Legislature(1993 - 1994)
03/28/1994 09:00 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 28, 1994
9:00 a.m.
TAPES
SFC-94, #51, Side 2 (300-end)
SFC-94, #55, Side 1 (000-end)
SFC-94, #55, Side 2 (end-345)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:00 a.m.
PRESENT
In addition to Co-chair Pearce, Senators Rieger, Kelly,
Sharp and Kerttula were present. Co-chair Frank, Senator
Jacko joined the meeting after it was in progress.
ALSO ATTENDING: Commissioner Nancy Bear Usera, Department
of Administration; Connie Sipe, Executive Director, Older
Alaskans Commission, Department of Administration; John
Barnett, Executive Director, Board of Storage Tank
Assistance, Division of Spill Prevention and Response,
Department of Environmental Conservation; Mike Conway,
Director, Division of Spill Prevention & Response,
Department of Environmental Conservation; David Skidmore,
aide to Co-chair Frank; Kimberly Busch, Director, Division
of Medical Assistance, Department of Health & Social
Services; Kevin Henderson, John Sherwood, and Dave Williams,
Medical Assistance Administrators, Division of Medical
Assistance, Department of Health & Social Services; Dennis
Murray, Administrator, Heritage Place; Don Koch, Marketing
Surveillance, Division of Insurance, Department of Commerce
& Economic Development; Dana LaTour and Susan Sorensen,
fiscal analysts, and Mike Greany, Director, Legislative
Finance Division; aides to committee members and other
members of the legislature.
TELECONFERENCE: Phil Petrie, Child Support Enforcement
Division, Department of Revenue, from Anchorage.
SUMMARY INFORMATION
CSSB 249(HES): An Act relating to assisted living homes;
relating to the conversion of an assisted
living home to a nursing home; repealing
references to residential facilities for
dependent adults; abolishing the authority of
certain municipalities to license or
supervise institutions caring for dependent
adults; and providing for an effective date.
Commissioner Nancy Usera, Department of
Administration, and Connie Sipe, Director,
Older Alaskans Commissioner, Department of
Administration, spoke in support of SB 249.
Discussion followed by Senators Kerttula and
Rieger regarding nursing care. CSSB 249(HES)
was REPORTED OUT of committee with a "do
pass," and zero fiscal notes for the
Department of Administration, Department of
Health & Social Services, Medicaid and
Claims, and a fiscal note in the amount of
$154.3 for the Department of Health & Social
Services, MH/DD Administration.
SB 289: An Act making appropriations to satisfy the
agreed-upon monetary terms of certain
collective bargaining agreements for certain
public employees; and providing for an
effective date.
Commissioner Nancy Usera, Department of
Administra-tion, spoke in support of the
bill. Discussion was had by Senators Rieger,
Kelly, Kerttula, and Sharp regarding health
insurance and cost of living issues.
Commissioner Usera was in support of SB 289
being HELD in committee until 4 other
contracts had been settled for incorporation
into this bill. SB 289 was HELD in
committee.
CSSB 295(JUD): An Act relating to financial assistance for
certain owners or operators of underground
petroleum storage tank systems; and providing
for an effective date.
John Barnett, Executive Director, Board of
Storage Tank Assistance, Division of Spill
Prevention and Response, Department of
Environmental Conservation, and Mike Conway,
Director, Division of Spill Preven-tion and
Response, Department of Environmental Con-
servation, spoke in support of the bill.
Discussion was had by Senators Kerttula,
Sharp, and Co-chair Frank, regarding the
Underground Storage Tank Program as it
related to bigger businesses, fees, and the
bush and rural areas. CSSB 295(JUD) was
REPORTED OUT of committee with individual
recommendations, and zero fiscal notes for
the Department of Environmental Conservation,
and the Department of Transportation and
Public Facilities.
SB 366: An Act relating to medical support for
children; allowing a member of the teachers'
retirement system or the public employees'
retirement system to assign to a
Medicaid-qualifying trust the member's right
to receive a monetary benefit from the
system; relating to the effect of a
Medicaid-qualifying trust on the eligibility
of a person for Medicaid; relating to the
recovery of certain Medicaid payments from
estates and trusts; requiring persons who
receive Medicaid services to be liable for
sharing in the cost of those services to the
extent allowed under federal law and
regulations; and providing for an effective
date.
Dave Skidmore, aide to Co-chair Frank, spoke
in support of SB 366. Kimberly Busch,
Director; Kevin Henderson, John Sherwood, and
Dave Williams, Medical Assistance
Administrators, Division of Medical
Assistance, Department of Health & Social
Services; Dennis Murray, Administrator,
Heritage Place; Don Koch, Marketing
Surveillance, Division of Insurance,
Department of Commerce & Economic
Development; and Phil Petrie, Child Support
Enforcement Division, Department of Revenue,
via teleconference from Anchorage, all
testified in support of SB 366 and answered
questions. Discussion was had by Senators
Rieger, Sharp, Kerttula and Co-chair Frank
regarding federal requirements, the estate
recovery program, Medicaid co-payments, etc.
SB 366 was HELD in committee until amendments
and letter of intent language were drafted.
CS FOR SENATE BILL NO. 249(HES):
An Act relating to assisted living homes; relating to
the conversion of an assisted living home to a nursing
home; repealing references to residential facilities
for dependent adults; abolishing the authority of
certain municipalities to license or supervise
institutions caring for dependent adults; and providing
for an effective date.
Co-chair Pearce announced that SB 249 was before the
committee. She invited Commissioner Nancy Bear Usera,
Department of Administration, to join the members at the
table.
COMMISSIONER USERA asked Connie Sipe, Executive Director,
Older Alaskans Commission, Department of Administration, to
join her. She said SB 249 had had numerous hearings. This
bill authorized the licensing of assisted living facilities.
She stated there was a great demand for some type of interim
care, particularly for seniors but this also effected other
individuals. It gave a lot of flexibility for alternative
care for individuals that could use help but did not want
institutionalization. She felt it was a great option for
the state of Alaska, and would prove effective. It came
about, in part, because of the success and experience in
this area in the Pioneer Homes. She strongly supported the
bill.
In answer to Senator Kerttula, CONNIE SIPE said it would
take about six months to get regulations in place to license
and relicense those facilities which explained the effective
date of January 1, 1995.
Again, in answer to Senator Kerttula, Ms. Sipe said that
individuals could receive home health nursing care for 60
days from Medicare if they had just come out of the
hospital, or they could get a personal care attendant or
chore service at home. She explained that nursing in your
own home was legal. What was not legal was nursing in an
adult foster care home or adult residential care home. If a
person lived in their own home, he/she could get nursing.
If a person lived in someone else's home, he/she could not
get nursing care unless they moved to a nursing home.
Senator Kerttula asked Senator Rieger if he wanted to make
any comments since the HESS Committee had held extensive
hearings on the bill. Senator Rieger mentioned concern
regarding nursing authority that was referenced in the bill.
The Nurses' Association wrote a letter saying that they
thought it should be watched carefully. Ms. Usera said
those provisions were governed by the Board of Nursing and
the bill did not effect any authority or responsibilities in
regard to the conduct of nursing activities.
In answer to Senator Kerttula, regarding cost to the state,
Ms. Usera said that SB 249 provided for the licensing of
additional facilities by the private sector. She went on to
explain that through the consolidation of the senior
programs, the administration had been able to absorb this
activity within the Division of Senior Services. The fiscal
note was for licensing other facilities that might serve
different constituencies, such as developmentally disabled,
or certain youth.
Senator Rieger MOVED for passage of CSSB 249(HES) from
committee with individual recommendations. No objection
being heard, CSSB 249(HES) was REPORTED OUT of committee
with a "do pass," zero fiscal notes for the Department of
Administration, Department of Health & Social Services,
Medicaid and Claims, and a fiscal note for the department of
Health & Social Services-MH/DD Administration for $154.3.
Senators Rieger, Kelly, Sharp and Jacko signed "do pass."
Co-chairs Pearce, Frank and Senator Kerttula signed "no
recommendation."
SENATE BILL NO. 289:
An Act making appropriations to satisfy the agreed-upon
monetary terms of certain collective bargaining
agreements for certain public employees; and providing
for an effective date.
Co-chair Pearce announced that SB 289 was before the
committee. She asked Commissioner Usera to return to the
table. At this time, Co-chair Pearce said she intended to
hold the bill and roll the dollars into the budget unless
Co-chair Frank wished otherwise.
Commissioner Usera said she was in support of holding SB 289
because there were four other contracts that were
outstanding. The terms of those agreements could be added
to this bill and it could serve as a complete package. She
went on to say that an amendment covered the confidential
employees unit and represented a two year agreement. She
said it contained consistencies in regard to health
insurance and overtime standards. She said that a 2.5
percent cost of living increase was allowed effective July
1995 and provided for a three year hiatus for any cost of
living increase. The $9,000 fiscal note provided for
incidental costs associated with the contract.
In answer to Senator Kelly, Ms. Usera said it differed
between bargaining units but the cost to the state for
health insurance was about $423.50 a month per employee.
In answer to Senator Rieger, Ms. Usera said the contract
provided for the state health insurance plan but the
bargaining units would have the option to choose another
plan within the same price range. She was pleased to note
that employees having to pay a small 5 percent co-pay amount
had had a significant effect on cost containment.
In answer to Senator Sharp, regarding the fact there was no
cap on insurance, Ms. Usera said the budget process would
keep that in check. Another conclusion with the agreement
was that there was going to be many changes in regard to
health insurance, and the administration needed some
flexibility. A state employee survey shocked the
administration with a strong choice towards an insurance
package. Senator Sharp voiced his opinion that health
insurance needed a cap. Ms. Usera said there was a cap in
the sense that if the union decided to go to a trust, there
was a limit set but when management was designing the health
plan, there was not.
Senator Rieger made a statement regarding the SBS account.
He felt it was inevitable that eventually a basic plan would
be offered to employees with the ability to add
supplementals at the employee's expense. Ms. Usera agreed.
In answer to Senator Kerttula, Ms. Usera said that in the
last round of bargaining, employees were willing to forego
wage increases or large cost of living increases in order to
maintain an adequate health package.
In answer to Senator Kelly, Ms. Usera spoke to the impasse
of one negotiation. She said that after seventeen months of
bargaining, mediation would be attempted on April 11.
Co-chair Pearce announced that SB 289 would be HELD in
committee.
CS FOR SENATE BILL NO. 295(JUD):
An Act relating to financial assistance for certain
owners or operators of underground petroleum storage
tank systems; and providing for an effective date.
Co-chair Pearce announced that SB 295 was before the
committee.
JOHN BARNETT, Executive Director, Board of Storage Tank
Assistance, Division of Spill Prevention and Response,
Department of Environmental Conservation (DEC), testified
that SB 295 was requested by the Alaska Underground Tank
Owners and Operators Association. The Board of Storage Tank
Assistance worked in cooperation with DEC to administer a
grant and loan program for underground tank owners
throughout the state. The Board acted as an appeal Board
and the first section of the bill clarified the appeal
authority of the Board. Currently only tank owners could
appeal if DEC determined that certain costs were ineligible
for reimbursement. This clarification allowed tank owners
to appeal if they had been determined ineligible. At
present there were 152 applications which DEC said were
totally ineligible and had no appeal rights. This bill
would provide a forum for and give the Board authority to
hear those appeals. The second section of the bill gave the
closure and upgrade program a statutory deadline of December
31, 1994.
Senator Kerttula asked if that date needed to be extended
because of rural problems. Mr. Barnett felt that the bush
was always a challenge, but public workshops and outreach
had been done in the fall of 1990 throughout the state.
Media advertising had been done and a newsletter had gone
out to all known tank owners listed in a database
established in 1986. He felt most of the rural areas were
aware of the program. Senator Kerttula asked for assurance
that all rural areas and river communities had been noticed.
MIKE CONWAY, Director, Division of Spill Prevention &
Response, Department of Environmental Conservation, stated
that most river communities used above ground storage tanks
and this legislation targeted underground tanks. He said
there were problems with above ground tanks too but there
was no state program to deal with it if the tank held less
than 10,000 barrels.
Mr. Barnett said very few small communities had applied to
this program. He went on to explain that the Board was
working with the Rural Bulk Fuel Task Force to share what
it had learned in order to address some the problems they
faced.
Co-chair Frank felt that SB 295 was a good bill and asked
Mr. Barnett or Conway to speak to the concern that this
program somehow benefited large companies.
Mr. Barnett thanked Co-chair Frank for bringing up this
issue. He said that at the beginning of the program a
registration fee was paid to defer some of the costs, and a
ranking system was established using a score. Fifty percent
was scored if the tank related to a public health threat.
The other half the score related to the distance to an
alternate fuel source, including details how many tanks were
owned with higher points for fewer tanks owned (giving
smaller businesses the advantage). Twenty percent of the
score was insurability. If a person was not self-insurable
they would receive 20 points. This definitely targeted
small mom and pop businesses. There were large companies
that belonged to this program but they paid large
registration fees each year and waited for a longer time to
receive funding. He estimated the program to take at least
10 years to complete.
Co-chair Frank asked Mr. Barnett to provide the committee
with the latest funding and criteria for the program. Mr.
Barnett said that information was available from their
annual report and funding was in the $4-5M range.
End SFC-94 #51, Side 2
Begin SFC-94 #55, Side 1
In answer to Senator Sharp, Mr. Barnett said that DEC,
DOT&PF, and the Board of Storage Tank Assistance, supported
SB 295. He said that the position paper should be in the
members' files. Mr. Barnett restated that about 400 upgrade
and closure applicants were on a waiting list for funds.
What this bill provided for those applicants, already on the
list and acting in good faith, was eligibility for clean up
after the clean up program deadline closed. He said the
bill would allow an extra six months to do outreach for the
closure and upgrade list and those people would also be
eligible for the clean up program. After December 31, 1994,
there would be a finite list of all applicants outlining the
scope of the problem.
Mr. Conway said that DEC was in support of the program
because it was a prevention program. It kept owners and
operators involved in the clean-ups, helped the rural areas
stay in business, and, if not funded, the response fund
would have to be used "after the fact" at a bigger expense
to the state. There also could be health problems if the
program was not in place.
In answer to Senator Sharp, Mr. Conway said that DEC
continued to get federal funds for the technical assistance
part of the program. He stated it was a state fund with no
other assistance.
Co-chair Frank MOVED for passage of CSSB 295 from committee
with individual recommendations. No objection being heard,
it was REPORTED OUT of committee with "individual
recommendations," and zero fiscal notes for the Department
of Transportation & Public Facilities and the Department of
Environmental Conservation. Co-chair Pearce, Senators
Rieger, Kerttula, and Sharp signed "no recommendation."
Senator Jacko and Co-chair Frank signed "do pass."
SENATE BILL NO. 366:
An Act relating to medical support for children;
allowing a member of the teachers' retirement system or
the public employees' retirement system to assign to a
Medicaid-qualifying trust the member's right to receive
a monetary benefit from the system; relating to the
effect of a Medicaid-qualifying trust on the
eligibility of a person for Medicaid; relating to the
recovery of certain Medicaid payments from estates and
trusts; requiring persons who receive Medicaid services
to be liable for sharing in the cost of those services
to the extent allowed under federal law and
regulations; and providing for an effective date.
Co-chair Pearce announced that SB 366 was before the
committee.
She said that Phil Petrie, Child Support Enforcement
Division, Department of Revenue, was on line via
teleconference from Anchorage. She invited David Skidmore
to join the committee.
DAVID SKIDMORE, aide to Co-chair Frank, said that SB 366 was
introduced at the request of the Division of Medical
Assistance, Department of Health & Social Services. He said
that the statutory changes in the bill were necessary to
comply with the 1993 Federal Omnibus Budget Reconciliation
Act (OBRA93). These changes fell in three areas; medical
support orders, Medicaid estate recovery, and Medicaid
qualifying trusts. Medical support orders had to do with
orders for minor children, usually through divorce decrees
in regard to health insurance coverage. He went on to
detail those provisions. OBRA93 also required states to
provide a Medicaid estate recovery program to collect
amounts paid by Medicaid to individuals receiving long term
care services, such as nursing home care, unless it would
prove an undue hardship. In regard to Medicaid qualifying
trusts, OBRA93 changed the law so that individuals in
nursing facilities who dispose of resources during a 2-1/2
year period before they apply for Medicaid were not subject
to a punitive delay in eligibility if it caused undue
hardship.
Mr. Skidmore said that the fourth part of SB 366 had to do
with co-payments and was not contained in OBRA93. This
would reduce cost to the state in regard to Medicaid.
In answer to Senator Rieger, regarding Section 20, KIMBERLY
BUSCH, Director, Division of Medical Assistance, said Kevin
Henderson, Medical Assistance Administrator, had done a lot
of work on this bill. She said the department supported the
bill and it would enable the department to continue to
receive federal funding for long term care. She said it
also supported the provision allowing PERS and TERS to be
put into a trust. It also allowed individuals to enter
other nursing homes other than the Pioneer Homes. She
thanked Co-chair Frank for taking the initiative on this
bill.
In regard to Section 20, Ms. Busch said it embraced federal
regulations. Individuals could put social security and
other income (not including their assets) into a qualifying
trust in order to receive long term care. In return, at the
time of death, the state and the federal government should
be able to recover from the trust what it had paid out for
long term care benefit (probably in excess of $100,000 a
year, $50,000 state and $50,000 federal).
Senator Rieger asked the difference between an estate and a
trust. Ms. Busch said a trust was a way to put the income
aside so it was not counted for Medicaid eligibility. The
estate could include a home that was left. Generally the
home was not counted if the individual could return to it,
or, in rare circumstances, if there was a spouse at home.
She agreed with the statement that when a person died, the
state had a claim on that person's net worth.
In answer to Senator Rieger, KEVIN HENDERSON said that the
language in the bill was taken from OBRA93. He went on to
say that there were only limited situations when a lien on
someone's real property was appropriate. They went on to
discuss other language regarding liens, and exceptions and
exclusions regarding trusts and liens.
JOHN SHERWOOD, Medical Assistance Administrator, said the
lien was only extinguished when a person would go home from
long term nursing care. The state could still recover from
the estate (the remaining income trust) if the person was
over 55 when they entered long term care.
Senator Sharp asked how the bill addressed the current
situation regarding a person's monthly income if it was over
$1100. Ms. Busch said that the income cap was around $1340
in Alaska, as high as allowable, and the balance could be
assigned to an income trust. What gives some individual's
problems was their assets, such as stocks. This bill should
solve this problem for many people.
Senator Kerttula asked if grandchildren were included on
page 11, lines 1-5. Mr. Henderson said that grandchildren
were not allowed and again, language had been taken directly
from federal law. Ms. Busch said the department would look
at adding grandchildren. She understood the state could be
more restrictive than federal law but not more liberal.
Senator Kerttula pointed out that grandchildren were
sometimes the main care givers. She reminded him that this
legislation targeted people in long term care facilities.
Mr. Henderson said that the section he was questioning may
be protecting the rights to certain individuals who may have
a right to real property. Senator Kerttula maintained, from
personal experience, his belief that grandchildren should be
included.
PHIL PETRIE, Child Support Enforcement Division, Department
of Revenue, via teleconference from Anchorage, offered to
answer any questions from the committee.
In answer to Senator Rieger, in reference to medical orders
of support, Mr. Petrie said that as federal and state
statutes exist, a medical support order was required of AFDC
of a general nature which required the obligor to obtain
insurance when it was available through an employer or union
policy. The state did not have to pursue it any further
than that unless the custodial parent had outstanding, out
of pocket expenses and those were reduced to a judgement.
SB 366 provided a new area where the state could go after
retirement plans and trusts. Currently, the department only
pursued Qualified Domestic Relations Orders (QDRO) when
income was attached. This bill provided a Qualified Medical
Support Order which would increase the workload although
there were not many cases like this.
Mr. Petrie confirmed Senator Rieger's statement that SB 366
allowed the state to go after the obligor for the state's
Medicaid outlays to the extent the person had insurance
available through a union group or policy only. Again, Mr.
Petrie said that it would have to be reduced to a judgement.
Senator Rieger then asked the department for a comment
regarding recovery. Mr. Henderson said that it would be
part of an on-going program to recover as much as possible.
Ms. Busch said that in third party recovery, the provider of
the medical care would bill the third party except for such
things as pharmaceuticals.
Senator Rieger said if there was a case where the non-
custodial parent had an order to buy health insurance for
the child, and if that child went on Medicaid, the state
would not file a claim against the custodial but could go
after the non-custodial parent. Mr. Petrie agreed with that
statement. Senator Rieger objected to this philosophy. Mr.
Petrie pointed out that individuals going on Medicaid were
probably already on AFDC. With this legislation, the
department would not have to go to the Department of Law to
have child(ren) added to a parent's health insurance. The
employer would be required to add child(ren) by the
department's request through the court order.
Senator Sharp asked if all non-custodial parents would be
eligible for this judgement. Mr. Henderson said that anyone
determined by the Court that had insurance was subject to
this law and that included military health coverage. Mr.
Petrie said that child(ren) of divorced military personnel
remained eligible for medical coverage and if not near a
military facility, CHAMPUS covered military dependents in a
civilian facility. He said that there were some problems
with Indian Health Service Benefits which was being debated
by the feds. He gave more details about that area.
End SFC-94 #55, Side 1
Begin SFC-94 #55, Side 2
Senator Sharp stated that considering the Native population
in Alaska, this would effect a large number of people. Mr.
Petrie agreed but said that at present there were not many
native obligors that were employed in businesses where
medical insurance was available.
DENNIS MURRAY, Administrator, Heritage Place, a nursing
facility in Soldotna operated by Lutheran Health Systems,
testified in support of SB 366. He said the question of the
qualifying trust had been problematical for persons who had
combinations of retirements. The critical issue was the
upper threshold for eligibility and this bill would allow
the individual to establish the trust, the income would go
into the trust, and at the time of death, escheat to the
state. He encouraged passing the bill.
DON KOCH, Marketing Surveillance, Division of Insurance,
Department of Commerce & Economic Development, said section
3 had sizeable revisions to the Unfair Trade Practices Act.
He said that page 4, line 3, needed an amendment adding the
words "as defined in AS 21.86.900;" after the word
"organization."
Mr. Koch went on to speak to concerns regarding reaching
some insurance companies and self-insured plans mentioned in
provisions on page 4, items 2 and 5. In answer to Co-chair
Frank, Mr. Koch said that he would not remove the self-
insureds from the legislation but be advised that they could
not be reached. He suggested it be added in other parts of
the statutes where self-insured's could be reached. He
closed his comments saying the department did support the
bill.
Co-chair Frank brought up the co-payment issue. He asked
Dave Williams to speak to it.
Ms. Busch said essentially, the recipient went to their
medical provider, and there was an expected amount that
would be co-paid. If the amount was not known at the time
of service, the individual could not be denied service. The
provider needed to know the category of the individual. On
a Medicaid coupon and on the automated eligibility system,
it told the provider the category of the recipient.
Different services were going to be examined to see if it
was even cost effective to pay. She asked Mr. Williams to
speak further on this issue.
DAVE WILLIAMS, Medical Assistance Administrators, Division
of Medical Assistance, Department of Health & Social
Services, added that SB 366 would allow deductible co-
insurance or co-pay. Every state he was aware of had found
the co-pay system the most reasonable way to ask for
contributions toward cost of care. The federal law was
broad in allowing states to administer co-pay. He wanted to
investigate the most practical way other states had used.
Places to enlist co-pay could include services, equipment,
and in and out-patient hospital care. He felt that SB 366
was a good tool in managing co-pay. He added that a word on
page 10, line 11, should be changed to read "to the maximum
extent practicable" instead of "to the maximum extent
allowable."
Co-chair Frank said he wanted a clear statement in SB 366
and was hesitant to make that change. He said the House had
decided to take a more flexible approach and delineate all
co-payments. He wanted the department to implement this as
soon as possible. The word practicable could give the
department another message.
Mr. Williams understood the intent behind the bill but felt
there could be some intent language added to solve this
problem. He then spoke to the fiscal note.
Co-chair Frank announced that SB 366 would be HELD in
committee.
ADJOURNMENT
The meeting was adjourned at approximately 10:50 a.m.
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