Legislature(2015 - 2016)CAPITOL 106

03/26/2015 03:00 PM HEALTH & SOCIAL SERVICES

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03:04:22 PM Start
03:04:47 PM HB148
05:20:50 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 148 MEDICAL ASSISTANCE COVERAGE; REFORM TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
                         March 26, 2015                                                                                         
                           3:04 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Paul Seaton, Chair                                                                                               
Representative Liz Vazquez, Vice Chair                                                                                          
Representative Neal Foster                                                                                                      
Representative Louise Stutes                                                                                                    
Representative David Talerico                                                                                                   
Representative Geran Tarr                                                                                                       
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 148                                                                                                              
"An Act relating to medical  assistance reform measures; relating                                                               
to  eligibility  for  medical assistance  coverage;  relating  to                                                               
medical assistance  cost containment  measures by  the Department                                                               
of Health  and Social  Services; and  providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 148                                                                                                                  
SHORT TITLE: MEDICAL ASSISTANCE COVERAGE; REFORM                                                                                
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/18/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/15       (H)       HSS, FIN                                                                                               
03/24/15       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/24/15       (H)       Heard & Held                                                                                           
03/24/15       (H)       MINUTE(HSS)                                                                                            
03/26/15       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JON SHERWOOD, Deputy Commissioner                                                                                               
Medicaid and Health Care Policy                                                                                                 
Office of the Commissioner                                                                                                      
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During the hearing on HB 148, testified on                                                               
behalf of the administration.                                                                                                   
                                                                                                                                
REMOND HENDERSON, Deputy Commissioner                                                                                           
Office of the Commissioner                                                                                                      
Department of Corrections (DOC)                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions related to HB 148.                                                                    
                                                                                                                                
LAURA BROOKS, Division Operations Manager                                                                                       
Office of the Commissioner                                                                                                      
Department of Corrections (DOC)                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions related to HB 148.                                                                    
                                                                                                                                
ALBERT WALL, Director                                                                                                           
Central Office                                                                                                                  
Division of Behavioral Health                                                                                                   
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions related to HB 148.                                                                    
                                                                                                                                
VALERIE DAVIDSON, Commissioner Designee                                                                                         
Department of Health and Social Services                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During the hearing on HB 148, testified on                                                               
behalf of the administration.                                                                                                   
                                                                                                                                
ILONA FARR, MD                                                                                                                  
Alaska Family Medical Care, LLC                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition of HB 148.                                                                       
                                                                                                                                
BECKY HULTBERG, President, CEO                                                                                                  
Alaska State Hospital & Nursing Home Association (ASHNHA)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
JOHN GAGUINE                                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
ALYSON CURREY                                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
MELISSA ENGEL                                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
KARENZA BOTT                                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
VERNE BOERNER, President, CEO                                                                                                   
Alaska Native Health Board (ANHB)                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
MICHAEL DZURISIN                                                                                                                
Location unknown                                                                                                                
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
ROBIN SMITH                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
ANDREW SMALLWOOD                                                                                                                
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
JEFF JESSEE, Chief Executive Officer                                                                                            
Alaska Mental Health Trust Authority                                                                                            
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 148.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:04:22 PM                                                                                                                    
                                                                                                                                
CHAIR PAUL  SEATON called  the House  Health and  Social Services                                                             
Standing   Committee    meeting   to    order   at    3:04   p.m.                                                               
Representatives Tarr, Stutes, Talerico,  Foster, Wool, and Seaton                                                               
were  present  at the  call  to  order.   Representative  Vazquez                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
           HB 148-MEDICAL ASSISTANCE COVERAGE; REFORM                                                                       
                                                                                                                                
3:04:47 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the only order of  business would be                                                               
HOUSE  BILL  NO. 148,  "An  Act  relating to  medical  assistance                                                               
reform measures;  relating to eligibility for  medical assistance                                                               
coverage;  relating   to  medical  assistance   cost  containment                                                               
measures by  the Department  of Health  and Social  Services; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
3:07:46 PM                                                                                                                    
                                                                                                                                
JON  SHERWOOD,  Deputy  Commissioner, Medicaid  and  Health  Care                                                               
Policy,  Office of  the Commissioner,  Department  of Health  and                                                               
Social  Services (DHSS),  said he  will be  reviewing the  fiscal                                                               
notes [Included  in members' packets].   Overall for  Fiscal Year                                                               
(FY) 2016, there  would be an appropriation of  over $146 million                                                               
with an actual  reduction in undesignated general  funds (UGF) of                                                               
over $2  million.  In 2021  total expenditure would rise  to $215                                                               
million and a  reduction in undesignated general  funds of almost                                                               
$98 million.                                                                                                                    
                                                                                                                                
3:08:50 PM                                                                                                                    
                                                                                                                                
MR. SHERWOOD explained  fiscal note 1 [dated 3/18/15]  is a small                                                               
increase for  the Department of  Administration (DOA),  Office of                                                               
Administrative Hearings.   Fiscal note  2 [dated 3/18/15]  is for                                                               
the  Department of  Corrections  (DOC),  [Physical Health  Care],                                                               
reflecting  a  reduction  in  expenditures as  a  result  of  the                                                               
expansion.   Inmates  who receive  in-patient  care could  become                                                               
eligible   for  Medicaid   coverage  when   receiving  in-patient                                                               
treatment  while  physically  out of  the  correctional  facility                                                               
overnight.   This would  allow the  Department of  Corrections to                                                               
bill those expenditures to Medicaid.                                                                                            
                                                                                                                                
3:09:25 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON observed  the reduction would be $4.1  million in FY                                                               
2016, but  $7 million in  FY 2017 and  thereafter.  He  asked why                                                               
the difference.                                                                                                                 
                                                                                                                                
MR. SHERWOOD deferred to the  Department of Corrections, but said                                                               
his understanding  is that DOC  doesn't anticipate being  able to                                                               
achieve the  maximum savings in the  first year.  Part  of it may                                                               
be that DOC  is paying for care that was  already provided in the                                                               
previous  year.   Also,  DOC  may not  be  able  to get  everyone                                                               
enrolled in the early part of the year.                                                                                         
                                                                                                                                
CHAIR  SEATON  inquired whether  there  is  any correlation  with                                                               
recidivism or  being able to  provide behavioral  health services                                                               
as  inmates  exit  the  corrections   system  and  are  still  on                                                               
probation.                                                                                                                      
                                                                                                                                
MR.  SHERWOOD  offered  his  belief that,  although  there  is  a                                                               
potential  for  savings,  he doesn't  believe  this  fiscal  note                                                               
reflects savings associated with that.  He deferred to DOC.                                                                     
                                                                                                                                
3:11:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked for clarification that  the $7 million                                                               
in savings  would be for  overnight hospital stays  for prisoners                                                               
in state custody, not a day trip for medical treatment.                                                                         
                                                                                                                                
MR. SHERWOOD confirmed the aforementioned  is correct.  An inmate                                                               
must actually  be staying  out of the  facility overnight  so the                                                               
inmate  would no  longer  be  considered to  be  residing in  the                                                               
facility on that day.                                                                                                           
                                                                                                                                
REPRESENTATIVE  TARR added  the  prison population  is aging  and                                                               
therefore the  health care needs  are more significant as  far as                                                               
extended stay care.                                                                                                             
                                                                                                                                
3:12:54 PM                                                                                                                    
                                                                                                                                
REMOND   HENDERSON,   Deputy    Commissioner,   Office   of   the                                                               
Commissioner,   Department   of  Corrections   (DOC),   addressed                                                               
Representative  Seaton's  first  question about  fiscal  note  2,                                                               
explaining the difference between the  $4 million reduction in FY                                                               
2016 and  $7 million in  reduction for each  of the out  years is                                                               
because DOC  will not be  fully ramped up  in the first  year and                                                               
only expects  to achieve  a 50 percent  savings that  first year.                                                               
The   DOC  analyzed   actual   medical   bills  for   individuals                                                               
institutionalized in  a hospital for  24 hours or more  in fiscal                                                               
years  2012, 2013,  2014, and  2015.   The  estimates arrived  at                                                               
fiscal  note 2  are 80  - 90  percent of  what was  seen in  that                                                               
analysis.   For example, in FY  2014, $8.5 million was  spent for                                                               
individuals who were in care for  24 hours or more; 90 percent of                                                               
that  is  $7   million.    For  FY  2015   through  January,  the                                                               
expenditure  is already  $5.5  million for  people  who would  be                                                               
potentially eligible  under Medicaid, which equates  to almost $9                                                               
million.   Therefore,  DOC believes  $7 million  is a  reasonable                                                               
amount.                                                                                                                         
                                                                                                                                
3:15:09 PM                                                                                                                    
                                                                                                                                
LAURA  BROOKS,   Division  Operations  Manager,  Office   of  the                                                               
Commissioner,   Department   of  Corrections   (DOC),   addressed                                                               
Representative Seaton's  second question about  behavioral health                                                               
follow up as  people transition from prison into  probation.  She                                                               
said the  department has staff  who work to link  those offenders                                                               
to community resources upon release  from DOC facilities.  If DOC                                                               
can  ensure that  these individuals  in  custody are  set up  and                                                               
ready to go for Medicaid upon  release, there will not be a lapse                                                               
in services as is often experienced  now.  However, in terms of a                                                               
fiscal  note, she  said  she  doesn't believe  that  is going  to                                                               
result in any direct savings  to the department because those are                                                               
services that  are already provided  in the community.   There is                                                               
research that  addresses that those  who have  their criminogenic                                                               
needs  met,  which  includes  things   like  stable  medical  and                                                               
behavioral health  care, have a  reduced likelihood  of returning                                                               
to  corrections   and  reduced   recidivism  in  the   long  run.                                                               
Responding  further,  she  confirmed  the fiscal  note  does  not                                                               
include those  who [have been  released and]  are now out  in the                                                               
community.                                                                                                                      
                                                                                                                                
3:16:39 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD addressed  fiscal note  3 [dated  3/18/15] for  the                                                               
Department  of  Health  and Social  Services,  Behavioral  Health                                                               
Administration,  explaining it  will be  the cost  of adding  one                                                               
position for the  1915(i) option [under Medicaid]  which would be                                                               
able to cover  individuals.  Some individuals  that are currently                                                               
served through  [Division of Senior  and Disability  Services] in                                                               
grant  programs   and  some  are  served   through  [Division  of                                                               
Behavioral Health].   Different  benefit packages are  allowed to                                                               
be designed for  different populations under that  option, and it                                                               
is  anticipated  that  one  person  would  be  required  for  the                                                               
development  and then  the ongoing  operation and  maintenance of                                                               
that  component.   The  expenditure starts  at  $120,400 [for  FY                                                               
2016],  which  includes some  one-time  expenses  for adding  the                                                               
position,  and  then goes  down  to  $112,800 in  the  subsequent                                                               
fiscal years.                                                                                                                   
                                                                                                                                
CHAIR SEATON asked where that employee would be located.                                                                        
                                                                                                                                
ALBERT  WALL, Director,  Central Office,  Division of  Behavioral                                                               
Health, Department of Health and  Social Services (DHSS), replied                                                               
that position is anticipated to be in Anchorage.                                                                                
                                                                                                                                
CHAIR SEATON  presumed "that one  position will be  doing whether                                                               
somebody's coming out of Juneau or Fairbanks or anything else."                                                                 
                                                                                                                                
MR. WALL responded correct.                                                                                                     
                                                                                                                                
REPRESENTATIVE TARR observed the  position would be called Health                                                               
Program Manager II, and requested a description of the position.                                                                
                                                                                                                                
MR.  WALL  answered  the  Health Program  Manager  II  handles  a                                                               
variety of  issues, including policy and  regulatory writing, and                                                               
program oversight  for various programs that  are health related.                                                               
This person provides  program approval and oversight  that is not                                                               
specifically for a  clinical position, which is done  by a mental                                                               
health clinician.                                                                                                               
                                                                                                                                
REPRESENTATIVE TARR surmised this  person would be experienced in                                                               
health care and would be a higher level position.                                                                               
                                                                                                                                
MR. WALL replied this position will  require a very high level of                                                               
expertise in  Medicaid services and  the regulations  that govern                                                               
those services.                                                                                                                 
                                                                                                                                
CHAIR SEATON understood  there would be two services:   one under                                                               
[Division  of  Senior  and Disability  Services]  and  one  under                                                               
[Division of Behavioral Health].                                                                                                
                                                                                                                                
MR.  SHERWOOD  responded  the  two  division  services  that  are                                                               
currently provided by  general funds could be  put under 1915(i).                                                               
One is  the Division of  Behavioral Health  and the other  is the                                                               
Division   of  Senior   and  Disability   Services.     Different                                                               
populations  can  be  served  under  this  option;  for  example,                                                               
individuals with dementia,  traumatic brain injury, developmental                                                               
disabilities  who  don't  meet  the  institutional  criteria  for                                                               
service under one  of the department's existing  waivers, as well                                                               
as  individuals with  severe mental  illness or  other behavioral                                                               
issues might qualify.                                                                                                           
                                                                                                                                
3:21:16 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD turned  to fiscal  note 4  [dated 3/18/15]  for the                                                               
Department  of  Health  and Social  Services,  Behavioral  Health                                                               
Treatment and  Recovery grants.   He said  those are  the general                                                               
funds services, some of which  could be shifted to Medicaid under                                                               
1915(i),  and some  of which  are  from the  expansion itself  as                                                               
individuals  not  currently  eligible   for  Medicaid,  but  with                                                               
behavioral health  needs, are  able to  get Medicaid  through the                                                               
expansion.  A reduction to the  grants is anticipated as a result                                                               
of people now  paying for their services  funded through Medicaid                                                               
instead of  through the grants.   That  begins as a  reduction of                                                               
nearly $1.6 million [in FY 2016]  and increases to a reduction of                                                               
$19.5 million  in FY  2021.   That is a  combination of  both the                                                               
expansion that  would occur in FY  2016 and FY 2017,  and then in                                                               
FY 2018 the reductions are related to the addition of 1915(i).                                                                  
                                                                                                                                
REPRESENTATIVE TARR surmised  that the smaller amount  in FY 2016                                                               
is  because  it is  the  year  in  which  people will  begin  the                                                               
transition to Medicaid billing.                                                                                                 
                                                                                                                                
MR. SHERWOOD answered yes, and  explained the department does not                                                               
have a  way to  effectively compel everyone  to come  forward and                                                               
identify themselves  as potentially  Medicaid eligible  and apply                                                               
on the first day.  It may  take some time to get individuals into                                                               
the system.                                                                                                                     
                                                                                                                                
3:23:40 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD discussed  fiscal note  5 [dated  3/18/15] for  the                                                               
Department  of  Health  and Social  Services,  Behavioral  Health                                                               
Medicaid Services,  stating this  is the  actual increase  to the                                                               
Medicaid  expenditures  around  behavioral   health.    Like  the                                                               
grants, it  stems from two  sources:  the expansion  which starts                                                               
in  FY 2016  and then  the  additions of  1915(i) services  which                                                               
would begin in  FY 2018.  It  is almost $4.8 million  in FY 2016,                                                               
increasing to $26.6 million in FY 2021.                                                                                         
                                                                                                                                
REPRESENTATIVE  STUTES   asked  whether  this   includes  1915(i)                                                               
services.                                                                                                                       
                                                                                                                                
MR.  SHERWOOD  replied  yes,  it  is  1915(i)  services  for  the                                                               
behavioral health side.                                                                                                         
                                                                                                                                
REPRESENTATIVE TARR surmised  the first year there  is no general                                                               
fund  match  because   the  state  is  at   100  percent  federal                                                               
reimbursement which steps down in the ensuing years.                                                                            
                                                                                                                                
MR.  SHERWOOD responded  the expansion  is initially  100 percent                                                               
federal, stepping down over this period  to 90 percent.  With the                                                               
retention of  the 100 percent  tribal match, Alaska's  match rate                                                               
will always be effectively higher.   The 1915(i) services will go                                                               
predominantly to people who may  already be Medicaid eligible but                                                               
who  do not  meet  an  institutional level  of  care  to get  the                                                               
[state's]  waiver  services.   The  anticipation  is  that  those                                                               
services will be  provided pretty much at the base  match rate of                                                               
50 percent.  He believed that  in this fiscal note the average is                                                               
about 56 percent because Behavioral  Health serves individuals on                                                               
Denali  Kid Care  and through  tribal  health systems.   But  the                                                               
1915(i) services are  not at the same enhanced match  rate as the                                                               
expansion services.                                                                                                             
                                                                                                                                
3:26:42 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD  moved  to  fiscal   note  6  [dated  3/18/15]  for                                                               
Department  of Health  and  Social  Services, Adult  Preventative                                                               
Dental Medicaid Services.  He  said this fiscal note reflects the                                                               
portion  of   the  increase  in  spending   related  to  Medicaid                                                               
expansion  for   this  particular  allocation  in   the  Medicaid                                                               
services  budget.   [The department]  allocated all  preventative                                                               
dental  and medical  services separately  and  this expansion  is                                                               
targeted  on   the  adult  population,   so  a  portion   of  the                                                               
expenditures would fall under this Medicaid services component.                                                                 
                                                                                                                                
REPRESENTATIVE  STUTES  recalled  a  presentation  in  which  Mr.                                                               
Sherwood indicated this was one of  the items that was cut out in                                                               
the 1990s  to save  money.  She  inquired whether  this expansion                                                               
would put it back in.                                                                                                           
                                                                                                                                
MR. SHERWOOD  answered [the department] cut  adult dental service                                                               
in  the 1990s  but then  restored  it later  in the  1990s.   The                                                               
service that  was cut  was what [the  department] referred  to as                                                               
emergency dental or  coverage of acute pain and  infection.  This                                                               
is an  enhanced dental service for  adults that was added  by the                                                               
legislature, he  believed, in  the early 2000s.   It  goes beyond                                                               
emergency care,  which is  something that would  put a  person in                                                               
the  hospital  if  left  untreated,  and  provides  basic  dental                                                               
services such as filling of  cavities, restoration, and dentures.                                                               
It has been available for about 10 years.                                                                                       
                                                                                                                                
REPRESENTATIVE  STUTES,  stating it  appears  that  this is  also                                                               
preventative, presumed it is cleaning  and those sorts of things.                                                               
She asked how many states provide dental coverage.                                                                              
                                                                                                                                
MR. SHERWOOD  replied he  does not know  how many  states provide                                                               
for adults  and added it is  an optional service.   He offered to                                                               
provide this information to the committee.                                                                                      
                                                                                                                                
3:30:04 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD   reviewed  fiscal  note  7   [dated  3/18/15]  for                                                               
Department of  Health and Social  Services, Health  Care Medicaid                                                               
Services.  He explained Health  Care Medicaid Services covers the                                                               
bulk  of primary  and  acute care  provided  by [the  department]                                                               
through the  Medicaid program.   Two things are included  in this                                                               
fiscal note.   One is the net increase in  Medicaid spending as a                                                               
result of adding  the expansion group.  The other  is the impacts                                                               
of  the Section  1115  waiver  for tribal  services,  which is  a                                                               
provision included in  HB 148.  The  expansion starts immediately                                                               
in FY 2016.   Some savings are anticipated from  the Section 1115                                                               
waiver in FY 2017, with savings  ramping up through FY 2021.  The                                                               
net  impact of  the Section  1115 waiver  is not  an increase  in                                                               
Medicaid spending, but a shifting  of Medicaid spending from non-                                                               
tribal  to  tribal facilities  and  therefore  the department  is                                                               
projecting  a change  in the  federal match  rate.   This service                                                               
would drop  from 50  percent general funds  to 0  percent general                                                               
funds, which is why the  line for federal receipts increases more                                                               
than  the line  for total  operating expenditures.   Even  though                                                               
there would  be a required  general fund match for  the expansion                                                               
piece,  the total  general  fund match  is  actually a  reduction                                                               
because  of  reducing  the  amount   needed  for  those  services                                                               
provided to tribal members that would be served in the waiver.                                                                  
                                                                                                                                
3:32:40 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD addressed  fiscal note  8 [dated  3/18/15] for  the                                                               
Department   of   Health   and  Social   Services,   Senior   and                                                               
Disabilities  Medicaid Services.   It  would begin  with a  small                                                               
amount  of   the  total   projected  expenditure   for  expansion                                                               
allocated to Senior and Disabilities  Medicaid Services, he said,                                                               
and then  in FY 2018 it  would be a more  substantial increase as                                                               
the 1915(i) option is brought in.   Also in HB 148 is the 1915(k)                                                               
option  in which  some services  from [the  department's] current                                                               
home and community based waivers  are converted to the (k) option                                                               
and get an extra  6 percent of federal match.   So, fiscal note 8                                                               
includes  three things:   the  expansion;  the 1915(i)  increase,                                                               
which  is offset  by reductions  to grant  programs that  will be                                                               
discussed  in subsequent  fiscal notes;  and the  1915(k) option,                                                               
which  shifts money  from general  funds to  federal funds.   The                                                               
total expenditure  in the first year  of FY 2016 is  $2.9 million                                                               
and by FY 2021 the total expenditure is up to $21.3 million.                                                                    
                                                                                                                                
3:34:25 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD  stated  fiscal  note 9  [dated  3/18/15]  for  the                                                               
Department  of  Health  and  Social  Services,  Catastrophic  and                                                               
Chronic  Illness Assistance,  is the  reductions for  the Chronic                                                               
and Acute Medical  Assistance (CAMA) Program.  Almost  all of the                                                               
individuals who are  eligible for CAMA right now,  he said, would                                                               
be  eligible for  the Medicaid  expansion and  it is  anticipated                                                               
that in  the first  year about  two-thirds of  the cost  would be                                                               
moved out  of the CAMA  Program and into the  Medicaid expansion,                                                               
eventually reducing CAMA by $1.4 million.                                                                                       
                                                                                                                                
CHAIR SEATON inquired about the number of participants.                                                                         
                                                                                                                                
MR. SHERWOOD responded it would be under 500.                                                                                   
                                                                                                                                
3:35:41 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD  said  fiscal  note  10  [dated  3/18/15]  for  the                                                               
Department  of Health  and  Social  Services, Medical  Assistance                                                               
Administration,  constitutes the  administrative  side of  health                                                               
care services.   It includes  staffing for the expansion  and the                                                               
Section 1115 waiver.  One position  would be added in FY 2018 for                                                               
the waiver because this waiver  typically comes with an extensive                                                               
amount of federal oversight and  data reporting that someone will                                                               
have to track  and provide to the federal government.   The other                                                               
four positions would be around the Medicaid expansion.                                                                          
                                                                                                                                
MR. SHERWOOD  explained fiscal  note 11  [dated 3/18/15]  for the                                                               
Department of  Health and Social  Services, Rate Review,  is very                                                               
small at $4,500 [in FY 2016].  One  provision of HB 148 has to do                                                               
with evaluating and developing a  proposal for a provider tax and                                                               
this  has some  funding  for meetings  in  Juneau and  Fairbanks.                                                               
[The department]  anticipates doing  the work and  absorbing most                                                               
of the  cost with existing staff  and budget, but the  funding is                                                               
for stakeholder  meetings in two  locations.  The staff  for this                                                               
office is  based in Anchorage  so no  funding was included  for a                                                               
meeting in Anchorage or the Anchorage area.                                                                                     
                                                                                                                                
3:37:52 PM                                                                                                                    
                                                                                                                                
VALERIE  DAVIDSON, Commissioner  Designee,  Department of  Health                                                               
and  Social Services,  pointed out  that implementing  a provider                                                               
tax is complicated.  Since Alaska  hasn't had a provider tax, but                                                               
other states have, the department is  using FY 2015 funds to work                                                               
on  a  request  for  proposals (RFP)  to  secure  an  independent                                                               
contractor who can  analyze what other states have  done and look                                                               
at  the Alaska  information  to help  the  department to  develop                                                               
recommendations for provider tax that might work in Alaska.                                                                     
                                                                                                                                
CHAIR SEATON noted there is an amendment in this regard.                                                                        
                                                                                                                                
REPRESENTATIVE TARR  asked whether  the contractor would  work in                                                               
conjunction with staff and do the stakeholder meetings.                                                                         
                                                                                                                                
COMMISSIONER DAVIDSON  answered correct.  Given  the timelines in                                                               
the  bill  in order  to  be  ready  to  deliver the  report,  the                                                               
department needs  to get started now  and is using FY  2015 funds                                                               
to  accomplish  that.    Therefore,  the  independent  contractor                                                               
dollar amount is not included in the FY 2016 fiscal note.                                                                       
                                                                                                                                
REPRESENTATIVE TARR observed there is  a 50 percent federal match                                                               
to  this.   Offering  her  understanding  that part  of  Medicaid                                                               
expansion included  administrative support, she  inquired whether                                                               
that  is  only available  for  FY  2017 or  would  administrative                                                               
support dollars still be available after that if needed.                                                                        
                                                                                                                                
MR.  SHERWOOD  replied the  department  can  receive funding  for                                                               
ongoing administrative  activities of Medicaid.   In terms  of 50                                                               
percent federal match, that is  the standard percent for Medicaid                                                               
administrative expenses that is  available to the department this                                                               
year and throughout the foreseeable future.                                                                                     
                                                                                                                                
3:40:28 PM                                                                                                                    
                                                                                                                                
CHAIR  SEATON   referenced  the  distribution  of   a  multi-page                                                               
document on  provider taxes, the  complications, and  the federal                                                               
requirements.   He said  the document backs  up why  outside help                                                               
might be necessary.                                                                                                             
                                                                                                                                
REPRESENTATIVE STUTES  observed that fiscal note  10 provides for                                                               
five additional staff members, but  said she didn't see any other                                                               
provision  for staff  members on  the  other fiscal  notes.   She                                                               
recalled that in  a prior presentation the committee  was told it                                                               
would take approximately 26 new  staff members to facilitate this                                                               
expansion.  She asked how the  other 21 new staff members will be                                                               
paid for.                                                                                                                       
                                                                                                                                
MR.  SHERWOOD responded  this  will be  addressed  in the  fiscal                                                               
notes he has yet to review.                                                                                                     
                                                                                                                                
3:41:59 PM                                                                                                                    
                                                                                                                                
MR. SHERWOOD  turned to  fiscal note 12  [dated 3/18/15]  for the                                                               
Department   of    Health   and   Social    Services,   Community                                                               
Developmental  Disabilities Grants,  saying  this  is within  the                                                               
Division  of  Senior  and  Disabilities   Services.    These  are                                                               
anticipated  reductions  in grants  for  services  that would  be                                                               
provided through the  1915(i) option.  It is a  pure general fund                                                               
reduction, he said, since those are state grant programs.                                                                       
                                                                                                                                
MR.  SHERWOOD  said  fiscal  note 13  [dated  3/18/150]  for  the                                                               
department of Health and Social  Services, Senior Community Based                                                               
Grants, is similar and is a  reduction for 1915(i) in a different                                                               
grant  component in  the budget  of  the Division  of Senior  and                                                               
Disabilities Services.                                                                                                          
                                                                                                                                
3:42:53 PM                                                                                                                    
                                                                                                                                
MR. SHERWOOD  explained that fiscal  note 14 [dated  3/18/15] for                                                               
the  Department of  Health and  Social Services,  General Relief/                                                               
Temporary Assisted Living, is another  program in the Division of                                                               
Senior and Disabilities Services.   It is an entitlement program,                                                               
not  a grant  program, for  vulnerable adults  who need  assisted                                                               
living  care because  they have  needs that  cannot be  met in  a                                                               
regular  community  setting.    If  they  are  not  eligible  for                                                               
Medicaid coverage  of that care,  [the department]  provides that                                                               
care through this  program.  With the  implementation of 1915(i),                                                               
the  department  believes  it  would   be  able  to  reduce,  not                                                               
eliminate,  the amount  of  individuals it  would  have to  cover                                                               
through the General Relief/Temporary Assisted Living Program.                                                                   
                                                                                                                                
CHAIR SEATON  surmised fiscal note 14  is not the full  amount of                                                               
the program, but just the  amount anticipated to change after the                                                               
passage of HB 148.                                                                                                              
                                                                                                                                
MR. SHERWOOD concurred, offering his  belief that the full amount                                                               
of the program is just under $8 million.                                                                                        
                                                                                                                                
MR.  SHERWOOD   reviewed  fiscal   note  15  [3/18/15]   for  the                                                               
Department   of   Health   and  Social   Services,   Senior   and                                                               
Disabilities  Services  Administration,   saying  it  is  largely                                                               
around  1915(i),  but to  some  extent  is also  around  1915(k).                                                               
System changes  would be required  to the  division's information                                                               
system,  called  the  automated  service plan,  as  well  as  one                                                               
additional staff person in the  first year for the development of                                                               
1915(i) and 1915(k).  As  1915(i) and 1915(k) come up, additional                                                               
staff people would be needed, with  a total projection in the out                                                               
years  of three  staff  people.   There is  a  difference in  the                                                               
amount   of  staffing   between  the   Division  of   Senior  and                                                               
Disabilities  Services and  the  Division  of Behavioral  Health.                                                               
This is because the 1915(i)  option requires an assessment of the                                                               
individuals receiving the senior  grants, something not currently                                                               
done.    This increase  in  assessment  would  not occur  in  the                                                               
behavioral health population.                                                                                                   
                                                                                                                                
MR. SHERWOOD  explained fiscal  note 16  [dated 3/18/15]  for the                                                               
Department  of  Health  and Social  Services,  Public  Assistance                                                               
Field Services,  is the increase  in work for  the administration                                                               
and  eligibility determination  of  people who  are  going to  be                                                               
covered through the  expansion.  The anticipation is  that 23 new                                                               
positions would be added beginning in  FY 2016.  The startup cost                                                               
for the first  year assumes $2.7 million and in  the out years it                                                               
is $2.3 million.  The funding  is 50 percent state and 50 percent                                                               
federally.                                                                                                                      
                                                                                                                                
3:47:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES understood this  would not include the five                                                               
people  from fiscal  note 10,  thus  it would  be a  total of  28                                                               
people.                                                                                                                         
                                                                                                                                
MR. SHERWOOD  answered there are  a couple of other  positions in                                                               
other  fiscal notes.   In  FY 2016,  the cumulative  total is  29                                                               
positions, growing to 31 in 2017, 32  in FY 2018 and 2019, and 33                                                               
in 2020 and 2021.                                                                                                               
                                                                                                                                
3:48:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  posited that currently it  costs the state                                                               
a certain amount  of dollars per individual  covered by Medicaid.                                                               
She asked whether the department has  any figures on what it will                                                               
cost the state to cover that  same individual starting in FY 2016                                                               
up through FY 2021 with Medicaid expansion in effect.                                                                           
                                                                                                                                
CHAIR SEATON  inquired whether  Representative Stutes  is talking                                                               
about the average recipient or the current recipient.                                                                           
                                                                                                                                
REPRESENTATIVE STUTES  said she is  talking about what  the state                                                               
is paying  today for one  individual.  However many  people there                                                               
are, there is going to be  an average cost per individual.  After                                                               
the expansion, even with more people,  there is still going to be                                                               
an average cost with the projected  increase of people.  She said                                                               
she realizes  this is a  ballpark figure,  but she would  like to                                                               
see what the  average cost would be from FY  2016 through FY 2021                                                               
for that same individual with Medicaid expansion in effect.                                                                     
                                                                                                                                
MR.  SHERWOOD replied  the department  will  calculate what  that                                                               
difference will be, but he can say  that since this is one of the                                                               
less expensive populations to serve,  the department expects that                                                               
the average cost per average  recipient adding Medicaid expansion                                                               
will go down, not up.                                                                                                           
                                                                                                                                
3:50:35 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON understood the  expansion population includes single                                                               
adults between  the ages  of 19  and 64.   He  further understood                                                               
that is why  the expansion population would  generally be assumed                                                               
to be in a healthier condition  than people with old age problems                                                               
and children covered under other programs.                                                                                      
                                                                                                                                
MR. SHERWOOD confirmed  Chair Seaton is correct,  saying the most                                                               
expensive  population to  serve  is the  elderly and  individuals                                                               
with disabilities.  The population  over 65 is ineligible for the                                                               
Medicaid  expansion   and  people   with  the   most  substantial                                                               
disabilities  and  low  incomes   would  already  be  covered  by                                                               
Medicaid through  one of the  categories that covers  adults with                                                               
disabilities.   The department believes  this population  is much                                                               
more comparable to  its population of adults who  are on Medicaid                                                               
because they  are parents of  children and historically  that has                                                               
been a less expensive population for the department to service.                                                                 
                                                                                                                                
3:52:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  understood  the second  group  of  people                                                               
would be an  average of all people covered by  Medicaid, not just                                                               
the new expansion.                                                                                                              
                                                                                                                                
COMMISSIONER DAVIDSON reported that  when Evergreen Economics did                                                               
the analysis  of the expansion  population, it was found  that 54                                                               
percent of the eligible expansion are  men and 20 percent of that                                                               
group is  between 19 and  34 years of age.   Men and  younger men                                                               
are typically  the lowest cost  beneficiary to cover.   Therefore                                                               
the department expects the average cost to actually decrease.                                                                   
                                                                                                                                
3:53:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL understood  the reimbursement  rate of  this                                                               
added population  is much higher,  which he surmised  would lower                                                               
the  average  cost per  Medicaid  recipient,  expansion and  non-                                                               
expansion population.                                                                                                           
                                                                                                                                
MR. SHERWOOD  responded it would  lower the average  general fund                                                               
cost.  The total costs of  providing coverage would be equal, but                                                               
because  the  federal match  rate  is  much better,  the  average                                                               
general  funds per  person would  be  much lower,  so that  would                                                               
lower the  average general  funds even more  than it  would lower                                                               
the overall average.                                                                                                            
                                                                                                                                
REPRESENTATIVE  WOOL noted  everyone is  asking what  the average                                                               
cost is per  recipient, but people in this building  want to know                                                               
what  the average  cost  is for  the state  per  recipient.   So,                                                               
although a person  might consume $7,000 in services,  what is the                                                               
state responsible  for?   The expansion  population getting  a 90                                                               
percent  reimbursement at  worst is  going to  further lower  the                                                               
expense.  He  posited that maybe Representative  Stutes is trying                                                               
to get at the number for what the state is on the hook for.                                                                     
                                                                                                                                
CHAIR  SEATON said  he  thinks what  is wanted  is  both sets  of                                                               
numbers.   He requested  the department to  provide a  table with                                                               
the average  cost that is  provided in  Medicaid and what  is the                                                               
average  cost in  state  general funds  for  the population  over                                                               
those fiscal year spans.                                                                                                        
                                                                                                                                
3:55:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL understood from  a prior day's testimony that                                                               
138,000 people are currently Medicaid  recipients in the State of                                                               
Alaska,  and the  expansion  would add  another  20,000 -  27,000                                                               
people over the next five or six years.                                                                                         
                                                                                                                                
MR. SHERWOOD  answered he thinks  the number of  138,000 referred                                                               
to was the number of people  who actually receive services.  When                                                               
talking about the  number that would be added  by expansion, that                                                               
is  the number  of enrollees  and  not everyone  who enrolls  may                                                               
receive a service that year.   In regard to the number of 138,000                                                               
recipients that was  referenced, he said he thinks  the number of                                                               
actual enrollees for that year was  over 150,000.  He declared he                                                               
would  follow up  and  provide the  committee  with the  specific                                                               
numbers.                                                                                                                        
                                                                                                                                
CHAIR SEATON clarified the committee  is asking the department to                                                               
provide information regarding the 20,000  - 27,000 as well as the                                                               
full number  of 40,000  to see  what the  effects of  100 percent                                                               
enrollment would be.                                                                                                            
                                                                                                                                
CHAIR  SEATON, responding  to  Representative  Vazquez, said  the                                                               
committee has  asked the department  to provide the  average cost                                                               
per person as well as the average general fund cost.                                                                            
                                                                                                                                
3:57:41 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD, responding  to  Representative  Vazquez, said  the                                                               
total expenditure  in FY 2016  for all  the fiscal notes  for the                                                               
Department of Health  and Social Services is  $146,549,600.  That                                                               
figure  grows  over  the  next  five years  and  in  FY  2021  is                                                               
$215,160,900.   Of that,  the federal  portion exceeds  the total                                                               
expenditures  and would  reduce general  funds in  the amount  of                                                               
$2,320,800  in  FY  2016  and further  reduce  general  funds  by                                                               
$97,916,400 in FY 2021.                                                                                                         
                                                                                                                                
4:00:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR recalled that  if all newly eligible Medicaid                                                               
expansion  folks  enrolled the  spending  per  enrollee would  be                                                               
$7,248 for everyone, but the  spending for the smaller group that                                                               
is expected  to enroll  is $6,560.   She  presumed these  are the                                                               
numbers  separating  out  the   expansion  population  and  asked                                                               
whether the question  being asked by Representative  Stutes is to                                                               
take those  people and put  them into the overall  population and                                                               
average it.                                                                                                                     
                                                                                                                                
MR.  SHERWOOD  replied  he  doesn't  think  the  department  ever                                                               
estimated  the cost  of enrollees  for  the expansion  population                                                               
would be as low  as $6,500 per year.  He  believed that was going                                                               
back to  the cost  of the adults  currently being  served through                                                               
family Medicaid.  The department  made a slight upward adjustment                                                               
to  reflect that  the  department knew  some  of the  individuals                                                               
would be  moving over  from CAMA and  those are  individuals with                                                               
chronic conditions  that might be  a bit more expensive  to serve                                                               
than the family Medicaid population.                                                                                            
                                                                                                                                
4:02:16 PM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  requested Mr.  Sherwood  to  review the  sectional                                                               
analysis for the bill, starting with Section 7.                                                                                 
                                                                                                                                
MR. SHERWOOD explained Sections 7  and 8 are technical amendments                                                               
to  the Medicaid  eligibility statute.   Certain  individuals who                                                               
receive long term care services,  nursing home services, and home                                                               
and community based  waivered services are subject  to a transfer                                                               
of  asset penalty  if  they give  away  assets without  obtaining                                                               
appropriate fair  market value  in return  for the  those assets.                                                               
There are some  exceptions or situations where  an individual can                                                               
give  away his/her  assets,  such as  to a  minor  or a  disabled                                                               
child.  The Patient Protection  and Affordable Care Act clarified                                                               
that individuals  who are determined eligible  for Medicaid under                                                               
the eligibility  categories that use the  modified adjusted gross                                                               
income  (MAGI)  methodology are  exempt  from  those transfer  of                                                               
asset  penalties.    [These amendments  would]  put  language  in                                                               
Alaska  statute  "that  clearly  shows  that  [Alaska's]  statute                                                               
around imposing transfer  of an asset is  consistent with federal                                                               
law   ...  on   imposing  penalties   for  transfer   of  asset."                                                               
Responding to  Chair Seaton,  he explained that  MAGI is  the new                                                               
way [the state]  is to determine income  for eligibility purposes                                                               
for  its  children, pregnant  women,  and  parents and  caretaker                                                               
relatives in  the Medicaid expansion group.   It is not  used for                                                               
the categories  that are  specifically for  the aged,  blind, and                                                               
disabled.                                                                                                                       
                                                                                                                                
REPRESENTATIVE TARR understood that  in some conditions there are                                                               
hold  harmless provisions,  but that  in general  the asset  test                                                               
applies for  Medicaid.  She  asked whether the  aforementioned is                                                               
more in line with the general provision.                                                                                        
                                                                                                                                
MR.  SHERWOOD responded  some  Medicaid  eligibility groups  have                                                               
asset limits in  addition to income limits, and some  do not.  As                                                               
a result of  the Patient Protection and Affordable  Care Act, all                                                               
the  eligibility categories  that  use the  MAGI methodology  are                                                               
exempt from the  asset test, so there is no  asset test for those                                                               
categories.   Hence, the argument  that it doesn't make  sense to                                                               
apply a transfer  of asset penalty to people who  give away their                                                               
assets when  in fact they  would have been eligible  for Medicaid                                                               
whether they retained or gave away their assets.                                                                                
                                                                                                                                
4:05:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VAZQUEZ requested  the  department  to provide  a                                                               
table  listing all  the programs  that are  dealt with  under the                                                               
MAGI system and those that are not.                                                                                             
                                                                                                                                
MR. SHERWOOD agreed to do so.                                                                                                   
                                                                                                                                
REPRESENTATIVE  VAZQUEZ  inquired   why  the  federal  government                                                               
decided  to change  to  the  MAGI and  disregard  all assets  for                                                               
certain categories of Medicaid recipients.                                                                                      
                                                                                                                                
MR. SHERWOOD  offered his  belief that  it was  to provide  for a                                                               
seamless transition between  healthcare coverage through Medicaid                                                               
and healthcare  coverage through  the health  insurance exchange.                                                               
The  tax  subsidies  that  are   available  to  subsidize  health                                                               
insurance for individuals  with incomes below 400  percent of the                                                               
federal poverty  level use the same  basic MAGI rules and  do not                                                               
have  an  asset test  applied  to  determine whether  people  are                                                               
eligible for those  subsidies.  He said he thinks  the notion was                                                               
that if the same methodology  and same asset requirements weren't                                                               
used,  then  some people  would  get  left  out if  their  income                                                               
increased and they then went  through the marketplace, or, worse,                                                               
if  their income  decreased they  then would  have fallen  into a                                                               
Medicaid category but there was  a Medicaid requirement that made                                                               
them  ineligible  for  Medicaid   and  then  they  wouldn't  have                                                               
coverage in either place.                                                                                                       
                                                                                                                                
REPRESENTATIVE VAZQUEZ understood assets  are not considered when                                                               
a person goes  through the health insurance  exchange and subsidy                                                               
is based only on income.                                                                                                        
                                                                                                                                
MR. SHERWOOD answered yes, that is what he was trying to say.                                                                   
                                                                                                                                
CHAIR SEATON understood  both would be determined the  same way -                                                               
the  MAGI is  used either  with  the exchange  or with  Medicaid,                                                               
except for certain special cases.                                                                                               
                                                                                                                                
MR. SHERWOOD agreed there are  some special cases, but said that,                                                               
in general,  they would  be determined the  same way  and neither                                                               
MAGI-based  Medicaid nor  the health  insurance exchange  uses an                                                               
asset test.                                                                                                                     
                                                                                                                                
MR. SHERWOOD  resumed the sectional  analysis, saying  Sections 9                                                               
and 10  of HB  148 outline  the cost  containment measures  to be                                                               
taken by the department.  The  department is directed to seek the                                                               
Section 1115 demonstration  waiver to look at ways  to develop an                                                               
innovative service  delivery system to improve  care and increase                                                               
efficiencies, reduce costs and expand  services for Indian Health                                                               
Service  beneficiaries using  services  delivered through  Indian                                                               
Health Service and tribal health  facilities; apply for a 1915(i)                                                               
option  to obtain  the  50  percent federal  match  for home  and                                                               
community  services  that are  now  100  percent general  funded;                                                               
apply for the  1915(k) option at the enhanced  federal match rate                                                               
[of 56 percent];  evaluate and apply to the  Centers for Medicare                                                               
and   Medicaid  Services   (CMS)   to   participate  in   various                                                               
demonstration   projects,   including    payment   reform,   care                                                               
management  programs, workforce  development and  innovation, and                                                               
other   innovative   service   delivery   models;   and   enhance                                                               
telemedicine  capabilities and  reimbursement to  incentivize its                                                               
use for Medicaid recipients.                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR pointed  out the  language directs  that the                                                               
department  "shall"  do  these  things, so  they  would  be  non-                                                               
optional and would for sure have to take place.                                                                                 
                                                                                                                                
4:11:37 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD  returning  to the  sectional  analysis,  explained                                                               
Sections  11  and  12  both make  amendments  to  Alaska  Statute                                                               
47.07.900, the  part of  the Medicaid  statutes which  define the                                                               
terms.   These  sections remove  the requirement  that behavioral                                                               
health  providers be  a grantee  of the  State of  Alaska.   This                                                               
language has  been in  Alaska statute  for some  time and  is not                                                               
viewed  favorably  by  the  Centers  for  Medicare  and  Medicaid                                                               
Services.  [These sections] would  potentially expand the pool of                                                               
Medicaid behavioral health providers.                                                                                           
                                                                                                                                
CHAIR SEATON  asked whether the grants  are perfunctory, relating                                                               
he has heard that some people  receive a $100 grant and then this                                                               
means they can provide services.                                                                                                
                                                                                                                                
MR.  SHERWOOD replied  most  of the  grants  are significant  and                                                               
substantial.  There  may have been times the  department has made                                                               
small grants  in the awareness  that it would enable  somebody to                                                               
provide Medicaid services.  He requested Mr. Wall to elaborate.                                                                 
                                                                                                                                
MR. WALL confirmed  Mr. Sherwood is correct,  responding that the                                                               
majority  of  those   grants  are  large  grants   given  to  the                                                               
department's community  treatment providers.   In the  past there                                                               
have  been  small grants  that  allowed  providers to  enroll  as                                                               
Medicaid providers, but removal of  this language would allow for                                                               
broader access to  Medicaid and the potential  enrollment of more                                                               
providers in the systems.                                                                                                       
                                                                                                                                
CHAIR  SEATON  inquired whether  removal  of  the grant  language                                                               
could in any way be  detrimental to any current behavioral health                                                               
providers receiving grants.                                                                                                     
                                                                                                                                
MR.  WALL answered  there is  a relationship  with the  providers                                                               
that  the department  must maintain  carefully.   There are  some                                                               
concerns  that the  licensed care  providers  who are  individual                                                               
members of  the behavioral health agencies  that provide services                                                               
may leave the  agencies they are in  and go out on  their own and                                                               
provide services in that manner.   The department is working with                                                               
its associations  to address that  issue.  The overall  effect on                                                               
the system  of care would be  a potential increase in  the number                                                               
of providers and more access for Alaskans for Medicaid.                                                                         
                                                                                                                                
REPRESENTATIVE STUTES  asked whether  the department  has certain                                                               
requirements for  someone to be  a provider and  whether removing                                                               
this  grant language  could prevent  someone such  as a  licensed                                                               
physician in mental health from becoming a provider.                                                                            
                                                                                                                                
MR. SHERWOOD replied  all Medicaid providers must  meet some kind                                                               
of provider standard.   In some cases the  department simply uses                                                               
an existing standard; for example,  for physicians the department                                                               
would use  license to practice in  the state.  For  some provider                                                               
types that are  not essentially licensed as  such, the department                                                               
must  put forth  its own  criteria.   For instance,  for the  two                                                               
services  directly impacted,  behavioral  health clinic  services                                                               
and  behavioral  rehabilitation  services, the  department  would                                                               
still  need to  establish standards  through regulations  and, in                                                               
the department's  state plan, submit  the standards  for approval                                                               
by the federal government.   They could be substantially the same                                                               
as the  standards that are  used currently for  behavioral health                                                               
grantees or they could be somewhat different.                                                                                   
                                                                                                                                
COMMISSIONER DAVIDSON  added the department does  not require any                                                               
other provider  type in Medicaid  to be a grant  recipient before                                                               
the  provider  can  bill  Medicaid.   For  example,  a  physician                                                               
providing physician  services can  bill for  Medicaid as  long as                                                               
the physician  meets the provider  requirements and enrolls  as a                                                               
Medicaid  provider.   Behavioral health  is the  only program  in                                                               
which the State of Alaska requires  the provider to be a grantee.                                                               
This is  akin to the department  saying a doctor cannot  bill for                                                               
Medicaid unless  s/he applies for  and receives a  separate grant                                                               
from the Department  of Health and Social Services.   At the time                                                               
the  requirement served  some purpose,  but the  department would                                                               
like to remove it through this legislation.                                                                                     
                                                                                                                                
REPRESENTATIVE  STUTES said  she is  concerned to  hear that  the                                                               
provider clinics are worried about  some of their licensees going                                                               
out  and practicing  on their  own,  given she  would think  that                                                               
would be a benefit cost-wise to the department.                                                                                 
                                                                                                                                
REPRESENTATIVE TARR  commented this might provide  better insight                                                               
into  the  types  of  services an  individual  is  receiving  and                                                               
through other  opportunities with  Medicaid expansion  working on                                                               
the continuum  of care  and be able  to better  address someone's                                                               
health needs if  there was more of this data.   She asked whether                                                               
the  department  agrees  with  this  and  thinks  this  potential                                                               
exists.                                                                                                                         
                                                                                                                                
MR.  WALL agreed  with  Representative  Tarr's statement,  saying                                                               
that  right now  data for  behavioral health  clients is  tracked                                                               
through  two  separate systems.    That  will continue,  but  the                                                               
services will shift from one source  to the other.  Both of those                                                               
systems  have  some different  capacity  for  reporting, but  the                                                               
department sees that capacity growing in the future.                                                                            
                                                                                                                                
4:20:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VAZQUEZ inquired  why  providers were  originally                                                               
required to be grantees before they could bill to Medicaid.                                                                     
                                                                                                                                
MR. SHERWOOD responded the provisions  existed prior to his time.                                                               
A decision  was made  in the development  of these  services that                                                               
this provision  would be put  in statute and  without researching                                                               
the legislative history and he cannot tell the committee why.                                                                   
                                                                                                                                
REPRESENTATIVE  VAZQUEZ   expressed  her  understanding   that  a                                                               
behavioral  health provider  could get  a grant  and at  the same                                                               
time bill Medicaid.                                                                                                             
                                                                                                                                
MR.  SHERWOOD  replied  that grantees  can  provide  services  to                                                               
individuals.    If  they  are Medicaid  eligible  they  can  bill                                                               
Medicaid.   He deferred to Mr.  Wall to answer the  question, but                                                               
said  he thinks  there are  provisions  in the  grant that  would                                                               
prohibit  duplicative  billing,  and   that  it  is  generally  a                                                               
requirement  of most  grants  that when  a  provider is  charging                                                               
Medicaid, the provider cannot also charge it off to the grant.                                                                  
                                                                                                                                
REPRESENTATIVE VAZQUEZ  asked why the  provider is first  able to                                                               
get  a  grant  before  the  provider can  bill  Medicaid  if  the                                                               
provider is not allowed to bill both programs.                                                                                  
                                                                                                                                
MR.  SHERWOOD replied  that is  why the  department is  trying to                                                               
eliminate the provision as it does not see the need for it.                                                                     
                                                                                                                                
REPRESENTATIVE VAZQUEZ inquired whether  the Division of Behavior                                                               
Health  has  a  database  that identifies  this  type  of  double                                                               
billing.                                                                                                                        
                                                                                                                                
MR. WALL  responded the  Alaska Automated  Information Management                                                               
System (AKAIMS) tracks  clients in both systems  and the division                                                               
has a quality assurance (QA) unit that does exactly that.                                                                       
                                                                                                                                
REPRESENTATIVE VAZQUEZ asked whether  the division has caught any                                                               
providers.                                                                                                                      
                                                                                                                                
MR.  WALL  replied  he  cannot  answer  that  specifically.    He                                                               
believed there  have been instances of  investigations which were                                                               
then  generally handed  over to  the  Medicaid fraud  unit.   The                                                               
Division  of Behavioral  Health may  encounter issues  in its  QA                                                               
process and then hand that over to the Medicaid fraud unit.                                                                     
                                                                                                                                
4:23:11 PM                                                                                                                    
                                                                                                                                
MR. SHERWOOD turned back to  the sectional analysis, stating that                                                               
Section 13 instructs  the department to amend  its state Medicaid                                                               
plan to be  consistent [with HB 148] and submit  the amended plan                                                               
to  the  federal  government.   The  Section  1115  waiver  would                                                               
essentially  be an  addendum to  the department's  Medicaid state                                                               
plan.  So, Section 13 is  really instructing the department to do                                                               
what  it knows  it has  to  in order  to keep  itself in  federal                                                               
compliance.                                                                                                                     
                                                                                                                                
MR. SHERWOOD  explained Section 14  authorizes the  department to                                                               
engage in emergency rule making  [under the Alaska Administrative                                                               
Procedure Act].   It allows  the department  to be clear  that it                                                               
can move fast on some  of these provisions and start implementing                                                               
reforms and  obtaining savings.   The  sooner the  department can                                                               
get  these  in place,  the  sooner  it  can start  achieving  the                                                               
savings.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  VAZQUEZ said  historically the  courts have  been                                                               
strict  in allowing  administrative agencies  to issue  emergency                                                               
regulations.   She inquired  as to how  much time  the department                                                               
expects it will be saving  by using this mechanism [for emergency                                                               
rule making].                                                                                                                   
                                                                                                                                
MR. SHERWOOD  responded he doesn't  know that the  department has                                                               
calculated an average.  A  fairly swift moving regulation process                                                               
through the  normal process  would take three  to four  months to                                                               
become  effective,  while  emergency  regulations  are  effective                                                               
immediately.  With  regard to the courts,  while these situations                                                               
can  rise  to  the  level  of emergency,  having  it  in  statute                                                               
eliminates  one  point  of  contention  should  a  group  try  to                                                               
obstruct  the  department's   implementation  of  regulations  or                                                               
emergency regulations.                                                                                                          
                                                                                                                                
REPRESENTATIVE  VAZQUEZ   offered  her  understanding   that  the                                                               
department  plans  to  implement  this immediately  if  the  bill                                                               
passes.    Commenting this  may  affect  thousands of  people  in                                                               
Alaska,  she asked  where the  due process  is by  rushing it  so                                                               
fast.                                                                                                                           
                                                                                                                                
MR. SHERWOOD  answered that the provisions  in the Administrative                                                               
Procedures  Act for  regulations do  provide for  a notice  and a                                                               
hearing.   In simplistic terms,  the normal process  for adopting                                                               
regulations  is  replicated, but  the  department  is allowed  to                                                               
begin implementing  them before  that process  is complete.   So,                                                               
the department  would put  the regulations  into effect  and then                                                               
would go through  that process.  That said, that  is at the state                                                               
level; there are still some  notice requirements that must be met                                                               
at the federal  level - 30 days' notice to  providers for changes                                                               
in reimbursement, timely notice to  recipients if making a change                                                               
that  would result  in the  elimination  or reduction  in any  of                                                               
their benefits.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  VAZQUEZ  requested  the  federal  regulatory  and                                                               
statutory  federal  citations  that   enable  the  department  to                                                               
immediately implement  this bill  without needing to  first apply                                                               
for a change to the state plan.                                                                                                 
                                                                                                                                
MR. SHERWOOD did  not recall the specific cite  that allows state                                                               
plan  amendments  effective in  the  quarter  in which  they  are                                                               
submitted.   However, any state  plan amendment  submitted before                                                               
the end  of March 2015, the  end of the first  quarter, will have                                                               
an effective  date of January  1, 2015, he  said.  He  offered to                                                               
provide  the citation  to the  committee.   In response  to Chair                                                               
Seaton,  he confirmed  that  any state  plan  amendment would  be                                                               
retroactive  to the  first day  of the  quarter in  which it  was                                                               
submitted.  For example, if  a state plan amendment was submitted                                                               
on  March  31, the  state  could  request  an effective  date  of                                                               
January 1, 2015.                                                                                                                
                                                                                                                                
CHAIR SEATON referred to proposed Section  17 of HB 148 and asked                                                               
whether the effective date would be July 1, 2015.                                                                               
                                                                                                                                
MR. SHERWOOD  acknowledged that  the state's  statutory effective                                                               
date for Section 17 is July 1,  2015, but he was referring to the                                                               
effective date  as it  relates to the  Medicaid state  plan being                                                               
sent  to  the  federal  government for  approval,  which  can  be                                                               
retroactive  to  the  beginning  of  the  quarter  in  which  the                                                               
amendment was submitted.                                                                                                        
                                                                                                                                
CHAIR SEATON asked for further clarification.                                                                                   
                                                                                                                                
MR. SHERWOOD clarified that nothing  precludes submitting a state                                                               
plan amendment  prior to that  date; however, the  effective date                                                               
per state statute  requires the effective date to be  on or after                                                               
July 1, 2015.                                                                                                                   
                                                                                                                                
CHAIR SEATON  related his  understanding that  the implementation                                                               
date  was  in Section  17  and  even  though federal  law  allows                                                               
retroactive provisions, state statutes  do not allow an effective                                                               
date prior to July 1, 2015.                                                                                                     
                                                                                                                                
MR. SHERWOOD expressed the dates can be challenging to track.                                                                   
                                                                                                                                
CHAIR SEATON next directed attention to Section 15.                                                                             
                                                                                                                                
4:31:19 PM                                                                                                                    
                                                                                                                                
MR. SHERWOOD stated that Section  15 would provide an instruction                                                               
to the  revisor of statutes  to make technical amendments  to the                                                               
title of AS 47.07.036 to conform to the amendments of this act.                                                                 
                                                                                                                                
MR.  SHERWOOD  stated that  Section  16  would provide  immediate                                                               
effective  dates for  Sections 13  and 14  of the  bill, sections                                                               
that  allow the  state to  submit  state plan  amendments and  to                                                               
begin  developing  emergency  regulations.   As  just  discussed,                                                               
Section 17  would provide an effective  date of July 1,  2015 for                                                               
the remainder of the bill.                                                                                                      
                                                                                                                                
CHAIR SEATON asked for further  clarification that the state plan                                                               
amendment could be submitted and  the department can proceed with                                                               
emergency  regulations, but  these  will not  be effective  until                                                               
after the statutory date of July 1,  2015 as per Section 17 of HB
148.                                                                                                                            
                                                                                                                                
MR. SHERWOOD answered that was  correct since the types of things                                                               
the   department  would   be  trying   to   implement  with   the                                                               
aforementioned state  plan amendments  and regulations  would not                                                               
be effective  until July 1,  2015.   Thus the effective  dates of                                                               
those provisions would not be prior to July 1.                                                                                  
                                                                                                                                
4:33:11 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON  moved to adopt Amendment  1, labeled 29-GH1055\A.2,                                                               
Glover, 3/24/15, which read:                                                                                                    
                                                                                                                                
     Page 7, following line 15:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 9. AS 47.07.030(d) is amended to read:                                                                      
          (d) The department shall [MAY] establish [AS                                                                      
     OPTIONAL  SERVICES]  a  primary  care  case  management                                                                    
     system  or  a  managed care  organization  contract  in                                                                    
     which  certain eligible  individuals, including  super-                                                                
     utilizers   as  identified   by  the   department,  are                                                                
     required  to  enroll  and seek  approval  from  a  case                                                                    
     manager  or   the  managed  care   organization  before                                                                    
     receiving  certain   services.  The   department  shall                                                                    
     establish    enrollment    criteria    and    determine                                                                    
     eligibility  for services  consistent with  federal and                                                                    
     state law."                                                                                                                
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, following line 3:                                                                                                  
     Insert a new bill section to read:                                                                                         
        *  Sec.  14. The  uncodified  law  of the  State  of                                                                  
     Alaska is amended by adding a new section to read:                                                                         
          MEDICAID MANAGED CARE FOR SUPER-UTILIZERS. On or                                                                      
     before January 1,  2017, the  Department of  Health and                                                                    
     Social Services shall                                                                                                      
               (1)  establish a primary care case                                                                               
     management  system  or   a  managed  care  organization                                                                    
     contract under  AS 47.07.030(d), as  amended by  sec. 9                                                                    
     of this Act, for  super-utilizers, as identified by the                                                                    
     department; and                                                                                                            
               (2)  deliver a report on the system or                                                                           
      contract to the senate secretary and the chief clerk                                                                      
         of the house of representatives and notify the                                                                         
     legislature that the report is available."                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, line 12:                                                                                                           
          Delete "sec. 10"                                                                                                      
          Insert "sec. 11"                                                                                                      
                                                                                                                                
     Page 9, line 17:                                                                                                           
          Delete "10"                                                                                                           
          Insert "11"                                                                                                           
                                                                                                                                
     Page 9, line 23:                                                                                                           
          Delete "Sections 13 and 14"                                                                                           
          Insert "Sections 15 and 16"                                                                                           
                                                                                                                                
     Page 9, line 24:                                                                                                           
          Delete "by sec. 16"                                                                                                   
          Insert "in sec. 18"                                                                                                   
                                                                                                                                
REPRESENTATIVE TARR objected for the purpose of discussion.                                                                     
                                                                                                                                
CHAIR SEATON  explained that  the amended  Section 9,  related to                                                               
the establishment  of a primary  care case management  system, or                                                               
managed care  organization for certain individuals,  changed from                                                               
"may" to  "shall" and includes the  super-utilizers as identified                                                               
by  the department  as eligible  persons.   He reported  that the                                                               
proposed  amendment  would also  add  a  new  Section 14  to  the                                                               
proposed  bill,   which  would  add  the   requirement  that  the                                                               
department  establish  the primary  care  case  management for  a                                                               
managed care contract  by January 1, 2017.  It  would require the                                                               
department  to  provide  a  report,  plan,  or  contract  to  the                                                               
legislature.   He stated that  the genesis of this  amendment was                                                               
to address  super-utilizers, as  they had  been identified  for a                                                               
large  potential savings;  however, AS  47.07.030(d) has  been in                                                               
statute without action.                                                                                                         
                                                                                                                                
CHAIR  SEATON  explained  that the  department  is  committed  to                                                               
seeing  action.   He recognized  the difficulties  of travel  and                                                               
small populations  means it  is not  practical to  institute case                                                               
management for the  entire state.  The department  has been given                                                               
leeway  to select  the type  of care  management and  to identify                                                               
eligible  individuals who  require  attention.   He  acknowledged                                                               
that some tweaks may be necessary.                                                                                              
                                                                                                                                
CHAIR  SEATON  tabled  Amendment  1  for  further  consideration,                                                               
noting it would be taken up at a later date.                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR asked  if this  was a  current reform.   She                                                               
agreed  that   several  million  dollars  has   been  saved  with                                                               
expansion of efforts related to  "super utilizers."  She asked if                                                               
he  could compare  whether  this amendment  will  change what  is                                                               
currently being done and whether  the department can continue its                                                               
cost savings efforts without language changes.                                                                                  
                                                                                                                                
MR. SHERWOOD did  not think the proposed  amendment was necessary                                                               
to continue the department's efforts  to curb costs by addressing                                                               
"super  utilizers,"  and  the  aforementioned  changes  will  not                                                               
interfere with the department's current actions.                                                                                
                                                                                                                                
CHAIR  SEATON  noted that  the  required  reporting will  provide                                                               
accountability to  inform the legislature  on the  progress being                                                               
made.                                                                                                                           
                                                                                                                                
4:37:49 PM                                                                                                                    
                                                                                                                                
CHAIR SEATON  moved to adopt Amendment  2, labeled 29-GH1055\A.3,                                                               
Glover, 3/24/15, which read as follows:                                                                                         
                                                                                                                                
     Page 9, following line 3:                                                                                                  
     Insert a new bill section to read:                                                                                         
        "*  Sec. 13.  The  uncodified law  of  the State  of                                                                
     Alaska is amended by adding a new section to read:                                                                         
          MEDICAID REDESIGN; REPORT TO LEGISLATURE. The                                                                         
     Department of Health and  Social Services shall present                                                                    
     to the  legislature on  or before the  10th day  of the                                                                    
     Second  Regular  Session  of  the  Twenty-Ninth  Alaska                                                                    
     State Legislature the results  of the Medicaid Redesign                                                                    
     and  Expansion Technical  Assistance study,  advertised                                                                    
     under  request  for   proposal  number  2015-0600-2986,                                                                    
     issued February 25, 2015.  The department shall deliver                                                                    
     a  report describing  the results  of the  study and  a                                                                    
     program  for reforming  the medical  assistance program                                                                    
     to the  senate secretary and  chief clerk of  the house                                                                    
     of representatives and notify  the legislature that the                                                                    
     report is available."                                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, line 23:                                                                                                           
          Delete "Sections 13 and 14"                                                                                           
          Insert "Sections 14 and 15"                                                                                           
                                                                                                                                
     Page 9, line 24:                                                                                                           
          Delete "by sec. 16"                                                                                                   
          Insert "in sec. 17"                                                                                                   
                                                                                                                                
REPRESENTATIVE TARR objected for the purpose of discussion.                                                                     
                                                                                                                                
CHAIR SEATON explained  that Amendment 2 would add  a new section                                                               
to  uncodified law  requiring  the department  to  report to  the                                                               
legislature the  results of the  Medicaid Redesign  and Expansion                                                               
Technical Assistance  study describing  the results of  the study                                                               
and a program for reforming  the medical assistance program on or                                                               
before  the  10th  day  of  the second  regular  session  of  the                                                               
legislature.                                                                                                                    
                                                                                                                                
CHAIR SEATON stated that the  department has already committed to                                                               
moving  forward  with  the  third-party  consultant  on  Medicaid                                                               
reform,  but this  report ensures  that the  legislature will  be                                                               
informed of the results of the study and program progress.                                                                      
                                                                                                                                
4:39:33 PM                                                                                                                    
                                                                                                                                
MR.  SHERWOOD  commented  that the  department  has  intended  on                                                               
sharing  the   results  of  the  aforementioned   work  with  the                                                               
legislature.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR expressed  her  concern  for any  additional                                                               
staff  time  to  produce  a   report.    She  asked  whether  the                                                               
contractor's report will be repackaged.                                                                                         
                                                                                                                                
MR. SHERWOOD replied  that the department would not  intend to do                                                               
substantially more work to prepare the report.                                                                                  
                                                                                                                                
COMMISSIONER  DAVIDSON  added  that  the final  report  could  be                                                               
presented  as  well  as  in a  condensed  PowerPoint  to  provide                                                               
information  to the  legislature and  the public  in a  condensed                                                               
format in an effort to provide transparency in the process.                                                                     
                                                                                                                                
REPRESENTATIVE  TARR asked  whether Amendment  2 would  adversely                                                               
impact the timeline for the contractor.                                                                                         
                                                                                                                                
MR. SHERWOOD answered that it should not impact the timeline.                                                                   
                                                                                                                                
CHAIR SEATON  said that prior  reports have not been  shared with                                                               
the  legislature  in  a  timely   manner.    He  emphasized  that                                                               
Amendment 2 would clarify the reporting expectation.                                                                            
                                                                                                                                
REPRESENTATIVE  TARR maintained  that she  did not  want to  take                                                               
away  any staff  time to  meet  the reporting  requirement.   She                                                               
recalled a  recent example of  the committee waiting on  a report                                                               
relating to Medicaid expansion.                                                                                                 
                                                                                                                                
4:42:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR removed her objection.                                                                                      
                                                                                                                                
REPRESENTATIVE VAZQUEZ  asked whether the bill  would provide for                                                               
a pilot project on case management.                                                                                             
                                                                                                                                
CHAIR  SEATON answered  that  [Amendment 2]  was  limited to  the                                                               
report  for   the  Medicaid  Redesign  and   Expansion  Technical                                                               
Assistance study.                                                                                                               
                                                                                                                                
REPRESENTATIVE VAZQUEZ said she had no objection.                                                                               
                                                                                                                                
4:43:35 PM                                                                                                                    
                                                                                                                                
There  being  no  further objection,  Amendment  2,  labeled  29-                                                               
GH1055\A.3, Glover, 3/24/15, was adopted.                                                                                       
                                                                                                                                
CHAIR SEATON said  that further consideration on  proposed HB 148                                                               
would be set aside.  He opened public testimony on HB 148.                                                                      
                                                                                                                                
4:46:33 PM                                                                                                                    
                                                                                                                                
ILONA FARR, MD, Alaska Family  Medical Care, LLC, stated that she                                                               
was representing herself and  several family practice physicians.                                                               
She spoke  in opposition to HB  148.  She explained  that she has                                                               
served  on the  [MRAG]  Medicaid Reform  Advisory  Group and  the                                                               
group was advised that [Medicaid  expansion] would cost the state                                                               
$6.2  billion by  2032 with  the state  paying $2.8  billion that                                                               
year.   This  cost  projection did  not  take into  consideration                                                               
Medicaid expansion.  She asked  where this money would come from.                                                               
She expressed her  concern about the provider tax.   Other states                                                               
have implemented some of these  taxes, consisting of 19 different                                                               
categories.  She expressed concern, noting  she has a copy of the                                                               
study  [Lewin Group  study], noting  her concern  related to  the                                                               
potential impact  this would  have on  small businesses,  such as                                                               
physical therapy and physicians.   Most physicians are paid about                                                               
72 percent of the costs,  with increased audits, regulations, and                                                               
other requirements  necessary with  Medicaid and she  feared this                                                               
will drive  small businesses out  of business and  increase large                                                               
facilities  and corporations.    Further,  the cost  differential                                                               
could mean  some providers will  be paid $540 for  services while                                                               
private practice physicians would be paid $50, she said.                                                                        
                                                                                                                                
DR. FARR  stated that  some people  graduate from  medical school                                                               
with  $400,000  -  $500,000  in  debt so  it  will  be  virtually                                                               
impossible for  them to set up  as small private practices.   She                                                               
expressed  concern  about  the   increasing  number  of  Medicaid                                                               
patients, noting  that currently  140,000 - 160,000  patients are                                                               
on Medicaid.  She said the  studies do not tell how many patients                                                               
will  be added  with Medicaid  expansion.   She has  seen studies                                                               
that report that Medicaid expansion  will add 40,000, others show                                                               
it will  add 64,000 to the  system.  She offered  her belief that                                                               
in  other states  that have  adopted Medicaid  expansion, it  has                                                               
been triple  that number.   She expressed concern about  the cost                                                               
and number  of audits  that will be  conducted, since  the audits                                                               
can be  costly.   She has  heard the  Medicaid patient  costs are                                                               
high,  with  an  average  of $7,500  per  patient,  although  she                                                               
understood one patient's  cost was $65,000.   Over 2,000 existing                                                               
Medicaid  patients  with  hepatitis  C  were  estimated  to  cost                                                               
$300,000 per patient, which she  has not seen budgeted.  Further,                                                               
some  individuals  are still  on  the  list to  receive  Medicaid                                                               
services that  are not being  covered.  Medicaid was  supposed to                                                               
provide  services  for the  elderly  and  the disabled,  but  the                                                               
program is being increased, which  could cause the state to reach                                                               
a financial crisis.                                                                                                             
                                                                                                                                
DR.  FARR   offered  to  provide   copies  of  reports   she  has                                                               
accumulated.   She  further asked  members to  support the  WWAMI                                                               
[Wyoming,  Washington, Alaska,  Montana  and  Idaho] program,  as                                                               
well as some of the provisions in HB 74.                                                                                        
                                                                                                                                
4:51:42 PM                                                                                                                    
                                                                                                                                
BECKY HULTBERG,  President, CEO, Alaska State  Hospital & Nursing                                                               
Home  Association   (ASHNHA),  stated  that  her   testimony  was                                                               
previously submitted  in written  form.   The ASHNHA  supports HB
148 because  it expands  Medicaid, but  also because  the state's                                                               
health  care system  must be  reformed.   She stated  that health                                                               
care  reform was  real, possible,  and attainable  and this  bill                                                               
will  set the  framework  for meaningful  Medicaid  reform.   She                                                               
cautioned that reform should not  be considered one point in time                                                               
but that reform  is process that needs to happen  each year.  She                                                               
said  that  states  that  have had  good  experiences  with  cost                                                               
containment are ones who analyze their system each year.                                                                        
                                                                                                                                
MS. HULTBERG  characterized the  state as  being at  a crossroad,                                                               
one  in  which  important  choices   must  be  made  on  Medicaid                                                               
expansion and reform  that will have fiscal  and economic impacts                                                               
and  will  impact  people's  lives.   The  choice  to  engage  in                                                               
meaningful reform remains  one of the most  important choices the                                                               
state  can make.   The  legislature has  indicated that  Medicaid                                                               
must be reformed.  The  ASHNHA agrees and supports these efforts,                                                               
and would like to partner with the state to achieve that goal.                                                                  
                                                                                                                                
MS.   HULTBERG   provided   two   quick   examples   of   reform.                                                               
PeaceHealthKetchikan  received a  CMS innovation  grant for  care                                                               
coordination, she said, and the  project saved money and improved                                                               
quality,  which  sounds good,  except  that  the hospital  "spent                                                               
money to lose  money" in order to improve care.   She offered her                                                               
belief  that the  state's financial  incentives are  not aligned.                                                               
The  current   payment  system  does  not   give  incentives  for                                                               
efficiency  and quality  and instead  rewards  volume.   Medicaid                                                               
reform will help to change  that dynamic to align incentives, she                                                               
said.                                                                                                                           
                                                                                                                                
MS.  HULTBERG said  that Central  Peninsula Hospital  in Soldotna                                                               
has  been considering  forming  a  Coordinated Care  Organization                                                               
(CCO) pilot program.   The CCO would be paid  a global payment to                                                               
cover  all  health care  needs  for  a defined  population,  with                                                               
metrics  and accountability  for  quality and  outcomes.   Within                                                               
that global budget the CCO  is empowered to shift resources where                                                               
they  are needed  to ensure  optimal cost  and quality  outcomes.                                                               
The  CCO takes  risks  and  in the  event  the  costs exceed  the                                                               
budget, they must "eat" it.   However, if the CCO can manage care                                                               
more  efficiently  with  better  quality outcomes  they  will  be                                                               
rewarded and incentives will be aligned.   She said, "That is the                                                               
destination."                                                                                                                   
                                                                                                                                
MS.  HULTBERG said  Medicaid expansion  will provide  health care                                                               
for those who could never  afford it, transforming lives, plus it                                                               
provides  the   engine  of  health  care   transformation,  which                                                               
benefits  everyone.   Innovation requires  investment, she  said,                                                               
and  transforming the  health care  system, the  state needs  the                                                               
risk  capital to  invest in  those transformative  efforts.   She                                                               
said that  Medicaid expansion through reduction  in uncompensated                                                               
care  provides the  risk capital  that will  enable the  state to                                                               
continue this  journey.   Besides risk  capital, the  state needs                                                               
health care  reform because financial incentives  must be aligned                                                               
and pay for  outcomes, not volume.  In conclusion,  she said that                                                               
[health care] reform is real,  possible, achievable, and Medicaid                                                               
expansion  is critical  to  achieving it.    Finally, the  Alaska                                                               
State  Hospital   and  Nursing  Home  Association   (ASHNHA)  and                                                               
hospitals are ready to partner on this journey.                                                                                 
                                                                                                                                
4:55:43 PM                                                                                                                    
                                                                                                                                
JOHN GAGUINE  stated that he is  a longtime Juneau resident.   He                                                               
offered  his belief  that people  have  firmly endorsed  Medicaid                                                               
expansion.   During  the last  election in  Alaska, an  incumbent                                                               
Democratic  U.S.  Senator was  voted  down  and even  though  the                                                               
Republicans  maintain  strong  control  of  both  houses  of  the                                                               
legislature, an incumbent Republican  governor was defeated.  One                                                               
primary  issue  between  Governor   Walker  and  former  Governor                                                               
Parnell was Medicaid  expansion.  The former  governor opposed it                                                               
vociferously and  [as a candidate  Mr.] Walker was  very strongly                                                               
in favor  of it.   Obviously,  there were  other issues  as well;                                                               
however,  he offered  his  belief  that it  was  the  one of  the                                                               
primary issues  between the two.   The people have spoken  and if                                                               
the legislature  does not  produce a  bill on  Medicaid expansion                                                               
that it will be flouting the will of the electorate.                                                                            
                                                                                                                                
4:57:20 PM                                                                                                                    
                                                                                                                                
ALYSON CURREY  stated that  her education  and background  are in                                                               
social work.  She offered her  belief that is an injustice when a                                                               
childless adult without  any disability in Alaska  who earns less                                                               
than $20,000 per  year - just under $10 per  hour - cannot afford                                                               
health care  coverage.  In her  work as a social  worker, she has                                                               
seen individuals  work multiple jobs  just to make ends  meet and                                                               
forego  necessary health  care  in order  to  pay utility  bills,                                                               
rent,  or groceries.   She  offered her  belief that  health care                                                               
represents a basic  human right and no one should  have to choose                                                               
between  seeking  medical  care  and  paying  rent.    Access  to                                                               
affordable health  care should not  depend on who you  are, where                                                               
you  live, or  on your  income level.   Medicaid  expansion would                                                               
ensure  that   all  Alaskans  have   health  care   coverage  for                                                               
preventative  care, which  would reduce  the number  of emergency                                                               
room visits  and allow currently uninsured  individuals to remain                                                               
productive  members  of the  Alaskan  economy.   Reforms  to  the                                                               
state's Medicaid program  are necessary to ensure  that the state                                                               
has  the  most  effective  and efficient  system  available,  and                                                               
certainly evaluation and  re-evaluation should continually occur.                                                               
Medicaid expansion  does not  need to  wait for  Medicaid reform.                                                               
Thus  the state  cannot afford  to  wait to  expand Medicaid  and                                                               
expansion does not need to wait for reform.                                                                                     
                                                                                                                                
4:59:16 PM                                                                                                                    
                                                                                                                                
MELISSA   ENGEL  spoke   in  support   of  Governor   Walker  and                                                               
Commissioner Davidson's  tireless efforts on  Medicaid expansion.                                                               
As  a United  Methodist  Church  youth pastor  she  looks to  the                                                               
ethics for guidance  and HB 148 is a step  in the right direction                                                               
toward  embodying compassion  and  Christian love.    As a  youth                                                               
pastor  working with  five churches,  she often  meets low-income                                                               
families  and   individuals  who   will  benefit   from  Medicaid                                                               
expansion and  reform.  Although  she also sees people  reach out                                                               
to  help  out others,  the  church  can only  do  so  much.   She                                                               
acknowledged  that people  can help  others financially,  but not                                                               
every  faith community  can  do  so.   The  church family  cannot                                                               
provide  health care  or act  as a  "go between"  for people  and                                                               
their  insurance companies.   She  urged members  to reflect  the                                                               
needs of the people and in  the spirit of kindness to give people                                                               
access to  the health care  they deserve, which could  allow them                                                               
to get  a "leg up"  and experience transformation in  their lives                                                               
and in  their current low-income  bracket.  She urged  members to                                                               
be authentic  and kind.  She  concluded by quoting John  Lewis, a                                                               
civil rights  activist who said,  "If not us,  then who?   If not                                                               
now, then  when?"  She  suggested the  answer could be  "yes" and                                                               
"now" and urged members to please support HB 148.                                                                               
                                                                                                                                
5:01:42 PM                                                                                                                    
                                                                                                                                
KARENZA BOTT stated that she  stands before members today because                                                               
of Medicaid.   She stated  that she  wasn't always poor,  but one                                                               
day in 2006 she was driving home  from her job at the Division of                                                               
Elections  and  a young  woman  talking  on  a cell  phone  while                                                               
driving ran  into her  at 55  miles per hour.   Her  life changed                                                               
dramatically  with  her brain  no  longer  talking to  her  body.                                                               
Ultimately she was  certified 100 percent disabled  by the [U.S.]                                                               
Social  Security   Administration  (SSA)  retroactive   to  2009.                                                               
However, she learned  that social security benefits  do not cover                                                               
physical therapy and restorative  dental work, but Medicaid does.                                                               
She described  her ordeal, noting  she was  able to get  off pain                                                               
medication in 2012-2013  and is currently in the  SSA's Ticket to                                                               
Work program,  and has successfully completed  an internship with                                                               
U.S. Senator  Mark Begich  in Juneau.   She credited  her success                                                               
due to  Medicaid.   She said  she was  enrolled in  Alaska Native                                                               
Studies at the University of  Alaska Southeast.  She concluded by                                                               
stating she  was proud to  be an  Alaskan and hoped  that members                                                               
will  "put a  face  to the  Medicaid reform."    She offered  her                                                               
support for Medicaid reform and HB 148.                                                                                         
                                                                                                                                
5:04:04 PM                                                                                                                    
                                                                                                                                
VERNE  BOERNER,  President,  CEO,   Alaska  Native  Health  Board                                                               
(ANHB),  spoke in  support of  HB 148.   The  ANHB serves  as the                                                               
statewide organization  for the Alaska Tribal  Health System that                                                               
serves  over   145,000  Alaska  Natives  and   American  Indians.                                                               
Although tribal programs are often  equated with health insurance                                                               
for tribal  members, the ATHS  does not provide  health insurance                                                               
for individuals  nor does  it guarantee benefits.   In  fact, the                                                               
ATHS  has been  chronically underfunded  since its  inception and                                                               
most tribal  programs must ration  care.  Not  expanding Medicaid                                                               
carries  opportunity costs  that  will not  only impede  economic                                                               
growth but  will result in  higher costs to the  statewide system                                                               
and sadly affect mortality, she said.                                                                                           
                                                                                                                                
MS.  BOERNER stated  that the  U.S. Indian  Health Service  (IHS)                                                               
sources of  funding are below the  level of need and  are finite.                                                               
Therefore,  tribes   have  been   innovative  in   designing  and                                                               
developing  programs  that  increase  resources  that  depend  on                                                               
third-party  billings to  extend  the capacity  to provide  care.                                                               
Heartbreakingly;  however,  Alaska  Natives  suffer  the  highest                                                               
rates  of uninsured  and poverty  rates  in the  program, and  so                                                               
Tribal programs  are still  forced to  direct resources  to cover                                                               
uncompensated  care and  are not  able to  apply those  resources                                                               
towards capacity  building.  Rationing care  means that diagnosis                                                               
and treatments are delayed, diseases  progress, treatment is more                                                               
costly,  and  outcomes  are  poorer.    She  said  that  Medicaid                                                               
expansion will alleviate pressure on  the health system and allow                                                               
for  more resources  to  be dedicated  to  capacity building  and                                                               
innovation.   In fiscal  year (FY) 2012,  Alaska Natives  made up                                                               
nearly  40  percent  of Alaska's  Medicaid  recipients;  however,                                                               
payments  to  those  tribal  programs  only  totaled  about  16.4                                                               
percent.   She said, "If that  percentage was pushed up  to 20-30                                                               
percent, the dollar  savings to Alaska's general  fund would have                                                               
been $25.8 million and $97.3  million, respectively."  Tribes are                                                               
ready  to  work   with  the  state  and   federal  government  on                                                               
developing  ways  to  better utilize  the  Alaska  Tribal  health                                                               
system, noting the  system has been impacted  by underfunding and                                                               
fiscal  pressure and  leaving Medicaid  expansion funding  on the                                                               
table  costs  lives.   "That  is  on  your  and my  shoulders  as                                                               
leaders,"  she said.    It  limits the  ability  to innovate  and                                                               
develop sustainable  programs and help improve  the health status                                                               
and quality of life for Alaskans.   She strongly urged members to                                                               
pass HB 148.                                                                                                                    
                                                                                                                                
5:08:37 PM                                                                                                                    
                                                                                                                                
MICHAEL  DZURISIN  stated  that  he had  been  a  state  licensed                                                               
insurance  agent in  California and  considers himself  to be  an                                                               
expert  on health  insurance.    He spoke  in  favor of  Medicaid                                                               
expansion since  it will  create 4,000 jobs  and $1.2  billion in                                                               
wages and salaries in Alaska.  He  said that it will also save $6                                                               
million  in  the  budget.    It will  provide  insurance  for  an                                                               
estimated  40,000 who  do not  currently  have health  insurance.                                                               
It's not  ethical to leave  people uninsured, plus  the uninsured                                                               
go to the emergency room for  care plus emergency room care costs                                                               
more and affects  hospitals.  He predicted the  overall effect of                                                               
passing Medicaid expansion will be  to lower health premiums.  He                                                               
applauded the  governor for  supporting Medicaid  expansion since                                                               
Medicaid  expansion  is   the  "right  move."     In  fact,  many                                                               
Republican  governors  in  other  states  have  adopted  Medicaid                                                               
expansion including  John Kasich of  Ohio, Chris Christie  of New                                                               
Jersey, as  well as,  he believed, in  Kentucky.   He appreciated                                                               
earlier  testimony  by  the  physician  who  testified  with  her                                                               
concerns  with Medicaid  expansion;  however,  he suggested  that                                                               
issues with  Medicaid can  be fixed  by increasing  the payments.                                                               
Speaking as an  expert in the field health  insurance, he offered                                                               
that insurance  is a  game.  He  advocated for  public insurance,                                                               
which most  industrialized nations have, except  for Switzerland,                                                               
which  tightly regulates  its insurance  industry.   He  reported                                                               
that  the overhead  for Medicaid  and  Medicare is  2 percent  as                                                               
compared to private  insurance with 10-20 percent.   He said that                                                               
insurance  companies   deny  people  coverage  on   claims  since                                                               
insurance  companies lose  money when  they pay  out big  claims.                                                               
Lastly, he emphasized his primary  reason for supporting Medicaid                                                               
expansion  is because  he believes  everyone's health  care costs                                                               
will go down.  People think  that if everyone has Medicaid, taxes                                                               
will  need  to  be  raised,   but  he  offered  his  belief  that                                                               
everyone's insurance payments represent a second tax.                                                                           
                                                                                                                                
5:12:01 PM                                                                                                                    
                                                                                                                                
ROBIN  SMITH asked  to speak  as a  business owner  in Anchorage.                                                               
She expressed  concern about the  Alaska's future.   According to                                                               
Northern Economics,  Inc. [a  consulting firm],  Alaska's economy                                                               
is heading  toward recession.   She said that  Medicaid expansion                                                               
was  one of  the bright  spots.   With  the drop  in oil  prices,                                                               
Alaska needs  to cut  the budget,  but if the  budget is  cut too                                                               
much it will  drive Alaska into a recession.   In fact, there was                                                               
little in sight that will  bring money into economy, but Medicaid                                                               
expansion will do so since it  will bring $1 billion to the state                                                               
in the  next five  years.   If Alaska does  go into  a recession,                                                               
businesses will  be dramatically impacted  and will be  forced to                                                               
increase the "bottom  line" for their companies,  which will mean                                                               
eliminating costs,  such as health care  insurance for employees.                                                               
Currently,  emergency room  fees incurred  for the  uninsured are                                                               
passed on to  Alaska's businesses and individuals in  the form of                                                               
higher  premiums  for  health care,  which  also  impacts  hiring                                                               
decisions for  businesses.  Health  care costs  have dramatically                                                               
risen in  the past 30  years, but Medicaid expansion  will reduce                                                               
health care costs and improve  business profits.  Further, if for                                                               
some  reason Medicaid  expansion did  not reduce  costs, Medicaid                                                               
can be cancelled in the future.   Still, two years of health care                                                               
would better  than no  health care,  she said.   In  closing, she                                                               
urged members  to take Alaska  future economy  into consideration                                                               
by supporting Medicaid expansion and passing HB 148.                                                                            
                                                                                                                                
5:14:51 PM                                                                                                                    
                                                                                                                                
ANDREW SMALLWOOD stated  that he works as  a commercial fisherman                                                               
and he is on  Medicare.  He urged members to  support and pass HB
148.  He  offered his belief that the state  has refused Medicaid                                                               
expansion in an attempt to  hinder implementation of the [Patient                                                               
Protection and]  Affordable Care Act.   He stated  that Anchorage                                                               
ranks as the highest in the  nation and arguably in the world for                                                               
most medical procedures.  An  uninsured patient in Anchorage must                                                               
pay about double what an  insured patient pays.  Further, coastal                                                               
Alaska also  has highest  percentage of  uninsured people  in the                                                               
nation, which  he characterized as  a "pretty  dismal situation."                                                               
Anything that  can be  done to improve  this situation  should be                                                               
done.   During declining  revenues in  Alaska, it  makes absolute                                                               
sense  to adopt  Medicaid expansion  and members  should consider                                                               
the  PPACA  in a  separate  issue.    He  suggested that  if  the                                                               
intention of  the majority is  to block implementation,  he hoped                                                               
the legislative leadership has an  alternative plan in mind since                                                               
the   present  system   in  Alaska   is  broken   for  low-income                                                               
individuals.                                                                                                                    
                                                                                                                                
5:16:47 PM                                                                                                                    
                                                                                                                                
JEFF JESSEE, Chief Executive Officer,  Alaska Mental Health Trust                                                               
Authority, Department  of Revenue, asked  to focus on  first line                                                               
of  the legislative  intent, which  read, "The  legislature finds                                                               
that the current  Medicaid program is not sustainable."   He said                                                               
that  reform is  not optional,  noting the  Alaska Mental  Health                                                               
Trust  Authority  (AMHTA)  is  a long-term  thinker.    He  urged                                                               
members not  to let the  Medicaid's "house of cards"  continue to                                                               
get bigger  since it will  collapse at  some point and  will take                                                               
the AMHTA's beneficiaries  down with it.  As Ms.  Hultberg of the                                                               
Alaska  State  Hospital  and Nursing  Home  Association  (ASHNHA)                                                               
testified earlier, the  AMHTA remains committed to  work with the                                                               
legislature, the department, and the  governor on reform to bring                                                               
the Medicaid  budget into  a sustainable  level.   Certainly from                                                               
the   Alaska  Mental   Health   Trust  Authority   beneficiaries'                                                               
standpoint, Medicaid  expansion is  absolutely critical.   First,                                                               
some beneficiaries  are homeless and often  suffer from substance                                                               
abuse  disorders or  have  mental health  issues.   Secondly,  65                                                               
percent  of  inmates in  correctional  facilities  have a  mental                                                               
health diagnosis  and 80  percent have  a substance  use disorder                                                               
diagnosis.   Thus expanding Medicaid  would serve as a  means for                                                               
them to obtain  services they need to get off  the street or stay                                                               
out of jail, which not only  makes good health sense, but it also                                                               
makes  good   economic  sense.     He  pointed   out  substantial                                                               
discussion  has   been  taking   place  in  the   legislature  on                                                               
recidivism and trying to avoid  building another prison; however,                                                               
the state needs  to support recovery in order to  keep people out                                                               
of  prison.   In  closing,  he said  that  financial support  can                                                               
either be paid  out of the general fund, which  is what currently                                                               
happens,  or  by  passing  Medicaid  expansion  and  getting  the                                                               
federal government to help with that effort.                                                                                    
                                                                                                                                
[HB 148 was held over]                                                                                                          
                                                                                                                                
5:20:50 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Health  and  Social  Services   Standing  Committee  meeting  was                                                               
adjourned at 5:20 p.m.                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
HB148 - Background - Letter from Secretary Burwell.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Reform talking points.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Fiscal note narrative update.pdf HHSS 3/24/2015 3:00:00 PM
HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Support - Alaska Common Ground letter.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Opposition - Jonathan Strickland.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Support - Emails in support - 3-25-2015.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
ASHNHA Provider Tax Comprehensive 2015.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
Medicaid
HB 148_ Proposed A.1_Seaton.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Proposed Amendment - A.2 - Seaton.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - ADOPTED amendment 1 - (A 3) - Seaton.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Proposed Amendment - A.14.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB 148 - support -emails from 3-26-2015.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB 148 - Support - Letter Lynda Giguere.pdf HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Opposition - Eledge.pdf HHSS 3/26/2015 3:00:00 PM
HB 148