Legislature(2021 - 2022)ADAMS 519
02/16/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Medicaid Update by the Department of Health and Social Services | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 16, 2022
1:35 p.m.
1:35:16 PM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 1:35 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter (via teleconference)
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Adam Wool (via teleconference)
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
MEMBERS ABSENT
None
ALSO PRESENT
Albert Wall, Deputy Commissioner, Division of Medicaid and
Healthcare Services, Department of Health and Social
Services; Sylvan Robb, Deputy Commissioner, Department of
Health and Social Services; Adam Crum, Commissioner,
Department of Health and Social Services; Gennifer Moreau-
Johnson, Director, Division of Behavioral Health,
Department of Health and Social Services.
PRESENT VIA TELECONFERENCE
Dr. Ted Helvoigh, Vice President, Evergreen Economics; Rich
Albertoni, Manager, Public Consulting Group.
SUMMARY
PRESENTATION: MEDICAID UPDATE BY THE DEPARTMENT OF HEALTH
AND SOCIAL SERVICES
Co-Chair Foster reviewed the agenda for the day.
^PRESENTATION: MEDICAID UPDATE BY THE DEPARTMENT OF HEALTH
AND SOCIAL SERVICES
1:36:15 PM
Co-Chair Foster relayed the list of testifiers and invited
the testifiers in the room to the table.
1:37:04 PM
ALBERT WALL, DEPUTY COMMISSIONER, DIVISION OF MEDICAID and
HEALTHCARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, introduced himself. He would be discussing
Medicaid, enrollees of Medicaid, associated costs, and the
future of Medicaid. The subject was vast and complex and he
would not be able to cover everything about Medicaid in one
presentation. He reviewed the list of testifiers from the
Department of Health and Social Services (DHSS). He began
the PowerPoint Presentation: "Medicaid Services FY 2023
Overview" (copy on file) by reviewing the agenda on slide
2. The topics of the meeting included the following:
Medicaid Eligibility
Medicaid Budget
Medicaid Eligibility and Spending in Alaska (MESA)
Ted Helvoigt, Ph.D.
Public Consulting Group Recommendations Rich
Albertoni
1115 Waiver Behavioral Health Demonstration
Project
1:40:46 PM
Mr. Wall turned to slide 3 to provide an overview of Alaska
Medicaid. He explained that Medicaid was the largest health
coverage program in Alaska and provided comprehensive
coverage for Medicaid-eligible recipients. The coverage
amount was dependent on recipient needs. He added that
Medicaid was a collaborative effort between multiple
divisions. While the process was dependent on the state,
Alaska had four divisions that were involved in the
process. He had been doing presentations on the involved
divisions at the DHSS subcommittee meetings.
Co-Chair Foster indicated Representative Carpenter had
joined the meeting online.
Mr. Wall continued to discuss the divisions involved in the
Medicaid process. The divisions were listed on the slide as
follows:
• Medicaid Eligibility: Division of Public Assistance
(DPA) Medicaid Program Administration: Health Care
• Services (HCS), Division of Behavioral Health (DBH),
Senior and Disabilities Services (SDS)
• Service Payment: HCS and DBH, through both fiscal
agents Conduent and Optum
Mr. Wall indicated that the majority of enrollees were
seeking primary care, which was usually referring to
services performed at hospitals and physician clinics.
Many Alaskans needed other services like mental health
treatment or substance abuse treatment. The Division of
Behavioral Health (DBH) was responsible for such services
and was highly involved in the Medicaid process. He also
pointed out that Medicaid had two service payments: Optum
and Conduent. It was divided into two because there needed
to be quick proof that services were medically necessary
due to the 1115 waiver. The two service payment methods
allowed for a more streamlined process.
1:44:49 PM
Mr. Wall continued to slide 4 and explained that Medicaid
was nuanced and complex. There were a variety of agencies
that performed specific and important tasks that were
paramount to Medicaid's functionality. He emphasized that
Alaska Medicaid could not exist without help provided by
the following agencies:
• Federal Reporting, Claiming, and Audits: Finance and
Management Services
• Rate Setting: Office of Rate Review
• Program Integrity: Medicaid Program Integrity Unit
and Medicaid Fraud Control Unit (Department of Law)
• Medicaid State Plan: Office of the Commissioner
• Health Information Technology
• Coordination and Consultation with Tribal Health
Organizations
Mr. Wall noted that the Federal Reporting, Claiming, and
Audits: Finance and Management Services unit was
responsible for drawing down about $1.7 billion in federal
funds every year. The unit had an immense impact despite
its small size. Program Integrity performed audits of
providers and brought in about $5.5 million per year. He
relayed that Medicaid was a contract between the federal
government and the state, and the Medicaid State Plan
administrator acted as the contract manager for the state.
Mr. Wall continued that each division had a tribal liaison
and met with a number of different tribal healthcare
groups. Another important element was the tribal reclaiming
process which was handled through healthcare services. The
tribal reclaiming process involved finding general funds
that could have been claimed under federal funds through
tribal health. The unclaimed funds would be adjusted to
bring the money back to the state. In FY 20, $90 million
was brought into the state through the process.
1:50:24 PM
Representative Rasmussen asked which departments providers
would contact if there were issues with Medicaid billing.
Mr. Wall replied that slide 3 represented the four
divisions within Medicaid. Behavioral health providers had
tools available to them through DBH that provided contact
information for Medicaid billing issues. If the provider
was anything besides a behavioral health provider, they
would go through health services.
Representative Rasmussen asked for the number of medical
providers that were assigned to one Medicaid billing
contact for questions and problems.
Mr. Wall replied that the number of providers assigned to a
single contact depended on provider-type, and there were
many different provider-types. He would get back to the
committee with the answer in writing.
Vice-Chair Ortiz asked what type of work a fiscal agent
would do in relation to Medicaid.
Mr. Wall explained that fiscal agents were responsible for
working with providers on the claim filing process. The
agents were also responsible for ensuring the accuracy of
the claim and handled the money involved in the claim. The
department worked with Conduent and Optum to provide the
service to providers.
Vice-Chair Ortiz was confused about the term "waiver" in
relation to Medicaid. He asked for more information on
waivers.
Mr. Wall explained that a waiver gave permission for
someone to not adhere to a core set of rules. For example,
the 1115 waiver referred to a section in federal code that
described the waiver. He agreed that waivers were confusing
and that each state had its own 1115 waiver and some had
more than one. The numbers referred to Medicaid rules that
were waived. He used the 1135 waiver as an example, which
Alaska filed in response to the COVID-19 pandemic. An 1135
waiver informed the federal government that there was an
emergency and requested that some rules be waived in order
to provide better healthcare given the circumstances. He
thought there was a testifier later in the presentation
that would give more detailed information about waivers.
1:55:24 PM
Representative Edgmon asked what effects splitting DHSS
would have on Medicaid.
Mr. Wall responded that the department would be dividing
the administration and processing of claims from 24/7 care.
The simplest way was to separate regulation from the actual
practicing of care. For instance, Alaska Psychiatric
Institute (API) was a licensed hospital and fell under the
jurisdiction of healthcare facility licensing. There were
divisions within DHSS that were responsible for overseeing
other divisions in the same department, which did not seem
logical. The split would address the issue and would allow
there to be more proactive focus on things like cost
containment of Medicaid.
Representative Edgmon noted that he and Representative
Thompson were present when the Medicaid legislation was
being crafted in 2016 and that it was time intensive.
Mr. Wall understood and noted that he had invested a lot of
work into Medicaid as well.
Mr. Wall turned to the slide 5 which discussed Medicaid
eligibility. He noted that as demographics in Alaska
changed, the impacts on Medicaid changed. He explained that
demographics were used to project costs.
Mr. Wall turned to the chart on slide 6. The green bars
represented the Medicaid expansion population. Overall,
enrollment in Medicaid was growing steadily. The Medicaid
enrollment numbers would continue to grow until the changes
brought about by the pandemic were controlled. He turned
the presentation over to Ms. Sylvan Robb from DHSS.
2:01:25 PM
SYLVAN ROBB, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, began with slide 7 to discuss the Medicaid
budget development process. She relayed that the department
included a number of variables in order to come up with
cost projections. Some of the variables included population
changes, utilization changes, actual spending trends, and
program changes and special initiatives. She relayed that
the department had to submit a report called the CMS 37 to
the federal government every year. The department used some
additional resources for projections, such as Medicaid
program utilization metrics developed using the state's
accounting systems as well as long-term forecasts of
Medicaid enrollment and spending in Alaska.
Ms. Robb continued to slide 8 and reported that Medicaid
had a budget of $2.4 billion. In FY 23, the projected
unrestricted general fund (UGF) need was $656 million. She
indicated that DHSS was asking for an increment of $45
million and she would discuss how the department arrived at
that number later in the presentation. She noted designated
general funds (DGF) as well as federal funding had been
relatively stagnant as shown in the graph on the slide.
Overall, the cost of Medicaid had increased slightly, but
UGF spending was down by $20 million.
2:04:45 PM
Ms. Robb continued to slide 9. She explained that the FY 23
budget assumed that the enhanced Federal Medical Assistance
Percentage (FMAP) map would conclude at the end of FY 22.
The assumption was that the state would be back at the
original FMAP levels for FY 23. The enhanced FMAP had
awarded the state an additional $17.5 million of federal
funding for Medicaid each quarter, which equated to nearly
$70 million annually. The department anticipated a
shortfall of $72 million if the department did nothing to
contain the costs. However, the department was only
requesting $45 million because it had a number of cost
containment strategies that would be implemented. Some of
the cost savings strategies were listed on the slide as
follows:
Public Consulting Group cost saving activities to be
implemented in FY2023:
$17.0 million projected to be captured once Medicaid
eligibility redetermination resumes (until the
Public Health Emergency is over, states receiving
the enhanced FMAP must adhere to a continuous
enrollment requirement).
$6.5 million Implementation of Section 1945 Health
Homes
$3.5 million Pay for Performance for Hospitals
Other cost saving activity to be implemented in
FY2023:
$4.6 million Implementation of Indian Health
Service (IHS) reclaiming by the Administrative
Services Organization for the Division of Behavioral
Health
2:09:03 PM
Representative Josephson noted that in FY 20, the
department had produced a phase 1 cost containment
implementation schedule. He wondered if he could get an
updated version of the schedule.
Ms. Robb suggested that Representative Josephson speak with
her after the meeting to ensure she understood which
document he wanted. She would get the updated version to
him.
Representative Edgmon noted there had been a previous
discussion about projecting annual Medicaid expenses with
an increased emphasis on tribal compacting. He asked how
tribal compacting impacted Medicaid expenses.
Mr. Wall asked the representative to repeat his question.
Representative Edgmon elaborated that there was a previous
meeting during which the need for more tribal compacting
was emphasized, particularly by the Office of Children's
Services (OCS). He wondered what the relationship was
between tribal compacting and Medicaid.
Mr. Wall indicated that tribal compacting would be an OCS
issue and would not have a direct impact on Medicaid. There
were some services offered through Medicaid that were used
by OCS clientele, but the compacting would not have a
direct impact.
Representative Edgmon asked if Mr. Wall was speaking
strictly to present circumstances. He wondered if there was
a possibility that Medicaid would play a more substantial
role in OCS in the future.
Mr. Wall reiterated that he did not believe there would be
a direct impact on Medicaid due to compacting. However,
services provided through Medicaid to OCS clientele would
be impacted. He explained that the department was required
to consult the tribes on any changes to Medicaid.
Vice-Chair Ortiz asked to return to slide 8. He noted there
had been a gradual increase in Medicaid participation and
thought the increase did not necessarily correlate to an
increase in costs. He wondered if a similar increase could
be seen in graphs ranging back to 2005.
Ms. Robb thought the question would be better answered by
subsequent testifiers.
2:14:41 PM
Representative Josephson asked about the last item on slide
9 which projected a $4.6 million savings in more aggressive
tribal reclaiming. He wondered if the savings was used both
in the Administrative Services Organization (ASO) for the
DBH and separately in the Division of Medicaid and
Healthcare Services (DMHS). He asked if the budget
reflected the $4.6 million savings twice.
Ms. Robb responded in the negative. Tribal reclaiming was
already done through the claims that were paid through
healthcare services. The forthcoming tribal reclaiming
would be for claims related to the 1115 waiver. Tribal
reclaiming for 1115 waiver claims had never occurred
before.
Mr. Wall added that one of the reasons was because the 1115
waiver was relatively new. The service line for the waiver
was introduced in two phases: first, substance abuse was
implemented, then mental health was added. The process had
been implemented thoughtfully and the reclaiming aspect had
not been added until the process had proven to be sound.
Other tribal reclaiming was already done through another
fiscal agent.
Representative Josephson thought that DMHS indicated that
tribal reclaiming opportunities were down due to the
pandemic and lower utilization. He asked if the $4.6
million might not be achieved because of a lack of
utilization.
Mr. Wall agreed that it was possible. However, he stood by
the present projection.
Ms. Robb indicated Dr. Ted Helvoigh from Evergreen
Economics would be continuing the presentation.
2:17:36 PM
DR. TED HELVOIGH, VICE PRESIDENT, EVERGREEN ECONOMICS (via
teleconference), continued to slide 10 to begin his portion
of the presentation. He relayed there was a demand by the
legislature in 2005 to compile a long-term spending
forecast for Medicaid Enrollment and Spending in Alaska
(MESA). The projections were based on Medicaid enrollment
as it currently operated and intended to inform the
legislature and DHSS on the state of Medicaid.
Dr. Helvoigh turned to slide 11 to review the modeling
approach, which relied on published data and statistical
modeling to build the forecast in consecutive steps. The
steps were ordered as follows: long-term population
projections, enrollment in the Medicaid program,
utilization of Medicaid services, intensity of Medicaid
use, and spending on Medicaid.
Dr. Helvoigh moved to slide 12 which charted weekly
spending on Medicaid services during all of FY 20, FY 21,
and part of FY 22. The chart took date of service into
account and acknowledged that services might be paid in 30
days, 90 days, or another timeframe. He relayed that
Medicaid spending was close to what it was prior to the
pandemic. The long-term forecast assumed that the pandemic
was a detour and that spending would fully recover.
2:25:24 PM
Dr. Helvoigh advanced to slide 13 which reflected
enrollment and growth in enrollment. He highlighted that
enrollment increased due to the pandemic. However, the
increase did not mean there was a greater demand for
Medicaid but simply that a person would have to "move or
die" to get off of Medicaid. He relayed that there were
fewer ways to get off of Medicaid than there were in the
past and the growth should decline because of the pandemic
waning.
Dr. Helvoigh moved to slide 14 which showed substantial
growth beginning in 2016. Spending increased rapidly when
Medicaid expansion began, slowed in FY 20, and was coming
back up again. The blue bars on the graph showed what the
state was spending on Medicaid services each year. The
state was spending less than it was 10 years ago. The green
line in the chart showed Medicaid enrollment and the blue
line showed Medicaid recipients. He emphasized that
enrollees and recipients were very different. He elaborated
that an enrollee was anyone who was enrolled in Medicaid
and a recipient was an enrollee who actually used Medicaid
services. In recent years, there were many more enrollees
than recipients, which was not the situation in 2012
because the reevaluation of Medicaid was done more
frequently prior to Affordable Care Act (ACA). He noted
that due to ACA, more people could enroll in Medicaid which
resulted in a greater separation between enrollees and
recipients. In FY 22, approximately 78 percent of Medicaid
enrollees were also recipients. Enrollment was not the best
indicator of program use; instead, recipient numbers were a
more informative benchmark.
2:31:27 PM
Dr. Helvoigh continued to slide 15 and explained that the
population was aging, and growth had slowed. The senior
population would experience relatively strong growth
through the 20-year projection period. The group that would
experience the slowest growth was children. He emphasized
that spending patterns were much different based on age.
Dr. Helvoigh advanced to slide 16 to discuss Medicaid
enrollment projections in the long-term. He reported that
in 1999, there were fewer than 100,000 enrollees and today,
there were about 267,000. Enrollee numbers were projected
to reach 300,000 by 2042. Children had historically been
the largest enrollee demographic, but that had since
shifted and working-age adults were now the main enrollees.
Dr. Helvoigh turned to slide 17 which contained a graph
that reflected the growth in Medicaid reimbursement rates.
He relayed that Medicaid reimbursement rates would grow at
a slower rate than overall healthcare price inflation. The
blue line on the graph showed the projected growth in
medical price inflation in Alaska, and the red line showed
the projected growth in Medicaid reimbursement rates. He
thought it was a useful graph to show cost controls.
2:36:19 PM
Representative Josephson asked if Dr. Helvoigh had
recommendations how to close the distance between the blue
and red lines. He asked if Dr. Helvoigh was using a 4.2
percent Evergreen economic growth rate.
Dr. Helvoigh responded that he could not provide guidance
on how to increase the growth in reimbursement rates. The
red line represented historical data and it trended in
coordination with national inflation increases. The
projections represented by the blue line came about by
looking at the historical medical price inflation for
Alaska as compared to the overall general price inflation
in the United States. He used data from a third party to
project what health care inflation would look like in
Alaska. He compared the U.S. and Alaska because he needed
to use a series that was already forecasted in order to
accurately project price inflation in the state.
Representative Josephson asked what Evergreen's projected
growth rate was for medical price inflation.
Dr. Helvoigh thought it was close to four percent. On
average, it was 3.5 percent to four percent.
Representative Josephson understood that the administration
was calling for a one percent growth rate.
Dr. Helvoigh responded that he did not know the rate called
for by the administration. His point was that over the past
15 years, medical price inflation had grown at 3.5 to four
percent or even faster, yet the overall Medicaid spending
has significantly lagged behind. It was clear that Medicaid
spending had grown at a much slower rate than general
medical price inflation in Alaska. In other words, Medicaid
costs appeared to have been strongly contained.
Dr. Helvoigh advanced to slide 18 and explained that
general fund spending would grow faster than federal
spending. He projected that Medicaid spending would grow by
3.5 percent each year. The state was currently receiving an
additional 6.3 percent FMAP that would eventually be
discontinued, at which time the state would experience a
substantial increase in Medicaid spending. Between state
general funds and other matching funds and federal funds,
annual Medicaid spending would grow at an average rate of
about 3.5 percent.
2:44:13 PM
Co-Chair Foster noted that administration projected in the
10-year outlook that the cost would increase by about one
percent. However, he understood that Dr. Helvoigh thought
3.5 percent should be expected.
Dr. Helvoigh confirmed that 3.5 percent was the
expectation. He was not familiar with the forecast by the
administration that Co-Chair Foster was referring to.
Co-Chair Foster thought he should have directed his
question to Mr. Wall.
Mr. Wall was confused about which projection of cost was
being discussed. He asked if the costs on slide 18 were
referring to the overall cost of medical or the
reimbursement costs for Medicaid.
Co-Chair Foster thought it was the overall cost of medical.
Representative Josephson asked what the department was
projecting for Medicaid growth.
Mr. Wall suggested that he get back to the committee with a
response in writing.
Dr. Helvoigh continued to slide 19 with a chart that
compared projected spending to the current forecast and the
first long-term Medicaid forecast. He explained that the
red line represented actual spending, the green dashed line
represented projected spending, and the blue dot line
represented the first long-term forecast from 2006.
Dr. Helvoigh turned to slide 20 which contained a graph
that showed that many more Alaskans were receiving Medicaid
services. He noted that the number of recipients was
similar to the forecasted number for a long stretch of time
but expanded significantly in about 2015 due to Medicaid
expansion.
Dr. Helvoigh advanced to the third chart on slide 21 which
concluded that spending per recipient was much lower in the
present day than was projected in 2006. Costs had been flat
over the past 10 years.
2:50:48 PM
Representative Edgmon thought the chart proved that
Medicaid expansion helped bend the cost curve down.
Dr. Helvoigh thought that it did provide slight proof on a
per recipient basis. By definition, the expansion
population was comprised of non-disabled working-age
adults. He thought Medicaid expansion probably helped
reduce spending per recipient but did not contribute to
reducing the overall spending costs.
Mr. Wall added that the real difference was in the general
fund spend. There was a tremendous reduction in the general
fund spend due to the expansion population, however the
overall expenditures were about the same.
Representative Edgmon thought that was intuitive because
expansion population was about 90 percent after starting at
100 percent.
Mr. Wall indicated it had stepped down over a couple of
years.
Representative Edgmon argued that it would be difficult to
bend the curve because of high costs in Alaska.
Mr. Wall responded that he understood the conversation to
be centered around the inflation of medical costs, not just
the reimbursement of Medicaid. The inflation costs seemed
to be the more important costs to address. He thought it
was important to isolate Medicaid to be able to look more
closely at it and come up with a better plan to reduce
costs.
Representative Edgmon was getting confused about the
inflation discussion. He thought that if the Medicaid cost
inflation was reduced to one percent it would help bend the
cost curve.
Mr. Wall wanted to find out more information about the one
percent projection before speaking to it.
Representative Josephson commented that the Legislative
Finance Division (LFD) in preparing its long-term outlook
for the governor's ten-year plan noted that the
administration anticipated that agency operations would
grow at 1.5 percent and Medicaid at one percent.
2:55:27 PM
Dr. Helvoigh continued to speak on slide 21. He commented
that inflation referred to the price of a service, not the
overall spending.
Dr. Helvoigh continued to slide 22. There had been a drive
by the department to use data to better understand Medicaid
spending in Alaska. The chart on the slide showed Medicaid
recipients by age and diagnosis of one or more chronic
conditions. As people aged, the likelihood of developing a
chronic condition increased.
Dr. Helvoigh moved to slide 23 which included a chart that
showed the average and total spending on Medicaid services
by number of diagnosed chronic conditions. The orange bar
represented total spending on Medicaid Services for
recipients with chronic conditions. The blue line
represented the average spending per recipient. As the
number of chronic conditions increased, spending also
increased.
Dr. Helvoigh advanced to slide 24 which included a chart
that showed the projected spending on Medicaid services for
FY 22 through FY 42. The orange bar represented spending on
beneficiaries that were not diagnosed with a chronic
condition and the blue bar represented spending on those
who were diagnosed with one or more chronic conditions.
About 80 percent of spending was dedicated to individuals
who had one or more chronic conditions. By 2042, spending
would increase to about 84 percent.
Representative Edgmon surmised that the numbers on the
slide included the prison population's need for Medicaid.
Dr. Helvoigh answered that incarcerated individuals were
included in the data.
Representative Edgmon remarked that Alaska's population
continued to get older and not younger. He thought that was
something to keep an eye on.
3:03:34 PM
RICH ALBERTONI, MANAGER, PUBLIC CONSULTING GROUP (via
teleconference), continued to the second portion of the
PowerPoint presentation titled "PCG Medicaid Strategic
Advising Project: Summary of Findings and Recommendations
Included in DHSS Budget" (copy on file). He began on slide
26 and explained that the Public Consulting Group (PCG)
assisted DHSS in creating a global roadmap that redesigned
the Medicaid and public assistance system at a lower cost.
Mr. Albertoni moved to slide 27 to show some of the
methodology utilized by PCG to shape the Medicaid system
redesign proposal. The left column included information on
site visits and engagements directly with DHSS, the middle
column showed engagement with stakeholders, and the right
column showed additional resources used over the course of
the project. All of the resources were vital in shaping the
recommendations and findings paper that was released by
PCG.
3:06:37 PM
Representative Edgmon asked if all of the stakeholder
engagement regarding Medicaid contributed to the decision
to split DHSS into two separate departments.
Mr. Wall indicated that the conversations were separate.
The conversation with PCG started prior to the pandemic and
had been ongoing for a number of years.
Representative Edgmon clarified that the conversation to
divide the department happened independently from the
conversation about Medicaid system strategies.
Mr. Wall responded that the conversations informed each
other, but PCG was not consulted on the decision to split
the department.
Representative Edgmon thought the conversations were one
and the same and the overall goal was to provide better
programmatic representation. He struggled with the fact
that conversations were separate.
Mr. Wall reiterated that the conversations informed each
other.
Representative Edgmon interjected that was not what he was
concerned about. He thought the conversations needed to
have happened together in real-time.
Mr. Wall reported that the conversations were held in
parallel but that Mr. Albertoni with PCG was not hired to
determine whether the department should be split.
ADAM CRUM, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, indicated that Mr. Albertoni specifically worked
to determine which items that worked across the country to
contain Medicaid costs would also work in Alaska. He
explained that Mr. Albertoni's role was to present how
strategies used across the country would function in
Alaska. At the same time, the department had separate
conversations with all of the stakeholders listed on slide
27 to ensure that they understood the DHSS split.
3:10:55 PM
Mr. Albertoni advanced to slide 28 to discuss the overall
reform principles. He explained that paper was organized
around the following principles:
Payment Reform: Move toward value-based purchasing
Delivery System Reform: Move toward coordinated care
Cost Containment: Address inflationary pressures
Program Integrity: Prevent fraud, waste and abuse
State Financial Stewardship: Assure Alaska claims
its fair share of Medicaid matching dollars
He relayed that the principles acted as a roadmap for the
Medicaid system to move away from a fee-for-service system
and containing costs through program integrity initiatives.
He relayed that he would be speaking later in the
presentation about why it was difficult to move away from a
fee-for-service system in Alaska.
Mr. Albertoni continued to slide 29 and indicated there
were three initiatives that the department included in the
budget: Medicaid eligibility redeterminations,
implementation of section 1945 health homes, and hospital
payments including pay for performance. The first was a
program integrity initiative, the second was a delivery
system reform, and the third was a payment reform.
Mr. Albertoni continued to slide 30. He explained that all
Medicaid recipients who had enrolled during the pandemic
would remain eligible for the program unless they moved out
of state, specifically asked to be removed from the
program, or become deceased. There had been discussions
about creating a one-time data use hub to gather
information about enrollees to determine if there were any
changes in circumstances that impacted eligibility. Other
states had done similar redeterminations and had saved
significant amount of money. Eligibility for Medicaid had
remained frozen with the declaration of the Covid Public
Health Emergency (PHE) and redeterminations had also
remained frozen. When PHE ended in April of 2022, states
would have options. States could incrementally evaluate
Medicaid enrollees and everyone would be evaluated over a
period of 12 months. There would be significant savings
with redeterminations coming out of PHE.
3:15:48 PM
Mr. Albertoni turned to slide 31 to discuss the Alaska
delivery system reform baseline. He relayed that Alaska was
much more fee-for-service than most states. He explained
that most states had implemented some version of commercial
managed care. The state had unique characteristics such as
the Tribal Health System that made traditional Medicaid
managed care challenging on a statewide basis. It was
difficult to establish networks within rural areas in the
state, but Alaska was making progress. The state had
existing care coordination assets upon which to build, such
as the Behavioral Health 1115 Waiver, the Providence Care
Coordination Demonstration, and High Utilizers Mat-Su
(HUMS). He relayed that PCG aimed to implement changes
incrementally in its report.
Mr. Albertoni advanced to slide 32 which discussed health
homes, which were authorized in Section 1945 of the ACA.
Health homes were providers that became care coordinators
and homes within the ACA were primarily targeted at people
with chronic health conditions. States had significant
latitude in determining health home implementation and
eligibility and could utilize state plan amendments instead
of waivers. The state could receive 90 percent in matching
funds for eight quarters for care coordinating elements of
health homes. He indicated there were footnotes in his
paper that showed how the process would provide savings to
the state.
Representative Josephson thought attaining state plan
amendments was an extensive process.
Mr. Albertoni responded that it depended on the amount of
detail required, but that it could take at least a few
months. If there were disagreements on items like
implementation, the process could take longer.
3:20:22 PM
Mr. Albertoni continued to payment reform on slide 33. He
reported that states often focused on hospitals when
beginning the process of payment reform. Hospitals
represented a large percentage of total spend for the
program and included a relatively small number of
providers. Currently, the baseline for hospital
reimbursement in Alaska was a per diem method, which
incorporated hospital cost increases as they accrued. As a
result, the state reacted to cost adjustments rather than
managing the rates. The outpatient method that was
currently in place was based on a percent of charges, which
permitted hospitals to control their own prices by
adjusting charges. Neither the percent of charges nor the
per diem method was acuity-based, meaning reimbursement was
not based on the intensity of resource utilization.
Mr. Albertoni moved to slide 34 to the new recommended
method for hospital payment reform. He explained that the
idea was to take a small portion of the overall hospital
budget and put it into a pay per performance fund. He
recommended that about $3 million be carved out for the
fund, which could be easily achieved by putting a budget
adjustment factor into the rate setting that effectively
managed cost growth and incentivized hospital efficiency.
Most states that implemented similar programs would then
pair the budget adjustment factor with quality-based
payments to incentivize both resource efficiency and
positive patient outcomes. The savings in the proposal were
based on reducing preventable readmissions in Alaska by 25
percent.
3:23:31 PM
Mr. Wall turned the presentation over to Ms. Gennifer
Moreau-Johnson.
GENNIFER MOREAU-JOHNSON, DIRECTOR, DIVISION OF BEHAVIORAL
HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, began
with slide 36 to discuss the 1115 behavioral health
Medicaid waiver. She explained that DHSS was required to
apply for a Section 1115 demonstration project waiver and
continue cooperation with grant-funded community mental
health clinics and drug and alcohol treatment centers.
Ms. Moreau-Johnson moved to slide 37 which included a graph
showing the mental health continuum of care. She explained
that the 1115 waiver targeted certain populations. The
population on the slide represented youth and adolescents
with mental health or substance use disorder or those at-
risk of developing such disorders. The blue bar on the
graph represented the services covered by the 1115 waiver.
She emphasized that the inclusion of early intervention
under applicable services had been a gamechanger for the
state.
Ms. Moreau-Johnson advanced to slide 38 which showed a
graph of the mental health continuum of care for
individuals aged 18 and older. She noted that the
gamechanger in the graph was the emphasis on "step-up,
step-down" services, which were services that could either
divert from or stabilize an individual when discharged from
acute care.
Ms. Moreau-Johnson explained slide 39 which showed the
substance abuse disorder continuum of care for individuals
aged 12 and older. She relayed that the gamechanger in the
category was aligning services with the American Society of
Addiction Medicine's (ASAM) levels of care.
Ms. Moreau-Johnson turned to slide 40 which showed an
example of a shift from state grant funds to Medicaid. The
graph focused on the Institute of Mental Disease (IMD) for
substance use disorder, which provided a service not
previously billable to Medicaid. The graph showed the
transition in costs from the service being funded by state
grants to being funded by state Medicaid, to being funded
by federal Medicaid. Overall, the 1115 waiver consisted of
about 80 percent federal dollars.
3:27:45 PM
Ms. Moreau-Johnson advanced to slide 41 which included a
graph depicting the difference between state and federal
spending on Medicaid during FY 21. Behavioral health claims
represented approximately ten percent of all Medicaid
claims.
Ms. Moreau-Johnson moved to the final slide 42 which showed
the number of unique agencies billing Medicaid for 1115
waiver services by state region. She emphasized that the
1115 waiver was authorized in two parts: behavioral health
and substance use disorder. The second part was not
authorized until May 1, 2021 [note: Ms. Moreau-Johnson made
a correction to this date below]. She relayed that grant
funded community providers would still remain part of the
collaborative process. She concluded her portion of the
presentation.
Representative Josephson asked for clarification that the
substance abuse portion of the waiver was not authorized
until less than a year ago.
Ms. Moreau-Johnson corrected herself and responded that it
was the other way around. The substance use disorder
component was implemented first in 2018, and the behavioral
health component was implemented in 2021.
Representative Josephson reported that Mr. Tom Chard from
Alaska Behavioral Health Association (ABHA) told him that
the problem with the proposed transition was capacity. He
understood that there needed to be expansion in order to
qualify. He asked if he understood Mr. Chard correctly.
Ms. Moreau-Johnson thought the question deserved a longer
conversation. She explained that some services were held
back through the state plan and other services were then
implemented through the 1115 waiver. It was complicated and
she did not want to understate that the transition was
difficult. The division continued to do things like pre-
provision certification opportunities for providers for
certain services to ease the transition. She acknowledged
again that the process was difficult and there were
capacity issues, but the department was doing everything it
could to make the transition as smooth as possible.
3:31:40 PM
Representative LeBon referred to slide 30 and noted that he
had not been part of the legislature when Medicaid
expansion was decided upon. He understood that the goal of
expansion was to ease the transition for enrollees who were
between jobs but were actively seeking employment or
education. However, there had been an increase in the
number of individuals unable to find employment due to the
pandemic. He asked if it was expected that enrollees who
were now able to work would detach from Medicaid and that
the Medicaid population would decline. He wondered if the
state would see Medicaid savings in the following year or
two.
Mr. Wall thought that some of Representative LeBon's
concerns were addressed during the cost containment and
redetermination eligibility portion of the presentation. He
expected that individuals who had found employment with
benefits would come off the Medicaid rolls and the
population numbers would decline. He added that many
individuals had jobs that either paid too little or did not
offer health benefits, and therefore they could not afford
to disengage from Medicaid. He offered reassurance that the
issue was being discussed.
Representative LeBon understood that the state would be
entering into a period of redeterminations and that
Medicaid populations were expected to decline within a
year.
Mr. Wall responded, "Absolutely." He added that
redeterminations were federally mandated.
Representative LeBon asked if Mr. Wall thought PHE would be
lifted within the next six to nine months.
Mr. Wall responded that he was confident that PHE would end
on the expected end date of April 15, 2022.
3:35:49 PM
Representative Josephson relayed that a cable news network
reported a 44 percent decrease in COVID-19 cases, but over
the past week over 2,300 people died every day.
Co-Chair Foster thanked Ms. Moreau-Johnson for her
efficiency in getting through the final slides. He wished
he had split up the presentations into multiple meetings.
He thanked all of the presenters and reviewed the agenda
for the following meeting.
ADJOURNMENT
3:36:58 PM
The meeting was adjourned at 3:36 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFIN DHSS-DOH Medicaid Services FY2023 Overview 2-16-2022 .pdf |
HFIN 2/16/2022 1:30:00 PM |
|
| DHSS Medicaid Update 021622 HFIN Response to Q 022422 .pdf |
HFIN 2/16/2022 1:30:00 PM |