Legislature(2023 - 2024)ADAMS 519
02/14/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB41 | |
| Fy 24 Budget Overview: Department of Health | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 41 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 14, 2023
1:35 p.m.
1:35:40 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:35 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Heidi Hedberg, Commissioner-Designee, Department of Health;
Josie Stern, Assistant Commissioner, Department of Health;
Emily Ricci, Deputy Commissioner, Department of Health;
Renee Gayhart, Director, Healthcare Services, Department of
Health.
PRESENT VIA TELECONFERENCE
Deb Etheridge, Director, Division of Public Assistance,
Department of Health; Dr. Anne Zink, Chief Medical Officer,
Department of Health.
SUMMARY
HB 39 APPROP: OPERATING BUDGET/LOANS/FUND; SUPP
HB 39 was HEARD and HELD in committee for further
consideration.
HB 41 APPROP: MENTAL HEALTH BUDGET
HB 41 was HEARD and HELD in committee for further
consideration.
FY 24 BUDGET OVERVIEW: DEPARTMENT OF HEALTH
Co-Chair Johnson reviewed the meeting agenda.
HOUSE BILL NO. 39
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
HOUSE BILL NO. 41
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:36:44 PM
^FY 24 BUDGET OVERVIEW: DEPARTMENT OF HEALTH
1:37:26 PM
HEIDI HEDBERG, COMMISSIONER-DESIGNEE, DEPARTMENT OF HEALTH,
introduced herself and her staff. She provided a PowerPoint
presentation titled "State of Alaska Department of Health:
House Finance Committee Budget Overview," dated February
14, 2023 (copy on file). She began on slide 2 and
highlighted that the Department of Health and Social
Services (DHSS) had split into the Department of Health
(DOH) and the Department of Family and Community Services
(DFCS) on July 1, 2022. She read from prepared remarks:
This visual on slide 2 is a helpful reminder of which
divisions went to which department. Department of
Health retained the prevention systems and payment.
The Department of Family and Community Services has
the direct care services also commonly referred to as
the 24/7 facilities. The department reorganization was
good. It provides a smaller span of control and allows
the commissioners to focus on divisional work and
system operations that support population health and
person-centered services. The Department of Health and
Department of Family and Community Services continue
to coordinate on approving the continuum of care for
person-centered care and working together on complex
care coordination.
Complex care coordination is defined by a person that
utilizes more than one division or department program.
These individuals have complex needs and require a lot
of resources and supports that can be incredibly
costly. Both departments are working on a complex care
plan, which will help streamline healthcare services
with the desired result of better client care and cost
savings. In addition, the two departments also
continue to share IT resources and are working on a
road map to separate those IT resources. The May 2021
cyberattack highlighted the technology debt,
overburdened, and overtaxed IT systems. The roadmap
will support both departments identifying the
necessary resources to support the HIPAA compliant
services for Alaskans.
1:39:57 PM
Commissioner Hedberg moved to DOH's mission on slide 3. She
read from prepared remarks:
Slide 3 is the Department of Health's mission to
promote and protect the health and well-being and
self-sufficiency of Alaskans with a focus on systems
of care to ensure Alaskans receive timely services.
We serve every Alaskan from birth through elders.
While not exclusive, but to give context for what the
budget supports, a few examples include senior
benefits; Medicaid eligibility; background checks;
licensing and oversight of healthcare and childcare
facilities; Medicaid services such as physical health,
dental care, and behavioral health services; vital
records like birth, marriage, and death certificates;
and personal care attendants for seniors and Alaskans
that have disabilities.
The department has ten appropriations that operate as
six divisions and Medicaid. The list of divisions is
on the slide.
1:40:57 PM
Commissioner Hedberg moved to an organizational chart on
slide 4 and read from prepared remarks:
Slide 4 is just a visual reference; it's a great tool
to see which programs are within each division. We
also have a handful of boards that are associated with
the Department of Health.
JOSIE STERN, ASSISTANT COMMISSIONER, DEPARTMENT OF HEALTH,
reviewed slide 5 titled "Department of Health Operating
Budget Comparison FY2022-FY2024." She read from prepared
remarks:
Looking at this chart you can see that the Department
of Health's total FY 2024 requested budget is around
$3.1 billion. This slide does not include Departmental
Support Services, Human Services Community Matching
Grants, and Community Initiative Matching Grants.
These items are usually presented as a singular item
and are not shown here because the majority of the
changes that occurred with the bifurcation of the
Department of Health and Social Services occurred
within Departmental Support Services. If these items
are included, the total requested budget is around
$3.14 billion.
This graph presents three budget aspects: Fiscal Year
2022, which represents the total actual spending from
July 1, 2021 to June 30, 2022; Fiscal Year 2023
management plan, which is a true-up of implementing
the FY 2023 enacted budget; and the Fiscal Year 2023
governor, which is the governor's proposed budget that
th
and 2024 show the budgetary authority of the
department.
Looking across these total numbers for the Department
of Health, there have been increases in unrestricted
general fund, also known as UGF, driven by inflation,
increased utilization, as well as federal and state
rate increases. As a result, the majority of the
increases reside in Medicaid Services.
The department received more federal funding in Fiscal
Year 2022 due to an increased enhanced Federal Medical
Assistance Percentage, also known as e-FMAP, which
accounts for the largest difference in federal
authority from FY 2022 to FY 2024. There was also an
adjustment in Fiscal Year 2022 to remove a
reimbursable services agreement with the Department of
Military and Veterans Affairs, Division of Homeland
Security and Emergency Management from federal COVID
to other COVID.
The department received funding from the Federal
Emergency Management Agency, also known as FEMA, for
COVID-19 activities by this department.
1:43:27 PM
EMILY RICCI, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH,
reviewed slide 6 with prepared remarks:
Medicaid is a joint state/federal program that offers
health insurance to low income families, children, and
individuals, as well as those with disabilities. The
purpose of the Medicaid program is to provide health
coverage to Alaskans in need. Medicaid is an
entitlement program, meaning those who meet the
eligibility criteria are entitled to benefits. These
benefits are outlined in state and federal regulation
and statute as well as through a state plan. The state
plan acts as the agreement between the State of Alaska
and the federal government outlining which services
will be provided to which individuals under what
circumstances.
I would emphasize that because this is a joint
program, making changes to the program is challenging,
time consuming, and frequently requires state statute
and regulatory changes followed by submission of a
state plan amendment to the federal Centers for
Medicare and Medicaid Services (CMS). The Medicaid
program plays an important role in the lives of many
Alaskans with over 262,000 individuals currently
enrolled in the program. This represents over 35
percent of Alaskans making this the largest health
coverage in the state.
As I stated earlier, this program is a joint program
financed by both the federal government and the state.
At a minimum, the state shares 50 percent of the cost
of eligible services including administrative services
with the federal government covering the other 50
percent. In practice, the total cost share between the
state and the federal government is higher, averaging
between 72 to 73 percent. This is because the federal
match, called the FMAP, which was discussed in the
last slide, may be higher for certain types of
services. For example, the federal government will
fund 90 percent of administrative costs for Medicaid
systems development, 100 percent of eligible services
through the Indian Health Service or our tribal health
organizations, 90 percent of cost for Medicaid
expansion, and 65 percent of associated with the
Children's Health Insurance Program. So, between that
blend, you tend to see higher overall federal matches
than the 50/50.
You may notice there are no specific positions
associated with the Medicaid component in the budget,
the work and the positions to administer the program
are embedded in the division's budget lines. Any
additional funding the divisions are able to leverage
or any cost savings they achieve are reflected in the
Medicaid budget rather than their division budgets.
This is a large program, as you can see, the total
spend in state Fiscal Year 2022 was $2.5 billion, the
state's share for that was about $610 million with the
federal share at $1.8 billion. To put that in context,
what this means on an operational basis is that in
state Fiscal Year 2022, 6.3 million claims were
processed within the Medicaid program and that creates
a weekly check write of between $45 million to $50
million. Every week the teams in the Division of
Health Care Services and other divisions supporting
the Medicaid program are paying out $45 to $50 million
and processing annually 6.3 million claims.
1:46:47 PM
Ms. Ricci turned to slide 7 and spoke about Medicaid cost
drivers and cost containment with prepared remarks:
This slide briefly highlights a combination of cost
drivers and cost savings or cost containment measures.
I'm going to start with the cost drivers and then walk
through some of the cost savings or cost containment.
The primary cost driver or cost savings reflects
changes in federal regulations that impact the federal
match we discussed in the prior slide. Aside from
enrollment, the item that has the largest cost impact
are changes to the percentage in the federal match.
Increases in the federal match like the enhanced 6.2
federal match we have received for the past three
years, can result in substantial offset of general
fund dollars required to fund the program.
Alternatively, reductions in the federal match, which
we're going to experience with the reduction of the
6.2 enhanced federal match beginning this spring, can
result in increased costs to the state. Other cost
drivers include inflationary adjustments in the amount
that providers are paid.
The average Medicaid inflationary rate component in
Fiscal Year 21 and 22 was 1.8 percent. This
inflationary rate is significantly lower than what
we've heard providers actually experience and we all
see this in our own experiences at the grocery store
or purchasing other items. Rates are also routinely
adjusted. They are reviewed and reset on a schedule
outlined generally in regulation. The timing for these
adjustments varies depending on the service. More
frequently, rates are redetermined or rebased for the
first year of a four-year cycle and then inflated
annually for the following three years. The process
then repeats.
Another important cost driver is enrollment in the
program. In 2020, in response to the pandemic, states
across the nation suspended eligibility reviews or
what we call redetermination, as part of the federal
government's response to the COVID-19 pandemic. We're
going to talk about this in more detail in the future
slides, specifically slide 9, but the result was an
increase in the overall Medicaid enrollment by around
30,000 Alaskans between 2020 and today. The good news
is that there's been some very strong and successful
efforts to contain costs within the Medicaid program.
The most impactful of these is tribal reclaiming. This
is a process where the state is able to receive 100
percent of federal funds for eligible services
provided to a tribal member covered by the Medicaid
program in certain circumstances.
In FY 22, the state saved $74 million through the
tribal reclaiming program. Since this process started
in 2017, states have saved nearly $380 million. Other
important saving mechanisms include recovering
eligible drug rebates, which created $123 million in
savings in FY 22 as well as ensuring Medicaid is a
payer of last resort, meaning that if there are other
health insurance plans or other coverages that should
be paying first, those coverages are paying first.
This is also called subrogation. This ensures other
eligible insurers like Medicaid are picking up the
bill. In Fiscal Year 2022, these activities resulted
in around $470 million in cost avoidance; however, a
portion of that would be experienced by the federal
government, not just the state. Other important cost
saving measures include program integrity, which
focuses on eliminating fraud and abuse as well as case
management programs.
Co-Chair Edgmon asked if there was any way to do the
presentation without reading verbatim. He wanted to have a
back and forth conversation. He appreciated the attention
to the detail, but he requested a dialogue.
Co-Chair Johnson was also having a hard time following
along. She asked to hear a summary of slide 7.
Ms. Ricci explained there were major cost drivers and cost
saving measures the state engaged in regularly. One major
cost driver was federal match (whether it increased or
decreased it could be a cost driver or cost savings).
Another cost driver was enrollment of the number of
individuals in the Medicaid program, which could change.
There was most recently a change with the response to the
COVID-19 pandemic in 2020, which required that enrollees
remain continuously eligible and resulted in about 30,000
additional enrollees. A third cost driver was an increase
in rates, particularly in relation to inflationary factors
as well as the routine review of rate rebasing undertaken
by the department. On the cost saving side, tribal
reclaiming had fundamentally changed how the state engaged
with the tribal system and how the Medicaid program
benefitted from the system.
1:53:03 PM
Representative Hannan shared that she served on the
Department of Corrections (DOC) subcommittee and one of
DOC's large costs was health and rehabilitative services.
She elaborated that when people went into custody, except
for 24-hour stays in the hospital, Medicaid was
discontinued for those who had previously been covered. She
explained it was an element of Medicaid in the state's
expansion waiver. She expounded that Representative Justin
Ruffridge, who also served on the DOC subcommittee and was
a pharmacist by trade, had stated the situation was not
supposed to happen under Obamacare expansion. She noted
they had been told off the record that it depended on how a
state implemented Medicaid expansion. She was curious when
Medicaid expansion had been implemented if the state had
talked about including coverage for its the corrections
population. She stated that without Medicaid or other
insurance the funds came straight out of UGF budgeting for
DOC. She noted the department had some cost containment
measures going but the corrections population was pretty
unhealthy.
Ms. Ricci answered that the department would follow up on
the question. She explained that the state's [Medicaid]
coverage terms were nuanced, particularly regarding more
than 24 hours out of a facility, they followed the national
standard. She remarked that California had received a
waiver in the past several weeks to provide expanded
coverage to incarcerated individuals. She noted it was the
first of its kind that had been approved nationally.
Representative Stapp asked about tribal reclaiming. He
stated his understanding that in FY 22 there had been
159,000 applications for tribal reclaiming and the
department had only been able to reclaim 20 percent of the
total. He asked what the state could do to increase tribal
reclaiming in the future.
Ms. Ricci deferred to a colleague.
RENEE GAYHART, DIRECTOR, HEALTHCARE SERVICES, DEPARTMENT OF
HEALTH, answered that tribal reclaiming started in 2016
after the state health official letter allowed states to
reclaim the remaining balance on American Indian and Alaska
Native beneficiaries. She explained that in order to enter
reclaiming there had to be a care coordination agreement
between a tribe and the non-tribal entity when services
were referred out to a non-tribal setting. She highlighted
an example where a patient went from the ANMC [Alaska
Native Medical Center] to Seattle Children's Hospital.
There would have to be an agreement between the two
entities to enter any kind of reclaiming.
Ms. Gayhart elaborated that the referral validation had to
be validated by the tribal health organization for the
State of Alaska. She detailed that many referrals were lost
because of the way data exchanged or did not exchange.
Additionally, the exchange of data had to go back and forth
between the two entities. For example, if a patient went
from ANMC to Seattle Children's Hospital for a transplant
and then came back to Alaska, the records would have to go
back and forth. She stated that when all was said and done,
it was necessary to have all three of the elements in
place. She reasoned it may seem as at though 159,000 claim
lines was substantial while only 20 percent was reclaimed;
however, it was often because the exchange of information
systems were not speaking to each other (i.e., the health
records and exchange of the records). She noted the process
was manual and administratively burdensome. The department
had been working with CMS to see if it could come up with a
more streamlined approach. She highlighted the State of
Alaska was the most aggressive tribal reclaiming state in
the union. She relayed that many other states were
following Alaska's lead. The state was pressuring CMS to
change the way it looked at the state health official
letter.
2:00:10 PM
Representative Tomaszewski asked if the department was
using the same dilapidated programming to get Medicaid
redeterminations. He asked if the process had started and
whether the department was prepared. He wondered whether
the department would be able to process the
redeterminations quickly.
Ms. Ricci answered that slide 9 would cover the topic in
more detail. She relayed that the systems the department
had available to maintain Medicaid eligibility were the
same systems the department had. The systems would be used
through the redetermination process. She elaborated there
was a lot of ongoing work that would continue in the next
several months. She stated it was a large challenge for all
states. There were certain timeframes and guidelines the
state had adhere to in order to communicate with CMS
regarding its ability and plan to operationalize the
redetermination process. She would elaborate more on slide
9.
Representative Josephson understood that tribal reclaiming
had started up under the prior administration. He stated
his understanding that additional staff for the effort had
been funded. He assumed there were not infinite
possibilities to fully reclaim and see savings. He asked if
his statements were accurate.
Ms. Gayhart answered that it was not necessarily the case.
She clarified that during the pandemic there had been a
reduction in services delivery and transportation overall.
She explained that the reductions resulted because the
services did not happen and there had been nothing to
reclaim. There would be an increase in the out-years after
the pandemic because the services started to increase
again. She elaborated that the state was reclaiming on the
backend, but if the tribes started providing more services
on the frontend, 100 percent would occur on the frontend,
making the work on the backend unnecessary. She explained
that the staff that were hired were working on two fronts:
they were working with the tribes to expand service on the
frontend in order for tribes to take on more services for
their beneficiaries and they were increasing the reclaiming
on the backend. The current reductions were a result of the
pandemic and because the department was working with CMS to
try to redefine the terms of the state health official
letter.
2:03:46 PM
Representative Josephson asked about inflationary and rate
adjustments. He thought they were things that required
legislative action; however, he believed Ms. Ricci
described it as an administrative adjustment. He asked for
clarification.
Ms. Ricci answered it was a bit of both. There were
regulations that articulated what increments the department
undertook, reviewed, or rebased. There were also certain
rates based on national standards called RBRVS [Resource-
Based Relative Value Scale] that were updated annually on a
national level. She stated that ultimately all of the
updates had to be reflected and approved in the budget
through the legislative process. She relayed there had been
periods of time where rates for certain provider groups had
not been updated or rebased in a way that reflected the
regulatory schedule. She cited home and community based
waiver services as an example. The items received increased
funding in FY 23, but the specific rates had not been
rebased prior to that since 2011. There were certain
services that may not be updated regularly.
2:05:58 PM
Ms. Ricci turned to slide 8 and discussed two Medicaid
increments in the budget. The first was $2.6 million to
extend the postpartum Medicaid coverage from 60 days to 12
months. She detailed that the coverage had been
demonstrated to result in savings. The second increment was
$18.1 million UGF associated with cost increases discussed
previously. The increment included about $7 million in
Medicare Part B changes, which impacted how much the state
had to pay on behalf of members who were Medicare age
eligible and participated in the program. There was about
$3.2 million associated with an increased encounter rate, a
rate paid by the department to tribal partners and
federally qualified health centers (FQHC). There was a $2.3
million increase associated with RBRVS, the method used to
determine payments for professional services. Additionally,
there were some increases associated with the home and
community based waiver services and some audit findings.
Representative Tomaszewski remarked on increased
utilization rates. He thought that redeterminations should
result in a decrease in utilization rates in the coming
fiscal year.
Ms. Ricci replied that there were currently many unknowns.
She explained there was uncertainty at the state and
federal level about the number of people who would be
ineligible as a result of the redetermination process. She
noted that another item to consider was whether individuals
who were no longer eligible for coverage under the Medicaid
program were individuals who had been or had not been
utilizing services. She estimated that about 75 percent of
enrollees in the Medicaid program utilized services. She
believed the answer to the question depended on how many
individuals were disenrolled and whether those individuals
were utilizing services.
Representative Tomaszewski asked if a person had to reapply
annually for the Medicaid program. Alternatively, he
wondered whether an enrollee was carried on year after year
until a redetermination occurred.
Ms. Ricci answered that redeterminations typically happened
annually. There were some instances and categories where
the timeframe was shorter or longer. Beginning in 2020, in
response to the pandemic, the review was suspended. During
that timeframe there had been only three reasons an
individual could be disenrolled: the individual was
deceased, moved to another state, or requested to be
disenrolled.
2:10:06 PM
Ms. Ricci turned to slide 9 titled "Unwinding of Continuous
Enrollment of Medicaid." She noted the unwinding of the
continuous enrollment of Medicaid was more frequently
referred to as the redetermination process. Beginning in
March of 2020, states were required to maintain eligibility
status for Medicaid beneficiaries with the exception of the
three reasons she had just reviewed (in response to the
pandemic). However, beginning on April 1, Alaska and all
other states would begin the process of redetermining
Medicaid eligibility for those individuals. She explained
the continuous enrollment requirement was included as part
of the federal legislation passed in response to the
pandemic, but it was initially tied to the ending of the
federal public health emergency. She elaborated there had
been substantial speculation over the past six to 12 months
about when the public health emergency would end, how much
notice states would be given before the end, and how much
time they would have to prepare for the redetermination
process. There was no clear guidance, but there was a lot
of speculation.
Ms. Ricci relayed that at the end of December, Congress
passed the Consolidated Appropriations Act, 2022, which
effectively separated the continuous eligibility
requirements from the public health emergency and it gave
states some definitive timeframes for when they could
expect to begin the redetermination process, what some of
the rules would be, in addition to how the phase down of
the temporary federal funding match would occur. She shared
that states had been working hard to think about what it
meant and to plan for it. She pointed to an inset window on
the right of slide 9 showing the phase down of the
temporary eFMAP over the next four quarters. The first
stepdown would occur in April, moving from 6.2 percent to 5
percent. The second stepdown would begin July 1, moving
from 5 percent to 2.5 percent. The third stepdown would
occur on October 1, moving from 2.5 percent to 1.5 percent.
Beginning in January of 2024, the eFMAP was eliminated.
Ms. Ricci continued to discuss slide 9. She relayed that
part of the guidance released in January was that states
would have 12 months to complete eligibility
redeterminations for all active Medicaid cases (beginning
on April 1). States would have 14 months to finalize
disenrollments. She explained the state had a period of 60
days to work through the process following the date an
individual was potentially determined to be disenrolled.
The first disenrollments specifically associated with the
redetermination effort would start at the end of May. The
federal government was aware the changes would be a big
lift for many states.
Ms. Ricci relayed that the department had engaged in at
least two technical calls to talk through the aging and
very challenged enrollment systems: ARIES [Alaska's
Resource for Integrated Eligibility Services] and EIS
[Eligibility Information System]. She elaborated that EIS
was the legacy system and was very challenging to use. She
specified that most of the state's Medicaid beneficiaries
were enrolled in ARIES, which was good news. She elaborated
that programming was already underway to have autorenewals
occur. She believed the testing should be finalized by the
end of February. To the degree the department would be able
to utilize information resources from other databases
within the Department of Labor and Workforce Development
(DLWD) and Permanent Fund Dividend Division (PFDD) to
complete information for applicants, the systems were in
place to automatically review those individuals and put
them through the system. The department did not yet know
what percentage of the total renewals would occur
automatically and what percentage would need to be done
manually. She stated it was one of the big questions the
department was currently working to address.
2:15:17 PM
Co-Chair Edgmon remarked on the department's estimate that
there were around 263,000 Alaskan's enrolled in Medicaid.
He observed that the state did not know what the total
number would be after the reenrollment process. He found it
interesting that with a state of ~740,000 people, one in
three were on Medicaid. He asked if it was an inordinate
amount compared to other states. He noted that Alaska's
population continued to taper off; however, he believed its
Medicaid population was increasing. He asked if Alaska was
aging as a state and having more people eligible for
Medicaid than before.
Ms. Ricci would follow up with exact estimates. In general,
around 30 percent was not unusual for other states. She did
not believe Alaska was unusual in the proportion of Alaska
residents who were eligible and participated in the
Medicaid program. She addressed why the number was
increasing. She detailed that a large portion of Medicaid
enrollment was based on income and eligibility and the
state had some changing economic factors over the past
eight to ten years. She did not know that an aging
population had as much impact on the Medicaid program. She
detailed that it did impact portions of the program such as
the home and community based waiver system services. The
aging population had less of an impact on general adult
enrollment, which was more of an issue of rate
reimbursement as more individuals were eligible for
Medicare. As that occurred, Medicare would become a larger
portion of a provider's business, which would have economic
impacts.
Co-Chair Edgmon stated that the previous year the
legislature had passed a PFD that was three times larger
than the prior year. He knew there was a backfill component
to the budget. He asked what the backfill figure may be.
Ms. Ricci believed Co-Chair Edgmon was referring to the
maintenance of effort. She deferred to Ms. Stern for
detail.
Co-Chair Edgmon added that the topic related to income
eligibility.
Ms. Stern asked for verification that Co-Chair Edgmon was
referring to the PFD hold harmless provision. She reported
the PFD hold harmless had been steady over the past several
years at about $17.5 million. Historically, the amount
spent was about $15 million. She reported the expenditure
was about $11 million in FY 22, which was lower than in
previous years.
2:19:56 PM
Co-Chair Edgmon wondered why the number would not rise
commensurately with the size of the aggregate PFD.
Ms. Stern clarified that the PFD hold harmless was an
account for when the PFD was distributed. She explained
that sometimes the PFD pushed recipients above the income
limit and then they were ineligible for services. She
explained it depended on how many individuals were pushed
out of services. The fund covered the individuals.
Additionally, because people were not allowed to be
disenrolled [during the pandemic], the actuals were lower
in FY 22 than in previous years.
Representative Stapp asked if administrative or ex parte
redeterminations would be used.
Ms. Ricci replied that ex parte redeterminations would be
used to the extent possible. She characterized the ex parte
redeterminations as automatic renewals where information
was used from other sources; however, the method would not
be available for all redeterminations.
Representative Stapp believed the income data for ex parte
administrative redeterminations generally came from SNAP
applications. He referenced the current state of the SNAP
program and asked if the state had the ability to use the
income verification used for the SNAP program for Medicaid
redeterminations.
Ms. Ricci replied it was one means that could be used to
inform the ex parte renewals, but there were other means
including DLWD and PFDD. She deferred to a colleague for
additional detail.
DEB ETHERIDGE, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH (via teleconference), confirmed that
while SNAP approval expedited Medicaid approval, the
department also had the ability through the redetermination
process to verify income using DLWD data.
2:23:13 PM
Representative Stapp asked how DLWD would have income data
for individuals in the state.
Ms. Etheridge answered there was a shared database that
included income data on individuals that DOH accessed
through DLWD. She would follow up with the details.
Representative Josephson looked at the 12 to 14-month
period as a blessing because it was a chunk of time. He
understood there were two things going on including the
redetermination and that the federal government would
provide less FMAP as COVID-19 was winding down. He
referenced the SNAP experience and shared he had met with
individuals from the Food Bank earlier in the day who had
communicated their shelves were empty. He stated it was
hard for laypeople to know the problem avoidance to be
looking for. He provided a couple of examples. He wondered
if it pertained to someone who needed surgery in a year and
could not get it at the federal and state government
expense or someone who got the surgery, but the doctor went
unpaid because the patient was Medicaid ineligible. He
wanted DOH to tell him everything it could possibly need in
order to avoid the problem. He asked what would happen if
no redetermination was done.
Ms. Ricci answered that if the state took no efforts to
redetermination eligibility, the state would not receive
the eFMAP in quarters two, three, and four in calendar year
2023. There were still certain requirements the state had
to undertake in order to receive the stepdown eFMAP. There
were also reporting requirements beginning on Aril 8 in
order for CMS to monitor how many and what proportion of
the population the department was working through
applications and how many were being disenrolled. She
explained that if redetermination did not occur or if the
division was late in making eligibility redeterminations,
an individual may not be eligible for health coverage that
they would otherwise be entitled to. She elaborated that
hospitals and providers may contact the division to
determine why they were not being reimbursed for services.
She highlighted that eligibility errors occurred at
different points in the system on a regular basis. One of
the first indicators in the department's system that an
error had occurred was when people tried to fill
medications. She explained it was one of the impacts when
someone was not properly enrolled in the Medicaid program,
but they were eligible for coverage.
Ms. Ricci communicated that the department needed and was
exploring partnerships. The department was exploring
whether it could benefit from work conducted by other
entities or organizations providing care to Medicaid
enrollees or collecting the information for other uses. She
thought about partnership in a couple of different ways.
The first was communication: what needed to be communicated
to which groups at what point. She explained the process
would be slightly longer than 12 to 14 months. Currently,
the department was advising recipients to update their
contact information to ensure any letters went to the right
address. The Division of Public Assistance had set up a
line through its call center for people to call with their
updated contact information. The department was also
developing a draft communications plan to share with
stakeholders in order to receive input on any errors or
missing components. The department was also working to
determine whether there were ways it could leverage what
other entities or groups were already doing to collect the
information.
2:29:40 PM
Commissioner Hedberg categorized the department's needs in
three separate buckets. The first was updating information.
The department needed every individual on Medicaid to call
the virtual call line and update their information. Two,
when individuals were called up to be redetermined for
eligibility, the department needed to collect information.
The department was actively engaged in conversation with
partner organizations in the healthcare industry to
determine what the organizations could do to help it
collect the verification information. Third, a DOH employee
had to make the final decision on whether an individual was
eligible or ineligible. She expounded that if someone was
determined to be ineligible, the department wanted to pivot
them to a federally facilitated marketplace to find another
appropriate health insurance plan. The department did not
want any Alaskan to go without health insurance. The
department was looking to leverage its partnerships with
the healthcare industry to ensure it was being innovative
and maximizing every relationship to prevent anyone from
being lost through the system.
Representative Hannan asked if the typical Medicaid
redetermination process occurred annually.
Ms. Ricci replied that for most individuals the
redetermination process occurred at 12 months. She noted
there may be certain categories of individuals where the
timeframe was longer.
Representative Hannan asked for circumstances where longer
eligibility was granted. She shared that her sister had
passed away in January with advancing cognitive decline due
to multiple sclerosis. She detailed that her sister had
been eligible for Medicaid since the onset of her
disability 14 years ago. She explained that that the
redeterminations had become more and more difficult because
her sister was an independent adult who insisted on doing
the eligibility application herself. She detailed that part
of her sister's diagnosis was a cognitive decline;
therefore, completing the application became more and more
cumbersome. She explained there was clear medical evidence
her sister's disability would persist and that she would
never hold a job or be eligible for other insurance. She
could not imagine her sister's circumstance was unique. She
considered all of the recipients on Medicaid with complex
diagnoses who had to spend a lot of time annually
completing the eligibility process and may experience a
loss of coverage for a month or two. She asked how to move
the individuals into a circumstance where they did not have
to take up their time and the department's time to ensure
their health insurance was intact.
Ms. Ricci would follow up on the question. She would speak
with the director of Senior and Disabilities Services as
well.
2:34:11 PM
Ms. Stern moved to slide 10 titled "Medicaid Services
Operating Budget Comparison FY2022-FY2024." She highlighted
that Medicaid was one of the top budget drivers in the
state. She elaborated that to draw approximately $1.8
billion in federal funding, the state leveraged around
$670.6 million. She relayed there had been increases in UGF
from fiscal year 2022 to 2024 due to the cost drivers
discussed earlier in the meeting. The department was also
able to collect additional federal funds in FY 22 due to
the eFMAP and open-ended federal authority.
Commissioner Hedberg discussed the Division of Public
Assistance on slide 11. The division had 18 programs and
459 full-time positions. On average it took about two years
to train an employee on all of the 18 programs. She
highlighted SNAP as one of the more complicated programs.
2:35:43 PM
Commissioner Hedberg turned to slide 12 and discussed the
Division of Public Assistance backlog. She explained the
backlog was in reference to SNAP. She reviewed the reason
for the backlog. In August of 2022, the department received
an influx of 8,000 applications, which was the kickstart to
the backlog. She detailed that the federal Food Nutrition
Services (FNS) agency had a policy stating it was necessary
to reverify a recipient's SNAP eligibility every six
months. The policy decision whether the six-month
eligibility verification process was suspended during
COVID-19 or not was held in federal court. She explained
that Alaska had been informed in August of 2022 it needed
to start the verification process. Additionally, the
department used a legacy EIS IT system for SNAP and a
portion of the Medicaid program. She expounded that the EIS
was built on technology based off of 1959. She relayed that
all of the department's IT systems had been impacted by the
May 2022 [2021] cyber-attack on DOH. The department had not
initially known the depth and breadth of the cyberattack.
She explained that all of the department's 181 IT systems
were pulled down. The department's IT staff had been
redirected to forensics analysis to ensure it could secure
and continue to protect the health information of Alaskans.
The event was significant and DOH was still working through
some systems that had not yet been brought back online.
Commissioner Hedberg continued to review reasons for the
SNAP backlog (on slide 12). She referenced the pandemic
Electronic Benefit Transfer (EBT) for children who
qualified for free lunch. When schools shut down due to
COVID-19, funds were transferred to a debit card for
families to purchase food. She detailed that the process
had been manual. She explained that the manual processes,
legacy IT system, cyberattack, and the restart of the SNAP
eligibility verification process all culminated in August
of 2022. She shared that she had started her position in
mid-November and had talked with many Alaskans who were
impacted by the backlog. She had visited the Division of
Public Assistance offices, talked with staff, met with
direct providers and Food Banks to hear what immediate
solutions could be implemented.
Commissioner Hedberg discussed immediate actions the
department was currently taking [to mitigate the SNAP
backlog]. The department was focusing on recruitment and
onboarding of its vacant positions. She highlighted that
due to media coverage, there had been a significant
increase in the number of applications for eligibility
technicians. The department had a training team with the
capacity to train 14 eligibility technicians at a time. She
specified the department's goal was to fill its vacant
positions and the team was doing well working towards that
goal. Additionally, DOH had requested and received about 45
long-term nonpermanent positions. The positions had been
recruited, filled, and were currently in the training
process.
Commissioner Hedberg relayed there had been two vacant IT
positions that had been filled by individuals with
experience coding with the antiquated IT languages on the
mainframe. She noted the department was awaiting approval
to hire for the two positions that would focus on EIS
reprogramming. The department expanded the contract for two
contractors to provide IT staff with reprogramming support.
2:42:08 PM
Commissioner Hedberg continued to review slide 12. She
highlighted the department's virtual call center with the
intended purpose of health equity. She explained there were
only 11 offices; therefore, the call center had been
created to help individuals with their application process
over the phone. She elaborated that the backlog had
resulted in a spike in calls that had peaked at about 2,000
calls per day in October 2022. She detailed that a couple
of weeks ago, DOH had engaged in a temporary contract with
one of its vendors for staffing support to help answer
calls, answer basic questions, collect information, and
pass the information on to the department's eligibility
technicians. There were around 30 eligibility technicians
on the call center and the contracted vendors had enabled
the department to pivot trained staff over to processing
applications.
Commissioner Hedberg continued to review backlog mitigation
efforts on slide 12. She highlighted the department's
efforts in crisis communication to ensure DOH was proactive
in getting the word out about what caused the issues, what
it was doing, and in managing expectations. She shared that
unfortunately due to the frustrations, there had been some
threats made by some Alaskans. She detailed that the
department took every threat very seriously and wanted to
ensure its staff felt safe when coming to work. In
response, DOH planned an analysis of each of its Division
of Public Assistance offices to ensure they were shored up
for safety. Additionally, the larger offices in Anchorage,
Juneau, Mat-Su, and Fairbanks would have security guards to
deescalate situations and respond to emergencies. She
stated that much of the feedback came from DOH staff and
the public assistance leadership team in addition to input
from direct providers and Alaskans. She shared that in
2022, the legislature had provided 20 long-term
nonpermanent positions and the department was requesting 10
full-time positions to invest in an IT infrastructure.
2:44:48 PM
Co-Chair Edgmon recalled there had been an executive order
in 2021 to split the department in addition to Executive
Order 121 that had been successful in 2022. He recalled
discussion about the IT systems and the tremendous amount
of processing work. He asked why the old mainframe issue
had not been included in a strategic outlook in the past to
avoid the current situation.
Commissioner Hedberg answered that 10 years earlier the EIS
had been slated to migrate to ARIES. She noted that ARIES
currently housed Medicaid and several other programs. She
explained that the system had only partially migrated over
10 years back. The programs remaining in EIS were SNAP and
a portion of Medicaid. For the past nine years funding put
into the capital budget was slowly matched with federal
funds to slowly address the reprogramming and changes to
get to a point where it was possible to move the two
programs off of EIS. The department had been working
towards the goal, but it had not had the funding to finish
the transition.
Co-Chair Edgmon wondered why the state had not planned for
the issue. He highlighted there were a lot of needy
families who were suffering the consequence of not having
the system modernized and in place. He was not blaming
anyone, but he wondered why it had not been planned for. He
found the situation hard to comprehend. He remarked that
the attempts to separate the Department of Health and
Social Services into two departments had been considered
before the Dunleavy administration.
2:48:32 PM
Representative Stapp looked at slide 12 and noted that one
of the causes for the backlog was listed as open enrollment
for federally facilitated marketplace. He stated his
understanding that CMS handed off applications to the state
when individuals were determined to be Medicaid eligible on
its website. He asked about the state's potential liability
for not enrolling a person in Medicaid in a timely manner.
Ms. Ricci answered that CMS could ultimately come in and
specify that Alaska was not meeting the requirements for
completing application and enrollment in a timely manner.
She stated CMS could put the state on a performance
improvement plan. The consequence was the impact on the
providers and the patient trying to receive services. She
explained that if an application was submitted in January
and it was worked in the beginning of February, it was
possible to look back 90 days after that January
application was received for services covered. There was
the ability to receive coverage for some of the services
even if the application was delayed. She remarked that
retrospective claims reviews were always administratively
complicated and not ideal, but it could be done.
2:50:52 PM
Representative Hannan remarked that Commissioner Hedberg
had specified the cyberattack was in May 2022, but slide 12
showed the cyberattack occurring in May 2021. She asked
which date was correct.
Commissioner Hedberg replied that the cyber-attack was in
2021.
Representative Hannan remarked that slide 12 showed an
explanation of how the problem would be fixed systemically.
She had not heard from the administration on how the state
was getting food to hungry families. She underscored that
many families had been without food support for four to
five months. She remarked the state had known coming out of
COVID that food banks were already stressed. She was
hearing from small community grocery stores that were not
certain they could remain open because SNAP beneficiaries
had been unable to shop. She noted there were government
emergency food stores with the National Guard or the
Department of Military and Veterans Affairs (DMVA). She
asked if there had been any effort to try to get food to
hungry families. She understood it was not something DOH
would do, but she wondered if there had been conversations
to try to resolve the immediate hunger families were
experiencing.
Commissioner Hedberg clarified that mitigation efforts
listed on slide 12 were immediate and temporary. There were
additional long-term strategies including transitioning
from EIS to ARIES. She acknowledged the frustration by
Alaskans who were experiencing delayed benefits. She
understood there was an impact and she had heard heart
wrenching stories. She wanted to ensure the department
could do everything possible to make sure families had
access to resources. The department had heard from the Food
Bank that it was running through food very quickly. The
department wanted to be at the table and figure out how it
could work with other state agencies and organizations to
solve the very complex problem of access to nutritious
foods. There was a recognition of and dialogue about how
the state could work through the situation. She stated it
was an active conversation.
2:54:14 PM
Representative Hannan asked if there had been any
administrative executive branch agencies standing up food
delivery programs to feed people immediately since the
start of the crisis in October. She highlighted emergency
services through DMVA and the National Guard. She
recognized it was not the best food, but it was food. She
asked if the state was doing anything to ensure the
outmigration of Alaskans did not continue because residents
could not survive the winter.
Commissioner Hedberg replied she heard Representative
Hannan's comments and would take the feedback back to the
group in order to look at every resource. She stated that
they wanted to get nutritious food out to Alaskans.
Representative Josephson stated the Food Bank had told him
two things that could be done immediately. First, 44 states
had broad-based category eligibility, which essentially let
someone earn more money and step down with food stamps.
Second, the state could move to a 12 or 24-month
recertification. He thought Commissioner Hedberg had stated
the federal government had indicated the opposite. He
believed the department had stated the federal government
wanted the state to use a six-month determination. He found
it to be confusing. He asked why the state did not do
broad-based categorical eligibility and why it did not
expand certification times.
Commissioner Hedberg answered there had been eight
different recommendations from the Food Bank and other
direct providers. She explained that the prior federal
administration had communicated intent to get rid of the
broad-based categorical eligibility; therefore, at that
time, DHSS had paused on evaluating the rule. She relayed
that the Division of Public Assistance was currently
reviewing "what that is and what it would look like." She
relayed that currently Alaska had a six-month certificate.
She elaborated that the state needed to reverify with the
federal Food Nutrition Services agency every six months.
The department wanted to move to a 12-month
recertification, and it had to reprogram the EIS system in
order to make the change. She explained that the
reprogramming of the EIS system started in January 2023.
The tentative reprogramming timeline was January through
March, at which time the system would be tested to ensure
there were no errors and staff would be trained. The goal
was to roll the updated system out in the spring.
Representative Josephson asked for verification that the
department could move to the 12-month determination process
without action being taken by the legislature. He believed
the change was within the governor's authority.
Commissioner Hedberg agreed.
2:58:45 PM
Representative Galvin echoed questions asked by
Representative Hannan about what was currently being done
and whether the state had thought about an emergency order
[related to the SNAP program]. She believed the answers had
been covered. She asked about hiring. She referenced a
statement by the department that two IT positions were on
hold awaiting permission. She asked if the positions needed
legislative funding or if there was another reason.
Commissioner Hedberg replied that as part of the
recruitment process the Department of Administration
reviewed the application and concurred with DOH's findings
that an individual met the criteria. The department was
currently waiting for approval to hire. She noted the
approval was expected via email any day.
Representative Galvin thought the two hires sounded
paramount for the work ahead. She asked how it was going
with the vacancy rate of other positions that would help
rectify the situation.
Commissioner Hedberg answered that about one week earlier
DOH had four recruitments for the Division of Public
Assistance in different job classes. The department was
seeing a high application rate in the specific division,
which was not always the case in other divisions. The
department had a team reviewing the applications. If
applicants met the criteria they went through an interview
followed by an onboarding process once approval to hire was
obtained. The department had a training team that took
cohorts of 14 new employees and trained them in the SNAP
application process or other public assistance programs.
Representative Galvin appreciated the energy and
willingness of individuals to sign on. She highlighted the
importance to Alaskan families with the most need. She
asked how many staff the department intended to hire. She
asked for the current vacancy.
Commissioner Hedberg would follow up. She answered the
number was decreasing.
3:01:50 PM
Co-Chair Johnson noted the time and asked to save questions
until the end of the presentation.
Ms. Stern reviewed the Division of Public Assistance
operating budget on slide 13. The slide included the Senior
Benefits Payment Program, which was usually a separate
budgetary line item. The program was included because it
was operated and managed by the division. The Senior
Benefits Payment Program totaled about $20.8 million UGF.
3:02:51 PM
Commissioner Hedberg noted that Dr. Anne Zink would speak
to the remaining three slides.
DR. ANNE ZINK, CHIEF MEDICAL OFFICER, DEPARTMENT OF HEALTH
(via teleconference), reviewed slide 14 pertaining to the
Division of Public Health. She shared that the division
served as the center point for thinking about how to
improve the health and wellbeing of Alaskans. She stated
there had been a robust conversation about the expense of
Medicaid and how to start minimizing the costs. She
remarked that healthy people were cheaper people. The
division housed over 430 employees and brought in $50
million in grant funding into the state. The department
worked extensively to respond to disasters, prevent
injuries, and ensure quality and accessibility of
healthcare, promoting healthy behaviors, and working across
the state.
Dr. Zink followed up on an earlier question by
Representative Hannan. She relayed that the program was
currently working with the Balto Box program [a program
implemented the Alaska Women, Infants, and Children (WIC)
program] that sent out food to impacted communities
including those struggling to get food. The program had
been sending the food to one community currently.
Dr. Zink discussed the Healthy Families Initiative on slide
15. She explained the initiative had been introduced by the
governor to make Alaska the best state in the country to
raise a family. The idea was that strong families were the
foundation of a healthy society and vibrant economy. The
initiative was comprised of three primary pillars: healthy
beginnings, healthcare access, and healthy communities. She
explained it was a four-year statewide initiative that
included investments and ongoing programming. She
highlighted the Fresh Start campaign that used federal
dollars to connect Alaskans with free services to help them
manage their chronic health conditions. She referenced the
cost of healthcare and one of the major drivers of Medicaid
was related to chronic conditions. The program helped
Medicaid beneficiaries and any Alaskans to help manage
chronic conditions and have a healthier lifestyle. There
was a proposed $9.9 million UGF in the FY 24 operating
budget for the Healthy Families Initiative. The funding
would go to postpartum Medicaid extension and $2.76 million
for TB and $4 million for congenital syphilis mitigation.
The state was seeing a rapid rise in the diseases that
could cause long-term devastating health consequences,
which would increase costs to the state as a whole.
3:05:34 PM
Dr. Zinc turned to slide 16 and spoke about the Healthy
Families Initiative: Office of Health Savings. The idea was
to reduce healthcare costs while improving the health of
Alaskans. She addressed the challenges of providing and
changing the way Medicaid did its work. The initial focus
would be improving the Medicaid program including a focus
on subrogation, ensuring Medicaid was the last payer if
someone had another type of insurance. She stated that
pharmacy continued to be a major driver of the cost of
healthcare. The office would work to address pharmacy cost
and improved access to critical medications. She elaborated
the work had been done through AVAP [Alaska Vaccine
Assessment Program] that worked broadly across the state.
She stated that it looked at pharmaceuticals and expensive
medication such as Paxlovid or other medication like
epinephrine and insulin. The office would also look at
innovative payment models. She stated that while the
Medicaid budget was large, the state spent more money with
other insurance types to ensure there were innovative
payment models working across payers.
3:06:56 PM
Ms. Stern reviewed slide 17 showing the Division of Public
Health operating budget comparison for FY 22 to FY 24. The
majority of the increase in UGF was due to the Health
Family Initiative increments discussed by Dr. Zink. There
was also a technical adjustment in FY 22 to accurately
reflect the reimbursable services agreement the department
had with the Department of Military and Veterans Affairs
for COVID-19 activities.
Co-Chair Johnson asked if DOH expected the budget to change
with the governor's amended or supplemental budget. If so,
she requested updated information based on any changes.
Commissioner Hedberg confirmed DOH would send an updated
slide deck.
Representative Josephson referred to slide 10 and observed
there was an increase under management plan for Medicaid
services and a greater increase in the coming fiscal year
on slide 10. He asked if the increase reflected the
rebasing and inflation adjustment.
Ms. Ricci confirmed the increase was largely the rebasing
and inflation adjustment including $18 million and $2
million for postpartum [Medicaid extension]. She deferred
to Ms. Stern for additional detail.
Ms. Stern added there were two increments in the FY 23
budget for Medicaid Services associated with increased
utilization and inflation, in addition to an item added by
the legislature for increased wages for personal care
attendants.
3:09:16 PM
Representative Galvin observed that the governor had
included funding for TB and congenital syphilis mitigation.
She asked if there was any recent data regarding chlamydia
mitigation. She believed in the past Alaska had been number
one in terms of chlamydia cases. She wondered why it had
not been included and asked for the status.
Dr. Zinc responded it had been difficult to choose the area
to put the most focus on. She remarked that gonorrhea and
chlamydia tended to be very high in Alaska. There was
substantial ongoing work and effort in the area. The
governor had specified funds for congenital syphilis and TB
because of the rapid rise in the diseases and the impacts
on families and communities. She relayed that congenital
syphilis could be treated with one shot of penicillin; the
disease could leave a child significantly deformed for life
and the state needed to bear the responsibility of the
cost. She noted that tertiary syphilis could cause
significant mental health and health challenges for adults.
The state had much higher rates for TB and had seen a rapid
rise since the pandemic. She explained that intervening now
would make a large difference. She noted it did not mean
that ongoing work for other diseases such as chlamydia,
gonorrhea, and HIV that was currently having a cluster
outbreak did not continue. The department had selected
the two specific diseases because the spending and focus
could have the biggest impact on Alaska's health for the
future.
Co-Chair Johnson thanked the presenters for the
presentation and reviewed the schedule for the following
day.
HB 39 was HEARD and HELD in committee for further
consideration.
HB 41 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:12:58 PM
The meeting was adjourned at 3:12 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOH HFIN Presentation Budget Slides 2.14.2023.pdf |
HFIN 2/14/2023 1:30:00 PM |
HB 39 |