Legislature(2017 - 2018)CAPITOL 106

05/11/2017 03:00 PM STATE AFFAIRS

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Audio Topic
03:08:31 PM Start
03:14:38 PM Presentation: Becky Hultberg, Ak State Hospital & Nursing Home Assoc.
03:57:03 PM Presentation: Gina Bosnakis, Bosnakis & Associates, and Jeff Ranff, Ak Assoc. of Health Underwriters
04:17:34 PM Presentation: Tom Chard, Alaska Behavioral Health Assoc.
04:28:34 PM Presentation: Kyle Mirka, Alaskans for Sustainable Healthcare Costs Member
05:01:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Location Change --
Joint with House HSS Committee
+ Presentation: The Price (and Cost) of TELECONFERENCED
Healthcare in Alaska
- Becky Hultberg, AK State Hospital & Nursing
Home Assoc.
- Gina Bosnakis, Bosnakis & Associates, and Jeff
Ranff, AK Assoc. of Health Underwriters
- Tom Chard, AK Behavioral Health Assoc.
- Kyle Mirka, Alaskans for Sustainable
Healthcare Costs member
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
                          May 11, 2017                                                                                          
                           3:08 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                                          
 Representative Jonathan Kreiss-Tomkins, Chair                                                                                  
 Representative Adam Wool                                                                                                       
 Representative Chris Birch                                                                                                     
 Representative DeLena Johnson                                                                                                  
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                             
 Representative Ivy Spohnholz, Chair                                                                                            
 Representative Sam Kito                                                                                                        
 Representative Geran Tarr                                                                                                      
 Representative David Eastman                                                                                                   
 Representative Jennifer Johnston                                                                                               
 Representative Colleen Sullivan-Leonard                                                                                        
 Representative Dan Saddler (alternate)                                                                                         
MEMBERS ABSENT                                                                                                                
HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                                          
 Representative Gabrielle LeDoux, Vice Chair                                                                                    
 Representative Chris Tuck                                                                                                      
 Representative Gary Knopp                                                                                                      
 Representative Andy Josephson (alternate)                                                                                      
 Representative Chuck Kopp (alternate)                                                                                          
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                             
 Representative Bryce Edgmon, Vice Chair                                                                                        
 Representative Matt Claman (alternate)                                                                                         
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Harriet Drummond                                                                                                 
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: ALASKA STATE HOSPITAL & NURSING HOME ASSOCIATION                                                                  
     - HEARD                                                                                                                    
PRESENTATION: BOSNAKIS & ASSOCIATES AND ALASKA ASSOCIATION OF                                                                   
HEALTH UNDERWRITERS                                                                                                             
     - HEARD                                                                                                                    
PRESENTATION: ALASKA BEHAVIORAL HEALTH ASSOCIATION                                                                              
     - HEARD                                                                                                                    
PRESENTATION: ALASKANS FOR SUSTAINABLE HEALTHCARE COSTS                                                                         
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
BECKY HULTBERG, President/CEO                                                                                                   
Alaska State Hospital and Nursing Home Association (ASHNHA)                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented an overview of the Alaska State                                                                
Hospital and Nursing Home Association.                                                                                          
GINA BOSNAKIS                                                                                                                   
Gina Bosnakis and Associates                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented an overview of the Alaska                                                                      
Association of Health Underwriters.                                                                                             
JEFF RANF, Member                                                                                                               
Alaska Association of Health Underwriters                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during discussions regarding                                                                   
medical cost transparency.                                                                                                      
TOM CHARD, Executive Director                                                                                                   
Alaska Behavioral Health Association                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint overview about                                                                    
sustainable health care costs.                                                                                                  
KYLE MIRKA                                                                                                                      
Alaskans for Sustainable Healthcare Costs Coalition                                                                             
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Presented  a  PowerPoint  overview of  the                                                             
Alaskans for Sustainable Healthcare Costs.                                                                                      
ACTION NARRATIVE                                                                                                              
3:08:31 PM                                                                                                                    
CHAIR  JONATHAN KREISS-TOMKINS  called the  joint meeting  of the                                                             
House State Affairs  Standing Committee and the  House Health and                                                               
Social  Services  Standing  Committee   to  order  at  3:08  p.m.                                                               
Representatives  Wool, Birch,  Johnson, Kreiss-Tomkins,  Eastman,                                                               
Saddler (alternate), Johnston,  Sullivan-Leonard, Tarr, Kito, and                                                               
Spohnholz were present at the call  to order.  Also in attendance                                                               
was Representative Harriet Drummond.                                                                                            
CHAIR SPOHNHOLZ said  that she and Chair  Kreiss-Tomkins had been                                                               
in discussion  regarding ways  to address the  cost and  price of                                                               
health care in  the state, as the state paid  for the health care                                                               
of its  employees and retirees.   She  added that the  state also                                                               
had to  manage the  Medicare and Medicaid  budgets.   She pointed                                                               
out  that  the  State  of  Alaska had  health  care  costs  which                                                               
exceeded those in  the Lower 48.  She stated  that they wanted to                                                               
expand the  conversation and get  some facts and  information out                                                               
regarding health care price transparency.                                                                                       
^PRESENTATION: BECKY  HULTBERG, AK STATE HOSPITAL  & NURSING HOME                                                               
 PRESENTATION: BECKY HULTBERG, AK STATE HOSPITAL & NURSING HOME                                                             
3:14:38 PM                                                                                                                    
CHAIR KREISS-TOMKINS  announced that the first  order of business                                                               
would be a presentation by  Becky Hultberg, Alaska State Hospital                                                               
and Nursing Home Association.                                                                                                   
3:14:46 PM                                                                                                                    
BECKY HULTBERG, President/CEO, Alaska  State Hospital and Nursing                                                               
Home  Association  (ASHNHA),  reported   that  the  Alaska  State                                                               
Hospital   and   Nursing   Home  Association   was   the   member                                                               
organization for the hospitals and  skilled nurses' facilities in                                                               
Alaska, which included the  community hospitals, emergency rooms,                                                               
and  nursing   homes.    ASHNHA   treated  the   underserved  and                                                               
marginalized, those  with insurance and those  without insurance.                                                               
She  emphasized that  it was  critically  important to  recognize                                                               
that behind  the dollars were real  people with real lives.   She                                                               
stated  that when  talking about  hospitals it  was easy  to only                                                               
think  about  the large  centers  in  larger  areas, but  it  was                                                               
important  to remember  the  small,  unaffiliated hospitals  that                                                               
operated on  very thin  margins and  were having  difficulty with                                                               
growing  costs  and falling  revenue.    She explained  that  the                                                               
reimbursement  environment  was  becoming  more  challenging,  as                                                               
hospitals take  all patients  regardless of  the ability  to pay.                                                               
She  pointed out  that a  high percentage  of the  payer mix  was                                                               
government,  specifically Medicare  and  Medicaid, which  already                                                               
reimbursed  less than  the cost  of care,  and with  a 5  percent                                                               
Medicaid reduction starting  on July 1, 2017.   She declared that                                                               
there  was unprecedented  uncertainty  at the  state and  federal                                                               
level, as  the American Health  Care Act would force  a reduction                                                               
of  almost  $1.5  billion in  Medicaid  reimbursement  on  Alaska                                                               
hospitals, as  well as  an additional  $500 million  for treating                                                               
the  uninsured over  the  next ten  years.   She  pointed to  the                                                               
current  fiscal challenges.   She  expressed  caution for  simple                                                               
answers  to very  complex problems,  as  cultural, economic,  and                                                               
structural reasons  influenced the health care  market, different                                                               
than normal  markets.  She pointed  out that if this  was an easy                                                               
problem  to solve,  there would  not be  "this vigorous  national                                                               
debate."   She  reported that  there were  ten different  factors                                                               
affecting health care costs.   She directed attention to employer                                                               
sponsored  health care  and  the tax  treatment  of health  care,                                                               
noting that  people get tax  breaks for buying  health insurance,                                                               
which  incentivizes  benefit plans  that  drive  costs up.    She                                                               
reported that  most people  with insurance  got it  through their                                                               
jobs  and the  amount that  employers paid  for coverage  was tax                                                               
deductible for the  company and tax exempt for the  worker.  This                                                               
encouraged more  expensive health plans with  richer benefits, as                                                               
these rich plans meant higher  utilization of services and higher                                                               
costs.  She  moved on to third party  payment, which incentivized                                                               
people  to consume  more care  than otherwise  needed.   She said                                                               
that, as  low deductibles or small  co-payments encouraged people                                                               
to  use health  care at  a higher  rate, driving  up costs,  many                                                               
private  sector  employers  were moving  toward  high  deductible                                                               
coverage to align incentives and  slow premium growth.  She moved                                                               
on to  the fee for service  system, which rewarded the  volume of                                                               
procedures,   doing  more   instead  of   being  efficient,   and                                                               
incentivized over-treatment.  She  stated that, as most insurers,                                                               
including  Medicare, paid  providers  separately  for each  task,                                                               
service, or treatment, the volume  of service instead of outcomes                                                               
was incentivized.   In this fee for service  system, the economic                                                               
incentives to providers and payers  were not aligned.  She stated                                                               
another factor, the high cost  of prescription drugs from federal                                                               
policies which constrained normal  market forces, as prescription                                                               
drugs  were often  one of  the  fastest growing  components of  a                                                               
health plan.   She noted that  this was one aspect  of the health                                                               
insurance system  that could be addressed  through smart, market-                                                               
based reform.   She  reported that  the high  use of  new medical                                                               
technology,  new drugs,  and new  services in  the United  States                                                               
comes  at a  high cost  as  they often  cost more  than what  was                                                               
replaced.   She  emphasized  that the  United  States had  higher                                                               
provider rates than other  industrialized, more heavily regulated                                                               
countries,   even  though   generalizations   about  rates   were                                                               
difficult and  it did not  capture the complexity.   She reported                                                               
that  an  aging  population  needed more  medical  care  and  the                                                               
overall  costs  were rising.    She  relayed that  the  unhealthy                                                               
lifestyles in  the US,  which led  to high  rates of  obesity and                                                               
chronic  conditions,  forced higher  payment  by  everyone.   She                                                               
pointed to  high administrative  costs, which included  the costs                                                               
of  insurance, billing,  processing,  regulations, and  insurance                                                               
broker  fees.   She offered  an example  of the  21,582 pages  of                                                               
hospital  guidance  from the  Centers  of  Medicare and  Medicaid                                                               
Services.     She  emphasized  that  the   industry  was  already                                                               
overregulated  at  all  levels,   with  more  local  and  federal                                                               
proposals poised to  add to this.  She  declared that "regulation                                                               
equals  cost."    She  shared  that culture  and expectations  of                                                               
health care  made the  system more expensive,  as we  expected to                                                               
not have  to wait,  even as  waiting lists  were not  uncommon in                                                               
other  countries.   She reported  that  much of  our health  care                                                               
expense  came in  the  last month  of life,  and  that too  often                                                               
interventions added  to suffering  and only  prolonged life  at a                                                               
terrible cost.   She  declared that these  were hard  issues, and                                                               
that  she was  not making  any  value judgements.   However,  she                                                               
pointed  out that  some of  the  cost discussion  was related  to                                                               
significant ethical  and deeply  personal components that  had to                                                               
be acknowledged.   She  pointed out  that these  societal choices                                                               
had an  impact on health care  costs.  She stated  that providers                                                               
had "to  be at the  table as  true partners" for  any discussions                                                               
regarding growing  health care costs while  maintaining access to                                                               
critical health  care services.   She  reported that  the factors                                                               
were much more complex than  merely pointing fingers at providers                                                               
for health  care costs and  were driven by systems  and decisions                                                               
not  often thought  about and  possibly taken  for granted.   She                                                               
declared that  the question would  be for whether the  public was                                                               
willing  to  listen,  to  do  the work,  to  have  the  difficult                                                               
conversations, and to  engage in the shared  sacrifice that would                                                               
be  necessary for  reform.   She stated  that this  would require                                                               
spending the  time learning and  then having  real conversations,                                                               
with a commitment  to deep and long-term engagement.   She shared                                                               
her realization,  after a long  career in health care,  that this                                                               
was a  huge challenge.  She  pointed out that hospitals  were the                                                               
community safety  net, with thousands of  dedicated employees who                                                               
spent  their careers  helping things  go right.   She  emphasized                                                               
that,  although  health  care   reform  was  hard,  complex,  and                                                               
required sacrifice,  it was  the most important  thing to  do and                                                               
was worth the commitment.                                                                                                       
3:25:36 PM                                                                                                                    
CHAIR  KREISS-TOMKINS  expressed  his   support  to  ensure  that                                                               
providers had a voice in the health care discussions.                                                                           
3:26:37 PM                                                                                                                    
REPRESENTATIVE JOHNSTON  acknowledged that the public  sector had                                                               
driven  up  a  lot  of  the health  care  costs.    She  directed                                                               
attention  to the  increased  use of  the  emergency rooms  since                                                               
Medicaid expansion and asked if that was the case in Alaska.                                                                    
MS.  HULTBERG replied  that  there was  not  enough recent  data,                                                               
although there was an emergency  room project being undertaken to                                                               
tie   the  emergency   rooms  together   through  an   electronic                                                               
information exchange  system.  This  would provide a  better care                                                               
linkage to providers in the community  and was based on the seven                                                               
best  practices  developed  in  the State  of  Washington.    She                                                               
reported that this  program saw Medicaid visits drop  by about 10                                                               
percent in  Washington.  She  acknowledged that a  challenge from                                                               
Medicaid expansion had been that  this initial access to care had                                                               
instituted an  increase for use  of the emergency rooms,  even as                                                               
this was  not always the appropriate  place.  She added  that the                                                               
hospitals were trying to address this at the front end.                                                                         
REPRESENTATIVE  JOHNSTON asked  about the  drop in  uncompensated                                                               
care in emergency rooms prior to Medicaid expansion.                                                                            
MS.  HULTBERG replied  that  the anecdotal  reasons  were for  an                                                               
increase  to  the   numbers  of  people  newly   insured  on  the                                                               
individual market through the health exchange.                                                                                  
3:29:48 PM                                                                                                                    
REPRESENTATIVE TARR  stated that Ms.  Hultberg was making  a case                                                               
for a single  payer [insurance program].  She  referenced the tax                                                               
breaks  which encouraged  higher spending  and lower  deductibles                                                               
which  encouraged more  use and  asked how  those behaviors  were                                                               
MS. HULTBERG  offered to provide  direction toward  some economic                                                               
studies which  demonstrated evidence  to support  the correlation                                                               
with these two  factors as a part of the  growing cost escalation                                                               
in  health care.    She explained  the  origin of  employer-based                                                               
health care  as being  post-World War II  when wage  controls had                                                               
prevented  any  raise in  wages,  so  health care  benefits  were                                                               
REPRESENTATIVE  TARR   asked  if   there  was   any  conversation                                                               
regarding  the   current  federally  prohibited   deductibles  on                                                               
MS.  HULTBERG reported  that  the new  Centers  for Medicare  and                                                               
Medicaid  Services   administrator  was  the  architect   of  the                                                               
"Healthy Indiana Plan,"  which "pushed the envelope"  in terms of                                                               
Medicaid plans by creating health  savings accounts.  She offered                                                               
her  belief that  there could  be  an increase  of incentives  to                                                               
apply these  principles to the  Medicaid population.   She stated                                                               
that, however, this  was a challenge because  this population had                                                               
few resources and it was necessary to ensure access to care.                                                                    
3:32:15 PM                                                                                                                    
CHAIR KREISS-TOMKINS asked about  market-based reforms to contain                                                               
the cost increases for pharmaceutical drugs.                                                                                    
MS.  HULTBERG said  that  a few  key  elements included  allowing                                                               
Medicare to  negotiate drug prices  just as they set  health care                                                               
rates.    She  pointed  out  how  long  it  took  to  get  patent                                                               
protections and  how long those  patent protections lasted.   She                                                               
spoke  about the  "orphan" drugs  which were  developed for  very                                                               
targeted conditions,  hence were not  economic to develop.   Even                                                               
so, these orphan  drugs could be used for "a  whole host of other                                                               
things  where  there's  a large  population"  even  though  these                                                               
orphan drugs had  very long patent protections.   She opined that                                                               
these and other  smart market-based reforms could  have an impact                                                               
on drug costs.                                                                                                                  
3:33:33 PM                                                                                                                    
CHAIR SPOHNHOLZ asked about strategies  regarding the high use of                                                               
new medical  technology, even as  research often showed  this was                                                               
not  the  best  practice,  and  about  the  impact  of  unhealthy                                                               
lifestyles on health care.                                                                                                      
MS.  HULTBERG  replied  that  it  was  a  difficult  and  complex                                                               
question  for  how   to  get  people  to  take   better  care  of                                                               
themselves.  She opined that it  was necessary to not let medical                                                               
technology proliferate  as it had,  as this  use was going  to be                                                               
covered  and  would continue  to  drive  the  cost upward.    She                                                               
offered  her belief  that the  bigger message  was for  a way  to                                                               
align  the incentives  for providers,  to do  more stuff  to more                                                               
people, with payers,  to receive high quality  and low-cost care.                                                               
She stated  that the  incentive should be  for the  objective and                                                               
not for the revenue.                                                                                                            
CHAIR  SPOHNHOLZ  observed  that a  realignment  of  compensation                                                               
would resolve many  problems.  She asked if there  should be more                                                               
proactive  compensation for  nutritionists and  personal trainers                                                               
to offer support for a healthy lifestyle.                                                                                       
MS.  HULTBERG   reported  that  discussions  with   primary  care                                                               
physicians indicated that many chronic  conditions were caused by                                                               
lifestyle  factors and  were  very challenging  to  manage.   She                                                               
suggested that it was  not a good use of time  for a primary care                                                               
physician to be  the nutritional counselor or  the social worker.                                                               
She  declared  that it  was  possible  for a  primary  care-based                                                               
system to  have reimbursement payment for  all these professional                                                               
3:38:33 PM]                                                                                                                   
REPRESENTATIVE WOOL  asked the reason  behind her  statement that                                                               
more people  having insurance and  more people using  health care                                                               
would make things more expensive.                                                                                               
MS. HULTBERG  explained that  in a system  where the  patient was                                                               
not responsible for  the overall cost of the  service, they would                                                               
utilize services  at a higher rate.   She said that  the question                                                               
was  for how  to  manage  that utilization  so  that health  care                                                               
resources  were being  appropriately and  necessarily used.   She                                                               
pointed to  an economic  function that  people consume  more when                                                               
something  does not  cost  much.   She asked  how  that could  be                                                               
managed  to avoid  unnecessary  utilization  and emphasized  that                                                               
Alaska State Hospital and Nursing  Home Association advocated for                                                               
access to coverage.                                                                                                             
REPRESENTATIVE WOOL asked at what  point something was determined                                                               
to  not  be new  technology,  and  if so,  why  was  it still  so                                                               
expensive.  He  offered an example of an MRI,  and asked why that                                                               
was still so expensive, even  though this was not new technology.                                                               
He  asked  if  this  was  partially due  to  a  fee  for  service                                                               
MS. HULTBERG  opined that the fee  for service system did  play a                                                               
role in  the proliferation and  cost of these  services, although                                                               
it was most likely not the only  cause.  She stated that "we have                                                               
a very  advanced medical system,  we have the  latest technology,                                                               
people come to the United States  from all over the world because                                                               
of the  technology advances  that we've made  in our  health care                                                               
system."   She  declared, "that  is a  good thing"  because those                                                               
advances were  lifesaving, although  they had  a very  high cost.                                                               
She  opined that  it was  necessary to  recognize and  understand                                                               
that the  technology advances  that brought  dramatic improvement                                                               
in  health also  cost a  lot of  money.   She added  that it  was                                                               
necessary to  use the most  effective and lowest  cost technology                                                               
MS.  HULTBERG,  in response,  said  that  there were  always  new                                                               
advances in technologies and she  pointed to the increased use of                                                               
specific technologies in  the United States compared  to the rest                                                               
of the world.                                                                                                                   
3:42:40 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD asked  for  feedback from  those                                                               
discussions  with the  Alaska congressional  delegation regarding                                                               
any changes to the Patient Protection and Affordable Care Act.                                                                  
MS. HULTBERG  reported that  the two Alaska  Senators were  "in a                                                               
listen  and learn  mode"  and that  their  respective staff  were                                                               
researching any effects on Alaska.                                                                                              
3:44:50 PM                                                                                                                    
REPRESENTATIVE BIRCH  offered his  belief that "you  can't really                                                               
manage what  you can't measure."   He shared some figures  from a                                                               
report in the  Anchorage newspaper for the  profits by Providence                                                               
Alaska  Medical Center  last  year.   He  asked  if  she had  any                                                               
reports for  gross dollars billed,  write-offs against  that, and                                                               
then the actual cost of delivery.                                                                                               
MS. HULTBERG said that she did  not have any hospital by hospital                                                               
data  and suggested  that he  review the  Medicare cost  reports,                                                               
even  though  these were  "pretty  complex  to interpret."    She                                                               
declared that  measurement was difficult  in health  care because                                                               
different  systems counted  different things  in different  ways.                                                               
She  acknowledged   that  this  information  would   be  helpful,                                                               
although  it was  difficult to  find.   She stated  that hospital                                                               
costs  were one  piece  in  the overall  spend  for health  care,                                                               
cautioning   that  the   numbers  from   one  hospital   did  not                                                               
necessarily translate to the entire industry.                                                                                   
REPRESENTATIVE BIRCH  reflected on an education  environment with                                                               
average  dollars per  student  as  a measure  and  asked if  this                                                               
compared to a similar metric for healthcare.                                                                                    
3:49:01 PM                                                                                                                    
REPRESENTATIVE   SADDLER   asked   about  any   effect   of   the                                                               
philosophical  or  legal background  for  which  health care  was                                                               
provided, and if this affected  pricing.  He listed various views                                                               
of health care  in the United States:  a  service available for a                                                               
fee; a hybrid social and  business obligation; a moral obligation                                                               
with profit  being reprehensible;  and a  basic human  right that                                                               
government should do what it can  to provide.  He asked about the                                                               
philosophical  expectation behind  health  care  pricing and  the                                                               
business model.                                                                                                                 
MS. HULTBERG replied that he had  "hit on one of the factors that                                                               
makes health  care unique, and  not like  a normal market."   She                                                               
said that opinions  were different.  She stated that,  at a macro                                                               
level,  we  want  healthcare  to  function  as  a  normal  market                                                               
economic  system.    She  reported  that  the  Emergency  Medical                                                               
Treatment & Labor  Act (EMTALA) ensured that  everyone had access                                                               
to care through an emergency room.   She stated that these issues                                                               
had  not yet  been addressed  from  a cultural  standpoint.   She                                                               
declared  that  there was  both  a  moral  and a  market  aspect,                                                               
emphasizing  that health  care was  a complex  conversation about                                                               
economics as well as an  ethical, moral discussion about personal                                                               
REPRESENTATIVE SADDLER  asked if  it was  necessary to  make that                                                               
decision before making decisions about  a price system to address                                                               
these expectations.                                                                                                             
MS.  HULTBERG said  that  there  were still  things  to make  the                                                               
system  function  more  efficiently and  effectively  within  the                                                               
construct  of the  current framework.    She said,  to a  certain                                                               
degree, the  determinations for health  care as  a right or  as a                                                               
market were going to be made  at the federal level.  She declared                                                               
that  the  state  could  think   about  a  better  way  to  align                                                               
incentives, manage  care, and target  areas with high  costs from                                                               
end of life care and chronic conditions.                                                                                        
3:53:22 PM                                                                                                                    
REPRESENTATIVE JOHNSON  asked which  targeted reforms  would curb                                                               
Medicaid fraud and abuse.                                                                                                       
MS. HULTBERG  opined that although  there were  some high-profile                                                               
examples of  Medicaid fraud,  she did  not believe  that Medicaid                                                               
fraud would "move  the needle that much on cost."   She suggested                                                               
to target  high risk  providers.  She  said that,  although there                                                               
was  not a  lot  of Medicaid  fraud in  the  hospital world,  the                                                               
compliance burden and the cost  burden to survive the many audits                                                               
and to  ensure the appropriate reporting  was huge.  She  was not                                                               
sure that  the balance had  been struck, and she  questioned that                                                               
an  increase of  audits  would  "find a  lot  more  money in  our                                                               
Medicaid  program."   She reported  that  additional layering  of                                                               
regulatory  systems would  only  add cost  to  the providers,  so                                                               
instead  it would  be  more  beneficial to  do  a  better job  of                                                               
REPRESENTATIVE  JOHNSON asked  how to  define the  fine line  for                                                               
over-use or over-prescribing instead of actual fraud.                                                                           
MS. HULTBERG offered her belief  that it was necessary for payers                                                               
and providers to work together  to align incentives to change the                                                               
economic model.   She stated  that high quality,  reasonable cost                                                               
care was  the end goal  for both  groups in the  economic system.                                                               
She  added  that utilization  reviews  were  another strategy  to                                                               
^PRESENTATION:  GINA BOSNAKIS,  BOSNAKIS &  ASSOCIATES, AND  JEFF                                                               
RANFF, AK ASSOC. OF HEALTH UNDERWRITERS                                                                                         
  PRESENTATION: GINA BOSNAKIS, BOSNAKIS & ASSOCIATES, AND JEFF                                                              
            RANFF, AK ASSOC. OF HEALTH UNDERWRITERS                                                                         
3:57:03 PM                                                                                                                    
CHAIR KREISS-TOMKINS  announced that  the next order  of business                                                               
would be a presentation by Bosnakis and Associates.                                                                             
3:57:39 PM                                                                                                                    
GINA BOSNAKIS,  Gina Bosnakis and  Associates, reported  that she                                                               
had a  small employee benefits  firm.   She said that  she worked                                                               
with employers for the best  fit for their health insurance needs                                                               
and budgets and  that she worked daily with employees.   She said                                                               
that employers were  paying on average over  $14,000 annually per                                                               
employee.  She  reported that when a surgeon or  facility was out                                                               
of  network,  the  employee  would  have to  pay  more  than  the                                                               
anticipated 20  percent.  She declared  that insurance technology                                                               
was  very  confusing.    She  reported that  an  out  of  network                                                               
provider cost the  employee a deductible plus 40 -  60 percent or                                                               
more, versus  the 20  percent owed  if they  were in  network, as                                                               
well as  any charges that  were considered over reasonable.   She                                                               
declared  that transparency  would be  a good  step in  the right                                                               
direction to  better allow patients  to determine the  cost ahead                                                               
of time.  She said that  it was necessary to obtain the procedure                                                               
code  and  the names  of  all  the  providers  for a  patient  to                                                               
determine the cost.   She said that a lot  of factors contributed                                                               
to having the  highest health care costs in the  country, so that                                                               
anything which  could assist  Alaskans to  lower those  costs was                                                               
positive.   She offered an  example of the  cost for a  total hip                                                               
replacement in  Anchorage, $23,200, whereas in  Seattle, the same                                                               
procedure  was  $11,700.   She  acknowledged  that, although  the                                                               
industry was heavily regulated, transparency  would be a big help                                                               
for patients.                                                                                                                   
4:01:20 PM                                                                                                                    
JEFF  RANF, Member,  Alaska Association  of Health  Underwriters,                                                               
stated that many Alaska medical  providers simply did not have to                                                               
be transparent,  and often found  reasons for not  being required                                                               
to post their  price data for consumers.  He  declared that every                                                               
other  industry produced  cost data  prior to  work and  services                                                               
being  performed and  that it  was  time for  the Alaska  medical                                                               
industry to  come into  line with  the rest of  the country.   He                                                               
emphasized  that he  was  not  implying that  this  was a  simple                                                               
problem  with  simple  solutions,  but  instead  that  it  was  a                                                               
complicated, decades old issue.  If  this was easy, it would have                                                               
been addressed  and resolved  long ago.   He  stated that  it was                                                               
imperative  to  address  why medical  cost  transparency  was  so                                                               
important as it focused on the  consumer, not on the insurer.  He                                                               
pointed out  that it was the  consumer who paid the  bill balance                                                               
beyond the insurance coverage because  the provider did not offer                                                               
full disclosure and  the insurance company was not  clear for the                                                               
coverages.  He  pointed out that the providers  were not required                                                               
to be  contracted with the  insurance companies, so  the consumer                                                               
needed to  be educated to the  workings of the system.   He noted                                                               
that the  providers did not readily  provide a cost sheet  to the                                                               
consumer.   He reported  that, in Alaska,  as many  providers did                                                               
not  agree with  the  reimbursement schedule  from the  insurance                                                               
company and then  did not contract with them,  the consumer ended                                                               
up  paying.    He  offered   the  question  for  whether  medical                                                               
transparency would  control costs.   He declared that cost  was a                                                               
separate  issue and  that only  specific  legislation to  address                                                               
pricing would  ultimately control  cost.   He reported  that many                                                               
states  had that  legislation,  which was  often  referred to  as                                                               
managed care.  He added  that transparency, as a pro-active first                                                               
step in understanding  medical pricing, placed the  consumer in a                                                               
more traditional consumer  role to receive care  and services and                                                               
agree with  the provider and insurer  for the share of  the cost.                                                               
He  identified  this  transaction  as being  more  open  for  the                                                               
consumer.   He  expressed  his "sincere  desire"  that the  state                                                               
enact  legislation for  how to  best  protect the  consumer.   He                                                               
expressed  his agreement  with Ms.  Hultberg that  physicians and                                                               
provider  groups  needed to  be  at  the  table to  resolve  this                                                               
problem in the current free market system.                                                                                      
4:06:54 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD  asked why  a hip  replacement in                                                               
Anchorage was so much more  expensive than this same procedure in                                                               
MS.  BOSNAKIS  stated  that  there were  many  reasons,  and  she                                                               
offered her belief  that the biggest culprit in the  cost of care                                                               
in  Alaska  versus  the  rest   of  the  United  States  was  the                                                               
regulation  through the  Division of  Insurance called  the "80th                                                               
percentile."  She said that it  was complicated but that it meant                                                               
that 8  out of 10 submissions  with the same procedure  code in a                                                               
region  would   determine  the   usual  and   customary  charges.                                                               
However, if there was only one  specialist in a more remote area,                                                               
they would  set their  own charges,  and the  insurance companies                                                               
would have to  pay that rate.   She said that this  would "not be                                                               
dealt with easily."                                                                                                             
4:08:57 PM                                                                                                                    
REPRESENTATIVE WOOL  referenced a study which  indicated that the                                                               
United  States  was  the only  developed  country  without  price                                                               
controls  on  health  care.   He  asked  why  a  CT scan  was  so                                                               
expensive when  the technology  had been around  for a  long time                                                               
and was used all over the world.                                                                                                
MR.  RANF, in  response,  stated  that there  was  not any  price                                                               
control in Alaska as there  was not any managed care legislation.                                                               
He offered his belief that managed  care was not legal in Alaska.                                                               
He explained  that groups  of physicians  or providers  could not                                                               
come  together  to form  a  collective  to provide  services  and                                                               
negotiate the prices  with the claims payers.   Consequently, the                                                               
80th  percentile tended  to  drive up  the  prices as  physicians                                                               
could  raise their  fees  and  the price  increases  would go  up                                                               
unabated with no  upper limit.  He pointed out  that in the State                                                               
of Washington,  there was regulation  which did not  allow prices                                                               
to go up unabated, and there was an upper limit.                                                                                
4:11:34 PM                                                                                                                    
CHAIR SPOHNHOLZ  asked for further  explanation to  his statement                                                               
that managed care was not legal in the State of Alaska.                                                                         
MR.  RANF offered  his belief  that legislation  had been  passed                                                               
several decades ago and that people  had reported that it was not                                                               
legal for provider groups to  come together and negotiate pricing                                                               
with the claims  payers.  He offered to research  a more in-depth                                                               
4:13:01 PM                                                                                                                    
CHAIR  KREISS-TOMKINS  asked  if  the passage  of  the  Anchorage                                                               
municipal  ordinance on  price transparency  had resulted  in any                                                               
changes to pricing or market behavior.                                                                                          
MS. BOSNAKIS  replied that,  as this  was recent  legislation, it                                                               
was too early  to determine any effects.  She  offered her belief                                                               
that  it would  take  at  least a  year  and  reported that  this                                                               
municipal ordinance had  "a much heavier hand  than anything that                                                               
we've  looked at  on  a state  level."   She  declared that  this                                                               
transparency for procedure  codes and the names  of the providers                                                               
was the only way to "step into this easily."                                                                                    
MR. RANF stated  that this had been discussed  at the association                                                               
level  and there  was  currently not  any  indication for  market                                                               
change.   He  expressed agreement  that "time  is going  to tell"                                                               
although  he  opined  that  there  could be  "a  fair  amount  of                                                               
pushback  from  the provider  community."    He stated  that  the                                                               
consumer  had to  oversee the  decisions for  their health  care,                                                               
which he  opined was  currently very  difficult for  the everyday                                                               
4:15:39 PM                                                                                                                    
REPRESENTATIVE SADDLER asked about  the effect of the certificate                                                               
of need requirement  for high cost medical  technology and health                                                               
care services.                                                                                                                  
MR.   RANF  replied   that  the   certificate  of   need  was   a                                                               
controversial  statute.    He  offered his  belief  that  it  had                                                               
virtually  no effect  on provider  groups applying  and receiving                                                               
approval,  and  he offered  an  example  from Montana  which  had                                                               
determined  that this  was  driving  up costs.    He offered  his                                                               
belief that it had not done anything to control costs.                                                                          
^PRESENTATION: TOM CHARD, ALASKA BEHAVIORAL HEALTH ASSOC.                                                                       
    PRESENTATION: TOM CHARD, ALASKA BEHAVIORAL HEALTH ASSOC.                                                                
4:17:34 PM                                                                                                                    
CHAIR KREISS-TOMKINS  announced that the final  order of business                                                               
would be a PowerPoint presentation  about sustainable health care                                                               
4:18:17 PM                                                                                                                    
TOM   CHARD,  Executive   Director,   Alaska  Behavioral   Health                                                               
Association,   explained  that   the  Alaska   Behavioral  Health                                                               
Association was a member driven  non-profit for mental health and                                                               
substance abuse  treatment providers in  Alaska.  He  pointed out                                                               
that,  on  slide 2,  that  there  were  many different  types  of                                                               
behavioral  health provider  services in  Alaska.   He referenced                                                               
Senate Bill 74, which made  the private for-profit providers much                                                               
more  able   to  provide  behavioral  health   services,  and  to                                                               
hopefully  be able  to  bill  Medicaid for  these  services.   He                                                               
pointed  out  that  the prison  system,  the  school  classrooms,                                                               
homeless shelters, foster families,  law enforcement and domestic                                                               
violence  shelters were  also behavioral  health  providers.   He                                                               
reported that  much of the  behavioral health budget  cut savings                                                               
in  the   Department  of  Health   and  Social   Services  budget                                                               
subsequently "show  up [as expenses] in  Corrections or Education                                                               
or other places."   He shared that there was  a membership survey                                                               
in 2015,  prior to Medicaid expansion,  to get a "rough  check on                                                               
what  was  going on."    He  noted  that  at that  time  Medicaid                                                               
comprised about 50  percent of revenue for  its member providers,                                                               
grants  comprised about  20 percent,  and  private pay  comprised                                                               
about 15 percent,  along with a myriad of  other revenue sources.                                                               
After  Medicaid expansion,  the portion  of Medicaid  revenue had                                                               
grown while  the grants were  shrinking.   He pointed out  that a                                                               
provider that had  multiple sources of revenue  also had multiple                                                               
reporting and system requirements.                                                                                              
4:22:05 PM                                                                                                                    
MR. CHARD  shared a  brief breakdown  of expenses  for behavioral                                                               
health providers  in the  state, noting  that wages  and benefits                                                               
were the  two highest cost drivers.   He reported that  these had                                                               
grown to  about 75  percent, even  though they  did not  have any                                                               
fancy new technology.  He said  that this cost was for counselors                                                               
and  clinicians providing  the service.   He  reported that  this                                                               
sampling found  that, in  2015, 20  percent of  the organizations                                                               
were operating  in the red and  that 70 percent of  the providers                                                               
were in the red during a  $100,000 pay cycle, which he declared a                                                               
crisis level.   He expressed his shock and  referenced the report                                                               
findings of  an independent consultant  hired by the  Division of                                                               
Behavioral Health, which concluded that  more than 75 percent had                                                               
fiscal health which  was vulnerable and at-risk  and were running                                                               
operating deficits.   He  noted that this  was still  the current                                                               
state of  the behavioral health  provider system.  He  added that                                                               
part of  the problem  was a  need for  reimbursement rates  to be                                                               
increased, and although Medicaid expansion  saved the state a lot                                                               
of money, the  reimbursement rate to providers did  not cover the                                                               
cost  of care.    He offered  the belief  that  an investment  in                                                               
behavioral health  services would  reflect a cost  savings across                                                               
the  budget.    He  encouraged the  committee  to  consider  this                                                               
problem from  a provider and  a patient perspective,  asking what                                                               
the main cost  drivers were.  He declared  that promoting earlier                                                               
intervention, group  and family  engagement, and  holistic health                                                               
care were all general points.   He pointed to the 11 efficiencies                                                               
to reduce the  administrative burden which had been  studied in a                                                               
joint investigation  with the department  and the providers.   He                                                               
added that  reductions of uncertainty  and support of  work force                                                               
development initiatives  were important,  as well  as examination                                                               
of appropriate scopes of practice  by practitioners.  He declared                                                               
that  removal  of  the  Federal   Institute  for  Mental  Disease                                                               
exclusion would also  help, and examination of  the Alaska Health                                                               
Care Authority  opportunity to include  State of  Alaska grantees                                                               
would help bring down the costs.                                                                                                
^PRESENTATION:  KYLE MIRKA,  ALASKANS FOR  SUSTAINABLE HEALTHCARE                                                               
COSTS MEMBER                                                                                                                    
 PRESENTATION: KYLE MIRKA, ALASKANS FOR SUSTAINABLE HEALTHCARE                                                              
                          COSTS MEMBER                                                                                      
4:28:34 PM                                                                                                                    
KYLE MIRKA, Alaskans for  Sustainable Healthcare Costs Coalition,                                                               
directed  attention to  slide 2,  and stated  that the  coalition                                                               
consisted  of employers  concerned with  the current  health care                                                               
environment  in   Alaska  and   was  working  with   Alaskans  to                                                               
understand and find solutions about  the drivers affecting rising                                                               
health  care  costs.   He  stated  that  Alaska had  the  highest                                                               
healthcare costs  in the United  States, which continued  to rise                                                               
faster than anywhere else.  He  noted that employers paid most of                                                               
the  cost burden,  even though  they  did not  have the  cohesive                                                               
platform to  address this increasing  strain on the  bottom line.                                                               
He moved on  to slide 3, sharing that the  coalition was striving                                                               
to educate  employers and break  down the barriers  of individual                                                               
businesses  while discussing  the issues  affecting all  of them.                                                               
He  shared a  desire for  an influence  over the  80th percentile                                                               
rule, which he  recognized as a main driver  for the skyrocketing                                                               
increase of health  care costs in Alaska.   He directed attention                                                               
to slide  4 and listed  a few  facts, which included  that Alaska                                                               
had the  highest cost of  health care  in the United  States, and                                                               
the medical consumer  price index reflected a  4 percent increase                                                               
annually  in Anchorage  compared  to a  2.2  percent increase  in                                                               
Seattle.   He  declared that  cost transparency  was critical  in                                                               
Alaska.  He stated that  remote locations, small populations, and                                                               
the  high cost  of certain  goods  and services  were not  enough                                                               
reason  for these  high  costs.   He reported  that  the cost  of                                                               
medical professional  services in Alaska averaged  400 percent of                                                               
the Medicare reimbursement rate,  which had already been adjusted                                                               
to the state.   He declared that the  80th percentile regulations                                                               
which  set the  usual and  customary rates  contributed a  3 -  5                                                               
percent annual  inflation to  the cost  of health  care services.                                                               
He  addressed  slide  5,  which outlined  some  of  the  specific                                                               
stories and the significant issues  with health care.  He pointed                                                               
to slide  6, which called attention  to the fact that  these cost                                                               
drivers  were   affecting  everyone,   whether  it   was  retail,                                                               
nonprofit,  or construction.   He  said that  slide 7  showed two                                                               
interesting  newspaper articles  about the  cost of  health care,                                                               
and that slide  8 showed that costs were going  up, and employees                                                               
out of pocket  expenses were increasing.  He  spoke about medical                                                               
tourism, a  great thing for  the state as it  offered substantial                                                               
savings  for  out-of-state  travel, although  leaving  the  state                                                               
could be  a challenge.   He expressed  a desire to,  instead, get                                                               
the in-state  costs under control.   He moved  on to slide  9 and                                                               
slide  number  10,  which  listed medivac  as  a  very  expensive                                                               
service and  would require state  assistance to reduce  those air                                                               
ambulance  costs.   He read  from slide  11 and  spoke about  the                                                               
adverse impact of  the 80th percentile on  the employer premiums.                                                               
He declared  that this  was now a  consumer penalty  as providers                                                               
could raise their fees at will.   He addressed the last slide and                                                               
offered his  belief that transparency would  empower the consumer                                                               
to shop around and make informed decisions on healthcare.                                                                       
4:36:57 PM                                                                                                                    
REPRESENTATIVE  JOHNSTON expressed  her agreement  that the  80th                                                               
Percentile was driving up the  healthcare cost, suggesting that a                                                               
state agency set the price instead.                                                                                             
MR. MIRKA, in response, said that  he would be encouraged by this                                                               
approach.   He expressed his  desire that the market  would allow                                                               
the  setting of  the price,  but  that the  80th percentile  went                                                               
against  this as  it allowed  providers to  charge whatever  they                                                               
liked.   He opined that  a maximum  allowable charge would  be "a                                                               
path towards getting costs under control."                                                                                      
4:38:48 PM                                                                                                                    
REPRESENTATIVE TARR  asked for  his reaction  to the  changes and                                                               
proposals  in  Washington  D.C.,   specifically  to  block  grant                                                               
MR. MIRKA acknowledged that he  had been following this, although                                                               
there were  so many unknowns.   He  reiterated that the  State of                                                               
Alaska had  a very unique  problem, and  he did not  believe that                                                               
the Patient  Protection and Affordable  Care Act  was responsible                                                               
for  these  rising  health  care  costs.    He  opined  that  the                                                               
conversations  in Washington  D.C. would  not have  a significant                                                               
impact on what Alaska was already experiencing.                                                                                 
4:40:45 PM                                                                                                                    
CHAIR KREISS-TOMKINS asked  that he speak to the  medivac cost in                                                               
Alaska and what Montana had done to control those costs.                                                                        
MR.  MIRKA declared  that medivac  was more  expensive in  Alaska                                                               
than  other locations  and  it  would be  preferable  to have  it                                                               
subject to state regulations instead of federal regulations.                                                                    
4:41:59 PM                                                                                                                    
CHAIR SPOHNHOLZ  asked for  examples to  an earlier  comment that                                                               
investments  in  behavioral  health  care  would  reduce  overall                                                               
healthcare cost.                                                                                                                
4:42:25 PM                                                                                                                    
MR.  CHARD replied  that emergency  departments  were flooded  by                                                               
people  with   undiagnosed  and   untreated  mental   health  and                                                               
substance  abuse issues.    He pointed  out that  a  lot of  this                                                               
emergency  room work  was case  management and  social work  in a                                                               
very expensive setting.   He offered his  belief that investments                                                               
in community behavioral health in  a less restrictive environment                                                               
was "far  cheaper and  would keep  the emergency  departments and                                                               
some of  the higher acute settings  from having to work  on these                                                               
cases."  He pointed out  that the professionals in these settings                                                               
were more expensive.                                                                                                            
CHAIR SPOHNHOLZ  offered her belief  that this might tie  in well                                                               
with the emergency department data  base system that Alaska State                                                               
Hospital and Nursing Home Association was currently piloting.                                                                   
MR.  CHARD added  that the  Alaska Behavioral  Health Association                                                               
had just  started talks  with Alaska  State Hospital  and Nursing                                                               
Home Association to ensure that  the primary care provider for an                                                               
individual had contact information included in the database.                                                                    
4:44:46 PM                                                                                                                    
REPRESENTATIVE WOOL asked Mr. Mirka  about the difference in cost                                                               
for rotator  cuff surgery,  $87,000 in  Anchorage and  $17,000 in                                                               
Seattle.    He asked  if  the  price  controls  in the  State  of                                                               
Washington  were strong,  and whether  other  states had  similar                                                               
MR.  MIRKA   offered  his  belief  that,   although  the  general                                                               
percentage of cost differentials  for services and procedures did                                                               
vary, the  primary driver  for these  cost differentials  was the                                                               
80th percentile rule.                                                                                                           
4:46:29 PM                                                                                                                    
REPRESENTATIVE BIRCH mused about  the obligations for day surgery                                                               
facilities  on  whether to  accept  emergency  care patients  and                                                               
asked how this obligation was distinguished.                                                                                    
4:47:35 PM                                                                                                                    
MS.  HULTBERG  replied that  it  had  to  do with  the  Emergency                                                               
Medical  Treatment  and  Labor   Act,  a  federal  statute  which                                                               
determined that when you operated  an emergency room or hospital,                                                               
you had to treat people  through that setting regardless of their                                                               
ability  to  pay.    She  added that  this  federal  statute  was                                                               
predicated on  licensing and whether  Medicare and  Medicaid were                                                               
4:48:35 PM                                                                                                                    
REPRESENTATIVE SADDLER  asked about the Alaskans  for Sustainable                                                               
Healthcare Costs  Coalition membership, and the  legal obligation                                                               
of Medicare and Medicaid to cover behavioral health.                                                                            
4:49:08 PM                                                                                                                    
MR. MIRKA reported  that the coalition had  no discrimination for                                                               
its membership  and that  many members would  come on  a periodic                                                               
REPRESENTATIVE  SADDLER noted  that  there were  not any  members                                                               
listed on the coalition website.                                                                                                
4:49:44 PM                                                                                                                    
REPRESENTATIVE  JOHNSON   expressed  her  appreciation   for  the                                                               
representation from private industry, as  health care costs had a                                                               
significant impact on them.                                                                                                     
4:50:40 PM                                                                                                                    
REPRESENTATIVE SADDLER  repeated his question for  the membership                                                               
of Alaskans for Sustainable Healthcare Costs Coalition.                                                                         
4:51:04 PM                                                                                                                    
MR.  MIRKA listed  his two  businesses in  Anchorage, as  well as                                                               
Denali Federal Credit Union, Northwest  Auto, and Valley Concrete                                                               
as members.                                                                                                                     
4:51:51 PM                                                                                                                    
REPRESENTATIVE JOHNSTON reflected that  mental health support was                                                               
grant and  private insurance based  prior to  Medicaid expansion.                                                               
She asked  for an estimate  to the administrative cost  of making                                                               
this  transition to  Medicaid based  compared  to the  previously                                                               
grant based  costs.   She expressed her  concern for  the outcome                                                               
should this become "unraveled."                                                                                                 
4:52:45 PM                                                                                                                    
MR.  CHARD explained  that  his  association membership  included                                                               
mental health and  substance abuse treatment providers.   He said                                                               
that  the mental  health treatment  providers had  were primarily                                                               
been  grant  based  and  had   already  made  the  transition  to                                                               
Medicaid, whereas  the substance  abuse treatment  providers were                                                               
now making  the transition.   He acknowledged that  the substance                                                               
abuse treatment providers  had a large challenge  and were hiring                                                               
"extra  back  office  folks  to   do  the  Medicaid  billing  and                                                               
compliance."  He added that  different quality assurance programs                                                               
were  being put  in place  to meet  the Medicaid  standards.   He                                                               
added that it was necessary to  review the mission of the clinic,                                                               
as Medicaid  had a medical  necessity framework.  He  pointed out                                                               
that many  of the substance  abuse providers had a  holistic care                                                               
approach,  which was  sometimes "hard  to fit  into that  medical                                                               
necessity box."  He said  the cost to transition depended heavily                                                               
on the current capacity as well as the anticipated volume.                                                                      
REPRESENTATIVE JOHNSTON said  that this should be  followed as it                                                               
would become part of the policy discussion.                                                                                     
4:55:32 PM                                                                                                                    
REPRESENTATIVE WOOL  referenced an earlier comment  that Medicaid                                                               
expansion  was causing  some to  lose more  money as  it did  not                                                               
suitably  reimburse  many  businesses.    He  noted  that  people                                                               
released  from prison  were now  eligible for  Medicaid expansion                                                               
and  behavioral health  counseling.   He  asked for  verification                                                               
that more  use of this  service created greater loss  and whether                                                               
this was  a result of the  80th percentile regulation.   He asked                                                               
for an update to "the 16-bed situation."                                                                                        
4:56:25 PM                                                                                                                    
MR. CHARD  replied that  Medicaid offered  an array  of services,                                                               
and he  offered an example  of the cost to  make a pizza  and the                                                               
maximum that  could be charged, which  was less than the  cost to                                                               
make  the pizza.   He  noted that  the Department  of Health  and                                                               
Social Services was  very aware of the potential  increase in use                                                               
and  was working  to  correct  the issue.    He  stated that  the                                                               
Institute of Mental Deficiency was  a throwback to the 1960s when                                                               
the Social Security  Act first created the Medicaid  program.  As                                                               
they did  not want  to build community  hospitals, the  number of                                                               
beds had been capped at 16  beds.  With Medicaid expansion, large                                                               
substance  abuse providers  not previously  under that  rule were                                                               
not  able to  bill  Medicaid.   He  said  that the  congressional                                                               
delegation was working to correct this problem.                                                                                 
4:58:04 PM                                                                                                                    
REPRESENTATIVE  SADDLER asked  about the  legal underpinning  for                                                               
coverage to  behavioral health under  Medicaid, and  whether this                                                               
expansion  would  bring  prosperity   to  the  behavioral  health                                                               
MR. CHARD  acknowledged that, although  there were a  few growing                                                               
pains  that needed  to be  fixed,  more people  were getting  the                                                               
necessary treatment,  and that  was a good  thing.   He expressed                                                               
agreement  that the  Patient Protection  and Affordable  Care Act                                                               
"double down on some parity  legislation that was previous to it"                                                               
as the act  had made mental health and  substance abuse treatment                                                               
services  part of  the essential  health  benefits package  which                                                               
required that  both Medicaid and private  insurance programs have                                                               
those services as part of the  minimum plan.  He noted that there                                                               
had  been congressional  discussions for  the Patient  Protection                                                               
and Affordable  Care Act which  questioned whether  mental health                                                               
and substance abuse  should be part of the minimum  plans, and he                                                               
offered his  understanding that states  would have the  option to                                                               
waive those requirements.  He  stated his belief that this "would                                                               
a  bad thing  for  the  State of  Alaska."    He reiterated  that                                                               
investment  in  mental  health   and  substance  abuse  treatment                                                               
services was  keeping costs down,  and removal of this  access to                                                               
treatment  would directly  impact prisons,  law enforcement,  and                                                               
5:00:19 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  offered  his  assumption  that  as  more                                                               
people were getting treatment, more  people were being diagnosed,                                                               
and he  asked about the remaining  gap for those remaining  to be                                                               
MR.  CHARD replied  that the  national  surveys on  drug use  and                                                               
health provided state  by state estimates on the  need for mental                                                               
health and  substance abuse  treatment services.   He  offered to                                                               
research and respond to the question.                                                                                           
5:01:31 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Health  and Social  Services Standing  Committee and  House State                                                               
Affairs Standing  Committee joint  meeting was adjourned  at 5:01                                                               

Document Name Date/Time Subjects
Tom Chard ABHA 5.11.17.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska
Kyle Mirka ASHCC 5.11.17.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska
Becky Hultberg Follow-up 5.19.17.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska
AHA Drug Price Recommendations 5.19.2017.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska
BPC Health Care Cost Drivers Brief 5.19.17.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska
Kaiser Healthcare & 2008 Election Study 5.19.17.pdf HSTA 5/11/2017 3:00:00 PM
Price and Cost of Healthcare in Alaska