Legislature(2015 - 2016)SENATE FINANCE 532
01/28/2016 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB140 | |
| Presentation: Mental Health Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 140 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
January 28, 2016
9:11 a.m.
9:11:30 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:11 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Donny Olson
ALSO PRESENT
Russ Webb, Chair, Board of Trustees, Alaska Mental Health
Trust Authority; Jeff Jessee, Chief Executive Officer,
AMHTA; John Morrison, Executive Director, Trust Land
Office, AMHTA.
SUMMARY
SB 140 APPROP: MENTAL HEALTH BUDGET
SB 140 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 140
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
9:12:32 AM
^PRESENTATION: MENTAL HEALTH BUDGET
9:12:35 AM
RUSS WEBB, CHAIR, BOARD OF TRUSTEES, ALASKA MENTAL HEALTH
TRUST AUTHORITY, introduced himself. He discussed the
PowerPoint, "Trust: Alaska Mental Health Trust Authority
(AMHTA)." He looked at slide 2, "Trustees":
•Russ Webb, chair
•Mary Jane Michael, vice chair
•Larry Norene, secretary
•Laraine Derr
•Paula Easley
•Carlton Smith
Mr. Webb looked at slide 3, "Trust Beneficiaries":
Approximate Number of Trust Beneficiaries
Mental Illness: 34,000
Developmental Disabilities: 13,000
Chronic Alcoholism/Substance-Related Disorders:
20,000
Alzheimer's disease and related dementias: 6,000
Traumatic Brain Injury: 11,000
Senator Hoffman wondered whether the beneficiaries were
mostly located in Fairbanks, Anchorage, and Juneau, or were
they located throughout the state. Mr. Webb replied that
the slide related to the number of people with a condition,
not the number of people served. He furthered that the
numbers served would be significantly smaller than the
displayed numbers. He explained that Fairbanks, Anchorage,
and Juneau contained the highest populations, but the
numbers represented people throughout Alaska.
Co-Chair MacKinnon asked whether there was a way to overlay
the beneficiaries and those who qualify for Medicaid. Mr.
Webb responded that there was an assessment within the
behavioral health system, and deferred to Department of
Health and Social Services (DHSS) for more information
about an estimate.
Mr. Webb discussed slide 4, "Established Focus Areas":
1. Disability Justice
2. Substance Abuse Prevention and Treatment
3. Beneficiary Employment and Engagement
4. Workforce Development
5. Housing and Long-term Services and Supports
9:17:58 AM
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, AMHTA, displayed
slide 5, "What is the Mental Health Budget Bill?" He stated
that the presentation would offer a high level overview of
the Mental Health Bill, its purpose, value, and its
function.
Mr. Jessee highlighted slide 6, "Mental Health Budget
Bill":
1. General Fund/Mental Health Base
2. Capital Budget
3. Mental Health Trust Authority Authorized Receipts
(MHTAAR)
Mr. Jessee explained that, at the time of the state's
settlement, there was no comprehensive and integrated
mental health system. There was a fragmented delivery
system to the beneficiaries. He explained that, once the
mental health bill is delivered to the legislature, the
bill is changed significantly. He stated that there should
be a discussion regarding how the separate budgets would
interface. He stated that Medicaid and justice reform must
be integrated into the mental health budget. He stressed
that the bill is intended to provide a "big picture."
Mr. Jessee addressed slide 7, "General Fund/Mental Health
Base":
•Amount is established by identifying the mental
health services funded within the state's GF budget
•These funds are designated as GF/MH
•Final budget from the previous fiscal year
establishes the base
9:22:59 AM
Co-Chair MacKinnon queried the power to define "mental
health." Mr. Jessee replied that the beneficiary groups
were set by the judge during the litigation. He explained
that the litigation, and the reason for the definition of
"mental health." He stated that individuals with traumatic
brain injuries were recently added to the list of qualified
beneficiaries.
9:27:43 AM
Co-Chair Kelly stated that there had been recent research
of the history of Morningside.
Mr. Jessee stated that there were some individuals at
Morningside with severe cerebral palsy. He stressed that
their physical disability inhibited their ability to easily
communicate.
Mr. Jessee looked at slide 8, "Mental Health Budget Bill
(FY16 Enacted)." He noted that the largest component of the
mental health budget bill was for DHSS (GF/MH) at $112.422
million. He stressed that dissecting an agency's budget was
an "art not a science." He explained that there was a
determination of whether all of the drug and alcohol
prevention programs should be included in the mental health
bill. He stressed that there was no "magic formula" in
deciding what should be included within the mental health
budget.
Mr. Jessee addressed slide 9, "Capital Budget":
•Separate MH appropriation bill includes portion of
the state's capital budget that funds mental health
projects
•Includes funds for both operating and construction to
provide housing for Trust beneficiaries
9:33:19 AM
Co-Chair MacKinnon wondered if AMHTA worked with Alaska
Housing Finance Corporation (AHFC). Mr. Jessee replied in
the affirmative. He furthered that AHFC was a significant
portion of the mental health capital budget.
Mr. Jessee highlighted slide 10, "Mental Health Trust
Authority Authorized Receipts -MHTAAR":
•Trustees authorize state agencies to spend Trust
funds for specific operating and capital projects
•State agencies must have legislative approval to
receive and expend Trust funds
Mr. Jessee stressed that there was no desire to create a
separate system for mental health. Rather, the mental
health budget was an integrated budget through many state
agencies.
Mr. Jessee discussed slide 11, "Long-term Funding
Strategy":
•Funds projects and activities that make significant
and long-term system improvements. The Trust can act
as a "venture capitalist" funding innovation to
increase effectiveness/efficiency of systems serving
beneficiaries
•Substantial portion of Trust funding is for
ongoing/long-term projects
Mr. Jessee stated that the slide showed the grants that had
been funded for the most recent ten years. He remarked that
there was nearly $8 million from MHTAAR. He stated that the
authority grants was significantly less than the $8 million
for MHTAAR.
9:38:20 AM
Co-Chair Kelly wondered if long-term was considered four
years. Mr. Jessee replied that long-term was considered
longer than four years.
Mr. Jessee addressed slide 12, "Current Priorities":
1. Medicaid Redesign
2. Justice Reinvestment
Multi-prong approach: expanding and redesigning
Medicaid and reforming the behavioral health system
are the foundation to successful criminal justice
reform.
Mr. Webb displayed slide 13, "Why is the Trust so engaged
with Medicaid Redesign?":
•For over 20 years Alaska has been pursuing a strategy
of "Medicaid refinancing" to take advantage of federal
matching dollars and reduce GF expenditures
•Systems serving Trust beneficiaries are now funded
primarily through Medicaid
•Sustainability of Medicaid is crucial to protecting
Trust beneficiaries
•Redesign must make Medicaid sustainable and improve
results
9:44:23 AM
Co-Chair MacKinnon wondered if there was a comparison with
other states regarding Medicaid redesign. Mr. Webb replied
that the Medicaid redesign was not unique to Alaska. He
stated that it was a major effort with other states in the
country. He remarked that there were various steps that
Alaska had copied from other states, and some steps that
other states had taken but not Alaska.
Co-Chair MacKinnon shared that there was a suggestion by
the public for eliminating the optional programs within
Medicaid. She wondered if Alaska had become a magnet for
people with mental health issues to come to Alaska to take
advantage of the optional programs. Mr. Webb felt that the
current system did not attract people to Alaska. He
stressed that the system of care moved to eliminate the
option for people to be housed in institutions.
Co-Chair MacKinnon noted that the 65 years and older
population was growing at a rapid rate. She noted that some
individuals were taking advantage of the system. She
wondered if there were aspects of the system that attracted
people to Alaska. Mr. Jessee replied that the only other
state that offered a "fee for service" system. He explained
that creating "holes" in the continuum of care by removing
optional services, required cognizance of understanding
where the need would be placed in other systems. He
stressed that it was more important to manage a system of
care, rather than reducing the number of eligible services.
He stressed that there must be the most cost-effective
constellation of services to meet the basic needs of the
beneficiary, rather than setting arbitrary silos of
services.
Mr. Jessee looked at slide 14, "Medicaid Redesign":
•The Trust has invested over $600,000 this year on
various contracts to provide a strong base of
information and options to help the state make
strategic decisions regarding Medicaid redesign.
Mr. Jessee stressed that the Medicaid redesign would be a
long-term process.
9:51:03 AM
AT EASE
9:51:31 AM
RECONVENED
Senator Bishop wondered if the qualified individuals who
were given GF dollars were still receiving services. Mr.
Webb replied that some of those people were not able to be
served in a Medicaid finance system. He shared that adult,
low income males, between the ages of 18 and 65 who were at
high risk in the prison population were not eligible for
Medicaid until expansion. He stated that those men with
general substance abuse problems or mental health problems
did not have access to care.
Senator Bishop wondered if those individuals would have
access after reform. He noted that drug and alcohol
problems were common in the prison system. Mr. Jessee
relayed that there was currently a greater ability to serve
those individuals to prevent and treat their problems in
order to reduce the prison population.
Co-Chair MacKinnon discussed her earlier question regarding
seniors, and whether the system was attracting people to
Alaska for a variety of reasons. She wondered if it was
accurate to say that a person 65 years or older would
qualify 100 percent for Medicare rather than Medicaid. Mr.
Webb stated that most individuals 65 years or older would
qualify for Medicare. He furthered that some would qualify
for Medicare and Medicaid, and some would not qualify for
either.
Mr. Jessee pointed out that Medicare did not pay for long-
term care services, so Medicaid may pick up the long-term
care cost for some poor individuals.
Co-Chair MacKinnon felt that people may divert from
Medicaid to Medicare, and found it intriguing that one
could continue with Medicaid benefits while also on
Medicare.
Co-Chair Kelly surmised that Medicaid was "need driven"
after age 65.
9:58:35 AM
Mr. Jessee addressed slide 15, "Funding Has Been Used For
Technical Assistance Contracts":
•Reviewing Medicaid reform nationwide to identify what
has worked -best practices
•Developing a roadmap for Alaska to reduce costs and
improve outcomes
•Redesign behavioral health system to avoid costly
crises and higher cost care, maximize federal dollars,
improve results to reduce costs affecting other parts
of budget
Mr. Jessee explained that AMHTA had partnered with Charlie
Curry to examine the reforms made by other states that
would be applicable to Alaska to build a sustainable mental
health program. He felt that Mr. Curry was a tremendous
resource. He stated that there were many opportunities to
examine external aspects.
Co-Chair MacKinnon wondered if Mr. Jessee meant to say
"President Bush", not "Governor Bush." Mr. Jessee replied
in the affirmative.
Co-Chair MacKinnon recalled that Senators Murkowski and
Begich brought the Charlie to Alaska. Mr. Jessee agreed.
Mr. Jessee highlighted slide 16, "Redesign … Now and in the
Future":
A number of reforms are already under consideration
•1915 (i)/(k) state plan options for Home-and
Community-Based services
•Primary Care Access Initiative
•Behavioral Health Access Initiative
•Data Analytics/IT infrastructure
10:03:48 AM
Vice-Chair Micciche wondered where "high risk physical
management" such as obesity would be categorized. Mr.
Jessee replied that, generally, obesity would not be
considered behavioral health. He stated that some eating
disorders could be considered a behavioral health
diagnosis.
Vice-Chair Micciche asked whether high risk behavior was in
trust's purview, or in purview of DHSS. Mr. Jessee replied
that the high risk behavior would within DHSS work.
Senator Dunleavy wondered if those with physical issues
that required pain killers, with no manifestation of mental
health issues, and become addicted to opiates, would be
under the purview of the trust. Mr. Jessee replied in the
affirmative.
Senator Dunleavy queried the addiction preventative
measures. Mr. Jessee replied that there should be a
question of how the medical industry prescribed
painkillers. He stressed that there should be training and
best practices to ensure that those individuals did not
become addicted. The focus should be toward how the
individuals would stop taking the painkillers.
10:09:23 AM
Senator Dunleavy remarked that the Mat-Su Health
Organization was looking at the issue. Senator Dunleavy
remarked that there were many drug commercials currently on
television. He wondered if there was an issue at the
federal level to regulate advertising. Mr. Jessee replied
that the AMHTA did not do much work on the federal level.
He understood the problem with the pharmaceutical
advertising. He furthered that the alcohol industry had a
strong tie to the sports industries. He remarked that he
understood that there should be a balance of free speech.
Senator Dunleavy wondered if reform included preventative
care. Mr. Webb replied that AMHTA was already focused on
prevention. He stressed that the attempt to affect policy,
messages to children, and addicts. He stated that there was
a constant prevention effort. He stated that the tobacco
national policy change was a result of the efforts of the
policy makers. He shared that the trust would work with the
state to continue prevention efforts.
Mr. Jessee continued to discuss slide 16:
•Pilot Accountable Care Organizations
•Alternative Benefit Plans for Expansion Population
10:15:31 AM
Mr. Jessee looked at slide 17, "What's Next?":
•Bills
-SB 74/HB190
-SB 78
-HB 219
-HB 227
•Reports
-DHSS: Medicaid Redesign and Expansion report
-LB&A: Medicaid Cost Containment and Reform
Initiatives report
10:16:19 AM
Mr. Jessee displayed slide 18, "Justice Reinvestment."
Co-Chair Kelly wondered when the video would occur. Mr.
Jessee said the video would be presented later in the
meeting.
Mr. Webb highlighted slide 19, "Why is the Trust so engaged
with Justice Reinvestment?":
•Trust beneficiaries account for more than 40 percent
bookings and 40 percent of Department of Corrections
(DOC) population, each year
•For felony offenses, Trust beneficiaries remain in
jail twice as long as non-beneficiaries
•Recidivism rates are approximately twice as high for
Trust beneficiaries
Mr. Jessee addressed slide 20, "Justice Reinvestment." He
stressed that there were three aspects that would reduce
recidivism for trust beneficiaries were housing,
employment, and support for recovery. Removing just one of
those aspects caused a significant increase in recidivism.
10:20:35 AM
AT EASE
10:24:59 AM
RECONVENED
10:25:31 AM
Mr. Jessee presented a video.
10:26:11 AM
AT EASE
10:26:36 AM
RECONVENED
10:26:44 AM
Mr. Jessee presented a video.
Mr. Jessee looked at slide 21, "Justice Reinvestment":
•There is a critical intersection between criminal
justice reform and Medicaid expansion and re-design in
re-establishing access to behavioral health services
for Trust beneficiaries at high risk of and with
involvement in the criminal justice system
10:32:36 AM
Mr. Jessee hoped that the video would help the public
understand that incarceration of criminals with mental
health issues, did not reduce recidivism.
Mr. Webb explained that there were 60 people in the
correctional system with Alzheimer's disease and related
dementia.
Mr. Jessee highlighted slide 22, "What's Next?":
•Recidivism Reduction Plan
•DOC -Prisoner Reentry Initiative (AK-PRI)
•Pew Public Safety Initiative, Justice Reinvestment
Project
•Criminal Justice Commission
•SB 91
•Alaska Justice Information Center
Mr. Jessee addressed slide 23, "FY17 Budget." He understood
that there was a major fiscal crisis, so all spending must
be essential.
Mr. Jessee looked at slide 24, "FY17 Operating Increments":
IT Application/Telehealth Service System Improvements
Mr. Jessee highlighted slide 25, "FY17 Capital." He stated
that most of the funds were for ongoing operating costs.
10:36:05 AM
Mr. Jessee discussed slide 26, "Cash Assets at End of FY15
in millions":
Payout
Settlement
Inflation Proofing
TLO Contributions
TLO Real Estate Acquisitions
Unrealized Appreciation
Budget Reserves
Mr. Jessee looked at slide 27, "Utilize POMV strategy":
The Trust's base payout is 4.25 percent of the average
value of the fund's cash assets
Funding approach ensures relatively stable cash
flow from year to year
Mr. Jessee discussed slide 28, "FY17 Anticipated Income."
He stated that there was a payout, prior year's lapse, land
office average spendable income, and interest average. The
total distributed income was almost $29 million.
Mr. Jessee looked at slide 29, "Payout History." He noted
the increase in the payout over time with the growing
reserve. He noted the increase in the available amount of
money to support the state's mental health program.
Mr. Webb highlighted slide 30, "Trust Land Office":
•GOAL: Match or exceed spendable income generated by
cash investments
•KEY STRATEGIES:
-Acquiring income-generating real estate
-Exploring and marketing mineral resources
-Land trade with Forest Service to increase
marketable timber
Vice-Chair Micciche wondered if the POMV was created in
2008. Mr. Jessee replied in the negative. The POMV was
initiated at inception.
Co-Chair MacKinnon felt that the goal was obtuse. She
queried the goal in dollars. Mr. Jessee replied with slide
28. He noted that almost $21 million was from the payout;
the Land Office income was currently at $4.3 million. He
stated that the Land Office anticipated income was also $20
million.
Co-Chair MacKinnon surmised that there was an exerted
effort to add $16 million to equal the payout from the
interest income. Mr. Jessee replied in the affirmative.
Co-Chair MacKinnon wanted to see that plan.
Mr. Webb stated that Mr. Morrison would provide some issues
and direction of the Trust Land Office.
10:41:46 AM
JOHN MORRISON, EXECUTIVE DIRECTOR, TRUST LAND OFFICE,
AMHTA, highlighted slide 31, "Trust Land Office, Annual
Revenue - FY 1995 to FY 2015." He stated that there was a
considerable amount of information on the slide including
real estate; timber; lands; coal, oil and gas; and minerals
and materials. He noted that the left of FY 10 was
dominated by timber and land. Those revenues were largely
principle, and related to unrepeatable one-time events.
Senator Bishop wondered what the slide would look like with
all of the land rights. Mr. Morrison agreed to provide that
information.
Co-Chair MacKinnon wondered the Trust Land Office was
interested in an ownership portion of a pipeline. Mr. Webb
responded that the Trust Land Office did not rule out any
options that would produce revenue.
Mr. Morrison continued to discuss slide 31. He announced
that the Trust Land Office mission was to maximize revenue.
He stated that all the decisions regarding trust assets
were directly related to the best interest of the Trust. He
stated that the Trust Land Office had adopted the mantra to
"diversify, develop, and defend trust assets." He looked at
the 2010 and 2011 time frame. He stated that, until 2010,
the Trust Land Office was dependent on two income streams
that were not repeatable events. He explained that from
2011 to current day, the Trust Land Office had a more
dependable and repeatable income revenue stream that was
continuing to expand. He also stated that the slide
represented a directionally incorrect activity, as the
Trust Land Office fully transitioned to a sophisticated
fixed asset management model rather than a land office
model.
10:45:32 AM
Mr. Morrison looked at slide 32, "Trust Land Office
Changing Timber Revenue FY95 to FY15." The slide stressed
the fallacy of relying on one source of revenue. He noted
the significant timber revenue, but had recently tapered
off. There were some lands that had not been as marketable
to harvest timber. He shared that there was a proposed
forest service land exchange to trade roughly 20,000 with
the forest service. He stated that there could be as much
as $60 million in trust revenue. He shared that there would
be legislation move that exchange forward.
Mr. Morrison addressed slide 33, "Trust Land Office
Revenues vs. Expenditures FY 1995 - FY 2015." The blue line
was the one-time principle injections; the green line was
the income revenue; and the purple line was the cost of the
Trust Land Office.
10:48:43 AM
AT EASE
10:49:57 AM
RECONVENED
Co-Chair Kelly discussed the schedule.
SB 140 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:50:29 AM
The meeting was adjourned at 10:50 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012816 2016 Leg presentation Senate Finance FINAL.pdf |
SFIN 1/28/2016 9:00:00 AM |
SB 140 |