 47.55.030 by adding
a new section, (f). This section works to limit
Pioneer Home Rate increases to no more than the rate
of inflation, as measured by Social Security Cost of
Living Adjustment, using current monthly and daily
rates (adjusted for inflation since 2004) as a
starting point.
Section 6. This section amends AS 47.55.070, the
statute regarding indebtedness of a home resident to
the State, with conforming language to reflect the
changes made in Section 5 of this bill.
Section 7. This section makes conforming changes, by
repealing sections of statutes requiring public notice
for proposed rate changes, which could be infrequent.
Section 5 of this bill sets this as an annual process.
MR. WALSH pointed out that Section 7 allows the department to
enact rate increases through statutory authority, as
Representative Fields described earlier.
SENATOR BEGICH asked if the allowances will also be inflation
proofed or do the allowances need to be visited every few years
and reset.
MR. WALSH answered that he thought the allowances were set as a
single increase, but he would check.
CHAIR WILSON invited Acting Deputy Commissioner Lasley to the
table.
2:21:00 PM
CLINTON LASLEY, Acting Deputy Commissioner, Family, Community, &
Integrated Services, Department of Health and Social Services
(DHSS), Juneau, Alaska, introduced himself.
SENATOR GIESSEL clarified that citizens enter and have assets to
pay for residency. Residents also have Medicare. She related her
understanding that once residents use up all personal assets
Medicare will still be in place, but these residents would be
asked to apply for Medicaid to help cover their costs.
MR. LASLEY replied that Pioneer Homes cannot accept Medicare
because Medicare is hospitalization. The Pioneer Homes receive
Medicaid waiver coverage. The Medicaid waiver has financial and
medical requirements for individuals to be eligible. Individuals
must be below resources and must meet the nursing home level of
care to be eligible for Medicaid waiver. The homes currently
have 96 out of the 450 elders in the home who qualify for the
Medicaid waiver. The Pioneer Homes try to shape the program
around the Medicaid waiver requirement because individuals at
some point need a higher level of care and will require a
Medicaid waiver or assistance, with strict financial
requirements for that.
SENATOR GIESSEL clarified that Medicare would cover their
medications.
MR. LASLEY answered that their Part D plan would. The Pioneer
Homes require that every elder have Medicare Part D or an
equivalent.
CHAIR WILSON asked when the new rate increases took effect.
MR. LASLEY said the new rates went into effect on September 1.
The notification went out at the end of July.
CHAIR WILSON asked if he knew how many residents had had
financial hardships, the number who were provided additional
assistance from the state, and the number who left the Pioneer
Homes.
2:24:28 PM
MR. LASLEY said a presentation before the House Finance last
week noted that the Pioneer Homes tracked those who left because
of the rate increases. He noted 16 residents stated it was due
to the rate increase. The majority were in Anchorage area. Some
of them had moved into the three new facilities that opened in
Anchorage, Palmer, and Wasilla in the past year.
CHAIR WILSON asked if Pioneer Home residents were offered
payment assistance from the additional $15 million that was
added to the program for people who could not afford the rate
increases.
MR. LASLEY said the Pioneer Homes held conversations with
everyone who was concerned how to pay for the increased costs.
Administrators and social workers helped them understand the
payment assistance program so residents understood that
individuals could stay in the Pioneer Homes regardless of their
ability to pay. When the notification of rate increase went out
at the end of July, the notification included a payment
assistance application.
SENATOR VON IMHOF asked if HB 96 allows the Pioneer Homes to
charge separately for supplies, equipment, and other services
not included in the monthly rate.
MR. LASLEY answered that nothing in the bill limits the Pioneer
Home from charging for supplies. Every elder in the homes who is
private pay gets an invoice every month for their supply use and
copays for medication from the Pioneer Homes' central pharmacy
that the majority of residents use. Supply charges are typically
minimal and individuals on the payment assistance plan are not
charged for supplies. Historically that has been charged to
their state indebtedness account.
SENATOR VON IMHOF said it was good to hear that the supply
charge has been minimal. She did not know what kind of checks
and balances could be put in place for supply charges.
MR. LASLEY replied the charge for supplies is at cost. He
believed the pharmacy charge for medications was cost plus three
percent.
SENATOR BEGICH discussed the burden that falls on a couple when
all their assets are required when one of them is in the Pioneer
Home. He said his constituents have considered divorce to
protect assets. He asked if the Pioneer Homes understood that
current rates could break up families.
MR. LASLEY responded that the department testified last year,
that the Pioneer Home regulations are closely tied to the
Medicaid waivers because typically only Level IV residents could
qualify for the waiver. Historically, individuals at Level IV
end up requiring the Medicaid waiver. Last year, the department
also increased the spousal support limit, to mirror the Medicaid
waiver requirements. The Medicaid waiver resource limit for an
individual or couple is $132,000, plus a family home.
2:31:08 PM
SENATOR BEGICH pointed out that the private nursing home rates
as shown on slide 9 are quite high. He asked if these are
arbitrary figures or if these figures are based on the actual
cost of care for a nursing home. He asked how the department
calculated its original rates.
MR. LASLEY answered that the department set the rates last year
based on what it cost to provide services in the Pioneer Homes.
The Pioneer Homes had a $64 million budget in fiscal year (FY)
2019. The Pioneer Homes expenditures were about $60 million. The
department testified that the FY 2020 projected costs for
services would be $60 million. Assisted living homes in Alaska
are not required to publish rates, but nursing homes or skilled
facilities must do so to qualify for state reimbursement.
Skilled home nursing reimbursement rates are set by the state
based on nursing homes' actual costs. The department relies on
the Genworth study for rates because it surveys its members
every year.
SENATOR BEGICH highlighted that there are vast differences in
nursing home rates, but assisted living rates are comparable
across the board. He wanted to be sure the fiscal note reflects
the actual cost of care, not what the cost of care in a private
facility that might not be accurately reporting. The graph [on
slide 9] consists of a map of services. He expressed concern
that the fiscal note might be reflecting increased costs as a
result of HB 96.
MR. LASLEY answered that the fiscal note of $60 million is the
cost of providing services at the Pioneer Homes system.
SENATOR BEGICH asked if the size of the fiscal note is not a
result of the bill adding increased costs to the Pioneer Homes'
operations.
SENATOR BEGICH observed that under this bill the department
would not be required to write regulations. He asked if the
department's fiscal note shows the reduction of regulation
projects.
MR. LASLEY replied regulation costs were not calculated. The
department's cost of writing regulations falls outside of the
Pioneer Homes and is performed by the Department of Law or the
DHSS commissioner's office.
CHAIR WILSON said the committee could ask the department for the
cost of writing regulations.
SENATOR BEGICH added that he wanted it to be fair. If the
department is going to put the cost of writing regulations in
all bills the legislature writes, then the department should
show the reduction in cost of not requiring regulations.
CHAIR WILSON said he is all about accurate notes. He has many
conversations with different departments about the accuracy of
costs and the reduction of costs in legislation.
2:37:31 PM
CHAIR WILSON opened public testimony on HB 96.
2:37:47 PM
BRAD RIDER, representing self, Juneau, Alaska, said he has lived
in Juneau since 1960. His family came to Alaska because of his
dad's dream of what it offered. Both his parents are in Pioneer
Home. When the rate increase went into effect, his mother's rate
went from just over $4,000 to just over $11,000. If his father
has another stroke, his rate will be over $24,000 a month and
they will be wiped out. Pioneer Homes were designed to take care
of elderly people in Alaska. The state needs to take care of
Alaskan elders.
CHAIR WILSON reminded everyone that comments could be submitted
in writing to senate.hss@akleg.gov until Wednesday.
2:42:33 PM
MARGIE BEEDLE, representing self, Juneau, Alaska, said her
mother has lived in Juneau for 70 years and is in the Juneau
Pioneer Home. She followed this bill last spring, gave
testimony, and watched it gain bipartisan and public support, so
she was surprised that the department raised the rates last
year. These increases ranged from 40 to 140 percent, a sudden,
extreme increase which left residents and their families
reeling. Residents have moved out following the price increase.
She knows of one person in Juneau who had been a private-pay
resident. That person's family calculated that the cost of
remodeling the house to accommodate a wheelchair and paying for
respite care was less than the Pioneer Home's rate. If a private
pay resident is replaced by one on Medicaid who has greater
needs, the cost to the state is greater. Her mother is a
private-pay resident at Level II of the new five-tier system and
her rate increased 40 percent. She had purchased long-term care
insurance. Before the department raised the rates, her insurance
covered her residential service rate plus her room and board.
After the increase, the maximum benefit amount falls short by
over a $1,000 a month. That discrepancy will increase as her
needs increase. She is 90 and in the middle stages of Alzheimer
disease.
MS. BEEDLE said her mother carefully planned for the Pioneer
Home. If this rate increase stands, the situation her mother
carefully planned for will have drastically changed. Her mother
was a businesswoman, so she understands cost-of-living increases
and how modest adjustments need to be made. Her mother does not
understand how the Pioneer Home community should be required to
pay 100 percent of the cost for others who are not held to the
same standards. If this bill is not enacted, the population of
the Pioneer Homes will continue to change.
2:46:18 PM
DOUG LARSON, representing self, Juneau, Alaska, shared that he
is a life-long resident of Juneau. His parents came to Alaska in
the 50s, married, and had children. They contributed to the
state and community. His parents were responsible and throughout
their lives and invested in long-term care, taking into account
the rates they expected to pay. The rate changes were
devastating. His dad is 92 with dementia. His rate went up 95
percent. This bill will increase rates over time and gives
people time to plan and figure out a new strategy. Moving out of
state for many elderly, like his parents, would be difficult
because of health reasons plus his parents do not want to move.
HB 96 is a more reasoned approach to senior care funding.
2:49:36 PM
LUANN MCVEY, representing self, Juneau, Alaska, said she came to
Alaska in 1957 with her parents, who were career professionals
with the federal government. Her parents are now 87 and live in
their home, but the challenges of aging impact their
independence. Her parents are one major health event away from a
serious life change that could require a permanent move to a
long-term facility. Medicare does not pay for long-term care. As
residents of the state since territorial days, her parents
always envisioned their final days would be spent in the Pioneer
Homes, which was meant to be an affordable senior living
facility. This administration has raised the rates to the point
that now even her parents, who receive federal pensions, cannot
afford it. HB 96 has reasonable limits on Pioneer Home rates,
which will allow elders to live at the Pioneer Home without fear
of becoming destitute.
2:51:56 PM
JUDY CRONDAHL, representing self, Juneau, Alaska, said very few
seniors who can live in their own homes choose to live in the
Pioneer Home. The Pioneer Homes provide a vital service for
those who cannot care for themselves. The Pioneer Homes were
built and established in recognition and appreciation of
contributions made by pioneers to the territory of Alaska and as
a means to provide in-state alternatives to seniors who could no
longer remain in their homes. Pioneer Homes provide high-quality
care, but do not provide luxury accommodations. The rate
increases will encourage seniors who can afford it to leave the
state. These prices will force the rest who stay to liquidate
their estates in order to move into a Pioneer Home and depend on
Medicaid when all other resources are depleted. She urged
members to pass HB 96 from committee.
2:53:24 PM
LAURA STATS, representing self, Juneau, Alaska, said she has
been in Juneau since 1981 raising a family. She was speaking on
behalf of her mother-in-law, Betty Daugherty, who is 98 and has
lived at the Juneau Pioneer Home since 2011. She ventured to
Alaska in the 1940s. She came partly because her Great-uncle
Heckman had journeyed to Ketchikan and devised the fish trap.
She taught high school after raising six children. In 2019, her
rate increased from $6,795, at the equivalent of Level IV, to
$13,333. She is a private payer who had long-term coverage,
which lasts four years. Since 2011, her rates have doubled,
which is greatly unfair. She suggested that the state find other
income streams such as adopting an income tax and using the
Alaska Permanent Fund.
2:56:22 PM
BRIEN DAUGHERTY, representing self, Juneau, Alaska, explained
that Laura Stats spoke about his mother. The Daugherty family is
an old Alaska family. Going to the Lower 48 is not an option for
them because the family has always lived in Alaska. The Sitka
Pioneer Home was built when Alaska had few resources and still
took care of its elders. He said he is testifying to appeal to
the humanity of the committee. He urged members to not just talk
about finances when talking about people's lives. He said he
understands why legislators are talking about finances, but he
asked them to think past that. The Pioneer Homes' population is
500 of 800,000 Alaskans. Many elders helped build this state,
including his parents. The state must rise up and take care of
elders, not force them to leave, and not bankrupt them. His
mother is self-pay but is assessed $14,000 every month. The
state can do better.
2:59:33 PM
KEVIN HENDERSON, representing self, Juneau, Alaska, spoke in
support of HB 96. He said he was testifying on behalf of his
wife's mother, Beatrice Long, 93, who is at the Juneau Pioneer
Home receiving Level II services and is self-pay. Beatrice and
her husband moved to Alaska in 1964 and raised four children
here. Her husband was a contractor and a state inspector
overseeing various projects, including the Auke Bay ferry
terminal. He expressed support for HB 96 on behalf of Beatrice
and her family. HB 96 recognizes that it was never going to be
possible for the state to sustain for-profit, assisted living
homes. It was understood that a subsidized Pioneer Home system
was needed to support seniors. Last year the governor ignored
the original intent of the Pioneer Home and decided that the
homes should be completely self-funded. As a result, the
exorbitant rate increases began last fall, which created lots of
panic. HB 96 will place the payment rate and the additional
charges in state statute. The bill will prohibit the
administration from raising Pioneer Homes rates based solely on
fiscal philosophy. If this bill passes, the legislature will
decide future rate increases. The bill recognizes the state's
fiscal responsibilities. This bill would create a 15 percent
increase, which is more reasonable than the 40 to 140 percent
increases. Rates must be fair, reasonable, and humane. HB 96 is
good government. It recognizes fiscal reality and it honors the
state's seniors.
3:03:40 PM
CHAIR WILSON said he would hold HB 96 in committee with public
testimony open.
3:04:12 PM
SENATOR GIESSEL disclosed that she has a conflict of interest
because her 92-year-old mother, who has lived in Alaska for 71
years, lives in the Anchorage Pioneer Home, is categorized at
Level V and is private pay.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1 CSHB 96 Sponsor Statement 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 2 CSHB 96 House Finance Committee Substitute Version S 5.12.19.PDF |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 3 CSHB 96 Supporting Document Sectional Analysis Version S 5.12.19.pdf |
SFIN 3/9/2020 9:00:00 AM SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 4 CSHB96 Version S Payment Assistance Allocation Fiscal Note 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 5 CSHB96 Version S Pioneer Homes Allocation Fiscal Note 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 6 CSHB 96 Summary of Changes Version M to Version S 5.12.19.pdf |
SFIN 3/9/2020 9:00:00 AM SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 7 HB 96 Supporting Document Combined Letters of Support 4.18.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 8 CSHB 96 Supporting Doc Petition of Support 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 9 CSHB 96 Supporting Document-Agnew Beck Study 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 10 CSHB 96 Supporting Document-Pioneer Home Advisory Board Report 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| 12 HB 96 Supporting Doc DHSS PH costs 5.12.19.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| CSHB96 Supporting Document-2019 AFN Resolution 1.23.2020.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB 96 FN DHSS AK Pioneer Home.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB96 FN DHSS APH Payment Assistance.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
CSHB96 HB 96 |
| CSHB 96 Supporting Document PPT Presentation 1.27.2020.pdf |
SHSS 1/27/2020 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |