Legislature(2017 - 2018)SENATE FINANCE 532
01/31/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Medicaid Cost Drivers and Reform Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
January 31, 2018
9:03 a.m.
9:03:18 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:03 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Shawnda O'Brien, Assistant Commissioner, Finance and
Management Services, Department of Health and Social
Services; Margaret Brodie, Director, Division of Health
Care Services, Department of Health and Social Services;
Monique Martin, Healthcare Policy Advisor, Department of
Health and Social Services; Jon Sherwood, Deputy
Commissioner, Medicaid and Health Care Policy, Department
of Health and Social Services; Valerie Davidson,
Commissioner, Department of Health and Social Services;
Monica Windom, Director, Division of Public Assistance.
SUMMARY
^PRESENTATION: MEDICAID COST DRIVERS and REFORM UPDATE
9:03:46 AM
Co-Chair MacKinnon relayed that the committee was very
interested in all state agencies and divisions. She
emphasized that there was a fiscal deficit, and the
committee continued to place downward pressure on the
budget. She reminded that Senator Micciche was chair of the
Senate Finance Subcommittee for the Department of Health
and Social Services and recalled that the department's
budget was approximately $2.4 billion including federal
funds. The Medicaid program was the largest line item in
the department's budget.
SHAWNDA O'BRIEN, ASSISTANT COMMISSIONER, FINANCE AND
MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, informed that she would discuss the department's
supplemental budget request before other department staff
would continue the presentation. She discussed the
presentation "Senate Finance Committee - Medicaid Cost
Drivers and Reform Update" (copy on file).
Ms. O'Brien showed slide 2, "Supplemental Request," which
also showed a pie chart:
? Distribution by Component
Adult Preventative Dental: $ 2,230.0
Behavioral Health: $12,640.0
Health Care Services: $78,130.0
Ms. O'Brien reminded that the supplemental request had been
$100 million, but the department expected $7 million of the
request to be reduced for the Children's Health Insurance
Program (CHIP) reauthorizations. She detailed that the
department had broken out its supplemental request for
Medicaid services into two line-items: one for regular
Medicaid enrollment increases, and one for the estimated
CHIP reauthorized amount (in the event that the
reauthorization occurred).
9:07:50 AM
Ms. O'Brien looked at slide 3, "Supplemental Request,"
which also showed a pie chart:
Expansion: $ 3,900.0
Non-Expansion: $ 89,100.0
Senator von Imhof asked how the two Medicaid populations
differed in terms of demographics.
Ms. O'Brien informed that the non-expansion population was
comprised of disabled individuals, children, and the
elderly; and the traditional Medicaid population that had
been seen in the past. The expansion population was the
population unable to be served previously and was a smaller
population of working and non-working adults.
Senator von Imhof asked if the expansion population was not
necessarily people with disabilities, and if the non-
expansion population was people with disabilities. She
asked if a person could be considered disabled if they had
a heroin addiction.
Ms. O'Brien was not certain if an addiction was a
qualifying disability. She offered to follow up on the
matter at a later time. She knew that alcohol addiction was
a covered class.
Ms. O'Brien turned to slide 4, "CHIP Update":
? Funding reauthorized
For 6 more years, through FFY 2023
Extends Maintenance of Effort
Enhanced FMAP restored
Ms. O'Brien stated that the department had been uncertain
of CHIP reauthorization at the time the supplemental
request was formulated. The program had been authorized for
an additional six years.
Senator von Imhof appreciated the slide. She noted that the
federal match seemed to be declining. She wondered if there
were plans to address the decline.
Ms. O'Brien stated that the department would take the
reduction into consideration when looking at the long-term
forecast. She discussed considerations such as the economy
and population data. In the out years, it was difficult to
get a precise projection of how to contain costs and make
adjustments.
Senator von Imhof thought it was important to keep track of
the decline in funding.
9:11:54 AM
Co-Chair MacKinnon understood that eligibility for the CHIP
program was set at the federal level and required the state
to pay 100 percent of healthcare costs for children that
entered the system. She wondered if the program covered
more than preventive care, or if all healthcare services
for a child were covered under CHIP.
Ms. O'Brien deferred the question to other DHSS staff.
MARGARET BRODIE, DIRECTOR, DIVISION OF HEALTH CARE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
indicated in the affirmative.
Co-Chair MacKinnon asked if the state was required to have
CHIP to receive federal matches for other programs.
Ms. Brodie stated that it was not mandatory to have a CHIP
program, but the program covered the majority of children
in the state.
Co-Chair MacKinnon thought the federal government had
defined what services were covered in the program. She
contemplated declining federal matching funds and discussed
the increased use of the program. She asked Ms. Brodie to
quantify the fund differences. She thought it was important
for future legislatures to understand the ramifications of
increased utilization of programs.
Ms. Brodie agreed to provide the information. She discussed
the Federal Medical Assistance Percentage (FMAP) and noted
that the FMAP had been temporarily at 88 percent, while the
65 percent was normal historical FMAP amount.
9:15:48 AM
Co-Chair MacKinnon asked if data for the committee's
information would be useful to make informed decisions on
the FY 19 budget. She stated that whatever past norms were,
the difference in the FMAP would be viewed as an increase.
Ms. Brodie answered in the affirmative.
Senator Micciche asked the department to include numbers
for other child-related services in the state when it
provided the CHIP data. He wondered if there were other
programs that could possibly satisfy the same category of
service as CHIP.
Co-Chair MacKinnon asked if it was fair to say Denali Kid
Care was a portion of the state's CHIP program.
Ms. Brodie answered in the affirmative.
Co-Chair MacKinnon wondered if other programs received CHIP
funds.
Ms. Brodie stated that Pregnant Women Medicaid also fell
under the auspices of CHIP.
Co-Chair MacKinnon recalled she heard that pregnant women
on Medicaid were at 208 percent of the federal poverty
rate.
Ms. Brodie recalled that pregnant women were at 203 percent
of the federal poverty rate, and children were at 208
percent.
Co-Chair MacKinnon asked if the poverty rate was set by the
federal government.
Mr. Brodie informed that the state worked with the federal
government to determine the rates.
Co-Chair MacKinnon asked if Mr. Brodie could inform about
the income threshold at 203 percent of the poverty rate.
Ms. Brodie offered to provide the information at a later
time.
9:18:39 AM
Senator Micciche thought the description of non-expansion
versus expansion populations had put emphasis on the
disabled population. He asked for a better definition of
the two populations and the poverty level.
MONIQUE MARTIN, HEALTHCARE POLICY ADVISOR, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, explained that Alaskans earning
up to about 138 percent of the federal poverty level
qualified for services under Medicaid expansion. The
individuals were typically non-disabled adults without
dependent children. She clarified that the department was
looking at whether it was achieving savings by people
waiting for a determination of disability through Social
Security Income through the federal government. The
department was trying to connect Alaskans with services and
looking at whether the department was helping with health
outcomes and getting Alaskans back to work.
Ms. Martin relayed that the acronym "SSI" signified Social
Security Income.
Vice-Chair Bishop asked for more information about the
determination of income levels.
Co-Chair MacKinnon clarified that the committee wanted to
see what income levels were accessing health care services.
She discussed the varying cost of housing and food. She
acknowledged that there were vast differences in the cost
of living in different areas of the state.
9:22:31 AM
Senator Micciche observed that slide 5 showed that the
Medicaid population was not primarily disabled. He
discussed proportions of Medicaid categories.
Ms. Brodie discussed slide 5, "Medicaid Cost Drivers,"
which showed a bar graph depicting FY 2017 Medicaid
enrollment compared to spending. She detailed that the blue
bar showed enrollment of children, while the red bar showed
enrollment of adults and included caretaker relatives and
Medicaid expansion. The green area showed enrollment of
disabled children, the purple showed enrollment of disabled
adults, and the light blue showed the enrollment of
elderly. She noted that the data shown on the slide was the
same compared to other parts of the country in that the top
percentage of expenditures was due to the elderly, disabled
adults, and disabled children. She continued that 44
percent of the children enrolled only accounted for 24.4
percent of expenditures. The adult category had a similar
expenditure breakdown.
Senator von Imhof thought it would be interesting to see
the slide for other years in order to observe a trend line
over time. She asked if the department had done any
research on the cost drivers behind the Medicaid
populations that comprised a greater share of the cost. She
wondered if there was anything that could be done to
mitigate the cost curve in the future.
Ms. Brodie re-stated that the spending ratio was consistent
across the nation. She explained that it was costlier to
care for the elderly, who needed more services. Alaska had
kept its costs lower than most other states because most of
the services were provided in the consumer's home rather
than institutionalization, which cost up to ten times as
much. She discussed various elder-care services. The state
had built its system on a home community-based service and
did not have the institutions and beds for the elderly.
9:26:13 AM
Co-Chair MacKinnon acknowledged that the committee requests
for data and information resulted in hours of work for
departmental employees. She encouraged department staff in
the gallery to offer any information that could be timely,
in lieu of the committee making a request on paper. She
asked if the deputy commissioner had any comments to offer.
JON SHERWOOD, DEPUTY COMMISSIONER, MEDICAID AND HEALTH CARE
POLICY, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, corrected
that "SSI" stood for Supplemental Security Income. He made
the committee aware that he had Medicaid eligibility
standards charts (copy on file). He offered to convey the
information to be read in the record.
Co-Chair MacKinnon asked for the document to be
disseminated in committee. She wondered if the charts would
provide income levels of Medicaid recipients.
Mr. Sherwood answered in the affirmative. He clarified that
there were two options for the CHIP program; through
Medicaid expansion, or a standalone program. He explained
that a standalone program did not require the offering of
the same exact same benefits as Medicaid, however it did
not have 100 percent eligibilities for tribal service and
would constitute a substantial loss of federal funding. As
a Medicaid expansion state, Alaska was subject to Medicaid
maintenance of efforts requirements through 2023, and the
reauthorization of CHIP act. Medicaid standards would have
to be maintained regardless of if the state had a CHIP
program.
Co-Chair MacKinnon asked if the administration made the
decision in cooperation with the legislature, or if the
department had made the determination.
Mr. Sherwood stated that the decision had been recommended
by the department and included in the discussion with the
legislature when it moved forward to expand into the CHIP
program.
Co-Chair MacKinnon asked when the discussion took place.
Mr. Sherwood thought the discussion took place in 1997 or
1998, as the program had started in March of 1999.
Co-Chair MacKinnon appreciated the discussion.
9:30:23 AM
Senator Micciche referred to slide 5 and appreciated the
description of demographics. He wondered how actively the
expenses in the Adults category were being managed. He
asked if there was someone focused on the reduction of
adult Medicaid enrollees. He asked about efforts to help
individuals obtain employment, which he thought was a key
to managing the healthcare cost problem. He wanted to care
for the most vulnerable people while encouraging those who
were physically able to be becoming working adults.
Ms. Brodie stated that the individuals in question were in
a case management program, to ensure that proper services
were being utilized. The department did not have a work
program. She mentioned the Temporary Assistance for Needy
Families (TANF) program, which had a work requirement. Some
adults in the TANF program were within the adult Medicaid
population.
Senator Micciche referenced efficiencies and savings gained
in the budget. He pondered a partnership between HESS and
the Department of Labor and Workforce Development (DLWD) to
reduce the rolls of healthy employable adults on Medicaid.
He thought the savings to the state could be substantial.
9:34:22 AM
Vice-Chair Bishop asked if the spending reflected on slide
5 reflected 100 percent federal spending, or if there were
some enrollees that were supplementing the Medicaid funding
with private health plans.
Ms. Brodie answered in the affirmative, particularly with
the elderly population that used Medicare as primary
healthcare insurance for which Medicaid paid the copay.
There were a number of individuals that had private
insurance, and Medicaid was considered the payer of last
resort.
Vice-Chair Bishop was familiar with TANF funds in his
former role as commissioner of DLWD. He supported
employment for healthy people. He thought that when
workforce training funding was cut, there were
ramifications.
Senator Micciche acknowledged that the spending shown on
slide 5 was not all federal dollars. He was concerned with
Unrestricted General Fund (UGF) spending, as well as a
supplemental request that was greater than $100 million.
Ms. Brodie stated that the spending was a combination of
federal and state funds, and the slide represented what
Medicaid had paid after other insurance had already paid
its portion. The actual cost for healthcare for the
individuals on the slide was much higher than what was
represented on the graph.
9:38:01 AM
Co-Chair MacKinnon asked about the categories on slide 5
and wondered if the criteria for the categories was
federally mandated.
Ms. Brodie informed that the federal government set the
criteria for disability, however the state had the ability
to set income thresholds.
Co-Chair MacKinnon asked about the income levels and
inquired how the state was using objective criteria to
outline the need of an individual.
Ms. Brodie stated that eligibility information referenced
earlier in the meeting would show the difference in
categories.
Co-Chair MacKinnon discussed the senior and disability
property tax exemption available in her community of Eagle
River. She considered the standards for disability and
mentioned invisible disabilities. She asked if there were
distinguishing criteria specific to any of the Medicaid
population categories.
Ms. Brodie informed that the state was held to the standard
of how the federal government was determining disability.
She shared that she was a disabled veteran but would not
qualify for Medicaid through her disability.
9:42:25 AM
Senator von Imhof referenced a movement towards Medicaid
"Back to Work" within the Trump administration. She asked
what percentage of the Adult category of Medicaid enrollees
was part of the Alaska Temporary Assistance Program (ATAP).
Ms. Brodie did not have the figures available. She added
that there was a good percentage of individuals in the
Adult category that were employed.
Senator von Imhof thought it would be helpful to see the
percentage of individuals in the Adult category that were
part of the ATAP program or working.
Co-Chair MacKinnon asked if there was anything else the
committee should know about slide 5 with reference to total
spending. She asked about the spending depicted on the
slide.
Ms. Brodie stated that the slide combined both federal and
state spending.
9:44:07 AM
Ms. Brodie spoke to slide 6, "Alaska Medicaid Cost Drivers,
FY2012 - FY 2017" which showed a bar graph and a table. The
slide showed the big cost drivers for the previous 5 years.
The largest cost drivers in the Medicaid program had been
hospital services, physician services, and pharmacy
services. In FY 17, there had been a 5 percent rate
reduction in hospital services and a 12 percent reduction
in physician services rates. Even with the rate reduction,
there had still been an increase in spending for basic
medical services for individuals.
Co-Chair MacKinnon asked about the graph on slide 5 and
wondered if the graphs would appear differently if the
spending categories were broken down.
Ms. Brodie stated that the graphs would look significantly
different, particularly the 24.4 percent for children would
be smaller do to the receipt of an 88 percent Federal
Medical Assistance Percentage (FMAP). For adults, the
spending would be significantly smaller due to the match
for Medicaid expansion. She affirmed that the majority of
the funding in the two categories were federal dollars.
Co-Chair MacKinnon thought it was important to consider
where UGF dollars were being invested.
9:47:16 AM
Senator von Imhof observed that there was more activity in
FY 16 and FY 17 in all categories. She asked if Ms. Brodie
attributed the increase to a growth in enrollment.
Ms. Brodie answered in the affirmative.
Co-Chair MacKinnon mentioned that there were differences of
opinion on Medicaid expansion. She thought the costs
associated by the growth in health coverage were uncertain.
She asked if there was growth because the state was
dovetailing with Indian Health Service (IHS) recipients and
migrating the individuals to Medicaid. She noted that IHS
had a cap, while Medicaid funds could be spent without
limitation. She stated that the previous day the committee
had heard that 40 percent of Medicaid recipients were from
His.
Ms. Brodie informed that there would be somewhat of an
increase through the state's care coordination agreements.
She stated that the chart would look very different if it
only considered UGF.
Co-Chair MacKinnon asked if it was accurate to say that the
state's coordination agreements had an impact on the number
of individuals receiving Medicaid services.
Ms. Brodie answered in the affirmative.
VALERIE DAVIDSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, stated that for FY 17, Alaska Natives and
American Indians comprised approximately 40 percent of the
Medicaid program, which equated to almost 73,000 people.
Those individuals who were IHS beneficiaries as well as
Medicaid beneficiaries were covered at 100 percent federal
match for services provided through an IHS facility. Due to
the expanded tribal claiming policy, the state was seeing a
significant shift from UGF expenses to federal expense.
9:51:21 AM
Senator von Imhof thought tribal claiming was an important
part of Medicaid expansion. She asked for clarification
that there was an increase in agreements between providers,
and how the increase had helped with the shift from UGF to
federal dollars.
Commissioner Davidson stated that in FY 17, through SB 74
[Medicaid expansion and reform legislation passed in 2016]
and collaboration of the committee, the department had
anticipated $32 million in savings of UGF through IHS
beneficiaries care coordination agreements. The agreements
included referral services and travel. The department had
been able to save $35 million. Currently there were just
less than 800 care coordination agreements between tribal
and non-tribal providers in the state. The department's
goal for FY 18 was to save $42 million in general funds
(GF), and it was on target to meet the goal.
Senator von Imhof asked if new agreements would save an
additional $42 million.
Commissioner Davidson answered in the affirmative.
Senator Micciche thought there had been reference to a cost
of $20 million per year for the Medicaid expansion
population. He considered expansion services that had not
been calculated before 2015 and thought there was an
expense of $369 million. He asked what percentage of $370
million was a cost to the state.
Ms. Martin stated that slide 16 would break out GF costs
for Medicaid expansion. The state cost for FY 17 was $16
million.
Senator Micciche asked if the federal match rates were
close to 100 percent for expansion.
Ms. Martin stated that slide 15 would address federal match
rates.
Commissioner Davidson referenced an earlier question about
employment. She informed that 8 out of 10 Medicaid
enrollees in Alaska lived in working households but were in
low-paying jobs that did not necessarily have healthcare
coverage. She continued that a significant portion of the
20 percent of non-working enrollees may be elderly or have
serious disabling conditions that prevented full-time work.
9:55:17 AM
Vice-Chair Bishop asked about the department's $100 million
supplemental request. He asked the commissioner about the
department's projection to save $42 million in the
forthcoming year.
Commissioner Davidson stated that the department projected
$42 million in savings through the care coordination
agreements with tribal health in FY 18.
Vice-Chair Bishop asked about the supplemental request.
Commissioner Davidson stated that the supplemental request
was for FY 18.
Vice-Chair Bishop asked if the supplemental request could
be reduced by the amount of expected savings.
Commissioner Davidson stated that the FY 18 supplemental
request already included the $42 million in projected
savings.
Co-Chair MacKinnon expressed appreciation for the work of
the commissioner and the department. She referred to the
deficit and reminded that the department was a huge cost-
driver for the state.
9:57:34 AM
Senator von Imhof asked if an analysis had been done to
examine potential savings of paying premiums toward the
insurance exchange market versus paying for individuals to
be on Medicaid. She referenced the Trump Administration's
signing of an advisory pertaining to insurance going across
state lines.
Ms. Martin recalled that in 2015 the department had gone
through the Medicaid re-design process and had actuarial
work to look at providing coverage to the expansion
population, similar to the "private option" that had been
implemented in the State of Arkansas. At the time, the
department had no expenditure experience for the expansion
population. The actuarial firm had suggested the department
not proceed because of the cost. She referenced the
Department of Administration's Healthcare Authority and
considered that now the department had real-world
experience in expenditures for the Medicaid expansion
population.
Senator von Imhof stated that she would look at it.
Co-Chair MacKinnon referenced a conversation about state
employees potential qualification for Medicaid. She
recalled that a group of employers that were not covered,
and did not think the state was fully taking advantage of a
program that it was paying for.
Ms. Brodie stated that there were quite a few state
employees on the Medicaid program. She stated that
individuals in some of the lower-level positions within the
state qualified for Medicaid. Employees also had state
insurance, which would pay before Medicaid paid the
remaining balance of medical expenses.
Co-Chair MacKinnon asked about IHS, and the 100 percent
reimbursement benefit. She acknowledged that some state
employees were in poverty conditions and thanked the
employees for their service to the state.
10:01:52 AM
Senator Micciche thought there was an impression that a
large proportion of people on Medicaid were employed. He
asked the department to provide data to inform on the
topic. He recalled that the previous day's presentation
indicated that approximately half of the people in Alaska
were employed, and about a third of them were on Medicaid.
Senator Micciche understood that there was a five-year
limit for TANF services. He asked if there was a waiver in
rural areas that allowed TANF to go on indefinitely.
Ms. O'Brien stated that there were some allowances for a
TANF waiver. The department had previously provided data as
to where waivers were occurring in the state. She stated
she would need to contact the public assistance director to
determine if the data had changed. The overall number of
individuals included in the exemption of the 60-month rule
were children. She offered to provide updated information
if it was available.
Senator Micciche thought the state had to be aggressive
with controlling the cost growth of Medicaid. He thought it
was necessary to move forward in addressing the proportion
of Medicaid users that were unemployed.
Co-Chair MacKinnon asked if there was anyone from the
department present that could speak to additional
information on the employment data being discussed.
10:04:56 AM
MONICA WINDOM, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
relayed that the department had looked at the number of
adults in exempt areas the previous year, and there were
zero families over 60 months. She stated that she would
look to see if there was new data to share.
Senator Micciche stated that his original question was
about Medicaid utilization, and the proportion of
employment. He thought the information was important for
the subcommittee process.
Ms. Windom stated that she had preliminary numbers but
needed to look into the matter further. She stated that of
the 218,000 people on Medicaid; about 19,000 to 20,000 were
disabled, about 10,000 were elderly, and 93,000 were
children. The remainder was 95,000 adult Medicaid users,
and 76,000 of the families had earned income already. She
would research the number of users that were pregnant and
how many others were subject to other work requirements.
She discussed a new program in Anchorage under which the
department was working with non-profits to help
Supplemental Nutrition Assistance Program (SNAP) recipients
go back to work, and there was no GF spend for the program.
Senator Micciche stated that he would wait for final
numbers.
10:07:00 AM
Ms. Brodie reviewed slide 7, "MMIS":
? Certification Update
Ms. Brodie informed that she would provide the committee an
update on certification. In September 2016, the Centers for
Medicare and Medicaid Services (CMS) did an onsite visit of
the department's Medicaid Management Information System
(MMIS) system, which looked at the system operation. The
review had included thousands of artifacts showing all
functions of the system, along with documentation to show
efficacy of the system. Alaska was the first state in the
new certification process, which required much more
documentation and information to become certified. In
October 2016 the department had received a request for 13
additional items in order for the system to be certified,
as well as a recommendation of 27 more items to work on.
The department had accomplished most of the 13 items over
the previous year.
Ms. Brodie continued her remarks. She described an issue
with the National Correct Coding Initiative (NCCI) edit.
She stated that the system needed to be corrected on a
nationwide basis and was estimated to be completed by April
of 2018. She The department's next steps would be
addressing the 13 items with CMS and implementing the
majority of the recommendations made by CMS. The department
would be working with CMS over the next few months and
hoped to receive the certification at the end of the
process.
10:10:45 AM
Co-Chair MacKinnon acknowledged the challenge of getting
the system certified. She thanked the team for continuing
to persevere. She noted that certification affected the
rate of reimbursement from the federal government. She
expressed concern that there could be potential loss in
funds without certification. She wondered if there had been
any indication of loss in reimbursement as the department
was working through the issues.
Ms. Brodie stated that the department had been operating
the system at a 50 percent match, while a certified system
received a 75 percent match. She continued that CMS would
certify the system retroactively to October 1, 2013; and
the state would get all the money back that had been
withheld.
Co-Chair MacKinnon highlighted that the state should see an
influx of funding when the system was certified, and it
would be reflected by one-time funds that would be an
anomaly in the department's budget. She hoped to see the
retroactive funds in the FY 19 budget cycle.
Ms. Brodie stated that she hoped to see the funds in the FY
18 cycle.
Co-Chair MacKinnon hoped for the funds in the FY 18 cycle
as well. She discussed the complexity of the system.
Senator Micciche thought that the governor's proposed
budget assumed that the state was not certified. He
commented that the 25 percent difference in federal match
was significant.
Ms. Brodie stated that the amount was estimated at just
over $13 million, which was the federal match amount for
running the system - which included paying the contractor
and approximately 10 state workers.
Senator Micciche asked if the $13 million was cumulative
since 2013.
Ms. Brodie answered in the affirmative.
Co-Chair MacKinnon clarified that the 25 percent remaining
federal match that was owed the state was for the system
itself rather than for Medicaid claims.
10:14:47 AM
Ms. Brodie added that the department was doing a Medicaid
Information Technology Architecture (MITA) 3.0 assessment
of the system, which was what CMS used across the country.
Every part of the system would be examined and rated on a
scale of 1 to 5. A rating of 1 denoted an aspect of the
system that would be difficult to change, while a rating of
5 signified an item that was easily changeable. She thought
that it would be found that the department's claims payment
function would be rated a 3 or a 4.
Co-Chair MacKinnon informed that the committee would be
considering the same presentation the following day.
Ms. Martin stated she would discuss Medicaid reform. She
expressed a preference for forgoing a discussion on process
in favor of discussing how the department would achieve the
savings outlined in SB 74.
Ms. Martin discussed slide 8, "Medicaid Reform":
? Senate Bill 74 (2016) signed into law - June 2016
? Implementation began in FY17
? Additional information on Medicaid Reform
http://dhss.alaska.gov/HealthyAlaska
Annual Medicaid Reform Report:
http://dhss.alaska.gov/HealthyAlaska/Pages/Initia
tives/Initiative-11.aspx
Ms. Martin drew attention to web links on the slide that
would provide greater detail.
10:18:24 AM
Ms. Martin displayed slide 9, "Medicaid Reform," which
showed a table depicting a summary of fiscal note savings
in SB 74. The department had divided the bill into 16 major
initiatives for implementation, not all of which had
associated savings. She pointed out the FY 17 savings
reflected on the slide as per the fiscal notes. She noted
that the department exceeded the projected savings by
almost $6.5 million in FY 17.
Senator von Imhof referenced the initiative entitled
"Federal Tribal Policy" on the table on slide 9. She
considered the figures associated with the initiative and
asked if there was anticipated savings of $140 million.
Ms. Martin answered in the affirmative and discussed care
coordination agreements. The tribal office had focused on
low-volume, high-dollar claims in order to garner savings
as quickly as possible. The office had also focused on
transportation in FY 17, in order to maximize federal
funds. As the care coordination agreements were signed,
savings would continue into future fiscal years and the
department would continue to expand its reach.
Senator Micciche congratulated Commissioner Davidson for
bringing forward ideas for federal tribal policy changes
that were successful.
Co-Chair Hoffman noted that the three-year cumulative
savings represented over 80 percent of the savings
attributed to the federal tribal policy.
Co-Chair MacKinnon discussed the difference in federal
funds and state general funds. She noted that the
administration had tried to coordinate with the federal
government to deploy funds in the state. She emphasized
that although the expansion was successful, it had
increased the size of the overall budget. She thought it
was important to have like comparisons when considering the
budget. She emphasized that the legislature had actively
pursued federal funds to help in the state's time of need.
Ms. Martin added that the department had recognized the
need to help reduce the UGF spend in the Medicaid program.
The department had not lost sight of long-term savings
opportunities to reduce the overall cost of the program.
10:23:19 AM
Ms. Martin spoke to slide 10, "Medicaid Reform":
Federal Tribal Claiming Policy
FY17 Fiscal Note ($32,065.5)
FY17 Actuals ($35,018.9)
FY18 Fiscal Note ($41,900.5)
FY19 Fiscal Note ($64,325.5)
On Track? Yes
? CMS Guidance: services "received through" an IHS
facility
? Care Coordination Agreements required between Tribal
and Non-Tribal Providers
786 Care Coordination Agreements
? Referral validation required for 100% FMAP
Ms. Martin drew attention to the green table at the top of
the slide and informed that should would illuminate both
successes and challenges. She recalled the committee had
been focused on transportation the previous session. She
clarified that the state was not a party to tribal care
coordination agreements; rather the agreements were between
tribal and non-tribal providers. She stated that all
providers had been very willing to work together and saw
the importance of reducing the state spend for the Medicaid
program.
Ms. Martin continued that the department had worked early
on to reduce transportation costs. The care coordination
agreements and the achievement of 100 percent federal match
required that the IHS beneficiary (and Medicaid recipient)
get care through the tribal health facility. The state was
receiving 100 percent of savings for any Alaska Native or
American Indian person who was travelling to a hub
community (such as Bethel or Sitka) for healthcare.
Senator Micciche wondered if part of the DHSS team was
pursuing additional care coordination agreements.
Ms. Martin informed that there were 786 agreements as of
three days previously, while at the start of the fiscal
year there had been 751. She stated that the department was
constantly adding care coordination agreements. The
department was examining long-term care services and
supports, which could be challenging.
10:26:00 AM
Ms. Martin reviewed slide 11, "Medicaid Reform":
Coordinated Care Demonstration Projects
FY17 Fiscal Note 4.8
FY17 Actuals 4.8
FY18 Fiscal Note 42.6
FY19 Fiscal Note ($1,457.4)
On Track? Yes
? Three potential models:
Managed Care Organization
Care Management Entity
Provider-Based Reform
? DHSS in negotiations with offerors and CMS
Ms. Martin shared that the Coordinated Care Demonstration
Projects were one of the large system-wide reforms the
department was undertaking for the Medicaid program. The
endeavor had required a Request for Proposals (RFP) process
and called out a proposal review committee to review
proposals and make recommendations as to how to proceed.
She added that the department was delayed in signing a
contract and hoped that it would be signed in the very near
future. She noted that there had not been a typical scope
of work as seen in other state RFPs, and thereby offers
submitted to the department were greatly varied.
Ms. Martin continued to discuss slide 11, noting that the
department was considering three offers. The department
considered one offer for each of the three potential models
as listed on the slide. The department continued to work
with CMS regarding potential waivers needed to implement
the models. She specified that a 1915(b) waiver would be
needed to implement managed care in the state. She noted
that CMS had stringent and lengthy regulations about
implementing managed care.
Senator Micciche asked if family caregivers would fit under
the categories being discussed. He had attended a
conference and heard about reduced costs and expanded
family caregivers.
Ms. Martin offerred to follow up with the Division of
Senior and Disability Services. She stated that the
department wanted to be conscientious (regarding the
demonstration projects) not to get in the way of one
behavioral health reform with the 1115 waiver; or the 1915
(i),(n), or (k) options. She would later discuss other
potential reform efforts at the department.
10:29:27 AM
Ms. Martin spoke to slide 12, "Medicaid Reform":
Behavioral Health Reform
? 1115 Behavioral Health Demonstration Project
Application
Submit to CMS by January 31st
? Administrative Service Organization RFP
Timing with Federal Public Comment period
Goals:
1. Reduce Alaska's over-reliance on acute and
institutional-level care and shift to more
community or regionally-based care
2. Intervene as early as possible in the lives of
Alaskans to address behavioral health conditions
3. Improve the overall behavioral health system
accountability by reforming the existing system
of care
Ms. Martin stated that the department planned to submit the
1115 waiver to the CMS later in the day. She informed that
the department was delayed 5 to 6 months in submitting the
waiver. She detailed that 1115 waivers required budget
neutrality for the federal government; and the department
had gone through an intense actuarial process with a
contractor. The department had considered services it would
no longer offer through Medicaid as well as new services
that would increase and target populations.
Ms. Martin continued to discuss slide 12 and noted that the
actuary had identified savings in the behavioral health
component. Typically, waivers allowed for frontloading
upfront costs such as expanding capital services as the
state looked to expand treatment services throughout the
state.
Ms. Martin discussed the Administrative Service
Organization, which was designed to help reform the
existing system of care and how the system was managed. She
detailed that the department had ended the comment period
for its RFP at the end of December, and the federal
government would conduct its own comment period. The
department would incorporate any new findings from the
federal comment period into the RFP.
10:31:45 AM
AT EASE
10:31:55 AM
RECONVENED
Ms. Martin discussed slide 13, "Medicaid Reform":
1915 (i) and (k) Options
FY17 Fiscal Note 71.1
FY17 Actuals 71.1
FY18 Fiscal Note ($5,118.8)
FY19 Fiscal Note ($10,781.6)
On Track? Delayed / Modified
? Contractor recommendations:
1915(k) Community First Choice
?Personal care services with a 6% FMAP
enhancement
?Institutional level of care criteria
required
?Skills training to foster independence and
self-care will also be provided
Do not proceed with 1915(i) Due to cost
containment concerns
New 1915(c) waiver Individualized Supports
Waiver
?Intellectual and Developmental Disabilities
previously served by state-funded grants
?Institutional level of care criteria
?Annual cap of $17,500 in services per
participant
Ms. Martin discussed home and community-based waiver
services. The 1915(i) and 1915(k) options would allow the
state to get either an enhanced federal match or to move
from 100 percent GF to a partial federal match. She
detailed that the 1915(c) waiver offered a delayed
opportunity for savings. The programs would commence on May
1, 2018. She asked if she could provide the committee with
a more concise summary of budgetary changes related to the
changes reflected on the slide.
Co-Chair MacKinnon answered in the affirmative. She
referenced slide 13 and asked how the annual cap of $17,500
in services was established.
Ms. Martin referred the question to the director of Senior
and Disability Services.
Co-Chair MacKinnon asked for follow-up information from the
director at a later time. She discussed other average caps
that had been referenced in committee. She knew that on
average there was 5 percent of the population that could be
driving 80 percent of the cost of the system. She discussed
the expense of hospice care.
Ms. Martin agreed to provide the additional information.
10:36:14 AM
Commissioner Davidson spoke to slide 14, "Medicaid Reform":
Primary Care Case Management
FY17 Fiscal Note ($93.5)
FY17 Actuals ($4,250.0)
FY18 Fiscal Note ($800.9)
FY19 Fiscal Note ($2,145.1)
On Track? Yes
? Temporarily expand Alaska Medicaid Coordinated Care
Initiative (AMCCI)
? Coordinated Care Demonstration Projects and
behavioral health system reform to develop / test new
models
Transition Medicaid recipients to appropriate
program
Ms. Martin stated that the department could start achieving
immediate savings by ramping up a program it already had,
without building too much infrastructure. Ultimately the
Medicaid recipients in question would transfer to a
Coordinated Care Demonstration Project or receive services
through the behavioral health 1115 waiver.
Senator von Imhof asked if the Alaska Medicaid Coordinated
Care Initiative (AMCCI) was more about the flow of funds or
if it pertained to a cooperative flow of provider
information and management.
Ms. Martin stated that AMCCI was a care-management case-
management service, through which a contractor worked on a
per-member monthly fee. The contractor helped Medicaid
recipients navigate the healthcare delivery system in a
more efficient manner, thereby avoiding more
hospitalizations.
Senator von Imhof asked about the potential activities and
the health information access of a care coordinator.
Ms. Martin explained that there were two different levels
of care management service. There was a telephone service
that connected "super utilizers" with appointment
reminders. There was also an in-person care coordination
service that included face-to-face meetings with program
users that helped identify needed services.
10:39:55 AM
Senator Micciche contemplated the fiscal note for FY 17 and
considered actual savings. He wondered if an Alaska Native
receiving Medicaid services through an IHS facility would
receive a 100 percent funding match.
Ms. Martin answered in the affirmative. She qualified that
there would also be a 100 percent match with a referral to
a non-IHS facility.
Senator Micciche asked if the department was encouraging
tele-health and other lower-cost options. He referenced the
supplemental budget and asked if the department was
aggressively pushing people towards lower-cost healthcare
alternatives.
Ms. Martin stated that in the RFP for the Coordinated Care
Demonstration Project, the department identified the
importance of maximizing the tribal claiming policy as well
as tele-health.
Co-Chair MacKinnon asked about overlap of recipients.
Ms. Martin stated that the reinsurance program applied to
those who purchased healthcare insurance on the individual
marketplace. She continued that the marketplace plans could
only be purchased by those that did not qualify for
Medicaid or other minimum essential coverage. She recalled
that the department was trying to reduce federal subsidies
for the re-insurance pool. Without opportunities at
healthcare.gov and federal subsidies, some individuals
would likely move to the Medicaid program. The department
worked closely with the Division of Insurance.
10:43:14 AM
Co-Chair MacKinnon referenced care coordination and
recalled that the committee had asked for additional
information on the topic previously. She discussed cost
savings through care coordination and utilization of
healthcare. She offered to follow up with the Division of
Insurance for further detail.
Ms. Martin added that the department was working with the
Department of Administration and its Healthcare Feasibility
Study. She queried whether there was an opportunity to
replicate any of the Coordinated Care Demonstration
Projects, or state employees on the AlaskaCare program.
Co-Chair MacKinnon reminded that the state had a budget
deficit and commented that DHSS was a user of GF dollars.
She commented on the cost of Medicaid, and the importance
of looking at how the resources were being utilized.
Vice-Chair Bishop pondered whether the commissioner and her
team discussed the same topics (such as cost saving
measures) within the department.
Co-Chair MacKinnon thanked members for submitting
questions. She appreciated the work of the department. She
recognized that some work of the department was difficult.
ADJOURNMENT
10:47:48 AM
The meeting was adjourned at 10:47 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 013118 SFC DHSS Medicaid Cost Drivers and Reform .pdf |
SFIN 1/31/2018 9:00:00 AM |
SB 144 |
| 013118 Medicaid Eligibility Standards DHSS.pdf |
SFIN 1/31/2018 9:00:00 AM |
SB 144 |
| 013118 Medicaid Spend by FMAP and BeneGroup.pdf |
SFIN 1/31/2018 9:00:00 AM |
SB 144 |