Legislature(2011 - 2012)HOUSE FINANCE 519

02/13/2012 09:00 AM House FINANCE


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09:06:02 AM Start
09:07:43 AM Presentation: Medicaid 101 & the Affordable Care Act & Its Impacts on Alaska
10:35:17 AM Adjourn
* first hearing in first committee of referral
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+ Dept. of Health & Social Services Presentation: TELECONFERENCED
Medicaid 101 & the Affordable Care Act & its
Impacts on Alaska
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 13, 2012                                                                                          
                         9:06 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:06:02 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Thomas called the House Finance Committee meeting                                                                      
to order at 9:06 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Bryce Edgmon                                                                                                     
Representative David Guttenberg                                                                                                 
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Wes Keller; William Streur, Commissioner,                                                                       
Department of Health and Social Services; Kimberli Poppe-                                                                       
Smart, Deputy Commissioner For Medicaid And Health Care                                                                         
Policy, Department Of Health And Social Services.                                                                               
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
PRESENTATION:                                                                                                                   
     MEDICAID 101 & THE AFFORDABLE CARE ACT & ITS IMPACTS                                                                       
     ON ALASKA                                                                                                                  
                                                                                                                                
9:07:43 AM                                                                                                                    
                                                                                                                                
^PRESENTATION: MEDICAID 101 & THE AFFORDABLE CARE ACT & ITS                                                                   
IMPACTS ON ALASKA                                                                                                             
WILLIAM  STREUR,  COMMISSIONER,  DEPARTMENT  OF  HEALTH  AND                                                                    
SOCIAL SERVICES, introduced staff  and provided members with                                                                    
a  PowerPoint  presentation: Partnerships,  Medicaid  Review                                                                    
2012 (copy on file).                                                                                                            
                                                                                                                                
KIMBERLI POPPE-SMART,  DEPUTY COMMISSIONER FOR  MEDICAID AND                                                                    
HEALTH  CARE   POLICY,  DEPARTMENT  OF  HEALTH   AND  SOCIAL                                                                    
SERVICES,  observed that  Medicaid was  started in  1965 and                                                                    
utilized state  and federal funds.  The program  was managed                                                                    
by states  to provide  care to low-income  individuals; two-                                                                    
thirds  of the  program coverage  went to  children and  the                                                                    
elderly. She  shared that each  state in the nation  ran the                                                                    
program differently; for example,  some states had childless                                                                    
adults  in their  coverage group.  Medicaid provided  health                                                                    
insurance to  approximately 60 million Americans  and was 18                                                                    
percent of the  $3 trillion spent by  the federal government                                                                    
on  healthcare.  She  said that  the  state's  $1.5  billion                                                                    
budget  paid  for  the  92 percent  of  the  nearly  146,000                                                                    
Alaskans that were eligible for the program.                                                                                    
                                                                                                                                
9:11:08 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze asked  if the  146,000 represented  single                                                                    
applicants, or a whole line of dependents.                                                                                      
                                                                                                                                
Ms.  Poppe-Smart  replied that  146,000  was  the number  of                                                                    
eligible individuals.                                                                                                           
                                                                                                                                
Ms. Poppe-Smart  continued. The program  supported providers                                                                    
and served  as a  safety net for  individuals who  would not                                                                    
otherwise have  healthcare coverage.  Additionally, Medicaid                                                                    
was  the  primary  payer for  long-term  care  services  and                                                                    
behavioral  health services.  She said  that access  through                                                                    
Medicaid  was comparable  in many  states to  private health                                                                    
insurance. In  Alaska, healthcare expenditures in  FY10 were                                                                    
approximately $7.5 billion,  Medicaid represented 18 percent                                                                    
of those expenditures, as well as 32,000 jobs.                                                                                  
                                                                                                                                
Ms.  Poppe-Smart   turned  to  Slide  4   titled,  "National                                                                    
Percentage Change in Total  Medicaid Spending and Enrollment                                                                    
FY 1998 -  FY 2011," which reflected the rise  and fall over                                                                    
economic times in relation to Medicaid enrollment.                                                                              
Ms. Poppe-Smart highlighted Slide  5 titled, "Percent Change                                                                    
in Alaska's Total Medicaid Spending  and Enrollment: FY 1998                                                                    
- FY  2011." She stated that  work had been done  across the                                                                    
states  in  order  to  eliminate,  or  reduce,  barriers  to                                                                    
enrollment. She mentioned  "express lane eligibility," which                                                                    
was  a  national  program  that   gave  children  that  were                                                                    
eligible for  school lunch programs  presumptive eligibility                                                                    
for  Medicaid.  She  furthered that  the  intention  of  the                                                                    
express  lane  eligibility   was  to  identify  individuals,                                                                    
primarily children,  of low economic  status that  would not                                                                    
otherwise be eligible for Medicaid.                                                                                             
                                                                                                                                
9:13:49 AM                                                                                                                    
                                                                                                                                
Representative Edgmon  asked if  the 32,000 jobs  created by                                                                    
Medicaid were in-state.                                                                                                         
                                                                                                                                
Ms. Poppe-Smart said yes.                                                                                                       
                                                                                                                                
Representative  Edgmon asked  if  the  growth in  healthcare                                                                    
jobs in the state could be attributed to Medicaid.                                                                              
                                                                                                                                
Ms.  Poppe-Smart  replied  that  the  state  represented  18                                                                    
percent  of Medicaid's  expenditures, which  could correlate                                                                    
to  the  increase of  jobs  overtime  that could  be  funded                                                                    
because of Medicaid contributions.                                                                                              
                                                                                                                                
Representative Edgmon  thought that it would  be interesting                                                                    
to  see  the  number  of  Alaskan jobs  that  were  tied  to                                                                    
Medicaid.                                                                                                                       
                                                                                                                                
Ms.  Poppe-Smart   said  she  would  work   to  provide  the                                                                    
information to the committee.                                                                                                   
                                                                                                                                
9:15:01 AM                                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  stated that Alaska's economic  ebb and flow                                                                    
paralleled  the national  economy,  with a  slight delay  in                                                                    
actual impacts.  She said  that Alaska's  increasing elderly                                                                    
population would  cause rolls  and expenditures  to increase                                                                    
over  time.  Nationally,  dual eligibles  accounted  for  40                                                                    
percent; the  numbers were  lower in the  state, but  it was                                                                    
anticipated that they would increase.                                                                                           
                                                                                                                                
Co-Chair  Stoltze asked  if  the  department was  presenting                                                                    
Medicaid as an economic engine.                                                                                                 
                                                                                                                                
Ms. Poppe-Smart replied in the affirmative.                                                                                     
                                                                                                                                
Representative Wilson wondered  how many Medicare recipients                                                                    
in the state were also benefiting from Medicaid.                                                                                
                                                                                                                                
Ms.  Poppe-Smart   replied  that  there  were   14,500  dual                                                                    
eligibles  in  Alaska;   individuals  that  became  Medicare                                                                    
eligible because of age were also eligible for Medicaid.                                                                        
                                                                                                                                
Representative  Wilson  asked  how  many  people  were  dual                                                                    
enrolled  because their  Social Security  payments were  not                                                                    
enough to cover healthcare.                                                                                                     
                                                                                                                                
Ms.  Poppe-Smart  replied  that   there  were  a  number  of                                                                    
individuals that became eligible because of health status.                                                                      
                                                                                                                                
9:17:36 AM                                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  reviewed Slide  6, which was  a map  of the                                                                    
Statutory Federal  Medical Assistance Percentages  (FMAP) FY                                                                    
2012. She  said that Alaska was  at a 50 percent  match rate                                                                    
for  general  Medicaid. She  stated  that  the last  of  the                                                                    
American Recovery  and Reinvestment  Act (ARRA)  dollars had                                                                    
been distributed  in June 2011.  Those funds  had translated                                                                    
to an  enhancement in the  state's FMAP rate.  She clarified                                                                    
that  if there  was  a Tribal  Health  beneficiary that  was                                                                    
receiving  services  from  a   Tribal  Health  provider  the                                                                    
reimbursement rate  for the service itself  was 100 percent.                                                                    
She added  that there  were breast  and cervical  cancer, as                                                                    
well  as   children  health  insurance  programs   that  had                                                                    
enhanced FMAP rates.  She relayed that the  formula that the                                                                    
FMAP  rates  was  based on  considered  unemployment  rates,                                                                    
general economy  and number  of participants.  She furthered                                                                    
that nationally, with the loss  of the enhanced ARRA funding                                                                    
federal match  rates sank  10.8 percent;  Alaska experienced                                                                    
the decrease  at 4 percent.  She reported that  Medicaid had                                                                    
been growing  at a  slower rate  per enrollee  than national                                                                    
health expenditures per capita  and private health insurance                                                                    
companies.                                                                                                                      
                                                                                                                                
9:20:35 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  asked how much  of the slower  growth rate                                                                    
could be attributed to the lower rate paid to Medicaid.                                                                         
                                                                                                                                
Ms.  Poppe-Smart  replied  that  in Alaska  the  rates  were                                                                    
comparable  to  private  health  insurance.  She  said  that                                                                    
across the  nation the reimbursement for  Medicaid was below                                                                    
other payers, in  some cases even below  Medicare rates. She                                                                    
thought   it   was  possible   that   there   was  a   lower                                                                    
participation  rate   by  providers,   but  she   could  not                                                                    
speculate as  to how  much the  smaller growth  per enrollee                                                                    
played a part.                                                                                                                  
                                                                                                                                
Representative  Wilson  expressed  disbelief  that  Medicaid                                                                    
payments were comparable to private insurance.                                                                                  
                                                                                                                                
Ms.  Poppe-Smart  assured  the  committee  that  comparisons                                                                    
would be  done during  the presentation. She  clarified that                                                                    
Medicaid paid less than commercial  insurance in Alaska, not                                                                    
necessarily nationwide.                                                                                                         
                                                                                                                                
9:22:25 AM                                                                                                                    
                                                                                                                                
Ms.  Poppe-Smart  discussed  Slide  8  titled,  "Controlling                                                                    
Growth  in Medicaid."  She explained  that  there were  four                                                                    
ways to control growth in Medicaid growth:                                                                                      
                                                                                                                                
     · Eligibility                                                                                                              
     · Covered Services                                                                                                         
     · Rates                                                                                                                    
     · Utilization Controls                                                                                                     
                                                                                                                                
Ms. Poppe-Smart stated that the  list on the right hand side                                                                    
of  the  slide  highlighted  other  efforts  being  made  to                                                                    
control Medicaid spending:                                                                                                      
                                                                                                                                
     · Compliance/Anti-Fraud                                                                                                    
     · Innovations in Service Delivery                                                                                          
     · Technology                                                                                                               
     · Maximize Revenue                                                                                                         
                                                                                                                                
Ms. Poppe-Smart spoke to Slide  9, which involved a bar-type                                                                    
chart  detailing   what  different  states  were   doing  in                                                                    
response to the economic climate.  She said some states were                                                                    
increasing  payments,   some  were  decreasing,   some  were                                                                    
increasing  and  decreasing;  some  states  had  found  that                                                                    
dentists needed  to be  reimbursed at a  higher rate  to get                                                                    
adequate dental  coverage for  recipients. She  relayed that                                                                    
some states  were cutting  provider rates  in an  attempt to                                                                    
control  the growth  in Medicaid  programs and  subsequently                                                                    
their state  budget deficits. She said  that eligibility had                                                                    
increased  nationwide   and  that  some   state-only  funded                                                                    
programs had appeared. She said  that the home and community                                                                    
bases  service  program  in Alaska  was  strong,  with  less                                                                    
institutional  care provided.  Alaska had  approximately 708                                                                    
nursing home beds.                                                                                                              
9:25:41 AM                                                                                                                    
                                                                                                                                
Ms.   Poppe-Smart   discussed  controlling   costs   through                                                                    
eligibility.  She explained  that  when  the state  received                                                                    
enhanced  funding  under  ARRA, the  maintenance  of  effort                                                                    
requirement   was  imposed   on   the   states.  Under   the                                                                    
requirement  the   state  could  not  eliminate   or  reduce                                                                    
eligibility categories.                                                                                                         
                                                                                                                                
Co-Chair  Stoltze  asked  if the  long-term  maintenance  of                                                                    
effort  restrictions were  a result  of the  short-term ARRA                                                                    
funding.                                                                                                                        
                                                                                                                                
Ms. Poppe-Smart replied yes,  the restrictions were extended                                                                    
through the Affordable Care Act  through 2014. She said that                                                                    
the maintenance of effort restrictions  still applied to the                                                                    
state, but with some possible exceptions.                                                                                       
                                                                                                                                
Ms. Poppe-Smart  discussed covered  services. She  said that                                                                    
mandatory   services  generally   included  nursing   homes,                                                                    
hospitals  and  out-patient   providers.  She  relayed  that                                                                    
optional benefits usually included  home and community based                                                                    
programs and  pharmacy services.  She said  that elimination                                                                    
of optional services would lead  to more demand in mandatory                                                                    
services.  She referred  to the  scenario  as the  "shifting                                                                    
bulge," and  asserted that most  optional services  were not                                                                    
really optional  when looking at  the big picture.  She said                                                                    
that examples of cuts due  to budget deficits could be found                                                                    
across the country.                                                                                                             
                                                                                                                                
Ms.  Poppe-Smart stated  that the  Centers for  Medicare and                                                                    
Medicaid  Services  (CMS)  would   not  approve  changes  to                                                                    
programs  that would  impact access  to necessary  services.                                                                    
She said  that in May  of 2011,  CMS put forward  a proposed                                                                    
rule that would  require the department to  study access for                                                                    
each service category for a  year to demonstrate that access                                                                    
would  not  be infringed  upon.  She  stressed the  CMS  was                                                                    
diligent about  vetting any State  Plan Amendments  (SPA) to                                                                    
make  changes  in  services,  including  changes  to  rates,                                                                    
services and eligibility.                                                                                                       
                                                                                                                                
Representative Wilson asked if  the federal ARRA funding and                                                                    
The Affordable Care Act (ACA) had caused the restrictions.                                                                      
                                                                                                                                
Ms.  Poppe-Smart  replied  that the  maintenance  of  effort                                                                    
requirement originated  with ARRA  funding and  was extended                                                                    
through the  ACA. She observed  that the state did  not take                                                                    
the  ARRA  funding.  She explained  that  by  continuing  to                                                                    
participate in  the Medicaid program  the state  must follow                                                                    
the rules.                                                                                                                      
                                                                                                                                
Representative Wilson  asked if the restriction  would still                                                                    
exist if Medicaid was state funded.                                                                                             
                                                                                                                                
Ms. Poppe-Smart responded  that if the state  had elected to                                                                    
decline the  $900 million in  federal Medicaid  funding, the                                                                    
state  could  make its  own  rules  but would  lose  federal                                                                    
matching funds.                                                                                                                 
                                                                                                                                
9:35:46 AM                                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  turned to Slide 13,  which listed mandatory                                                                    
and optional services:                                                                                                          
                                                                                                                                
   Mandatory                                                                                                                
                                                                                                                                
     · Inpatient hospital                                                                                                       
     · Outpatient hospital                                                                                                      
     · Physicians                                                                                                               
     · Nurse midwives                                                                                                           
     · Lab and X-ray                                                                                                            
     · Advanced Nurse Practitioners                                                                                             
     · Early Periodic Screening, Diagnosis, and Treatment                                                                       
     · Family planning services                                                                                                 
     · Pregnancy-related services                                                                                               
     · Nursing facility (NF) services                                                                                           
     · Home Health (NF qualified)                                                                                               
     · Medical/surgical dental services                                                                                         
                                                                                                                                
   Optional                                                                                                                 
                                                                                                                              
     · MH Rehab/Stabilization                                                                                                   
     · Diagnostic/Screening/Preventive                                                                                          
     · Therapies (OP,PT,SLP)                                                                                                    
     · Inpatient psychiatry<21 years                                                                                            
     · Drugs                                                                                                                    
     · Intermediate Care Facility/Mental Retardation                                                                            
     · Personal care                                                                                                            
     · Dental                                                                                                                   
     · Other home health                                                                                                        
     · Other licensed Practitioners                                                                                             
     · Transportation                                                                                                           
     · Targeted Case Management                                                                                                 
                                                                                                                                
Ms.  Poppe-Smart stressed  that optional  services were  not                                                                    
always optional.                                                                                                                
                                                                                                                                
Co-Chair  Stoltze   took  offense  with  the   term  "mental                                                                    
retardation." He  hoped a  different term  would be  used in                                                                    
the presentation into the future.                                                                                               
                                                                                                                                
Ms.  Poppe-Smart   responded  that  a  national   change  in                                                                    
terminology   to   "intellectual   disability"   was   under                                                                    
discussion.                                                                                                                     
                                                                                                                                
Ms. Poppe-Smart discussed rate control.  She relayed that 39                                                                    
states  in  the nation  were  looking  to control  rates  by                                                                    
freezing or reducing them. She  observed that reducing rates                                                                    
in one  area may cause  cost increases in another.  She said                                                                    
that  some  rate reductions  had  ended  in litigation.  She                                                                    
noted CMS approval of an  SPA was necessary and could impact                                                                    
access and quality of care.                                                                                                     
                                                                                                                                
Co-Chair Stoltze  emphasized the cost  of not being  able to                                                                    
charge Medicaid for  no-shows. He wondered if  the issue had                                                                    
been examined.                                                                                                                  
                                                                                                                                
9:41:16 AM                                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  noted that the  department looked  into no-                                                                    
shows for  dental providers. She  observed that  the no-show                                                                    
rate  was   not  higher  among   Medicaid  users   than  for                                                                    
commercial  providers. She  said  that  the problem  existed                                                                    
across the board. She asserted  that covering no-shows would                                                                    
put  pressure on  CMS and  would  pose the  question of  the                                                                    
state covering the cost of no-shows.                                                                                            
                                                                                                                                
Representative  Wilson  pointed  out that  self-payees  were                                                                    
responsible  for   their  no-show  costs   whereas  Medicaid                                                                    
recipients were not.                                                                                                            
                                                                                                                                
Ms.  Poppe-Smart  understood  that  there  was  a  financial                                                                    
impact  for no-show  self-payees.  She  reiterated that  the                                                                    
rate  of no-shows  was not  higher  for Medicaid  recipients                                                                    
than self-pay patients or people covered by private plans.                                                                      
                                                                                                                                
Co-Chair Stoltze echoed Representative Wilson's concern.                                                                        
                                                                                                                                
Commissioner Streur  acknowledged the issue. He  pointed out                                                                    
to  the committee  that the  issue  was not  just a  no-show                                                                    
issue, but  that it was  a challenge for providers.  He said                                                                    
that the state  was precluded under federal  law from paying                                                                    
for  no-shows, unless  general funds  were used.  He assured                                                                    
the committee that solutions were under discussion.                                                                             
                                                                                                                                
9:45:13 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze asked  if the  no-show  problem was  worse                                                                    
among Medicaid recipients than the rest of the population.                                                                      
                                                                                                                                
Commissioner  Streur explained  that  a  study performed  by                                                                    
dental  providers showed  that the  numbers were  not higher                                                                    
for  Medicaid patients  than  self-providers.  He said  that                                                                    
dental  providers  did  take issue  with  the  inability  to                                                                    
charge the state for no-show patients covered by Medicaid.                                                                      
                                                                                                                                
Representative Guttenberg  suggested that  there could  be a                                                                    
division   between  other   medical  providers   and  dental                                                                    
providers. He wondered if the  no-show issue could stem from                                                                    
the nature of  the service being provided.  He stressed that                                                                    
many people had an aversion to dental care.                                                                                     
                                                                                                                                
Ms. Poppe-Smart  replied that she  did not have any  data on                                                                    
no-shows regarding other medical providers.                                                                                     
                                                                                                                                
9:47:44 AM                                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  looked to Slide 14,  which provided payment                                                                    
comparisons  from  the  Milliman  Client  Report:  Physician                                                                    
Payment Rates  in Alaska and Comparison  States prepared for                                                                    
the  Alaska  Health  Care  Commission  in  2011.  The  slide                                                                    
reflected two different categories  of service: Office Visit                                                                    
and  Obstetrical  Care;  and  the  payment  methods;  Alaska                                                                    
Medicare,   Alaska   Medicaid,   Alaska   Commercial   Mean,                                                                    
Washington  Medicaid,  Washington   Commercial  Mean,  North                                                                    
Dakota Medicaid  and Idaho Medicaid. She  shared that Alaska                                                                    
paid a higher rate than  most states for Medicaid and higher                                                                    
than some commercial providers.                                                                                                 
                                                                                                                                
Representative  Wilson  queried  the consequence  of  paying                                                                    
higher Medicaid rates than other  states in the country. She                                                                    
expressed  concern  that  people  would move  to  Alaska  to                                                                    
benefit from the higher rate Medicaid coverage.                                                                                 
                                                                                                                                
Ms.  Poppe-Smart responded  that she  did not  have data  to                                                                    
validate  that   assumption.  She  acknowledged   that  some                                                                    
patients  came  to the  state  to  be  cared for  by  family                                                                    
residing in Alaska.                                                                                                             
                                                                                                                                
Representative Wilson believed that  there was a correlation                                                                    
between  people  moving  in-state and  the  higher  Medicaid                                                                    
benefits. She  suggested that  Alaska should  lower coverage                                                                    
in order to stay in the same realm as other states.                                                                             
                                                                                                                                
Co-Chair Stoltze  interjected that the correlation  would be                                                                    
hard to determine.                                                                                                              
                                                                                                                                
9:50:46 AM                                                                                                                    
                                                                                                                                
Ms.  Poppe-Smart  reminded  Representative Wilson  that  the                                                                    
rates  were  paid to  providers  and  not recipients,  which                                                                    
should result in more providers  moving to the state and not                                                                    
recipients.  She observed  that rural  areas were  addressed                                                                    
differently. She  said that the  department did  not receive                                                                    
complaints  that   people  found  it  difficult   to  access                                                                    
services in the  program. She stressed that  people in other                                                                    
states had complained of the  difficulty in finding a doctor                                                                    
that would take their Medicaid rate.                                                                                            
                                                                                                                                
Representative  Wilson pointed  out  the difference  between                                                                    
Medicaid and commercial rates.  She maintained that Medicaid                                                                    
did not  offset the additional  cost of paperwork.  She said                                                                    
that she thought that the system was "pretty poor."                                                                             
                                                                                                                                
Ms.  Poppe-Smart   rebutted  that  Health   Care  Commission                                                                    
studies  had  reflected a  higher  cost  of health  care  in                                                                    
Alaska in general, but had not yet identified the cause.                                                                        
                                                                                                                                
9:52:51 AM                                                                                                                    
                                                                                                                                
Ms.  Poppe-Smart continued  to Slide  15, which  highlighted                                                                    
utilization controls:                                                                                                           
                                                                                                                                
   · States may impose utilization controls to ensure                                                                           
     appropriateness of treatment being funded                                                                                  
   · Wide range of controls and screens                                                                                         
                                                                                                                                
        o Prior Authorization                                                                                                   
        o Post payment reviews                                                                                                  
        o Hard or soft edits                                                                                                    
       o Bundling, unbundling, and order of billing                                                                             
        o New Edits and audits for FFS (fee-for-service)                                                                        
                                                                                                                                
9:54:54 AM                                                                                                                    
                                                                                                                                
Ms.  Poppe-Smart   looked  to  Slide  16,   which  discussed                                                                    
compliance and anti-fraud:                                                                                                      
                                                                                                                                
   · In some states may be an untapped area for savings                                                                         
   · Fraud in Medicaid is a reality                                                                                             
   · Numerous methods and vendors                                                                                               
   · Fraud undermines the entire program                                                                                        
   · Politically popular reduction                                                                                              
                                                                                                                                
Ms. Poppe-Smith  explained that  the federal  government was                                                                    
concerned $22.5 billion in improper  payments that were made                                                                    
to Medicaid in FY10. She  noted that Alaska had a relatively                                                                    
small provider population.                                                                                                      
                                                                                                                                
Representative  Guttenberg asked  if there  was a  breakdown                                                                    
available   to  separate   intentional   fraud  and   simple                                                                    
miscoding mistakes.                                                                                                             
                                                                                                                                
Ms.  Poppe-Smart replied  that  fraud cases  in Alaska  were                                                                    
handled by  the Medicaid  Control Unit under  the Department                                                                    
of Law.  She said that  few cases  in the state  resulted in                                                                    
prosecution, as  compare to the national  numbers. She added                                                                    
that fraud  had proven  a problem in  larger urban  areas of                                                                    
the   country.  She   shared  that   there  was   an  active                                                                    
surveillance  and utilization  system that  tracked patterns                                                                    
of  practice and  payments in  the attempt  to identify  any                                                                    
problems.                                                                                                                       
                                                                                                                                
9:58:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze questioned  if  there  was a  quantifiable                                                                    
fraud percentage.                                                                                                               
                                                                                                                                
Ms. Poppe-Smart responded that there  was not a quantifiable                                                                    
percentage available.  She said that the  Division of Public                                                                    
Assistance  had   a  unit   dedicated  to   examining  fraud                                                                    
concerns.  She explained  that the  department examined  the                                                                    
statutory required  audits. She stressed the  department had                                                                    
programs already  in place to  look for, and  prevent fraud,                                                                    
and  did  not believe  that  it  was  a rampant  problem  in                                                                    
Alaska.                                                                                                                         
                                                                                                                                
10:00:38 AM                                                                                                                   
                                                                                                                                
Representative Wes  Keller probed  the efforts taken  by the                                                                    
department to control fraud.                                                                                                    
                                                                                                                                
Ms.  Poppe-Smart  stated that  the  process  began with  the                                                                    
enrollment  of a  provider; inspector  general records  were                                                                    
examined to determine any history  of fraudulent activity or                                                                    
exclusion in  other state  programs.   She furthered  that a                                                                    
surveillance  and  review  team  looked  to  claims  payment                                                                    
systems  for any  suspicious patterns.  She  added that  the                                                                    
department  sometimes  received  reports  from  individuals;                                                                    
explanation  of benefit  reports  helped individuals  review                                                                    
their  claims.  She  furthered that  the  department  had  a                                                                    
program integrity  team that worked with  audits. She shared                                                                    
that the error  rate in Alaska for 2008-2009 was  one of the                                                                    
lowest in  the nation. She stated  that statutorily mandated                                                                    
audits  occurred  on  a regular  basis  and  any  fraudulent                                                                    
activities  were referred  to  the  federal government.  She                                                                    
noted the existing compliance efforts in Alaska:                                                                                
                                                                                                                                
   · Surveillance Utilization Review (SUR)                                                                                      
   · Audits required by AS 47.05.200                                                                                            
   · Credit Balance Audits                                                                                                      
   · Focused reviews                                                                                                            
   · CMS Medicaid Integrity Program                                                                                             
   · Payment Error Rate Measurement                                                                                             
   · "Cluster Audits"                                                                                                           
   · Medicaid Recovery Audit Contractors                                                                                        
   · Medicaid Fraud Control Unit (MFCU)                                                                                         
   · Provider, referrer, prescriber, renderer enrollment                                                                        
   · Medicaid Recovery Audit Contractor                                                                                         
                                                                                                                                
Co-Chair Stoltze asked if it  could be determined were fraud                                                                    
existed.                                                                                                                        
                                                                                                                                
Ms. Poppe-Smart  replied that  there was  a small  number of                                                                    
fraud  on  both the  provider  and  the recipient  end.  She                                                                    
stated that she did not have the figures at hand.                                                                               
                                                                                                                                
10:05:11 AM                                                                                                                   
                                                                                                                                
Representative Wilson  asked how  much the state  was paying                                                                    
to  handle fraud  cases versus  how much  was recouped  from                                                                    
prosecution.                                                                                                                    
Ms. Poppe-Smart responded that the  department would work to                                                                    
would  provide  data.  She  believed that  due  to  low  the                                                                    
incidences   of   fraud   the  department   paid   more   in                                                                    
administrative cost than was recovered.                                                                                         
                                                                                                                                
Representative  Keller shared  that federal  measurements of                                                                    
error rates  involved insuring that recipients  received the                                                                    
maximum benefits allowed by law.                                                                                                
                                                                                                                                
10:07:50 AM                                                                                                                   
                                                                                                                                
Ms.  Poppe-Smart continued  to Slide  17 which  showed where                                                                    
recoveries had been, she noted  that the numbers were not an                                                                    
identification of fraud but audits  where an overpayment had                                                                    
been made, usually  in an instance where there  had not been                                                                    
documentation in  provider's records to support  the payment                                                                    
that was made through the claims system.                                                                                        
                                                                                                                                
Ms.   Poppe-Smart  turned   to   Slide   19,  which   listed                                                                    
innovations in service delivery and payment:                                                                                    
                                                                                                                                
   · Medical Home                                                                                                               
   · Tribal Health - exemplar of alternative provider types                                                                     
   · Bundled services                                                                                                           
   · Integrated      Bills      previously     Heard      or                                                                    
     Scheduled./Primary care services                                                                                           
   · More                                                                                                                       
                                                                                                                                
Ms. Poppe-Smart said that medical  homes worked because they                                                                    
provided case  managers that helped patients  manage chronic                                                                    
medical  conditions   and  stay   on  top  of   care  needs;                                                                    
additionally,  it had  lowered  the rate  of emergency  room                                                                    
visits  for those  patients.  She shared  that  some of  the                                                                    
medical home  programs that had  started across  the country                                                                    
had witnessed a 10 percent savings in Medicaid costs.                                                                           
                                                                                                                                
Co-Chair Stoltze  spoke to the Tribal  Health Consortium. He                                                                    
had  been  told  that  the  top  three  priorities  for  the                                                                    
consortium  were entities  in The  Copper River  Valley, the                                                                    
Mat-Su, and one to be built in Kenai.                                                                                           
                                                                                                                                
10:11:23 AM                                                                                                                   
                                                                                                                                
Commissioner  Streur  shared  that  the  Mat-Su  effort  was                                                                    
largely  driven by  the  South-central  Foundation. He  said                                                                    
both  Kenai  and the  Copper  River  Native Association  had                                                                    
approached  the  state  for  funding  for  their  respective                                                                    
facilities. He added  that if the facilities  are built they                                                                    
will  have 20  years  of  operation costs  paid  for by  the                                                                    
federal government.                                                                                                             
                                                                                                                                
Co-Chair Stoltze wondered whether  savings would be realized                                                                    
because of  the higher reimbursement rate  for tribal health                                                                    
entities.                                                                                                                       
                                                                                                                                
Commissioner Streur  replied that  every patient,  and every                                                                    
service  that  was diverted  for  an  Alaska Native  into  a                                                                    
native  facility,  received  double reimbursement  from  the                                                                    
federal government.                                                                                                             
                                                                                                                                
Co-Chair  Stoltze  wondered  whether the  numbers  could  be                                                                    
quantified.                                                                                                                     
                                                                                                                                
Commissioner Streur  explained that currently 40  percent of                                                                    
native  services were  reimbursed  at 100  percent. He  said                                                                    
that the goal was  to substantially increase those services.                                                                    
He  believed the  state could  double the  amount of  native                                                                    
services.                                                                                                                       
                                                                                                                                
Ms.  Poppe-Smart   interjected  that  the   native  services                                                                    
reimbursement amount was $208 million.                                                                                          
                                                                                                                                
Ms.  Poppe-Smart addressed  the second  bullet on  Slide 19.                                                                    
She stated that 1 in 5  Alaskans was covered by Medicaid, 40                                                                    
percent of  which were Tribal  Health beneficiaries,  and 40                                                                    
percent  of  that  received their  care  within  the  Tribal                                                                    
Health system. She  believed this left a  lot of opportunity                                                                    
to enhance the Tribal  Health participation. She stated that                                                                    
the  she  had  attended  the  Alaska  Native  Tribal  Health                                                                    
Consortium where  she learned  that the  federal government,                                                                    
through  Indian Health  Services  (IHS)  funding covered  50                                                                    
percent  of health  costs. She  said that  Medicaid was  the                                                                    
partner that  could help  to make up  the other  50 percent.                                                                    
She  stressed that  there was  significant dialogue  between                                                                    
the  department and  IHS. She  explained that  Tribal Health                                                                    
beneficiaries,  like  Medicaid beneficiaries,  continued  to                                                                    
maintain a choice on where  they received their health care.                                                                    
She said  that the  department supported ongoing  efforts to                                                                    
provide choices in rural areas.                                                                                                 
                                                                                                                                
10:16:14 AM                                                                                                                   
                                                                                                                                
Ms. Poppe-Smart  said innovations  in the area  of long-term                                                                    
managed  care had  been seem  in  other states,  as well  as                                                                    
changes  in  dual  eligibility. She  said  that  because  of                                                                    
Alaska's  small  Medicaid  population the  department  could                                                                    
observe  changes   made  in  other  states   and  then  only                                                                    
incorporate the best ideas. She  stated that many stats were                                                                    
moving toward  the deinstitutionalization of  long-term care                                                                    
residents; community  based care was already  a trademark of                                                                    
the Alaska Health Care Delivery System.                                                                                         
                                                                                                                                
Ms. Poppe-Smart  noted Slide 20 which  addressed technology:                                                                    
operational  efficiencies  and care  delivery  implications.                                                                    
She noted that more  efficiencies lead to higher enrollment.                                                                    
She  said that  the  department was  working  on the  claims                                                                    
payment   system   with    the   expectation   of   enhanced                                                                    
efficiencies by  spring 2012, as  well as  the incorporation                                                                    
of  additional metrics  to allow  for better  management and                                                                    
observation of overall  quality. She said that  there were a                                                                    
number  of technology  initiatives across  the country  that                                                                    
looked into  increased compliance  efforts and  searches for                                                                    
fraud using software. She relayed  that the department hoped                                                                    
to be able to manage  health care through technology systems                                                                    
that  allowed for  access  to  real-time health  information                                                                    
across systems.                                                                                                                 
                                                                                                                                
Ms.  Poppe-Smart   pointed  to  Slide  21   related  to  the                                                                    
maximization    match,     collections    and    refinancing                                                                    
opportunities. She said  that the plan was  to replace state                                                                    
funding  with federal  funding where  allowable and  to seek                                                                    
out Tribal Partner opportunities.                                                                                               
                                                                                                                                
Representative  Keller  requested  that  the  department  be                                                                    
watchful  for other  health  care  facilities. He  expressed                                                                    
concern  that the  supply of  care  could negatively  impact                                                                    
other health care providers.                                                                                                    
                                                                                                                                
Ms. Poppe-Smart  agreed that the conversation  was important                                                                    
for all parties involved.                                                                                                       
                                                                                                                                
10:22:38 AM                                                                                                                   
                                                                                                                                
Ms.   Poppe-Smart   moved   to  "Accounting   and   Recovery                                                                    
Collections"  on Slide  22. She  stated that  the department                                                                    
collected  third party  liability  if  a Medicaid  recipient                                                                    
also had access to insurance.                                                                                                   
                                                                                                                                
Ms.  Poppe-Smart continued  to Slide  23, which  highlighted                                                                    
the Medicaid  Task Force. She  relayed that the  request for                                                                    
proposal  for the  Medical Home  had been  responded to  and                                                                    
that the  department was  in the  process of  evaluating the                                                                    
responses.  She   said  that  four  pilot   sites  had  been                                                                    
estimated. She  shared that the  initial estimates  had been                                                                    
pretty  slim with  a savings  of approximately  $165,000 per                                                                    
1,000 lives.  She estimated that  the numbers would  rise as                                                                    
the program matured.                                                                                                            
                                                                                                                                
Ms.  Poppe-Smart discussed  the Care  Management Program  on                                                                    
Slide 24:                                                                                                                       
                                                                                                                                
   · Care Management Program - expanded element of medical                                                                      
     home with focus on recipients at highest risk who                                                                          
     offer the greatest potential for improvements in both                                                                      
     health outcomes and enhanced funding/cost avoidance.                                                                       
                                                                                                                                
        o Estimated cost of avoidance: Enhanced FMAP for 8                                                                      
          quarters for each participant. Conservative                                                                           
          savings   estimate   of   $1,040,000   for   7,500                                                                    
          participants.                                                                                                         
                                                                                                                                
Ms. Poppe-Smart addressed Slide  25 which discussed Pharmacy                                                                    
Initiatives:                                                                                                                    
                                                                                                                                
   · Increased substitution to generic medications                                                                              
        o Phase 1: Q2 $1,250,000 cost avoidance annualized                                                                      
          at $5,000,000                                                                                                         
                                                                                                                                
   · Increased Generic Medication through edits/PA                                                                              
        o Phase 1: 6 months $1,405,938 cost avoidance                                                                           
          annualized at $2,810,000                                                                                              
                                                                                                                                
   · State Maximum Allowable Cost                                                                                               
        o Fully   implemented:   $500,000   cost   avoidance                                                                    
          annualized at $5.5-$6 million                                                                                         
                                                                                                                                
   · Enhanced preferred Drug List - not implemented                                                                             
       o Estimate cost avoidance analysis underway.                                                                             
                                                                                                                                
   · Psychiatric Medication Policy - not implemented                                                                            
        o Estimate of cost avoidance $182,000 - right care.                                                                     
                                                                                                                                
   · Pharmacy initiative cost avoidance through Q2:                                                                             
    $4,655,938 annualized to $13,310,000 - $13,810,000                                                                          
Ms. Poppe-Smart stated  work was being done  on the enhanced                                                                    
preferred drug list.  She stated that the list  had not been                                                                    
implemented but that discussions  alone had resulted in cost                                                                    
avoidance.   She   shared   that   appropriate   psychiatric                                                                    
medication administration for children  in state custody had                                                                    
been under  discussion in light of  concerns about metabolic                                                                    
dysfunction   that   occurred  when   multiple   psychiatric                                                                    
medications were administered.                                                                                                  
                                                                                                                                
10:27:30 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  discussed the  estimate of  cost avoidance                                                                    
on slide 26. He thought that  it could be dangerous to limit                                                                    
access to needed psychotropic drugs.                                                                                            
                                                                                                                                
10:28:49 AM                                                                                                                   
                                                                                                                                
Ms. Poppe-Smart  responded that  the initiatives  were about                                                                    
providing the right care to  patients and not about limiting                                                                    
care to anyone. She stressed that  the plan was to provide a                                                                    
consultant to  help with the  administration of  sometimes 5                                                                    
to 7 different psychotropic drugs at a time.                                                                                    
                                                                                                                                
Commissioner  Streur  explained  that  the  issue  had  been                                                                    
delayed due to the emotion surrounding the issue.                                                                               
                                                                                                                                
10:31:01 AM                                                                                                                   
                                                                                                                                
Ms. Poppe-Smart concluded with Slide 27:                                                                                        
                                                                                                                                
   · Community First Choice - home and community based                                                                          
     personal care services. Consultant engaged, design                                                                         
     discussions and viability analysis underway.                                                                               
        o Estimate of cost avoidance: Enhanced FMAP of 6%.                                                                      
                                                                                                                                
Ms.  Poppe-Smart   shared  that  the  Affordable   Care  Act                                                                    
estimations could not be calculated  until the United States                                                                    
Supreme Court ruled on the constitutionality of the act.                                                                        
                                                                                                                                
Commissioner  Streur  emphasized   that  the  Supreme  Court                                                                    
ruling  would  provide some  answers  as  to how  ACA  would                                                                    
affect Medicare/Medicaid in the state.                                                                                          
                                                                                                                                
Co-Chair Stoltze asked if  the department could hypothesize,                                                                    
independent of  a Supreme Court  rule, how ACA  would affect                                                                    
the Medicaid budget.                                                                                                            
                                                                                                                                
Commissioner Streur replied that he could not separate the                                                                      
two. He stressed that absent the ruling the department did                                                                      
not know the impact of the expanded Medicaid coverage.                                                                          
                                                                                                                                
10:33:47 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze thought that the department would have had                                                                     
concerns about ACA, given that Governor Parnell was                                                                             
litigating the legislation.                                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:35:17 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:35 AM.                                                                                          

Document Name Date/Time Subjects
Medicaid 101 HFIN 2-13-12.pdf HFIN 2/13/2012 9:00:00 AM