Legislature(2011 - 2012)HOUSE FINANCE 519

02/08/2011 01:30 PM House FINANCE

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01:37:20 PM Start
01:38:33 PM HB21
02:08:30 PM Overview: Medicaid 101 and Fmap Discussion
03:30:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 21(FIN) Out of Committee
+ Medicaid 101 & FMAP discussions by: TELECONFERENCED
- William J. Streur, Commissioner, Dept. of
Health & Social Services
- Kimberli Poppe-Smart, Director, Division of
Health Care Services, Dept. of Health & Social
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 8, 2011                                                                                           
                         1:37 p.m.                                                                                              
1:37:20 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 1:37 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative David Guttenberg                                                                                                 
ALSO PRESENT                                                                                                                  
Kate   Burkhart,   Executive    Director,   Alaska   Suicide                                                                    
Prevention   Council;  William   J.  Streur,   Commissioner,                                                                    
Department  of Health  and  Social Services;  Representative                                                                    
Wes  Keller;  Kimberli  Poppe-Smart, Director,  Division  of                                                                    
Healthcare  Services,   Department  of  Health   and  Social                                                                    
HB 21     SUICIDE PREVENTION COUNCIL MEMBERS                                                                                    
          CSHB 21(FIN) was REPORTED out of committee with a                                                                     
          "do pass" recommendation and with previously                                                                          
          published fiscal note: FN1 (DHSS).                                                                                    
OVERVIEW: MEDICAID 101 AND FMAP DISCUSSION                                                                                      
HOUSE BILL NO. 21                                                                                                             
     "An Act relating to the membership of the Statewide                                                                        
     Suicide Prevention Council."                                                                                               
1:38:33 PM                                                                                                                    
VICE-CHAIR  FAIRCLOUGH,  SPONSOR, introduced  the  workdraft                                                                    
CSHB   21(FIN).  She   and   Representative  Berta   Gardner                                                                    
currently served  on the  Alaska Suicide  Prevention Council                                                                    
and with the  support of the council they had  been asked to                                                                    
move forward with two changes  to the existing state statute                                                                    
regarding suicide prevention in  Alaska. She pointed to page                                                                    
2,  line  15  of  the  work draft  and  explained  that  the                                                                    
previous version  had read "when  appointed is at  least 16,                                                                    
but not more than 20 years  of age." The change modified the                                                                    
language to read "...not more than 24 years of age."                                                                            
Vice-chair Fairclough  discussed that  the change  moved the                                                                    
age  limit  from  20  to  24,  which  would  permit  college                                                                    
students to  participate on the  council. The  bill expanded                                                                    
the eligibility  age to begin  at age  16 in order  to allow                                                                    
high school students to  participate. The council discovered                                                                    
that participation usually began in  the 11th or 12th grades                                                                    
versus the 9th and 10th  grades. The council decided that it                                                                    
would  be  more  appropriate to  include  younger  teenagers                                                                    
given the sensitivity  of the subject and  the importance of                                                                    
the  ability to  talk about  death. She  explained that  the                                                                    
other modification  to the statute  increased the  number of                                                                    
members  who  served on  the  council  from  16 to  17.  The                                                                    
request was made  due to an increased number  of suicides in                                                                    
the military  population and the council's  desire to ensure                                                                    
that there  was a military  influence as they  moved forward                                                                    
with prevention strategies for the state.                                                                                       
Representative Wilson  asked why the new  position could not                                                                    
have been included within the original 16 council members.                                                                      
Vice-Chair  Fairclough directed  attention to  the Statewide                                                                    
Suicide  Prevention  Council  FY  10  Annual  Report  titled                                                                    
"Mending  the Net:  Suicide Prevention  in Alaska"  (copy on                                                                    
file).  She  discussed  that page  5  listed  the  different                                                                    
council  participants. She  clarified that  she, along  with                                                                    
Representative Gardner  and the  council, believed  that the                                                                    
military personnel should be an  addition to the participant                                                                    
list  and not  a  replacement. She  communicated that  their                                                                    
contribution  would  be  valuable. She  listed  the  current                                                                    
participating members:                                                                                                          
     ·  one person representing the Department of Health and                                                                    
        Social Services;                                                                                                        
     ·  one person representing the  Department of Education                                                                    
        and Early Development;                                                                                                  
     ·  one person from the Advisory Board on Alcoholism and                                                                    
        Drug Abuse;                                                                                                             
     · one person from the Alaska Mental Health Board;                                                                          
     ·  one person recommended  by the Alaska  Federation of                                                                    
     · one person who works for a high school;                                                                                  
     · one person who is active in a youth organization;                                                                        
     ·  one person who has experienced the  death by suicide                                                                    
        of a member of their family;                                                                                            
     ·  one person who resides  in a rural  Alaska community                                                                    
        not on the road system;                                                                                                 
     · one person who is a member of the clergy;                                                                                
     ·  one person who is enrolled in grades 9 through 12 of                                                                    
        a secondary school in Alaska; and,                                                                                      
     · one public member.                                                                                                       
Vice-chair  Fairclough remarked  that  in  deference to  the                                                                    
committee,  it  could choose  to  replace  a person  on  the                                                                    
council. She  illuminated that the council  typically worked                                                                    
as a consensus group as  opposed to a voting group, however,                                                                    
the addition of a  seventeenth position would help eliminate                                                                    
an occurrence of a tie in the event of a vote.                                                                                  
Co-Chair Stoltze  asked a question  regarding the  intent of                                                                    
language  added to  page  2, subsection  J,  that read  "one                                                                    
person who, when appointed, is at  least 16 years of age but                                                                    
not more  than 24 years of  age." He wanted to  make certain                                                                    
that the language  did not restrict the council  to only one                                                                    
participant  in   the  age  category.  He   also  asked  for                                                                    
verification that  the bill did  not restrict the  number of                                                                    
veterans allowed  to participate on the  council. He queried                                                                    
whether the intent was "at least one person."                                                                                   
Vice-Chair  Fairclough responded  that  the  intent was  "at                                                                    
least  one   person."  She  explained   that  each   of  the                                                                    
categories  represented a  cross-section  of  the state  and                                                                    
that  many members  on the  board represented  a variety  of                                                                    
areas that  were important for the  education and engagement                                                                    
of the population regarding suicide prevention.                                                                                 
Co-Chair Stoltze  wanted the commentary of  the committee to                                                                    
reflect that the language did  not restrict the council from                                                                    
having  more  than one  member  who  fell within  a  certain                                                                    
Representative Gara asked whether there  was a way to reduce                                                                    
the  number of  members  needed  for a  quorum  in order  to                                                                    
address low meeting attendance.                                                                                                 
Vice-Chair Fairclough  responded that legislation  passed in                                                                    
the  previous  session  had  solved  the  issue  related  to                                                                    
reaching a  quorum. She clarified  that the council  had not                                                                    
experienced a  problem reaching a  quorum subsequent  to the                                                                    
Representative Gara wondered about  the obligation to report                                                                    
a person who confided  that they were contemplating suicide.                                                                    
He wondered whether a person  was deterred from seeking help                                                                    
when  they  believed  a  confidant  would  report  them.  He                                                                    
contemplated whether there was an  answer to the problem and                                                                    
remarked that people  might not seek help because  of a fear                                                                    
of institutionalization.                                                                                                        
1:46:17 PM                                                                                                                    
Vice-Chair  Fairclough   responded  that  the   council  had                                                                    
discussed two different philosophies  at a previous meeting.                                                                    
Some people believed  that many times a person  on the verge                                                                    
of  committing  suicide  was  irrational   and  it  was  not                                                                    
possible to change their mind.  Other members of the council                                                                    
preferred  the  alternative  view that  engaging  youths  in                                                                    
discussion  about hope  and the  future would  help them  to                                                                    
think first,  reach out for  help, and realize  that suicide                                                                    
was not the only answer.                                                                                                        
Co-Chair Thomas MOVED Work  Draft CSHB 21(FIN) (27-LS0154\D,                                                                    
Bullard,   2/2/11)  as   a  working   document  before   the                                                                    
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
Vice-Chair  Fairclough discussed  her  opening remarks.  She                                                                    
emphasized that  suicides in Alaska were  twice the national                                                                    
rate. She explained that 15 to  24 year olds had the highest                                                                    
rate  of suicide.  Alaska Natives  had the  highest rate  of                                                                    
suicide out  of all  other ethnic  groups within  the United                                                                    
States  and Native  men were  particularly susceptible.  She                                                                    
reported that  page 11 of  the Statewide  Suicide Prevention                                                                    
Council FY 10 Annual Report cited  suicide as one of the top                                                                    
ten  causes  of death  in  Alaska.  Page  20 of  the  report                                                                    
discussed the role of the public  health model as a means to                                                                    
address the  crisis facing Alaska. The  report discussed the                                                                    
importance of a community  readiness and willingness to take                                                                    
personal responsibility  for events  that occurred  in their                                                                    
communities and for  the development of a  path forward. She                                                                    
thanked staff and the new  Executive Director Kate Burkhart.                                                                    
She explained  that the council had  been without assistance                                                                    
from the  administration for a  two-year period and  that it                                                                    
was back on  the right path. She directed  attention to page                                                                    
6 of  the report  and stressed  that 140  Alaskans committed                                                                    
suicide in 2009; the average age was 20 years old.                                                                              
Vice-chair Fairclough  pointed to page 7  and specified that                                                                    
between 2000  and 2009, there were  1,369 confirmed suicides                                                                    
in  Alaska. The  deaths occurred  in 176  communities, where                                                                    
school  districts, local  community  councils, and  villages                                                                    
discussed the tragedy that occurred  and the difficulty that                                                                    
each  family faced  in  the  loss of  a  loved  one. Page  8                                                                    
specified  that  "Alaska  Native individuals  are  twice  as                                                                    
likely   to  commit   suicide   as   individuals  of   other                                                                    
ethnicities." She discussed  that 15 to 24  year olds tended                                                                    
to  have  the  highest  rate   of  suicide  in  Alaska.  She                                                                    
referenced a bar  graph on page 9 that  showed suicide rates                                                                    
declined as  age increased; however, the  suicide rate began                                                                    
to increase  again in the  65 to  74 age group.  She relayed                                                                    
that many reasons could contribute  to the increase later in                                                                    
life, such  as cancer or  loss of  hope. She shared  that 44                                                                    
percent of people who committed  suicide tested positive for                                                                    
alcohol, and  48 percent  had one or  more drugs  present in                                                                    
their  body (page  10).  She emphasized  the  extent of  the                                                                    
impact that  the loss of  a loved  one had on  families. She                                                                    
explained that the Suicide Prevention  Council of Alaska was                                                                    
working  quickly  and  hard  to   bring  the  legislature  a                                                                    
strategic plan  with the hope  of preventing suicide  in the                                                                    
1:51:49 PM                                                                                                                    
Representative Neuman asked whether  there was a correlation                                                                    
between  unemployment and  suicide. He  believed that  there                                                                    
were other factors  related to suicide in  addition to drugs                                                                    
and  alcohol. He  wondered  whether there  was  a list  that                                                                    
identified   other  reasons   that  influenced   a  person's                                                                    
decision to commit suicide.                                                                                                     
Vice-Chair Fairclough  responded that page 12  in the report                                                                    
addressed  the  impact  that   unemployment  could  have  on                                                                    
suicide  rates. When  there  was  a lack  of  hope within  a                                                                    
community  and a  person  had an  inability  to provide  for                                                                    
themselves or their family, high suicide rates existed.                                                                         
Representative  Neuman asked  about the  range of  different                                                                    
reasons  that might  impact a  person's  decision to  commit                                                                    
Vice-Chair  Fairclough answered  that  specific  to the  age                                                                    
group  of  15   to  24,  hormones  were   present  and  life                                                                    
experiences were  more limited than  those of an  adult. She                                                                    
explained that  some youths did  not have the  resiliency or                                                                    
coping  skills to  deal with  the  loss of  a close  friend,                                                                    
relative, or a romantic  relationship. She detailed that the                                                                    
youth could believe  that nothing could ever  make them feel                                                                    
better. The presence of people  within a community that made                                                                    
others  feel  a  sense  of  value  and  contribution  was  a                                                                    
significant factor  in fighting suicide. She  discussed that                                                                    
rural  Alaska  experienced  a higher  number  of  per  ratio                                                                    
suicides,  but  that Anchorage  had  the  highest number  of                                                                    
deaths.  Suicide was  a social  issue and  not just  a rural                                                                    
versus  urban issue.  The prevalence  of  drugs and  alcohol                                                                    
could  be  a person's  way  of  attempting to  numb  painful                                                                    
feelings and  may not  mean a person  had a  substance abuse                                                                    
problem. She  listed that there  were many reasons  a person                                                                    
could feel  hopeless, including child abuse  and violence in                                                                    
the home. The council believed  that ultimately it was about                                                                    
hope and  the ability for  a young person to  feel connected                                                                    
to a community that cared about them.                                                                                           
Representative Neuman  asked about  indicators such  as self                                                                    
mutilation  that   might  be  prevalent  in   a  person  who                                                                    
contemplated suicide.                                                                                                           
KATE   BURKHART,   EXECUTIVE    DIRECTOR,   ALASKA   SUICIDE                                                                    
PREVENTION COUNCIL,  discussed that the council  worked hard                                                                    
to educate  people about the  many warning  signs. Sometimes                                                                    
indicators involved self harm  and sometimes extreme changes                                                                    
in mood were  present. She explained that  an extreme change                                                                    
of mood did not necessarily  mean that a person would appear                                                                    
severely  depressed  or  down.  She pointed  to  the  public                                                                    
comment from a father in  Bethel who had been very surprised                                                                    
that his son  had been much happier  right before committing                                                                    
suicide. Other indicators could  be: a sudden disinterest in                                                                    
activities that a  person had previous interest  in, such as                                                                    
sports,  or church;  increased  attention  to lethal  means,                                                                    
such as  knowing the  location of  a fire  arm or  about the                                                                    
contents  of  a  medicine  cabinet;  and,  overt  or  covert                                                                    
disclosures such as, "I just  don't want to be here anymore"                                                                    
or "life  doesn't have meaning." Education,  prevention, and                                                                    
intervention  models,   including  Gatekeeper   and  Applied                                                                    
Suicide Intervention Skills Training,  helped people to pick                                                                    
up on less  extreme warning signs and to  ensure that people                                                                    
were  connected to  services long  before  they developed  a                                                                    
suicide plan.                                                                                                                   
1:57:25 PM                                                                                                                    
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, Work Draft CSHB 21(FIN) was ADOPTED.                                                                         
Vice-Chair Fairclough  discussed Fiscal  Note 1;  the $4,000                                                                    
fiscal  note was  for travel  expenses  associated with  the                                                                    
1:58:37 PM                                                                                                                    
AT EASE                                                                                                                         
1:58:50 PM                                                                                                                    
Co-Chair Stoltze CLOSED public testimony.                                                                                       
Vice-Chair Fairclough  MOVED to  report CSHB 21(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSHB 21(FIN) was REPORTED out  of Committee with a "do pass"                                                                    
recommendation  and with  previously published  fiscal note:                                                                    
FN1 (DHSS).                                                                                                                     
2:00:00 PM                                                                                                                    
AT EASE                                                                                                                         
2:01:36 PM                                                                                                                    
2:02:33 PM                                                                                                                    
^OVERVIEW: MEDICAID 101 AND FMAP DISCUSSION                                                                                   
WILLIAM J.  STREUR, COMMISSIONER,  DEPARTMENT OF  HEALTH AND                                                                    
SOCIAL SERVICES, presented a  PowerPoint titled "Overview of                                                                    
National and  State Medicaid" (copy on  file). He introduced                                                                    
Kimberli  Poppe-Smart,  Director,  Division of  Health  Care                                                                    
Services. He explained that an  addition to the presentation                                                                    
had  been inserted  after slide  28.  He highlighted  topics                                                                    
including, Alaska's  status compared to the  national level,                                                                    
issues that  faced Alaska,  actions that  had been  taken by                                                                    
the  Medicaid  Task  Force, and  others.  He  explained  the                                                                    
importance of  "bending the curve"  and moving  forward with                                                                    
Medicaid reform for Alaska.                                                                                                     
Commissioner  Streur  discussed   slide  2:  "U.S.  Medicaid                                                                    
Enrollment  Increases in  Economic Downturns:  FY 1992  - FY                                                                    
2010." He explained that Medicaid  moved in four-year up and                                                                    
down cycles.  The reason for  the cycles was not  known, but                                                                    
was most  likely linked to  economic upturns  and downturns.                                                                    
He moved on  to discuss slide 3:  "Medicaid Spending Growth,                                                                    
U.S. and  State of Alaska,  1996-2010." He relayed  that the                                                                    
national annual growth in Medicaid  in 2010 was 6.6 percent;                                                                    
whereas, Medicaid spending in  Alaska grew from -2.8 percent                                                                    
in  2008  to  14.2  percent   in  2010.  He  cited  concerns                                                                    
associated  with  the  spending   growth  that  included  an                                                                    
increase in Medicaid enrollment,  cost for services, and the                                                                    
overall budget.                                                                                                                 
Commissioner  Streur  addressed  slide  3:  "Total  Medicaid                                                                    
Spending Growth, U.S.  FY 2000 - FY 2010."  He reported that                                                                    
Alaska had been comparable to other  states from FY 00 to FY                                                                    
08,  and in  FY  09  and FY  10  Alaska  benefited from  the                                                                    
Federal Medicaid  Assistance Percentage  (FMAP) enhancement.                                                                    
With FMAP contributions the state  went from 51.9 percent to                                                                    
approximately 62  percent. As a  result, the state  was able                                                                    
to reduce  its general fund  contribution by $74  million in                                                                    
2009, $102  million in 2010, and  approximately $114 million                                                                    
in  2011.  He pointed  to  slide  5 titled  "Total  Medicaid                                                                    
Spending  Growth, State  of Alaska  FY 2000  - FY  2010." He                                                                    
discussed  the overall  spending  growth  trend for  Alaska;                                                                    
increased state spending on  Medicaid occurred (primarily in                                                                    
enrollment), despite the $102 million FMAP funding.                                                                             
2:08:30 PM                                                                                                                    
Commissioner Streur turned to slide  6: "End of ARRA FMAP in                                                                    
July  2011." He  relayed  that in  July  2011, the  American                                                                    
Recovery and Reinvestment Act (ARRA)  and FMAP funding would                                                                    
end.  He stated  that on  the average,  states would  see an                                                                    
increase in the non-federal share  by over 30 percent due to                                                                    
the   loss  of   FMAP  inflation   and  enrollment   growth.                                                                    
California had a  50 percent FMAP and the loss  of the funds                                                                    
would  result in  a  30 percent  growth  of its  non-federal                                                                    
share,  with  a  projection  of  approximately  37  percent.                                                                    
Arkansas  had  a 71.37  percent  FMAP  and  could see  a  44                                                                    
percent growth due  to the economic downturn.  Florida had a                                                                    
55 percent  FMAP and could  see a  36 percent growth  in its                                                                    
non-federal share. Alaska  would see a 38  percent growth in                                                                    
its  non-federal  share  due  to the  loss  of  FMAP  funds,                                                                    
inflation, and  enrollment growth; this was  the genesis for                                                                    
the $123 million funding request for Medicaid.                                                                                  
Commissioner  Streur had  met with  the Medicaid  Task Force                                                                    
and they had  compiled a list of options in  response to the                                                                    
upcoming  loss of  federal Medicaid  funding. The  challenge                                                                    
was how to determine what  to focus on. He discussed various                                                                    
possibilities on slide 7 titled  "Options." The first option                                                                    
related to eligibility.  He explained that one  of the basic                                                                    
tenets  of the  federal stimulus  money was  "maintenance of                                                                    
efforts",  which  instructed  that  services  could  not  be                                                                    
changed for  the people who  were currently  receiving them;                                                                    
therefore, eligibility had  to be taken off  the table until                                                                    
2014.  The second  option related  to  provider rates;  many                                                                    
states were  currently looking at  the option as  a solution                                                                    
to the loss of federal funding.                                                                                                 
Commissioner Streur  discussed that the third  option was to                                                                    
take a look  at the benefits packages that  were provided by                                                                    
the   state  (slide   7).  Option   four  was   to  increase                                                                    
utilization controls; however, there  were issues related to                                                                    
"maintenance  of  efforts."  The  fifth  option  focused  on                                                                    
improved  purchasing.  He  stated that  improved  purchasing                                                                    
worked for other  states. For example, a  state could choose                                                                    
a single  durable medical equipment provider  for the entire                                                                    
state; however, Alaska  did not have a  large enough durable                                                                    
medical vendor  that was equipped  for such a  large demand.                                                                    
The  geographic  separation  was a  challenge  for  Alaska's                                                                    
ability  to provide  durable medical  equipment on  a timely                                                                    
basis.  Option six  focused on  cost  sharing, which  people                                                                    
frequently  expressed  interest  in exploring.  The  seventh                                                                    
option related to  anti-fraud, but he did not  know what the                                                                    
solution  was regarding  the specific  option. He  explained                                                                    
that  some people  believed there  was significant  money in                                                                    
anti-fraud in  Alaska and some  people disagreed.  The state                                                                    
would  continue  to  increase  its  anti-fraud  efforts.  He                                                                    
detailed that  recipient anti-fraud  would bring in  a small                                                                    
amount of money and that  provider anti-fraud would bring in                                                                    
more. Funds from  anti-fraud in Alaska would  not compare to                                                                    
the  billions  of  dollars  that  had  been  recovered  from                                                                    
fraudulent activity  perpetrated by  mafia rings  in Florida                                                                    
and  New York.  He added  that states  would be  required to                                                                    
mimic Medicare efforts.                                                                                                         
2:12:18 PM                                                                                                                    
Representative  Doogan asked  whether the  term "non-federal                                                                    
share" on  slide 6  was synonymous  with the  state's share.                                                                    
Commissioner  Streur answered  in  the  affirmative. The  38                                                                    
percent  increase  listed  on   slide  6  included  a  small                                                                    
percentage of  other funding, but was  primarily the state's                                                                    
Representative  Doogan  asked  for  a breakdown  of  the  38                                                                    
percent  increase related  to the  loss of  FMAP, inflation,                                                                    
and  enrollment growth.  Commissioner Streur  responded that                                                                    
he  would  get back  to  the  committee with  the  requested                                                                    
Representative   Joule   referred  to   earlier   discussion                                                                    
regarding  State of  Alaska cost  savings in  the amount  of                                                                    
$104 million  or $114 million.  He wondered how  the savings                                                                    
worked with the  38 percent cost increase  that Alaska would                                                                    
experience  in the  absence  of  FMAP funding.  Commissioner                                                                    
Streur answered that the FMAP  funding would go through July                                                                    
1, 2011; the 38 percent increase would begin at that time.                                                                      
Representative  Gara referenced  earlier comments  regarding                                                                    
fraud  cases that  negatively impacted  providers. He  asked                                                                    
the  department  to  be  sensitive  and  to  recognize  that                                                                    
innocent mistakes could also occur.                                                                                             
Commissioner Streur replied that  the department was working                                                                    
to   differentiate   between    administerial   errors   and                                                                    
intentional fraud.  He explained administerial  errors could                                                                    
include   a    person's   failure   to    provide   adequate                                                                    
documentation in a chart or  the accidental transposition of                                                                    
a number.                                                                                                                       
2:15:22 PM                                                                                                                    
Commissioner Streur  provided an in-depth report  on each of                                                                    
the  options  he  had previously  outlined,  beginning  with                                                                    
"Eligibility"  on  slide  8.  Eligibility  was  normally  an                                                                    
option states  used to control  budget. He relayed  that the                                                                    
State of  Alaska had not  provided additional services  to a                                                                    
population  beyond  the  basic Medicaid  levels  other  than                                                                    
Denali  KidCare.   Similar  to   most  states,   Alaska  was                                                                    
currently at  the 175 percent  level for Denali  KidCare. He                                                                    
explained  that  the  eligibility option  was  prevented  by                                                                    
maintenance of effort restrictions  including ARRA and PPACA                                                                    
[Patient Protection and Affordable  Care Act] until 2014. He                                                                    
detailed  that beginning  in  2014  Medicaid would  increase                                                                    
from 100 percent of poverty  level to 138 percent of poverty                                                                    
level and  maintenance of effort restrictions  would end. He                                                                    
relayed that  more restrictive standards,  methodologies, or                                                                    
procedures  could not  be adopted  regarding eligibility  or                                                                    
enrollment in the Medicaid program.                                                                                             
Representative   Wilson  wondered   whether   there  was   a                                                                    
particular  age bracket  that was  influencing the  Medicaid                                                                    
growth.  Commissioner  Streur   responded  that  growth  was                                                                    
occurring  across the  board. He  furthered that  enrollment                                                                    
growth  primarily resulted  from children  and families  and                                                                    
not the senior population.                                                                                                      
Representative Wilson  asked what portion of  the growth was                                                                    
related to new  cases. She wondered whether  it was possible                                                                    
to tell how many new  families had enrolled due to hardship.                                                                    
Commissioner Streur responded that he  would get back to the                                                                    
committee with the requested information.                                                                                       
Commissioner Streur  discussed that "Provider  Rates" (slide                                                                    
9)  represented  the most  common  reduction  by states.  He                                                                    
detailed states  that currently  utilized the  provider rate                                                                    
option,  which included  Kentucky, Arizona,  California, and                                                                    
Washington.  He relayed  that the  State  of Washington  had                                                                    
recently imposed a  15 percent rate reduction.  He read from                                                                    
slide 9:                                                                                                                        
     · Many rate reduction options                                                                                              
     · Considerations                                                                                                           
          o Reducing rates in one area may cause cost                                                                           
             increases in another                                                                                               
          o Potential litigation                                                                                                
          o CMS [Centers for Medicare and Medicaid                                                                              
             Services] approval of State Plan Amendment                                                                         
          o Impact on access and quality of care                                                                                
          o Provider taxes affect state's ability to reduce                                                                     
Commissioner Streur  reported that he wasn't  very concerned                                                                    
about potential litigation in Alaska.  He discussed that CMS                                                                    
was  involved in  everything  that the  state  did and  that                                                                    
everything  required the  SPA  approval.  He mentioned  that                                                                    
some  states were  interested  in  receiving federal  "block                                                                    
grants" in  order to  continue providing  Medicaid benefits.                                                                    
He explained  that changes  to provider  reimbursement would                                                                    
need to be included in the SPA.                                                                                                 
Vice-Chair  Fairclough   asked  for  clarification   on  the                                                                    
meaning of  the acronym  CMS. Commissioner  Streur responded                                                                    
that  CMS  stood  for  Centers  for  Medicare  and  Medicaid                                                                    
Representative  Joule  wondered  whether  the  reference  to                                                                    
"impacting"  provider rates  on  slide  9 essentially  meant                                                                    
lowering   rates.  Commissioner   Streur  answered   in  the                                                                    
Representative  Joule asked  whether providers  could choose                                                                    
to  take their  business  elsewhere in  response to  lowered                                                                    
rates.  Commissioner  Streur  acknowledged  that  it  was  a                                                                    
possibility.  He  thought  that  Medicare  provided  a  good                                                                    
example  of  a place  that  the  state had  experienced  the                                                                    
problem; however, he opined that  the state was currently in                                                                    
a good  position. He communicated  that he would  speak more                                                                    
about the issue later in the presentation.                                                                                      
2:20:25 PM                                                                                                                    
REPRESENTATIVE  WES KELLER  joined the  committee table  and                                                                    
asked  what the  process would  be in  the event  of a  rate                                                                    
reduction.  He wondered  whether  the reduction  would be  a                                                                    
flat  percentage and  who would  be designated  to determine                                                                    
what would  get cut. He  was concerned that  the significant                                                                    
difference  in  the  size  and   influence  of  the  various                                                                    
providers could present a problem.                                                                                              
Commissioner Streur  answered that the  responsibility would                                                                    
continue  to reside  with the  department.  He thought  that                                                                    
reductions would most likely  impact certain provider groups                                                                    
and types that  would be determined by a  study conducted by                                                                    
the department.                                                                                                                 
Representative  Keller thought  the  question was  important                                                                    
because the issue  would be relevant for  the department and                                                                    
Representative   Gara  referenced   that  the   presentation                                                                    
indicated  Alaska  as  one of  the  higher  paying  Medicaid                                                                    
states.  He   had  heard  that  in   most  states  insurance                                                                    
companies were  required to  reimburse medical  providers at                                                                    
an  average rate;  however, Alaska  reimbursed  at the  70th                                                                    
percentile, which  may have been  an explanation  for higher                                                                    
medical   rates  in   Alaska.   He   wondered  whether   the                                                                    
information was accurate.                                                                                                       
Commissioner Streur replied that  the issue was more closely                                                                    
related to the commercial sector than to Medicaid.                                                                              
Representative  Gara wondered  whether providers  would take                                                                    
issue with a reduced  Medicare reimbursement rate that would                                                                    
result in  much lower  pay than the  insurance reimbursement                                                                    
they were able to receive in the commercial sector.                                                                             
Commissioner   Streur  replied   in   the  affirmative.   He                                                                    
explained that the situation was  currently more relevant to                                                                    
Medicare.  He would  discuss a  Medicaid  fee comparison  on                                                                    
slide 11. He remarked that  the situation was more difficult                                                                    
to justify than it should have been.                                                                                            
Commissioner   Streur   directed   attention   to   Medicaid                                                                    
physician fees for the 25  highest paying states (slide 10).                                                                    
Alaska was  shown as second,  given that the chart  was cost                                                                    
adjusted  based  on  the  cost  of  living  in  each  state;                                                                    
however,  fees  in  the state  were  actually  significantly                                                                    
higher than  those in  all other  states. He  believed there                                                                    
were  four other  states where  Medicare  rates were  higher                                                                    
than those in Alaska.                                                                                                           
Representative Wilson asked how  many states had implemented                                                                    
a co-pay.  She had heard  that a  $5.00 co-pay could  make a                                                                    
difference  for  a  patient. Commissioner  Streur  responded                                                                    
that  he  would   speak  about  co-pays  later   on  in  the                                                                    
Commissioner Streur moved on to  discuss 2009 payment levels                                                                    
for the  highest level primary  care office visit  (level 5)                                                                    
on slide  11, titled "Payment Comparisons."  He relayed that                                                                    
Alaska Medicaid  paid $209.11  compared to  Alaska Medicare,                                                                    
which paid  $164.32. Medicaid paid $76.00  in Washington and                                                                    
$129.21  in   Montana.  The   department  had   conducted  a                                                                    
comparison of  approximately 12 states, which  had all shown                                                                    
similar results as those on slide 11.                                                                                           
2:25:50 PM                                                                                                                    
Commissioner Streur discussed slide 12 titled "Benefits:"                                                                       
     · States that provide optional benefits can eliminate                                                                      
        them for adults                                                                                                         
          o EPSDT (Early Periodic Screening, Diagnosis, and                                                                     
             Treatment) and nursing facility services are                                                                       
             not optional                                                                                                       
     · States can establish limits on benefits for certain                                                                      
          o Can be soft or hard limits                                                                                          
Commissioner Streur  continued to discuss benefits  on slide                                                                    
13. He  explained that a  reduction of benefits in  one area                                                                    
may result  in cost increases  in another. He noted  that it                                                                    
was possible  to reduce  an optional benefit  in one  of the                                                                    
state's   waiver  or   personal  care   attendant  programs;                                                                    
however, most  of the eligible  individuals met  the nursing                                                                    
home level of care  requirements; therefore, the elimination                                                                    
of one  of the programs  introduced the possibility  that an                                                                    
individual would be forced into  a nursing home and would be                                                                    
a  considerable "push  on the  balloon." He  pointed to  the                                                                    
second bullet point:  "Federal Litigation-Medicare Rules and                                                                    
Olmstead."  He relayed  that the  Olmstead Act  required the                                                                    
state to  provide services in the  least restrictive setting                                                                    
possible.  To  ensure  an individual  continued  to  receive                                                                    
services  in other  areas, it  may be  necessary to  address                                                                    
transition   issues  if   a  service   was  eliminated.   He                                                                    
reiterated his  earlier remark regarding  CMS approval  of a                                                                    
SPA. He discussed the impact  on access and quality of care;                                                                    
many of  the state's optional  programs were built  into the                                                                    
continued care of services.                                                                                                     
Representative Joule  understood that the term  "push on the                                                                    
balloon"  meant that  cost cuts  in one  area could  lead to                                                                    
increased  hospital  or  homecare  costs.  He  believed  the                                                                    
additional costs were significant  and noted that members of                                                                    
the public may not know what the term meant.                                                                                    
Commissioner   Streur   replied    that   the   costs   were                                                                    
significant. He  expounded that the average  annual cost for                                                                    
an individual in the waiver  program was $30,000 compared to                                                                    
a much higher amount for nursing home level of care.                                                                            
KIMBERLI  POPPE-SMART,  DIRECTOR,   DIVISION  OF  HEALTHCARE                                                                    
SERVICES, DEPARTMENT  OF HEALTH  AND SOCIAL  SERVICES, added                                                                    
that the  nursing home level  of care for an  individual was                                                                    
$202,000 on an annual basis.                                                                                                    
2:28:39 PM                                                                                                                    
Co-Chair  Thomas  thought  that high  assisted  care  living                                                                    
facility  costs should  incentivize the  state to  help fund                                                                    
personal  care attendants  who would  reduce  costs for  the                                                                    
state.  He had  heard from  a  constituent who  had taken  a                                                                    
brother out  of an  assisted care  living facility  that had                                                                    
cost the state  $17,000 per month. The  individual had hoped                                                                    
to  become a  personal  care attendant;  however, the  costs                                                                    
were too  high and  they were  currently faced  with putting                                                                    
the brother back  in the assisted living  facility. He noted                                                                    
that he would follow up  with Commissioner Streur at a later                                                                    
Commissioner  Streur moved  on to  slide 14:  "Mandatory vs.                                                                    
Optional Benefits." He relayed that  it would not be easy to                                                                    
just remove the optional Medicaid  benefits in order to save                                                                    
costs.  The  mandatory   benefits  utilized  by  individuals                                                                    
without  chronic complex  medical conditions  included items                                                                    
such   as  inpatient   and   outpatient  hospital,   nurses,                                                                    
physicians, nurse  midwives, lab  and X-ray,  advanced nurse                                                                    
practitioners,  early  periodic  screening,  diagnosis,  and                                                                    
treatment, family  planning, pregnancy, and  other. Optional                                                                    
Medicaid  benefits  included  items such  as  mental  health                                                                    
rehabilitation  and  stabilization;  diagnostic,  screening,                                                                    
and  preventative  therapies; inpatient  psychiatry;  drugs,                                                                    
which  cost $65  million per  year, would  be a  significant                                                                    
challenge  to cut;  Intermediate  Care  Facility and  Mental                                                                    
Retardation (ICF/MR)  residential facilities;  personal care                                                                    
attendants;  dental  services,  which  served  approximately                                                                    
10,000  adults and  had helped  people  with various  issues                                                                    
that included returning to work  and eating different foods;                                                                    
other  home health  services, other  licensed practitioners;                                                                    
and  transportation, which  cost  approximately $70  million                                                                    
per  year   and  was  necessary   for  the   rural  villages                                                                    
throughout  the state.  He  emphasized that  it  was a  very                                                                    
difficult  challenge to  determine areas  to cut  that would                                                                    
reduce costs.                                                                                                                   
2:32:21 PM                                                                                                                    
Representative   Joule  pointed   out  that   mandatory  and                                                                    
optional benefits  were different for adults  than they were                                                                    
for children. He expounded that  many typical adult services                                                                    
fell  under the  optional category;  however, most  children                                                                    
services  were mandatory.  He had  been  surprised to  learn                                                                    
about the  differences and the  costs associated  with items                                                                    
in each category.                                                                                                               
Commissioner  Streur responded  that  Medicaid SCHIP  [State                                                                    
Children's  Health  Insurance  Program]  was  very  oriented                                                                    
towards children first and families  second. He informed the                                                                    
committee that  beginning in 2014  every person who  met the                                                                    
138 percent poverty level would  be eligible under Medicaid.                                                                    
He thought  that the optional  and mandatory  categories for                                                                    
children would still exist, but  they would see an increased                                                                    
melding together.                                                                                                               
Commissioner Streur  addressed slide 15  titled "Utilization                                                                    
Controls." He stressed that it  was challenging to determine                                                                    
whether  the $1.5  billion annual  Medicaid expenditure  was                                                                    
directed at the right care, at  the right time, in the right                                                                    
place, and for the right  amount of money. He emphasized the                                                                    
importance  of making  improvements to  a range  of controls                                                                    
and screens  to ensure  the state was  providing individuals                                                                    
with  the  appropriate  care.   A  new  Medicaid  Management                                                                    
Information System (MMIS), which  paid claims for the state,                                                                    
would be active  in the spring of 2012. He  was looking into                                                                    
the possibility of moving data  from the old system into the                                                                    
new  system that  would allow  the  department to  implement                                                                    
some utilization  controls at an  earlier date.  The current                                                                    
25 year  old MMIS  system paid claims  efficiently; however,                                                                    
it was not  possible to determine how it  paid claims unless                                                                    
a  report  was built.  The  data  warehouse would  help  the                                                                    
Divisions  of Healthcare  Services,  Behavioral Health,  and                                                                    
Senior Disability Services; he was  hopeful that it would be                                                                    
activated in the fall of 2011.                                                                                                  
Representative  Gara wondered  whether  it  was possible  to                                                                    
prevent  Medicaid recipients  from  going  to the  emergency                                                                    
room  for non-emergency  related health  problems. He  asked                                                                    
whether a  system could  be implemented  that would  pay in-                                                                    
full  for Medicaid  patients to  go to  physicians for  non-                                                                    
emergency health  issues, but  would cover  much less  of an                                                                    
emergency room visit for the same issues.                                                                                       
Commissioner  Streur  responded   in  the  affirmative.  The                                                                    
department  was looking  into options  that would  deal with                                                                    
people  it  termed  "frequent fliers,"  who  tended  to  use                                                                    
higher  cost services.  He thought  that  putting people  in                                                                    
medical homes and  ensuring access to services  was a better                                                                    
option  than  co-pays  and deductibles.  He  referred  to  a                                                                    
former client who  had visited the emergency  room 300 times                                                                    
in one  year, which had  cost between $600 hundred  and $800                                                                    
hundred per  visit. He  added that there  was a  downside to                                                                    
the option;  therefore, it was  important to figure  out the                                                                    
best way to  handle the issue and to let  patients know they                                                                    
had "skin in the game."                                                                                                         
2:38:49 PM                                                                                                                    
Vice-Chair Fairclough  asked whether certain  items (related                                                                    
to individual families)  that could not be  tracked with the                                                                    
current  MMIS,  would  be  accessible  under  the  new  data                                                                    
tracking system.                                                                                                                
Commissioner Streur  replied that it was  currently possible                                                                    
to  retrieve  the  information; however,  a  time  consuming                                                                    
report  had  to  be  built each  time  the  information  was                                                                    
Vice-Chair  Fairclough queried  whether  the  state knew  if                                                                    
there were  duplicate services being accessed.  She referred                                                                    
to  the $1.5  billion  annual Medicaid  cost  in Alaska  and                                                                    
wondered whether the  state was working to look  at care for                                                                    
individuals and families  in a more holistic  way instead of                                                                    
only  looking  at  crisis intervention.  She  asked  whether                                                                    
there were  any controls  on the  annual spending  limit for                                                                    
available Medicaid  services and if  there was a  trigger in                                                                    
the  system  to  indicate  whether  a  patient's  needs  had                                                                    
changed or increased.                                                                                                           
Commissioner  Streur   answered  that  DHSS   was  currently                                                                    
looking only at individuals  because each Medicaid recipient                                                                    
had a personal identification number  that was not linked to                                                                    
other  family members.  He detailed  that  a data  warehouse                                                                    
would  help  as  it  would allow  the  department  to  enter                                                                    
groupings.  The  department  was currently  working  on  the                                                                    
ability to look at families and  was doing the best it could                                                                    
with  the information  that was  available. He  relayed that                                                                    
the  annual  Medicaid  cost  was  approximately  $9,300  per                                                                    
person; the  cost for a family  of four was $36,000;  the 15                                                                    
percent overhead  on a monthly  premium would cost  a family                                                                    
approximately $3,000.  He stressed that the  costs were very                                                                    
expensive and  that the state  needed to bend the  curve; he                                                                    
was more  concerned about the  overall spin and the  need to                                                                    
get  a grip  on costs.  He  talked about  the importance  of                                                                    
utilization controls  and eliminating  duplicative services.                                                                    
He noted that funding for  the data warehouse had previously                                                                    
been acquired.                                                                                                                  
2:43:09 PM                                                                                                                    
Commissioner Streur  discussed a wide range  of controls and                                                                    
screens on  slide 15:  (1) the department  was moving  to an                                                                    
electronic  prior authorization  and care  management system                                                                    
through its  current vendor at  a considerable  savings. The                                                                    
Division  of Health  Care Services  was  focused on  getting                                                                    
more out of  the services that were provided  by the vendor.                                                                    
Currently the  majority of prior authorization  was hospital                                                                    
based and the department wanted  to expand it to other areas                                                                    
as well,  including outpatient  hospitals; (2)  post payment                                                                    
reviews  were  necessary   to  determine  whether  duplicate                                                                    
services were conducted;  (3) hard or soft  edits would take                                                                    
a  look at  whether specific  services were  appropriate for                                                                    
the  given health  problem;  (4)  bundling, unbundling,  and                                                                    
order  of  billing  were  tools  the  department  used  with                                                                    
hospitals  and physician  offices to  group services  into a                                                                    
single billing;  and, (5) the  department was  interested in                                                                    
new  edits   and  audits  of  fee-for-service   and  in  the                                                                    
possibility of movement away from the area.                                                                                     
Commissioner  Streur  addressed  slide 16  titled  "Improved                                                                    
Purchasing:" (1)  Medicaid had  significant market  share at                                                                    
an annual cost  to the State of Alaska of  $1.5 billion; (2)                                                                    
the   department   was    working   to   determine   whether                                                                    
improvements could  be made  to purchasing;  durable medical                                                                    
equipment continued to  be a challenge. He was  proud of the                                                                    
generous  pharmacy benefit  that  provided a  wide range  of                                                                    
drugs to  recipients; returns on the  program, satisfaction,                                                                    
and  management worked  well on  the provider  and recipient                                                                    
sides. There was a Pharmacy  and Therapeutics Committee that                                                                    
consisted  of providers  and  pharmacists  that conducted  a                                                                    
quarterly  review of  how drugs  were handled;  (3) pharmacy                                                                    
provider   and  manufacturer   contracting;  and,   (4)  the                                                                    
department worked  to recognize centers for  excellence when                                                                    
2:46:56 PM                                                                                                                    
Commissioner   Streur  discussed   slide  17   titled  "Cost                                                                    
     · Recipient pays a portion of the cost services                                                                            
     · Personal responsibility-reduction in inappropriate                                                                       
     · Recipient assumes a portion of responsibility for                                                                        
     · Considerations                                                                                                           
          o May cause care to be delayed resulting in                                                                           
             higher cost care later                                                                                             
          o Medicaid rules complex and prescriptive                                                                             
          o May result in a reduction in provider revenues                                                                      
Commissioner Streur  explained that  individuals with  a co-                                                                    
pay may decide  to delay a visit to the  doctor, which could                                                                    
result in a  higher cost at a later time;  therefore, it was                                                                    
important  to  be  careful  about  where  cost  sharing  was                                                                    
utilized  and  how  it  was  conducted.  He  discussed  that                                                                    
according  to Medicaid  rules an  individual  could only  be                                                                    
charged  on  a limited  percentage  of  their income  on  an                                                                    
annual  basis; however,  the  department  did not  currently                                                                    
have  the necessary  tracking  tools  available. He  thought                                                                    
that it was  important to begin cost-sharing  in areas where                                                                    
people who  could make  decisions were forced  to do  so. He                                                                    
had  talked   with  multiple   provider  groups   about  the                                                                    
possibility that  cost sharing  could result in  a reduction                                                                    
in  provider  revenues  and had  solicited  input  regarding                                                                    
potential solutions.                                                                                                            
Commissioner  Streur moved  on  to discuss  slide 18  titled                                                                    
"Existing Cost Sharing in Alaska:"                                                                                              
     · $50 per day, up to a maximum $200 per discharge, for                                                                     
        inpatient hospital services                                                                                             
     · 5 percent of charges for outpatient hospital                                                                             
     · $3 per day for physician services                                                                                        
     · $2 for each prescription filled/refilled                                                                                 
Commissioner  Streur estimated  that the  provider collected                                                                    
less than  50 percent of the  cost sharing fees that  it was                                                                    
Representative Gara  asked whether individuals that  went to                                                                    
the  emergency  room   for  non-emergency  related  services                                                                    
represented  a  significant  cost in  the  Medicaid  system.                                                                    
Commissioner Streur responded in the negative.                                                                                  
Co-Chair Stoltze had been told  multiple times that Medicaid                                                                    
patients represented  the most  frequent number  of no-shows                                                                    
at  dental and  medical appointments.  He expressed  concern                                                                    
that the  medical providers  already took a  cut in  pay for                                                                    
Medicaid  patients. He  did  not want  patients  in need  of                                                                    
treatment to be  denied; however, he did not  want people to                                                                    
have  such  a cavalier  attitude  towards  the services.  He                                                                    
wanted  the  situation to  improve  so  providers would  not                                                                    
decide to discontinue service to Medicaid patients.                                                                             
2:51:06 PM                                                                                                                    
Commissioner Streur answered  that dental providers provided                                                                    
a  good  example  of  the  situation.  The  single  greatest                                                                    
frustration with  Medicaid recipient treatment was  the high                                                                    
frequency  of no-shows.  There were  several dental  offices                                                                    
that  were  currently  tracking  the  Medicaid  versus  non-                                                                    
Medicaid no-show  rates for the state.  Dental offices could                                                                    
implement a  charge for no-shows across  the board; however,                                                                    
they could  not implement  the charge for  Medicaid patients                                                                    
only.  The  issue  was  significant and  he  had  heard  the                                                                    
frustration most frequently from dental providers.                                                                              
Co-Chair  Stoltze  emphasized  that  the  state  should  try                                                                    
harder  to solve  the no-show  problem. Commissioner  Streur                                                                    
replied  that Medicaid  was an  entitlement program  and the                                                                    
challenge  was  significant.  He had  enlisted  support  and                                                                    
input from providers to help find a solution.                                                                                   
Co-Chair Stoltze  replied that  there were people  that were                                                                    
not  as  sympathetic  to  the   entitlement  aspect  of  the                                                                    
program.  He   encouraged  medical  providers   to  continue                                                                    
stressing the importance of the problem to the department.                                                                      
Vice-Chair  Fairclough appreciated  the value  of a  no-show                                                                    
survey that  included all patients.  She discussed  that one                                                                    
of the no-show issues in  Anchorage was due to problems with                                                                    
transportation,  specifically  with Share-A-Ride  and  other                                                                    
services   that  provided   transportation   to  groups   of                                                                    
individuals.  She  pointed  to  the  Alaska  Native  Medical                                                                    
Center  that  had  implemented some  successful  strategies,                                                                    
including a  no-show fee. She  agreed that it  was important                                                                    
to convey the value of medical providers' time.                                                                                 
Representative Gara had discussed  the issue previously with                                                                    
the  commissioner.  He   believed  that  the  administrative                                                                    
burden often  times cost more  than the savings.  He relayed                                                                    
that  he had  missed a  handful of  dental appointments  the                                                                    
past summer  due to  injury and he  appreciated that  he had                                                                    
not been  charged a  fee. He  pointed out  that it  could be                                                                    
challenging for  offices to  determine when  a person  had a                                                                    
valid  reason for  missing an  appointment.  He opined  that                                                                    
sometimes it  could cost more  to enforce a rule.  He agreed                                                                    
that a  solution was  important, but  did not  believe there                                                                    
was an easy answer.                                                                                                             
Representative  Wilson noted  that  there  were dentists  in                                                                    
Fairbanks who  no longer took  Medicaid patients due  to the                                                                    
cancelation problem.  She stressed that the  state could not                                                                    
continue  to   lose  more  Medicaid  providers,   given  the                                                                    
negative impact it would have on the program.                                                                                   
2:56:41 PM                                                                                                                    
Commissioner   Streur   reiterated   his   earlier   remarks                                                                    
regarding  slide 18:  "Existing Cost  Sharing." He  directed                                                                    
attention to slides  19 through 20 related  to services that                                                                    
were exempt from cost sharing requirements:                                                                                     
     · Services provided to a recipient under age 18                                                                            
     · Services provided to a recipient in a long term care                                                                     
     · Services provided to a pregnant woman, including                                                                         
        postpartum services                                                                                                     
     · Family planning services and supplies                                                                                    
     · Emergency services                                                                                                       
     · Hospice care services                                                                                                    
     · Tribal health services provided to an American                                                                           
        Indian or an Alaska Native                                                                                              
     · Services provided to an individual who is eligible                                                                       
        for both Medicare and Medicaid when Medicare is the                                                                     
        primary payer of the service                                                                                            
Commissioner  Streur   remarked  that  Medicaid   could  not                                                                    
mandate  the   exemption  of  services  from   cost  sharing                                                                    
requirements for  Alaska Natives; internal cost  sharing was                                                                    
an available  option. He addressed  slide 21 related  to the                                                                    
inability to pay cost share:                                                                                                    
     · 42 CFR 447.15                                                                                                            
        The provider may not deny services to any eligible                                                                      
        individual on account of the individual's inability                                                                     
        to pay the cost sharing amount                                                                                          
Commissioner  Streur   noted  that   Alaska  did   not  have                                                                    
complaints  about  denial  of  access to  care  due  to  the                                                                    
inability to pay cost share.  Providers had worked to ensure                                                                    
that  care  was available.  He  discussed  slide 22:  "Anti-                                                                    
Fraud:"  (1)  some  states  may  be  an  untapped  area  for                                                                    
savings;   (2)  fraud   in  Medicaid   was  a   reality  and                                                                    
departmental   and  attorney   general   efforts  would   be                                                                    
increased to help  determine its extent in  the system; and,                                                                    
(3)  numerous  anti-fraud  methods and  vendors  included  a                                                                    
Medicaid Integrity Program,  Payment Error Rate Measurement,                                                                    
and other.                                                                                                                      
Co-Chair Stoltze  wondered whether fraud  typically involved                                                                    
a patient  or provider. He remembered  legislative work that                                                                    
had been done in the past related to Medicaid anti-fraud.                                                                       
Commissioner   Streur  answered   that   fraud  related   to                                                                    
recoveries  was typically  committed by  providers; whereas,                                                                    
recipient fraud was related to prescription drugs.                                                                              
Co-Chair  Stoltze  requested  an   example  related  to  the                                                                    
typical magnitude of provider fraud.                                                                                            
3:00:30 PM                                                                                                                    
Commissioner  Streur  replied  that the  majority  of  fraud                                                                    
settlements ranged from $25,000  to $125,000 up to $150,000.                                                                    
There had  been one  fraud case  related to  on-call nursing                                                                    
that cost somewhere in the millions of dollars.                                                                                 
Co-Chair Thomas queried whether  a provider would lose their                                                                    
license   for   committing    fraud   against   the   state.                                                                    
Commissioner  Streur  responded  that  it  depended  on  the                                                                    
extent of  the fraud. The  department was provided  a weekly                                                                    
list of people who were  no longer allowed to participate in                                                                    
Medicare  and  in  many  cases it  pulled  the  people  from                                                                    
Medicaid as  well; the department was  occasionally mandated                                                                    
by CMS to  pull the person's participation.  He would follow                                                                    
up with more detail.                                                                                                            
Co-Chair  Thomas discussed  that stealing  was a  felony. He                                                                    
thought  that those  who committed  fraud should  be treated                                                                    
equally in their punishment.                                                                                                    
Co-Chair   Stoltze   commented    that   not   every   fraud                                                                    
investigation  was  born with  malice.  He  opined that  the                                                                    
regulations and laws were complex  and it was possible for a                                                                    
person to find  themselves in the midst  of an investigation                                                                    
Commissioner Streur agreed.                                                                                                     
Co-Chair Thomas thought  that in the case of  a settlement a                                                                    
document could  be signed that  stated no  further penalties                                                                    
or charges would be filed against the offender.                                                                                 
Co-Chair Stoltze referenced  complicated federal regulations                                                                    
imposed  on  the  state  that  were  difficult  for  medical                                                                    
professionals to keep  up with. He had heard  of cases where                                                                    
people had been accused of  Medicaid fraud because they were                                                                    
charging too  little. He  added that  there were  people who                                                                    
egregiously  abused programs  and  those  who made  innocent                                                                    
mistakes due to the complexity of the regulations and laws.                                                                     
Co-Chair Thomas noted that  drivers and commercial fishermen                                                                    
would   lose  their   license  for   certain  offences;   he                                                                    
reiterated  that  fraud  offenders should  also  receive  an                                                                    
appropriate penalty.                                                                                                            
3:04:00 PM                                                                                                                    
Commissioner  Streur   believed  it  was  necessary   to  be                                                                    
judicious  in  the handling  of  fraudulent  cases and  that                                                                    
intentional fraud  should be  penalized; whereas,  the state                                                                    
should  collect   money  owed   from  those   who  committed                                                                    
mistakes, but should not apply an additional penalty.                                                                           
Commissioner  Streur discussed  slide 23  titled "Anti-Fraud                                                                    
Efforts, Audits,  and Other Activities  in Alaska:"  (1) the                                                                    
Surveillance  Utilization  Review  (SUR) looked  at  payment                                                                    
patterns,  diagnosis, recipients  who  saw multiple  doctors                                                                    
and  received  multiple  prescriptions,  billing  comparison                                                                    
between physicians, and other;  (2) the department conducted                                                                    
70  annual  audits  required by  AS  47.05.200,  which  were                                                                    
moderately  effective;   (3)  credit  balance   audits;  (4)                                                                    
focused reviews identified  particular patterns, groups, and                                                                    
outlying providers;  (5) CMS Medicaid Integrity  Program was                                                                    
new and would conduct  provider audits; (6) Alaska's payment                                                                    
error rate the prior year had  been the lowest in the nation                                                                    
at  under   1  percent.  Through  the   Payment  Error  Rate                                                                    
Measurement  system  CMS  vendors   worked  to  verify  that                                                                    
services had  been paid  appropriately; (7)  Cluster Audits;                                                                    
(8) the Medicaid  Recovery Audit was a  federal program that                                                                    
the  department  hoped  would  replace  the  current  audits                                                                    
required by  AS 47.05.200;  and, (9) Medicaid  Fraud Control                                                                    
3:08:17 PM                                                                                                                    
Commissioner  Streur  addressed  slide 24  titled  "Provider                                                                    
Taxes." He explained that provider  taxes offered a means to                                                                    
generate   revenue  specifically   to  fund   Medicaid.  The                                                                    
department  used the  taxes  generated  to supplant  general                                                                    
fund money and  to fund providers at a higher  rate in order                                                                    
to offset the taxes. The state  was able to charge a tax and                                                                    
leverage the 50 percent  federal participation. He discussed                                                                    
that between 14  and 15 states had  implemented provider tax                                                                    
in  the past  18 months.  He read  additional bullet  points                                                                    
from slide 24:                                                                                                                  
     · Can provide needed provider rate increases/avoid                                                                         
     · Can provide money for the state                                                                                          
     · Some provider types work better than others                                                                              
     · Federal rules complex but taxes can work                                                                                 
Commissioner Streur  elaborated that  the tax  worked better                                                                    
for non-specialty  physician offices, primary  care offices,                                                                    
and other,  given that the  majority of income  in specialty                                                                    
offices was not Medicaid related.                                                                                               
Representative  Wilson wondered  why the  federal government                                                                    
was creating an  incentive for states to  tax providers. She                                                                    
could  not imagine  taxing providers  who  were already  not                                                                    
paid what they were worth.                                                                                                      
Commissioner  Streur  answered  that individual  states  had                                                                    
introduced the provider  tax and that it was  not related to                                                                    
the federal  government. He communicated that  states needed                                                                    
to meet the  50 percent match rate; general  fund sources in                                                                    
some states were not available  and Medicaid costs continued                                                                    
to  increase.  States  were  looking  for  ways  to  provide                                                                    
matching funds that  were not painful to  recipients and the                                                                    
Co-Chair Stoltze  wondered why  the provider tax  option was                                                                    
listed in  the presentation if  the state did not  intend to                                                                    
utilize it. Commissioner Streur  replied that the option had                                                                    
been  included  in order  to  fully  disclose all  available                                                                    
possibilities for Medicaid funding.                                                                                             
3:11:53 PM                                                                                                                    
Commissioner  Streur  addressed  slides  25  and  26  titled                                                                    
"Provider   Tax   Considerations."    He   read   from   the                                                                    
     · Unlikely in a state with an aversion to any kind of                                                                      
     ·  Taxes are levied against all providers  of a certain                                                                    
        type or group                                                                                                           
     ·  Taxation will affect current  payment methodologies.                                                                    
        Tax payments could be accounted for in cost-based                                                                       
        payment methodologies for hospitals and nursing                                                                         
     · Where used, the industry is more than not in support                                                                     
     ·  If Alaska  Medicaid cuts  funding, industry  support                                                                    
        may develop                                                                                                             
     ·  If implemented  in  Alaska,  there  will be  a  high                                                                    
        degree of CMS oversight                                                                                                 
Commissioner Streur continued on slide 27: "Revenue                                                                             
     ·  While most states have focused on this, still may be                                                                    
     · Allowable federal funding can replace state funding                                                                      
     · States should make sure their reviews are current                                                                        
     ·  Opportunities with  state  and  local  programs  and                                                                    
        certain inmate care                                                                                                     
Commissioner Streur believed that  Alaska had an opportunity                                                                    
for  revenue  maximization  with   its  tribal  partners  in                                                                    
particular.  He read  additional points  related to  revenue                                                                    
maximization on slide 28:                                                                                                       
     ·  When Medicaid-eligible IHS [Indian  Health Services]                                                                    
        beneficiaries receive services at IHS facilities,                                                                       
        the State receives 100 percent FMAP (Federal Medical                                                                    
        Assistance Percentage)                                                                                                  
     ·  In FY 10, if  all Alaska Native  Medicaid recipients                                                                    
        had   received   services   exclusively   from   IHS                                                                    
        facilities, it would have saved Alaska Medicaid                                                                         
        about $108 million general fund                                                                                         
Co-Chair Thomas asked whether the  figure was in addition to                                                                    
what  had been  provided. Commissioner  Streur responded  in                                                                    
the affirmative.                                                                                                                
Co-Chair Stoltze asked how  many Denali KidCare participants                                                                    
could  be utilizing  the revenue  maximization. Commissioner                                                                    
Streur did not have the number on hand.                                                                                         
Co-Chair Stoltze asked for an  estimate and wondered whether                                                                    
the  number represented  tens of  millions out  of the  $108                                                                    
Commissioner  Streur responded  that  the  $108 million  was                                                                    
Medicaid  only.  He  did  not believe  there  would  be  any                                                                    
savings  in the  areas  of cardiac  care,  cancer care,  and                                                                    
complex children's conditions.                                                                                                  
Co-Chair  Stoltze expressed  frustration  that savings  were                                                                    
discussed  that may  not  have  been possible.  Commissioner                                                                    
Streur believed  that approximately half of  the money could                                                                    
be  realized  through  a  more  effective  partnership  with                                                                    
tribal partners in areas such  as nursing care and other. He                                                                    
opined that  it was necessary to  take a look at  savings of                                                                    
$15 million  to $30 million whenever  possible; however, the                                                                    
$108 million in savings was not available.                                                                                      
3:15:04 PM                                                                                                                    
Representative  Joule referred  to testimony  from a  recent                                                                    
meeting  that had  pertained to  the Division  of Behavioral                                                                    
Health, Medicaid, and opportunities  that were available. He                                                                    
wondered  whether IHS  facilities were  associated with  the                                                                    
Commissioner  Streur   believed  the  discussion   had  been                                                                    
related  to  the  behavioral   health  encounter  rate.  The                                                                    
department  had  started  retroactively  reimbursing  at  an                                                                    
encounter  rate  for  all behavioral  health  services.  The                                                                    
money would go a long  way towards funding behavioral health                                                                    
services within  the IHS community. The  transportation rate                                                                    
would  be reduced  because services  had  been increased  in                                                                    
Representative  Wilson asked  for  a breakdown  of the  $108                                                                    
million.  Commissioner   Streur  replied  that   DHSS  would                                                                    
provide the information to the committee.                                                                                       
Commissioner Streur  moved on to  slide 29  titled "Proposed                                                                    
Strategies."  [Note:  slide  29   was  an  addition  to  the                                                                    
presentation and  appears as a  separate document  on BASIS;                                                                    
therefore, slides  in the  original presentation  labeled 29                                                                    
through 30 are  referred to as slides 30  through 31 below.]                                                                    
He  referred   to  Ms.  Poppe-Smart's   role  in   home  and                                                                    
community-based services.                                                                                                       
Ms.  Poppe-Smart  discussed  her  past  position  as  acting                                                                    
director of  the Division of Senior  and Disability Services                                                                    
and  her  work  related  to cost  control  strategies  (e.g.                                                                    
provider tax,  etc.) for the  long-term care arena  that had                                                                    
been proposed  by the Medicaid Task  Force. She communicated                                                                    
that   based  on   multiple  studies   the  long-term   care                                                                    
population  in  Alaska  that included  senior  and  disabled                                                                    
individuals, was  increasing and had outpaced  other states;                                                                    
growth was most notable in the senior population.                                                                               
Ms.  Poppe-Smart explained  that  home  and community  based                                                                    
services  had been  instrumental in  the state's  success in                                                                    
keeping individuals out of  institutions. She explained that                                                                    
unlike other states, Alaska did  not have the opportunity to                                                                    
control  its spending,  given  that  institutional care  was                                                                    
significantly more  expensive than home and  community based                                                                    
care. There were approximately 708  nursing home beds in the                                                                    
state and no  more than 10 or 20 of  the beds were available                                                                    
at any  given time.  Additionally, there  were approximately                                                                    
3,500  individuals  in  home and  community  based  services                                                                    
through the  department's four  waiver programs  and roughly                                                                    
3,500  individuals  who  received  personal  care  attendant                                                                    
services (half of whom were  waiver recipients). The average                                                                    
cost  of nursing  home care  was approximately  $202,000 per                                                                    
year in Alaska. She relayed  that the Medicaid cost was much                                                                    
less:  the average  cost for  elderly Alaskans  who received                                                                    
waivered  services at  home was  about $30,000  and cost  an                                                                    
additional  $33,000 for  personal  care attendant  services.                                                                    
Approximately  3,000  of  the 3,500  in  the  personal  care                                                                    
program were in need of an institutional level of care.                                                                         
Ms.  Poppe-Smart  highlighted   that  other  long-term  care                                                                    
service  options included:  the few  individuals in  out-of-                                                                    
state   ICF/MR    institutes   that   provided    care   for                                                                    
developmental disabilities and  administrative wait days and                                                                    
swing  beds in  critical  access hospitals,  which acted  as                                                                    
nursing home beds in acute care facilities.                                                                                     
Ms.   Poppe-Smart  communicated   that  subsequent   to  the                                                                    
implementation  of maintenance  of effort  requirements, the                                                                    
state was not able  to increase eligibility restrictions for                                                                    
its waiver  programs through 2014.  She reiterated  that the                                                                    
state  had  few  options  to   reduce  or  restrict  current                                                                    
services; therefore, it was necessary  to be creative and to                                                                    
look at successes in other  states. One option was long-term                                                                    
managed  care; other  states had  developed a  demonstration                                                                    
project or SPA to  manage individuals who required long-term                                                                    
care services in  a holistic manner, similar  to the medical                                                                    
home model. It  was important to consider  that Medicaid was                                                                    
the primary payer for long-term  care services and that very                                                                    
few private  insurance companies  would pay  for any  of the                                                                    
long-term care  services. Long-term  care insurance  did not                                                                    
pay  for  home and  community  based  services and  Medicare                                                                    
would only pay a maximum of 100 institutional days.                                                                             
Ms. Poppe-Smart continued to  discuss proposed strategies on                                                                    
slide 29. The state could  look at its current personal care                                                                    
attendant  program  and  develop   a  new  program  under  a                                                                    
demonstration  project.  She  informed  the  committee  that                                                                    
there  was currently  a 6  percent federal  matching program                                                                    
through  the Affordable  Care Act,  which would  require the                                                                    
state  to  build  in  oversight  quality  monitors.  Another                                                                    
option was to put a "safe  independent" in the home, where a                                                                    
home would  be evaluated for  safety and items such  as grab                                                                    
bars would be installed; the  option was available for homes                                                                    
that did not  meet the institutional level of  care and were                                                                    
not eligible for waiver services.                                                                                               
Ms. Poppe-Smart pointed to a  strategy (slide 29) related to                                                                    
quality,   utilization,  and   compliance  management.   She                                                                    
discussed Medicaid fraud  and noted that in  Alaska a person                                                                    
could be convicted due to  reckless disregard and it was not                                                                    
required  for  a person  to  have  the intention  to  commit                                                                    
fraud; many other states required proof of intent.                                                                              
3:24:00 PM                                                                                                                    
Ms.  Poppe-Smart  moved  on to  discuss  the  last  proposed                                                                    
strategy  on slide  29 that  related to  the examination  of                                                                    
options to  refinance current general fund  programs through                                                                    
demonstration  project. She  delineated  that the  long-term                                                                    
care  arena  included  "general   relief,"  which  paid  for                                                                    
assisted living  homes for individuals  who were  not waiver                                                                    
eligible   and  the   CAMA   [Chronic   and  Acute   Medical                                                                    
Assistance]  program paid  for  ongoing medication  services                                                                    
for   individuals   who   had   specific   limited   medical                                                                    
conditions. She detailed  that many studies in  the past had                                                                    
recommended that the state  should refinance the populations                                                                    
through  the  development  of a  demonstration  project  and                                                                    
obtain  a federal  match.  She  elaborated that  eligibility                                                                    
criteria would  be defined in  order for the  populations to                                                                    
fall within  the Medicaid eligible categories;  therefore, a                                                                    
portion of the  general fund financing would  be diverted to                                                                    
the federal government.                                                                                                         
Commissioner Streur  discussed slide 30 titled  "Third Party                                                                    
Liability."   He  explained   that  third   party  liability                                                                    
provided  the opportunity  to shift  costs or  collect money                                                                    
from  third party  entities  including insurance  companies,                                                                    
Medicare, estates, and other. He read from slide 30:                                                                            
     · Wide range of programs and activities                                                                                    
     · Electronic matches can improve effectiveness                                                                             
     · Contingent fee contracts are matchable                                                                                   
Commissioner Streur noted that  the state had contingent fee                                                                    
contracts, but  did not  use them all.  He pointed  to slide                                                                    
31: "Alaska  Medicaid TPL  Activity," and  was proud  of the                                                                    
state's efforts in  third party liability that  had netted a                                                                    
considerable  return.  The  state's net  recovery  in  post-                                                                    
payment  reviews was  $9.1 million  in the  prior year.  The                                                                    
state had  collected $2.5 million for  accident, estate, and                                                                    
trust recovery  (accidents included situations in  which the                                                                    
state funded  patient care and  was reimbursed  by insurance                                                                    
settlements).  He discussed  cost  avoidance that  included:                                                                    
state  assisted   Health  Insurance  Premium   Payments  and                                                                    
coverage;  the department  had experienced  success in  data                                                                    
matches   with  insurance   carriers  to   identify  primary                                                                    
insurance carriers  that may  not have  been reported  by an                                                                    
individual;  and,  Medicare  buy-in  where  the  state  paid                                                                    
Medicare  Part  A and  B  premiums,  which had  saved  $35.4                                                                    
million the  prior year.  He noted  that the  cost avoidance                                                                    
programs had been successful.                                                                                                   
Representative  Joule   asked  what  the   state's  Medicaid                                                                    
related  general  fund  expenditures had  been  three  years                                                                    
earlier  compared  to   future  expenditures  through  2012.                                                                    
Commissioner Streur  answered that costs  were approximately                                                                    
$1.1  billion  in  2008,  $1.2 billion  in  2009,  and  $1.3                                                                    
billion in the current year.                                                                                                    
Representative  Joule  asked  whether the  numbers  provided                                                                    
were   only   related    to   general   fund   expenditures.                                                                    
Commissioner Streur responded in the negative.                                                                                  
Representative  Joule  wondered specifically  about  general                                                                    
fund expenditures.  He thought  that general fund  costs had                                                                    
been  approximately  $300 million  to  $400  million in  the                                                                    
past, were approaching approximately  $700 million in FY 11,                                                                    
and depending  on FMAP funding  the costs  could potentially                                                                    
be $850 million or so looking out to 2012.                                                                                      
Commissioner Streur  responded that the figures  were a good                                                                    
approximation. He  added that  they were  a little  light in                                                                    
2007, in  2008 and 2009  the state's general fund  share was                                                                    
slightly reduced,  in 2010  there was  a small  increase, in                                                                    
2001 there  was an  increase, and there  was an  increase of                                                                    
roughly $180 million in 2012.                                                                                                   
Representative Doogan  congratulated Commissioner  Streur on                                                                    
his new appointment at DHSS.                                                                                                    
3:30:00 PM                                                                                                                    
The meeting was adjourned at 3:30 PM.                                                                                           

Document Name Date/Time Subjects
HB21 Sponsor Statement Final.PDF HFIN 2/8/2011 1:30:00 PM
HB 21
FINAL version of FY2010 Annual Report Mending the Net 1-26-11.pdf HFIN 2/8/2011 1:30:00 PM
CS WORKDRAFT HB 21 (FIN).pdf HFIN 2/8/2011 1:30:00 PM
HB 21
DHSS Medicaid 020811 PDF.pdf HFIN 2/8/2011 1:30:00 PM
Medicaid PP slide 29.pdf HFIN 2/8/2011 1:30:00 PM