Legislature(2023 - 2024)ADAMS 519
02/06/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Department of Health Fy 25 Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 6, 2024
1:36 p.m.
1:36:56 PM
CALL TO ORDER
Co-Chair Edgmon called the House Finance Committee meeting
to order at 1:36 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, Department of Health; Josie
Stern, Assistant Commissioner, Department of Health; Emily
Ricci, Deputy Commissioner, Department of Health.
SUMMARY
HB 268 APPROP: OPERATING BUDGET; CAP; SUPP; AM
HB 268 was HEARD and HELD in committee for
further consideration.
HB 270 APPROP: MENTAL HEALTH BUDGET
HB 268 was HEARD and HELD in committee for
further consideration.
OVERVIEW: DEPARTMENT OF HEALTH FY 25 BUDGET
HOUSE BILL NO. 268
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations; making
supplemental appropriations; making reappropriations;
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. 270
"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."
^OVERVIEW: DEPARTMENT OF HEALTH FY 25 BUDGET
Co-Chair Johnson reviewed the agenda for the meeting.
1:38:44 PM
HEIDI HEDBERG, COMMISSIONER, DEPARTMENT OF HEALTH,
introduced the PowerPoint presentation "State of Alaska
Department of Health Department Overview" dated February 6,
2024 (copy on file). She began on slide 2 and relayed that
the Department of Health (DOH) celebrated its one year
anniversary on July 1, 2024. The department had been busy
engaging its stakeholders around system changes in health
care, behavioral health, and child care to support the
growth of healthy families. The department had also been
focused on leveraging technologies and automations to
support its staff and processes. All of the new focuses for
the department had synergized down to four major areas of
effort: behavioral health, complex care, child care, and
the transformation of systems. She relayed that DOH had
made significant progress on system and policy alignment.
The staff had worked diligently to promote the department's
mission, which was to promote the health, well-being, and
self-sufficiency of all Alaskans. For example, SB 58
related to expanding Medicaid eligibility for postpartum
mothers passed in 2023. The department staff worked with
the Centers for Medicare and Medicaid Services (CMS) and
engaged the public through the regulatory process after the
bill passed. The department was able to implement SB 58 on
February 1, 2024, which was ahead of the July 1, 2024,
deadline. She explained that the presentation would provide
a budget overview and demonstrate how the budget supported
the department's mission.
1:41:20 PM
JOSIE STERN, ASSISTANT COMMISSIONER, DEPARTMENT OF HEALTH,
continued the presentation on slide 3. She explained that
the slide reflected the department's budgets starting from
when it was first stood-up in FY 23. Overall, DOH's budget
in FY 25 was slated to be about $2.2 billion, which was a
decrease of around $273.5 million from the FY 24 management
plan. The overall decrease was due to reversals of federal
COVID-19 funding. There was a small decrease of around
$39.4 million in unrestricted general funds (UGF), which
was mostly tied to reversals of one-time increments and
multi-year appropriations that were made in 2024.
Representative Galvin understood that the state spent less
money than was authorized in FY 23. She asked if her
understanding was correct.
Ms. Stern responded in the affirmative. She explained that
between the FY 23 actuals and authorized FY 23 finals,
there was less funding spent in UGF because the department
was limited in the amount of receipts it could collect.
Representative Galvin understood that the department was
unable to spend more money due to the receipt cap. For
example, the department could not spend more money on
Supplemental Nutrition Assistance Program (SNAP) employees.
She often heard from constituents that they were struggling
in many of the department's items of focus. She asked if
she could tell constituents that the state had money but it
was unable to spend it. She hoped the problem could be
fixed.
Ms. Stern responded that there were some situations in
which the spending of the funds was limited by the receipts
that could be collected. There were other situations in
which the department was unable to spend all available
funds during the times that were allotted for employment
contracts. She could follow up in writing with more details
because there were a variety of reasons for underspending.
Representative Galvin commented that she would appreciate
more information.
Co-Chair Johnson confirmed that Representative Galvin had
made a request for additional information.
Representative Galvin responded in the affirmative.
Co-Chair Johnson asked Ms. Stern to provide a response to
all members of the committee.
1:45:31 PM
Representative Josephson acknowledged there were hundreds
of millions of COVID-19 relief dollars that could not be
spent. He was not able to discern what was not happening
that benefited the public in the absence of the unspent
COVID funds. He asked if there was funding that stood alone
and apart from COVID funding that had benefited the public
but would no longer be available.
Ms. Hedberg responded that the department had been working
across all divisions on the uses of the remaining federal
funds. The department had been working on the transition
over an extended period of time to ensure that there would
not be an unexpected cut of the federal funds specific to
COVID. For example, the Division of Public Health (DPH) had
been working on data monetization projects and there would
be continued benefits from the funds that would support the
community.
Representative Galvin understood that due to SNAP backlogs
and other issues, the funding was not fully released to the
public. The backlog still existed but there was a plan to
address it. She asked if some of the dollars were not
distributed to families because the state did not have the
capacity to distribute the funds at the time.
Ms. Hedberg replied in the negative. The next few slides of
the presentation would discuss the Division of Public
Assistance (DPA) and the SNAP backlog.
Co-Chair Johnson suggested that the committee wait to ask
questions until all of SNAP slides had been presented.
1:49:15 PM
Ms. Stern continued on slide 4 and detailed DPA's budget.
She relayed that the proposed budget for FY 25 was $275.4
million, which was a decrease of about $174 million from FY
24. The decrease was mainly due to reversals in federal
funding. The UGF decrease was due to the sunset of the
Senior Benefits Payment Program (SBPP) along with some one-
time increments that were received in FY 24.
Ms. Hedberg continued to slide 5, which offered detailed
information about SNAP. When she began working as DOH's
commissioner in November of 2022, there was an existing
SNAP backlog. The new leadership within DPA led the charge
of closely examining staffing needs and the division's
processes. There was also a business process redesign of
SNAP in April of 2023. The redesign examined the way in
which applications flowed through the system and how
eligibility technicians were assessing applications. There
was a team that was specifically focused on the
applications and a requirement that each application be
processed within 30 days. There was a second team that was
focused on the SNAP backlog of applications that were older
than 30 days. There was a third team that was focused on
Medicaid redetermination. She explained that the division
was able to address the first backlog by the summer of 2023
due to the business process redesign. There was a short
period of time during which the division was maintaining
timely processing of applications.
Ms. Hedberg explained that in the fall of 2023, there was a
series of cascading events that contributed to the decrease
in processing time. She thought the quick decrease was a
reflection of the fragility of DPA. One of the first events
that happened in the fall of 2023 was that the waiver for
SNAP interviews implemented by Food Nutrition Services
(FNS) under the U.S. Department of Agriculture (USDA) ended
on September 30, 2023. The end of the waiver meant that all
states needed to restart the interview process. She
remarked that eligibility technicians had a difficult job
and there was significant turnover in the role. She noted
that interviews were not completed for a period of three
years. Once the interview process began again, eligibility
technicians were averaging about 96 minutes per interview.
There needed to be an additional focus on training to
streamline the process. Also in the fall of 2023, there
were significant storms and weather events that impacted
the division's staff and their ability to work, such as
school closures and difficult road conditions. In addition,
the division's document and management system moved to the
cloud and there was some increased lag time in the process.
She explained that the quick succession of the
aforementioned events impacted the processing time of
applications.
Ms. Hedberg shared that in order to address the problems
brought about by the events, she immediately reached out to
the division's partners at FNS to request that the division
be permitted to temporarily pause the interviews. She noted
that FNS was supportive and asked the division to submit a
waiver. After 30 days, FNS determined that it did not have
the authority to approve the waiver. In response, she made
the decision to temporarily pause the interviews. She noted
that interviews were causing the division's backlog to grow
significantly. In December of 2023, there were 12,098 cases
in backlog. Presently, the number of cases in backlog was
3,212. She stressed that the process was working due to the
temporary pauses. She expected that the entire backlog
would be eliminated by the end of the month. She reiterated
that staff training needed to be examined in order to
streamline the interview process. The division had received
many helpful recommendations from its contractors on how to
improve the process and the recommendations were currently
being implemented. She stressed that staff were being
trained on how to conduct the interviews more efficiently.
The interview process would begin again once the backlog
was completely eradicated; however, the progression would
be slow as it was time consuming to train all division
staff. She indicated that her focus was on preventing
backlogs and being proactive.
1:55:37 PM
Ms. Hedberg continued on slide 6 and shared that the
division had started to see a slow increase in vacancies.
Leadership was working closely with staff and trying to
determine ways in which the culture and the environment
could be improved. The department was also implementing new
technologies to support the clients' experience and to
support the eligibility technicians. In December of 2023,
the department launched the online SNAP application. To
date, there had been over 2,500 applications submitted
online. The applications were being completed more quickly
and had made the process simpler. In addition, the
applications were more complete because applicants were
prompted to upload necessary information that was sometimes
missed on paper applications. The online application also
made easier the jobs of eligibility technicians.
Ms. Hedberg continued that the next technology that was
going to be launched was the self-service portal, which
would be live in July of 2024. The portal would allow
clients to upload documents after submitting the
application and would be accessible for all public
assistance applications. The department was also on target
to launch the online interim report, which was a federal
FNS requirement. Clients were required to report any
changes after six months, which could now be completed
online. In addition, the department planned to launch an
advanced capture and intelligent scanning program in the
spring of 2024. The program would leverage technology to
scan and categorize documents, making the process easier.
In the summer of 2024, phase II of the self-service portal
would be launched, which would allow for clients to have
better access to documents and make it easier for clients
to check the status of their applications.
Ms. Hedberg thought the technological improvements would
help increase the communication and decrease the call
volume for the virtual contact center. Towards the end of
summer of 2024, the department planned to launch electronic
notifications, which would allow clients to opt-in to
receive notifications about the application. Currently, all
notifications were mailed out via the postal service and it
was common for the mail to get lost. All of the
technological improvements were made possible due to a
capital appropriation in 2023 that allowed the division to
move the document management system into the cloud. She
appreciated the financial support of the legislature in the
prior year.
2:01:01 PM
Co-Chair Johnson asked how long Ms. Hedberg had been
working for the department. She understood that Ms. Hedberg
had been onboard for one year.
Ms. Hedberg responded in the affirmative.
Representative Stapp appreciated the hard work done by DOH
leadership. He noted that Ms. Hedberg joined during a
difficult time and she was in the process of mitigating the
problems. He appreciated willful defiance of federal
agencies, particularly when federal agencies such as FNS
overstepped in Alaska. He asked if any other state received
approval for waivers for the interviews.
Ms. Hedberg responded in the negative.
Representative Stapp asked what the consequences could be
for intentionally disobeying FNS and pausing interviews. He
suggested that the state might be responsible for paying
the federal government because it was refusing to conduct
interviews.
Ms. Hedberg responded that the administration of SNAP was
50 percent federal funds and 50 percent state general
funds. She received an advance warning letter from FNS and
she was aware that providing a warning was part of FNS's
role. She shared that DOH was working closely with FNS and
the two entities met weekly. She did not find the letter
surprising and stressed that FNS was required to send the
letter.
Representative Stapp asked if there were any other states
that were in the same predicament and might also receive
letters from FNS.
Ms. Hedberg responded that there were many other states in
the exact same position as Alaska. She had reached out to
many other states to discover how the other states were
working with FNS and there were a variety of strategies.
2:04:32 PM
Representative Hannan asked if the following information
was available for SNAP eligibility technicians: the
turnover rate, vacancy rate, letter of agreement, whether
there was a classification alignment, and whether there
were retention incentives.
Ms. Hedberg replied that the vacancy rate for DPS as of
December of 2023 was 16.1 percent. The rate had been much
higher in the past. She would follow up with Representative
Hannan about the turnover rate. She had been told that for
every six new hires, about four employees were leaving the
job. She explained that there were letters of agreement to
allow interested eligibility technicians to work overtime,
which was how the division was working through the SNAP
backlog. The FY 24 supplemental budget also included
funding for hiring bonuses and retention.
Representative Hannan noted that senior benefits were not
currently in the budget. She asked if there was an
intersection of eligibility between senior benefits and
SNAP. She asked if all three levels of senior benefit
recipients were eligible for SNAP.
Ms. Hedberg responded that she would follow up with the
information. She added that when an eligibility technician
processed an application, all of the client's information
and any other public assistance applications that the
client had filled out were evaluated as part of the
eligibility process. She explained that it was a "one and
done" model to ensure that all of the needs of a client
were addressed at the same time.
2:08:52 PM
Co-Chair Edgmon remarked that he had the opportunity to
meet with the Board of Directors at the Alaska Federation
of Natives (AFN) earlier in the day and SNAP was an
important topic of conversation. He appreciated the work
done on the SNAP program and backlog. He asked if there was
information about the 3,200 remaining SNAP backlog
applications. He asked if there was a sense of where the
applicants lived and whether they were in remote areas of
the state.
Ms. Hedberg replied that the eligibility technicians
processed applications in the order in which the
applications were received and technicians were going to
complete the backlog by the end of the month. She added
that the department worked collaboratively with tribes and
tribal organizations. Some of the organizations had
approached the department and asked if there was a way for
the organizations to support the interview process. The
division accepted the offer and asked FNS for permission to
accept help; however, it was determined that only state
employees were permitted to conduct interviews. She shared
that FNS had suggested that there could be a potential
demonstration project in the future, which was communicated
with the tribal partners and the crafting of the project
was in the preliminary stages.
Co-Chair Edgmon noted that he read the letter from FNS and
thought it included some stern language, such as
highlighting Alaska as the state with the highest error
rates. He understood that if compliance was not attained in
the near future, the state could be responsible for paying
back some of the federal funding it had received. He had
missed portions of the earlier conversation that Ms.
Hedberg had with Representative Stapp regarding the
potential consequences for incompliance and he asked if she
could repeat her comments.
Ms. Hedberg responded that many states received advanced
warning letters. She disagreed with some of the words used
in the letter but it was not a surprise to receive the
letter. The letter simply stated that Alaska was not in
compliance with federal rules and it needed to begin
interviews. There were weekly communications with FNS and
the letter simply represented FNS "checking a box." The
letter also stated that the federal funds could potentially
be withheld as a consequence of incompliance. She stressed
that FNS had never withheld funds from any state in the
past, but it was an action that FNS could choose to take.
Co-Chair Edgmon commented that the technological
advancements seemed exciting. He noted that in rural areas
of the state, computer literacy was not widespread nor was
owning a computer. He thought there was enormous
opportunity and benefit but also some unanticipated
challenges.
Ms. Hedberg replied that the SNAP application could be
filled out using a cellphone and an individual did not need
to own a computer. She referenced Co-Chair Edgmon's comment
about Alaska's error rate and explained that the error rate
was not related to interviews. There needed to be changes
at the congressional level on the way in which the payment
error rate was calculated in order to put Alaska on-par
with the remainder of the nation. In addition, the state
would have a high payment error rate until the first
quarter of 2025 due to the method that FNS used to
calculate the error rate. She noted that the high error
rate was due to decisions that were made prior to her
tenure at DOH and she would continue to work towards a
solution. She reiterated that the error rate was not
related to the interviews and she was unsure why the
connection was implied in the letter.
2:15:31 PM
Representative Galvin understood that the administration of
SNAP was 50 percent federal and 50 percent state general
funds and there was a threat of the federal government
pulling the funding. She asked how much funding would be
pulled.
Ms. Hedberg would follow up with the information.
Representative Galvin asked if there had been discussion
about the way in which the legislature could better support
the division.
Ms. Hedberg appreciated the comment. She added that FNS was
required to send the letter and it had never withheld
federal funds. She admitted that FNS could choose to
withhold the funds, but the division had been proactive in
its communication with FNS and she thought there was a
workable solution.
2:17:18 PM
Representative Ortiz referred to slide 4 and asked why the
FY 25 budget was less than the FY 24 budget.
Ms. Stern responded that the majority of the changes were
due to reversals of federal COVID funding in addition to
SBPP.
Representative Ortiz thought it was quite clear that the
SNAP backlog had been an issue in the state for a long
time. In the past, he heard more feedback about issues with
the roads and the ferries from his constituents in
Ketchikan, but he was now hearing more about SNAP than any
other issue. He noted that his office had received
excellent assistance from DOH's legislative liaison,
Courtney Enright.
Representative Josephson asked for clarification that FNS
told the division to restart the interviews and the
response from the division was "no."
Ms. Hedberg replied that she had communicated to FNS that
the backlog needed to be eliminated and staff needed to be
retrained. She stressed that interviews were going to be
restarted. She was committed to not creating a new backlog,
which was why the timing of the interviews was a point of
discussion.
Representative Josephson noted that overpayments were
highlighted as being at-risk in the letter. He asked if his
understanding was correct.
Ms. Hedberg noted that the purpose of an interview was to
verify the information in the SNAP application. The
division also had tools to verify the financial status of
applicants and ensure that each applicant received the
correct benefit. The reference in the letter to overpayment
was due to a concern that too much money would be
allocated. There was a small threshold of overpayment in
policy, which was typical for all states. The division was
not seeing a high amount of overpayments.
2:21:33 PM
Representative Josephson remarked that he might have been
raised to be too compliant, but he preferred to adhere to
the requirements from the federal government. He viewed
Alaska as a partner in the federal program and he thought
the state should follow instructions.
Representative Coulombe asked for clarification on why the
federal government insisted upon an interview in addition
to the application. She asked what information could be
uncovered in person that could not be verified from the
application.
Ms. Hedberg replied that the minimum requirements for a
SNAP application were name, address, and phone number.
There were many paper applications that were missing
important information and it was the responsibility of the
eligibility technicians to help the applicant. There were
some elements that were required on the online application
that could get missed on the paper application. She thought
it was important to train staff on how to conduct better
interviews and the process needed to be revisited to ensure
that the interviews were both efficient and effective.
Co-Chair Johnson wanted to remind the committee that the
next section of the presentation was about Medicaid.
Representative Coulombe asked if the interviews could be
conducted remotely.
Ms. Hedberg responded that interviews could be conducted in
person or over the phone.
2:25:15 PM
Ms. Stern continued on slide 7 and detailed the budget for
Medicaid services. The department was anticipating an FY 25
budget of about $2.5 billion. Medicaid was one of the top
three budget drivers in the state, along with the Permanent
Fund Dividend (PFD) and the Base Student Allocation (BSA).
In order to draw about $1.8 billion in federal funding, the
state leveraged about $704 million in state general funds.
The budget had slightly increased since FY 24 due to the
second year of Medicaid post-partum services, which was
passed in the prior year through SB 58.
EMILY RICCI, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH,
continued on slide 8 to discuss Medicaid redeterminations.
As part of the federal government's response to COVID-19,
states were provided with an enhanced federal match at
about 6.2 percent and required that states provide
continuous eligibility for individuals enrolled in
Medicaid. She explained that during this time, there was no
annual review for individuals enrolled in Medicaid, which
was the typical practice prior to the pandemic. States were
not allowed to disenroll individuals from Medicaid except
for in extremely specific cases.
Ms. Ricci explained that the program suspending eligibility
reviews ended in March of 2023 and the associated enhanced
federal match of 6.2 percent was reduced, requiring states
to redetermine Medicaid eligibility for all individuals
within the program. She relayed that states had never been
faced with such a challenge before. In addition, the
division that processed Medicaid eligibility was DPA, which
was already struggling in other areas. She shared that the
department was about ten months into the redetermination
process and it had initiated over 140,000 redeterminations
thus far, which amounted for over half of the workload. The
department also renegotiated with CMS to request additional
time for redeterminations. The department was able to
negotiate the time period for it to complete
redeterminations from 12 months to 18 months.
Ms. Ricci continued that the department had also
implemented new mitigation strategies for redeterminations,
which were all listed on the department's website. One of
the new mitigation strategies was allowing the initiation
of a Medicaid renewal at the same time as a SNAP
determination was being made. While DPA was working through
the SNAP backlog, eligibility technicians were able to
initiate Medicaid redeterminations simultaneously. The
department's website also included new data dashboards to
share the process of Medicaid redeterminations. The
department had initiated about 90,000 redeterminations
though a new automated system. The remainder of the
redeterminations had been initiated through the use of the
mitigation strategy allowing SNAP and Medicaid to be
reviewed simultaneously.
2:30:01 PM
Ms. Ricci noted that another item that helped the
department advance was the ability to text applicants about
things like missing documents. In her discussions with
other state Medicaid directors, she found that there was
not a single state that was not feeling the pressure of
Medicaid redeterminations. She thought that although the
system changes and process changes were difficult in the
current moment, the changes would result in a better
process in the long term.
Ms. Ricci noted that one of the new systems was called the
Ex Parte or the Automated process, which leveraged
information from a variety of databases to discover if an
individual's eligibility could be determined automatically
and prevent additional paperwork. Currently, about 25
percent of applications were being completed through the Ex
Parte process. She explained that like any new process,
there were some bumps that needed to be worked out along
the way. In the fall of 2023, CMS discovered that there was
a higher than anticipated percentage of procedural
disenrollments occurring across the nation. There were over
23 states that identified an error in the procedural
disenrollment system, including Alaska. In response,
procedural disenrollments were paused and DPA reexamined
all of the cases in the state that had potentially been
impacted. The state was working with new partners to help
it address the error in the system and determine if there
was a way to increase the number of individuals who were
being automatically renewed. The changes would likely be
rolled out within the next six months. The division was
continuing to process redeterminations, but disenrollment
was being suspended until the error could be fixed.
2:33:29 PM
Representative Galvin referred to slide 7 and asked for
more information about the increase in "other" funds from
the FY 23 actuals to the FY 24 management plan. She also
requested more information about the automated process that
had been put into place. She had heard from families that
accessing the online resources was difficult due to weak
broadband and there were many families who struggled with
language barriers.
Ms. Stern responded that the "other" category consisted
primarily of statutory designated program receipts and
agency receipts, which were tied to the reimbursable
service agreements with other agencies in addition to
reclaiming fees for providing emergency medical transport.
The FY 24 management plan provided the department with the
authority to collect the funds, but it did not necessarily
mean that the department would actually collect the funds.
Ms. Ricci added that the department worked closely with its
tribal health partners in order to improve broadband
access. The partnership allowed the department to share
information about individuals who might need to return a
form in order to complete their redeterminations. The
strategy would ensure that tribal health partners were able
to see which members would be most impacted on a monthly
basis. Additionally, Medicaid redetermination materials
were available online in multiple languages as well as a
language line that individuals could call to receive help
with language-related issues.
Representative Galvin clarified that she was mostly
referring to individuals near Anchorage who were having
difficulty with reliable broadband. Many people who she had
heard from were immigrants and would not necessarily be
working with a tribal organization. She thought it was
important to be mindful of the issue.
2:37:14 PM
Ms. Ricci continued on slide 9 which included a depiction
of the number of renewals that had been initiated through
December of 2023. The slide also showed the scheduled
redeterminations through September of 2024. The scheduled
redeterminations were aspirational in the sense that the
allowance of additional time gave the department the
flexibility to help manage its staff and manage the volume
of redeterminations. She expected that the numbers would
change once the actual number of redeterminations had been
initiated.
Ms. Stern continued on slide 10 and detailed the budget for
the Division of Healthcare Services (DHS). For FY 25, the
governor's proposed budget was $23.6 million in total
funds, which was a slight increase of about $1 million from
FY 24 that was mainly due to the union negotiated salary
increases.
Ms. Ricci remarked that DHS was the "heart" of the Medicaid
program and the division performed a number of activities
that were essential to Medicaid. She noted that DHS had a
small team and a relatively small budget. She continued to
slide 11 and relayed that one of the other areas of focus
for DHS was how to spend the general fund dollars as
effectively as possible. She highlighted the tribal
reclaiming general fund savings listed on the slide, which
was made available to states beginning in FY 17. The
division was able to increase the tribal reclaiming general
fund savings from $34 million in FY 17 to $124.5 million in
savings in FY 23. The type of savings seen on the slide
helped mitigate the amount of general fund dollars that
were paying into the Medicaid program to support an
increase in Medicaid recipients.
Ms. Ricci continued that another area in which DHS was
focused was related to the increased savings in pharmacy
cost and drug rebate recoveries. There was a total of over
$700 million in drug rebate recoveries had been secured by
DHS over the past six years. Combined with the over $500
million in savings for tribal reclaiming, the division had
secured over $1 billion in savings since FY 17.
Representative Ortiz asked how the pharmacy rebate process
worked. He asked who was receiving the rebates.
Ms. Ricci responded that the pharmacy rebate system was
highly complex but she could offer a high level overview of
the process. In general, a pharmacy rebate could be
considered controversial, but in the context of a Medicaid
rebate it was less controversial because it allowed the
state to leverage additional funds from the pharmaceutical
companies in alinement with the federal government based on
the prescription of different types of medication.
Additionally, there was a preferred drug list which allowed
for more opportunities for rebates that were available from
the pharmaceutical manufacturers and would be distributed
to states and to the federal government.
2:43:02 PM
Representative Hannan asked for more details on tribal
reclaiming. She assumed that tribal citizens from other
states might not be covered under Alaska's tribal health
partners. She asked if there was reclaiming for other
dependents of federal programs such as for military
dependents who received services through state Medicaid.
Ms. Ricci responded that tribal reclaiming described the
process under which the state could receive 100 percent
federal funding for services provided to individuals who
were tribal members and were receiving services either
directly through a tribal health organization, or through
another entity that had not established a documentable care
agreement. The process began in 2016 and was still
considered relatively new. She was not certain if
individuals from other states would be covered and she
would follow up with Representative Hannan with the
information.
Ms. Ricci noted that one of the reasons there was an
increase in tribal reclaiming as noted on slide 11 was
because DHS was always looking to identify areas in which
individuals were receiving services that could be eligible
for 100 percent federal funds, but there might not be an
established care agreement. For example, there had been
some individuals with high-cost and intensive needs who had
sought care outside of the state. She relayed that DHS had
established an agreement that would allow individuals
receiving care outside of the state to receive 100 percent
federal funding. She explained that DHS had other methods
for savings not included in the presentation, such as fair
party liability payments, which involved DHS examining
whether there were individuals who would be eligible for
other primary health insurances that would typically pay
before Medicaid.
2:46:13 PM
Representative Stapp thanked the department for its
dedication to progress. He asked if the department could
discuss the progress of the Office of Health Savings (OHS).
Ms. Ricci acknowledged that the presentation had been less
focused on the upcoming reduction in federal funds. The
department had engaged Evergreen Economics to work on the
state's Medicaid forecast, which showed the projected
effects of the reduction in federal funding on the Medicaid
program. She relayed that the goal was for the department
to be forward-thinking and everyone agreed that more money
should be spent on primary care. She noted that it was also
important to leverage the existing opportunities that the
department already had and find more opportunities to bring
money back to the state. The OHS was focused on how
existing savings could be expanded upon and on ensuring
that current spending would contribute to future goals.
Representative Josephson recalled that over one-third of
Alaskans were on Medicaid during the pandemic. He asked
whether the department considered the impacts of
disenrolling individuals from Medicaid during the
redetermination process.
Ms. Ricci responded that the department had dedicated a
significant amount of time to trying to determine what
redeterminations would look like for Alaskans. She relayed
that there was a natural churn in Medicaid enrollments.
There were a number of individuals who were disenrolled in
the summer of 2023 that were currently reenrolling into the
program, and the benefits were provided retroactively to
the time at which the individuals were first disenrolled.
The impacts were yet to be determined because many
individuals who had been disenrolled for a variety of
reasons were being retroactively reenrolled. The department
was monitoring how many individuals who were retroactively
reenrolled had used Medicaid services and how many had not
used the services. There could be many individuals who were
no longer eligible for Medicaid; however, the ineligible
individuals were not necessarily using Medicaid services.
Anecdotally, individuals who had not reenrolled had a much
lower level of spending than those who had reenrolled.
2:52:39 PM
Co-Chair Johnson asked for more information about the
cyberattack and how it had impacted the department.
Ms. Hedberg replied that fortunately, she had not had to
think about the cyberattack for a long period of time. When
she started working at the department in November of 2022,
the cyberattack was a major focus. The IT staff had a
matrix of the systems that needed to come back online in
the aftermath of the attack and all systems had since come
back online. There was still some cleanup to do, but the
major impacts of the attack were no longer present.
Co-Chair Johnson noted that the department was also willing
to take questions outside of the meeting.
Representative Stapp asked for more information about the
Medicaid redetermination process. He asked for confirmation
that individuals who were disenrolled from Medicaid would
be pointed towards other health care resources.
Ms. Ricci replied that it was difficult to discern how many
individuals had disenrolled permanently because there was a
period of time during which individuals could reenroll and
retroactively receive services. The data was constantly
changing. When an individual was disenrolled, the
individual was automatically transferred to the Federally
Facilitated Marketplace (FFM) and could receive coverage
through the marketplace. There were also a number of
individuals who had moved out of the state or had other
employer-sponsored health insurance.
Representative Stapp asked if the disenrolled individual
would automatically have a qualifying event for open
enrollment and would therefore not experience a lapse in
coverage.
Ms. Ricci responded in the affirmative.
2:57:58 PM
Representative Galvin asked what the state was doing to
ensure that there were enough care givers in the state and
that there was sufficient access to health care. She had
heard that the vacancy rate in the public health sector was
very high. She asked what was being done to ensure that
qualified health care professionals were being recruited
and retained.
Ms. Hedberg replied that there was a program called the
Strengthening Healthcare Access Recruitment Program (SHARP)
that supported the health care workforce and the
recruitment and retention of health care workers. She
explained that SHARP had a number of contracts with health
care providers across the state. She noted that the
department had seen a lot of success and utilized many
different recruitment and retention strategies. She could
follow up with more detailed information about the
strategies.
Representative Galvin commented that she would appreciate a
follow up and would also like more information about the
particular strategies utilized to recruit and retain public
health nurses.
Representative Tomaszewski thanked the department for its
work. He asked if there were any individuals who were not
citizens of the U.S. who were collecting Medicaid benefits.
Ms. Ricci responded that she could follow up with the
specific eligibility requirements. She noted that proof of
citizenship was part of the Medicaid application process.
Representative Tomaszewski asked if there was a way for
non-citizens to be in the Medicaid system.
Ms. Ricci responded that she could follow up with specific
details. She thought that there were ways for individuals
who had lived in the U.S. for a certain period of time and
had a particular status to apply. She reiterated that she
would follow up to ensure that she was not giving incorrect
information.
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnson reviewed the agenda for the following
day's meeting.
ADJOURNMENT
3:02:49 PM
The meeting was adjourned at 3:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFIN - DOH FY 25 Budget Overview Final 2024.02.6.pdf |
HFIN 2/6/2024 1:30:00 PM |
|
| HFIN - DOH Response to Q Budget Overview 2-6 022624.pdf |
HFIN 2/6/2024 1:30:00 PM |