Legislature(2017 - 2018)SENATE FINANCE 532
02/01/2018 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
February 1, 2018
9:04 a.m.
9:04:39 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:04 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
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; Margaret Brodie, Director,
Division of Health Care Services, Department of Health and
Social Services; Duane Mayes, Director of Senior and
Disability Services, Department of Health and Social
Services.
SUMMARY
^PRESENTATION: MEDICAID COST DRIVERS and REFORM UPDATE
9:05:10 AM
Co-Chair MacKinnon noted that the presentation had
concluded on Slide 13 the previous day and would begin on
Slide 14.
MONIQUE MARTIN, HEALTHCARE POLICY ADVISOR, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, continued to address the
presentation "Senate Finance Committee - Medicaid Cost
Drivers and Reform Update" from the previous day's
committee meeting.
Ms. Martin looked at 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 explained that SB 74 required the department to
provide care management services for Alaskans receiving
Medicaid that had multiple hospitalizations. She said that
the hope was that these Alaskans could shift to a
coordinated care demonstration project or to receive
services through the 1115 behavioral health waiver. She
stated that the Alaska Medicaid Coordinated Care Initiative
(AMCCI) had been ramped up to provide care management for
those individuals. She relayed that the department was
looking to AMCCI to provide services for those reentering
communities from the correctional system. She expressed
confidence that savings would be achieved in FY18.
9:08:51 AM
Ms. Martin presented Slide 15, "Medicaid Reform":
Telehealth
FY17 Fiscal Note -
FY17 Actuals -
FY18 Fiscal Note ($650.0)
FY19 Fiscal Note ($1,300.0)
On Track? Savings indeterminate
? Telehealth Workgroup Report:
http://dhss.alaska.gov/HealthyAlaska/Documents/redesig
n/MCDRE_Telehealth_Workgroup_Report.pdf
? SB74 directs the department to identify improvements
in telehealth capabilities that would be most
effective in reducing Medicaid costs and improving
access to health care services
Ms. Martin reminded the committee that SB 74 outlined
significant requirements for telehealth. She noted the
indeterminate fiscal note and actuals for FY17 as reflected
on the green chart. She said that the indeterminate number
existed as the department ramped up the telehealth
workgroup that the department had facilitated. She
emphasized that SB 74 had been very specific that any
telehealth programs implemented would also reduce Medicaid
cost, and shared that the department was working cautiously
around telehealth.
9:11:10 AM
Ms. Martin discussed Slide 16, "Medicaid Reform":
Health Homes
FY17 Fiscal Note 4.8
FY17 Actuals 4.8
FY18 Fiscal Note 42.6
FY19 Fiscal Note ($1,672.4)
On Track? Yes
? Planning for Health Homes: 2018
Coordinated Care Demonstration Projects
Other reform initiatives
? 90 / 10 Match for eight quarters only
Ms. Martin informed that health homes had a specific
definition in the Affordable Care Act (ACA). She believed
that the one of the coordinated care demonstration projects
would be a good model for the rest of the state and other
providers to implement. She relayed that the state received
a 90/10 match from the federal government for health home;
the federal government paid 90 percent of the cost
associated with implementation of a health home model for 8
quarters. She stressed that it was important that when the
program was implemented, it could be implemented as far
across the state a possible to maximize savings, rather
than for a small group of Medicaid recipients in one part
of the state.
Senator Stevens queried the definition of "health home."
Ms. Martin explained that health homes allowed for
examination of an individual's surroundings and living
conditions and how it might affect a person's health.
9:13:57 AM
Ms. Martin spoke to Slide 17, "Medicaid Reform":
Pioneer Homes
FY17 Fiscal Note (1,066.7)
FY17 Actuals (217.0)
FY18 Fiscal Note (1,066.7)
FY19 Fiscal Note (1,066.7)
On Track? No
? Requires payment assistance applicants to apply for
Medicaid
? Timing
Income Qualifying Trust
Waiver Application Process
Level III Residents require the highest level
of care
Ms. Martin detailed that Pioneer Homes were implementing
this initiative directly with residents. She noted that
there were challenges that were being addressed.
9:16:00 AM
Senator Olson wondered whether there was an opportunity to
speed up the waiver application before elderly individuals
passed away.
Ms. Martin stated that the Pioneer Homes were working with
the Division of Public Assistance and Seniors and
Disability Services to find opportunities for efficiencies
and other ways to speed up the process.
Senator Olson wondered what the committee could do to make
the process more efficient.
Ms. Martin thought some internal barriers had been
identified. She believed that Commissioner Sherwood could
offer more information.
Senator Olson expressed frustration with the bureaucracy
that the elderly and families had to go through to receive
care.
JON SHERWOOD, DEPUTY COMMISSIONER, MEDICAID AND HEALTH CARE
POLICY, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, replied
that the department was looking at how to address the
barriers. He lamented that most of the barriers were the
result of federal requirements. He continued that people in
long-term care are subject to transfer of asset penalties,
which required the department to do a five-year look back
at the patient's financial records to determine
eligibility. He thought there was enough coordination but
agreed that improvements could be made. He was not sure
what could be done at the legislative level. He appreciated
Senator Olson's concern.
9:20:14 AM
Ms. Martin turned to Slide 18, "Medicaid Reform":
Emergency Department Improvement Initiative
FY17 Fiscal Note 4.8
FY17 Actuals 4.8
FY18 Fiscal Note 42.6
FY19 Fiscal Note ($1,300.0)
On Track? Yes
? Alaska State Hospital & Nursing Home Association and
Alaska Chapter of the American College of
Emergency Physicians
? Emergency Department Information Exchange (EDIE)
Nine hospitals are "live"
Connecting to the Prescription Drug Monitoring
Program (PDMP) in 2018
? Established uniform statewide guidelines for
prescribing narcotics
? http://www.ashnha.com/edcp/
Ms. Martin informed the committee that one of the key
pieces of the Emergency Department Improvement Initiative
was the Emergency Department Information Exchange (EDIE).
This system was the real-time information exchange for
physicians and providers in emergency room facilities. The
system was designed to keep tabs on patients
inappropriately seeking prescription pain killers. The
system also helped to identify people who were not getting
connected with a primary care provider to address their
health concerns. She shared that regulations had been
recently submitted that would connect the emergency
department information exchange with the prescription drug
monitoring program, which would allow for further
surveillance of prescription drug acquisition by patients.
Senator von Imhof referenced slide 6, which showed that
hospital services costs was the largest cost driver for
Medicaid. She recalled discussion from the previous day
pertaining to coordinated and primary care programs. She
wondered whether the department was tracking individuals
using the emergency room for non-emergency medical
services. She wondered whether people who used the
emergency room frequently, and who had been identified as
high users, could be cut off from Medicaid.
Ms. Martin stated that there were two programs underway to
address the issue.
9:24:10 AM
Senator von Imhof wanted to see past data that showed
identification of high utilizers and what had been done to
decrease utilizations of the ER. She asked whether the
department flagged such incidents as high-priority, since
they contributed as the biggest cost driver.
MARGARET BRODIE, DIRECTOR, DIVISION OF HEALTH CARE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, relayed
that if an individual was over-utilizing ER services, there
was a service utilization review program, used both for
recipients and providers. If the individual did not work
through the care management program, and continued to over
use the emergency room, that person would be put into a
care management program, which would lock the patient into
one physician and one pharmacy. If the patient continued to
utilize the emergency room, Medicaid would not pay for the
visit unless it was an emergency.
Vice-Chair Bishop queried the leading cause of return
visits to the emergency room.
Ms. Brodie stated that the leading cause was typically
behavioral health issues.
Co-Chair MacKinnon asked whether Ms. Brodie could address
why care coordination might not be an entry point for
determining whether a person should be in a care management
program, which would restrict use and could be more closely
monitored.
Ms. Brodie stated that both programs were always running,
and each referred to the other. The contractor currently
handling the care management program had 312 individuals
enrolled in the program. She said that the care management
program could only manage just over 300 people at any time.
Co-Chair MacKinnon asserted that her constituency was
curious why the division had decided not to maximize the
return on investment with the care management program by
targeting a structured delivery of the services for those
that overutilized the hospital and the emergency room.
Ms. Brodie stated that there was a shortcoming in the
capacity of the contractor. In June of 2017, the department
had signed a contract with a new contractor, which would
allow for service for more recipients.
Co-Chair MacKinnon asked whether the department would start
to examine over-utilization of emergency room care as a
cost driver.
Ms. Brodie stated that the department used data analytics
to determine who was an outlier of the use of services. She
stated that using the new contractor would result in
serving many more recipients, and the threshold for overuse
could be changed as appropriate.
Co-Chair MacKinnon thought that if emergency room overuse
was the number one cost driver, overutilization should be
considered when considering recipients.
Ms. Brodie stated that the department did look at the
highest cost drivers. She used the example of opioid abuse,
in which a patient could be drug seeking at the emergency
room or could legitimately use the emergency room for a
drug overdose. She reiterated that the limiting factor was
the number of individuals that could be served by the
contractor.
9:32:24 AM
Senator von Imhof asked whether Truven Health Analytics was
the name of the new analytics company hired by the state.
Ms. Brodie answered in the affirmative.
Senator von Imhof expressed appreciation for the company's
work. She hoped that data could be gathered quickly and
that the department could provide the company with
diagnostic data so that analysis could begin immediately.
She hoped that a report could be produced by February 2019.
9:34:02 AM
AT EASE
9:34:27 AM
RECONVENED
Co-Chair MacKinnon stated that there had been an ongoing
discussion concerning major cost drivers in Medicaid and
healthcare in general. She listed cost drivers had been
scrutinized for doctors, pharmaceuticals (companies),
insurance and insurance providers, and hospitals.
Ms. Brodie thought that the accurate costs drivers were
hospitals, physicians, and pharmacies.
Co-Chair MacKinnon asked whether insurance was driving
costs.
Ms. Brodie thought insurance could be driving the cost of
healthcare overall, which could impact Medicaid.
Co-Chair MacKinnon thought that there was an argument
between doctors and insurance providers as to which was the
higher cost driver.
9:38:29 AM
Ms. Brodie stated that for hospital stays, a contractor
determined whether the length of stay was appropriate; the
length of the hospital stay was pre-approved. She asserted
that a patient did not go to the hospital for 10 days and
then Medicaid picked up the bill. She said that if a
patient was admitted from the emergency room, they would
have three days before they needed to get prior approval.
9:39:26 AM
Co-Chair MacKinnon rebutted that the weighted average in
trying to manage hospital stays was directly linked to
emergency room stays. She asserted that individuals that
were on the system were using their emergency room
privileges to access healthcare. She wondered if studies
were being held up in order to control the cost of the
system based on what the state and federal government are
paying for those hospital stays.
Ms. Brodie stated that the department was identifying
individuals on a quarterly basis. The new contractor would
include more information which would enable quicker
intervention.
Senator Micciche referenced a document entitled "Medicaid
Claims and Enrollment," (copy on file). He noted the over
$11 thousand per year cost per recipient. He understood
that the figure reflected actual utilization costs.
Ms. Brodie answered in the affirmative.
Senator Micciche asked whether intense case management had
been considered for the top 25 percent of users.
9:43:51 AM
Ms. Brodie replied that some individuals were in a case
management program; however, individuals that reached older
age sometimes became disabled and required more assistance
in their daily activities or they could be
institutionalized, which substantially raised the cost.
Senator Micciche suggested leaving individuals 85 years or
older out of the equation. He spoke to a "normally healthy
range," of people 21 through 30 years of age. He argued
that the average costs for that age group was higher for
Medicaid than in the private sector. He contended that the
pressure that the private sector face to keep average costs
down was not a problem for Medicaid. He thought that costs
could be driven down if users were taught how to manage
their healthcare.
Ms. Brodie believed that under the new contract, the high-
cost recipients Senator Micciche referred to would be
picked up. She shared that the plan was to serve several
thousand, not just the top 300 users, under the new
contract. The new system would be in place by June 2018.
9:47:26 AM
Senator von Imhof asked whether the cost of the contract
was in the FY19 budget.
Ms. Brodie specified that the cost was taken from the
Enterprise contract and recalled that there had been a
savings of $200,000 per year with the new contract.
Co-Chair MacKinnon asked whether the transition was a new
idea, or an idea that was just now being implemented. She
relayed that the Medicaid program had been a point of
discussion for quite some time. She wondered whether there
were competing interests within the department to address
the highest cost drivers or had attention been diverted to
other things.
Ms. Brodie stated that the department had wanted to make
the change for some time. There was a question of staff
capacity when considering taking on new initiatives. The
staff had been focused on paying claims accurately and on-
time. She explained that everyone within the department was
working closely together to prepare the system for every
reform laid out in SB 74. She relayed that there was a
monthly meeting of all Medicaid directors and other key
staff members to discuss ongoing projects and capacity for
taking on new actions. She used the example of providing
clients with an improved explanation of benefits. She
believed that some users focused on their co-pay amount and
were unaware of the total cost of their care. The concept
had been postponed as the department prioritized other
money-saving actions.
9:52:04 AM
Co-Chair MacKinnon recalled her comments from the previous
day. She remembered a discussion about explanation of
benefits in previous meetings on SB 74, and thought it was
an important piece of the problem. She asked about the
organizational structure in place for taking on initiatives
inside the Medicaid system. She wondered who had been
helping to implement the latest software.
Ms. Brodie explained that a team within Healthcare Services
was responsible for the system. She explained that the
contractor, Conduent, coded the system and made changes at
the direction of the team. She described the process,
adding that a federal match of 90 percent was being
requested for anything over $100,000. She relayed that
weekly meetings were held with the contractor to discuss
all projects. She related many projects were active at one
time and that currently there were several SB 74
initiatives that needed changes.
9:56:32 AM
Co-Chair MacKinnon recalled that Ms. Brodie had discussed
interface with the many areas of public health. She thought
Ms. Brodie had referenced four different entities that
intersected with Medicaid and wondered whether those
entities were working with the department on system
changes.
Ms. Brodie stated that the public health entities did not
help with the system but did help with population health
issues. She said that the department worked to align its
policies with public health policies.
Senator von Imhof relayed that she also served on the
Senate Health and Social Services Committee. She had seen a
presentation the previous day pertaining to changing
services for autism related care. She was concerned that
the state would be saving money in reforms while increasing
costs through expanding programs with federal match. She
wondered who retained the authority to burden the state
financially to increase regulation, expand population, and
increase programs.
Mr. Sherwood stated that the addition of the autism
regulations that Senator von Imhof referenced was the
implementation of federal requirements after clarification
of policy. He specified that states are required to provide
coverage for autism services for children. He stated that
the department implemented policy updates on a regular
basis and that the department vetted the regulations before
implementation. He added that there was also litigation
related to the speed in which the department had
implemented certain regulations. He explained that under
state statute the department had to operate the Medicaid
program in compliance with federal law and regulations.
10:01:32 AM
Senator von Imhof asked whether there was flexibility on
how the state implemented updated federal requirements.
Mr. Sherwood thought that there was some flexibility on how
a program was structured. If it was determined to be
medically necessary for a child to receive a service, the
state was required to provide that service. He relayed that
there were provisions around limits before requiring prior
authorization.
Mr. Sherwood addressed Senator von Imhof's question about
the $9.8 million. He said that the number of children
diagnosed and the number of providers available would be
examined to assess the expectation of available services.
He thought that the 50 percent match rate applied to some
recipients of Medicaid, but there were varying increased
match rates for other populations.
10:04:33 AM
Co-Chair MacKinnon commented that the previous year
individuals had called from out of state to indicate they
had relocated to Alaska from out of state to participate in
the robust healthcare system. She was concerned that the
mandates from the federal government had been interpreted
to provide better care than other states under Medicaid.
She was concerned that the federal government was driving
spending in the department.
Mr. Sherwood agreed that the state had a robust Medicaid
program, but did not think it had a top ranking in the
nation. He stated that Alaska could be more attractive than
other states depending on individual needs. He countered
that for others, the state was not an attractive state for
healthcare; lack of access to certain specialists and
availability of support for specialty care had forced other
Alaskan families to relocate out-of-state. He spoke about
the federal requirements, the department always considered
how to meet the requirements in the most efficient ways
possible.
Co-Chair MacKinnon asked whether cost was considered when
evaluating a program's impact to the state or if only the
public health impact was considered.
Mr. Sherwood stated that he certainly considered cost. He
stressed that the health of the population was important
and that he subscribed to practices that provided good
health outcomes. He stated that he was aware that money
spent in one area was money that might not be spent in
another; resource allocation for optimum benefit was a
constant challenge.
10:08:35 AM
Senator Stevens stressed the importance of patients
understanding an explanation of benefits. He felt that
people could not change their behavior if they were
ignorant of the cost of their care.
Ms. Brodie stated that the issue was under repeated
discussion and that the department was working diligently
to be sure that patients were better informed.
10:10:20 AM
Senator Micciche recommended that the department should not
expand in any new area until the state could get a "handle
on costs." He asked whether the department had considered
bringing on a private sector insurance manager.
Mr. Sherwood stated that the department had considered the
option from time to time. He pointed out that the Medicaid
program was different from insurance programs in a variety
of ways.
10:15:16 AM
Senator von Imhof asked whether the department had
considered putting out a request for proposal (RFP) for one
component of Medicaid. She thought that while the private
sector might not understand the complexities of the
Medicaid population, they could bring new tools to the
table.
Mr. Sherwood elaborated that one option in the coordinated
care project included the proposal of working with a
private entity. The department was in negotiations with
three different entities, one of which was a managed care
organization.
Senator von Imhof understood that the RFP was for
eligibility and payment processing.
Mr. Sherwood stated that it was not possible to contract
out eligibility determination. He clarified that under
federal law eligibility determination could only be done
for Medicaid by merit based, government employees or
employees of tribally operated TANF programs. He relayed
that operation of eligibility systems could be contracted
out but that the department was looking at contracting out
the coverage side of the issue and not eligibility.
Co-Chair MacKinnon wondered how waivers were driving costs.
10:19:14 AM
Ms. Martin addressed Slide 19, "Medicaid Reform":
Fraud & Abuse Prevention
FY17 Fiscal Note (401.9)
FY17 Actuals -0-
FY18 Fiscal Note ($556.2)
FY19 Fiscal Note ($543.7)
On Track? Delayed
? Alaska Medicaid False Claims and Reporting Act
Coordination with the Office of the Inspector
General for enhanced FMAP
? Require Medicaid Providers to conduct self-audits and
return overpayments along with Interest and penalties
Regulations implementing these provisions have
been adopted by DHSS and transmitted to Dept. of
Law
? Fraud and Abuse prevention efforts for FY17
http://dhss.alaska.gov/HealthyAlaska/Documents/Medicai
d_Fraud_Abuse_Waste_Report_SB74_Nov15-2017.pdf
Ms. Martin stated that although the initiative was delayed,
the department had a robust fraud, abuse, and waste
prevention program. She shared that the Department of Law
produced an annual report on fraud, waste and abuse
prevention efforts in the state, based on fiscal year. She
said that the report was transferred to the legislature on
November 15th of each year and highlighted the larger fraud
cases and the efforts to reclaim state dollars. She said
that the provisions in SB 74 had helped the department set
up the Alaska Medicaid False Claims and Reporting Act,
which would help to achieve an enhanced Federal Medical
Assistance Percentage (FMAP). She said that the department
continued coordination with the office of Inspector General
on the federal level, through the Department of Health and
Social Services. She relayed that efforts continued and
that the department would work to keep the legislature
abreast of any new information about fraud and abuse. She
believed that savings could still be achieved.
10:22:07 AM
Co-Chair MacKinnon wondered whether a tip line existed that
would pay the public a reward for exposing fraud and abuse.
Ms. Martin replied that the department already received
calls from the public and had a Program Integrity Unit
within the Department of Health and Social Services and the
Medicaid Fraud Control Unit within the Department of Law.
She shared that the department retained a contractor that
helped with utilization reviews that identified "oddities"
in billing and a until that examined how claims matched up
with recipient's health conditions.
Senator Stevens thought it was important that the public
was aware of Medicaid fraud and wondered how the public
could be made more aware of the issue.
Ms. Martin responded that there were often press releases
once information could be publicly exposed.
10:24:48 AM
Senator von Imhof noticed that the fraud use and prevention
required Medicaid providers to conduct self-audits. She
asked if third-party, surprise audits were ever conducted.
Mr. Sherwood stated that in addition to self-audits, the
department did regular audits of providers from a random
sample of varied provider types. There were also federal
efforts to the same end. He spoke to additional types of
audits. He said that providers complained when too many
audits were conducted and for random audits the same
provider would not be audited more than once every three
years. He felt that between the state and the federal
government, there were plenty of audits being conducted. He
added that anytime something suspicious was noticed, the
department could conduct a separate investigation as
appropriate.
Senator von Imhof asked whether the findings of the audits
could be summarized.
Mr. Sherwood relayed that the department had found a
combination of things; many providers were billing
appropriately, with a small degree of error. He stated that
inappropriate billing had been identified and had been the
result of a lack of education on policy or fraud. All cases
found fraudulent were turned over for further criminal
investigation.
Senator von Imhof observed that the 'FY Actuals' listed on
Slide 19 listed zero.
Mr. Sherwood replied that the numbers on the slide were
projections of what would be obtained through the state
false claims act, which had yet to receive approval from
the Office of Inspector General.
10:29:36 AM
Ms. Martin informed that if state residents were concerned
about potential fraud they could call 1-907-269-6279.
Co-Chair MacKinnon asked whether the department was
reaching out to pharmacists in the state in the effort to
fight the opioid epidemic.
Ms. Martin stated that one provision of the prescription
drug monitoring program was allowing Medicaid pharmacists
access to the data in that program, which she said had been
helpful in fighting the epidemic.
Ms. Martin showed Slide 20, "Medicaid Reform":
Electronic Verification System
FY17 Fiscal Note 611.3
FY17 Actuals -0-
FY18 Fiscal Note ($23.0)
FY19 Fiscal Note ($23.0)
On Track? Delayed
? Computerized income, asset and identity verification
system
Third party vendor
Annual savings must exceed the cost of implementing
the system
? ARIES Release 2 delayed
January 2017 Maintenance for ARIES transferred
from contractor to DHSS
Working with CMS and Federal 18F team for agile
development process
RFP for Eligibility Verification System and Asset
Verification System by end of April
Ms. Martin relayed that there had been a delay in some of
the software system due to the departure of one of the
contractors. The Centers for Medicare and Medicaid Services
(CMMS) has paid for a significant portion of the system and
had offered technical support. She said that the Asset
Verification System (AVS) and the Eligibility Verification
System (EVS) would be combined, an RFP for both systems
will be released in April 2018.
10:33:55 AM
Co-Chair MacKinnon requested further information conserving
the asset portion of the combined systems. She understood
that asset value was not currently considered for
eligibility for Medicaid.
Mr. Sherwood affirmed that some Medicaid beneficiaries were
not subject to an asset test; including, children, low-
income parents and caretaker relatives, pregnant women, and
Medicaid expansion population. He furthered that the
Medicaid categories for the aged, blind, and disabled still
had asset tests, due to the long duration of coverage under
the program.
Ms. Martin showed Slide 21, "Medicaid Expansion FMAP,"
which showed a table illustrating Medicaid Expansion
matches and the impact of expenditures for Indian Health
Service (IHS) recipients. She related that the calendar
year FMAP was overlaid with the state fiscal year and
combined with the expenditures that qualified regardless of
the 100 percent federal match, to reveal the state General
Fund match related to Medicaid expansion.
Senator von Imhof asked whether there was a way to overlay
dollar values. She wondered what the percentages on the
table would equate to in dollars.
Ms. Martin turned to Slide 22, "Medicaid Expansion," which
showed a table of the dollar amounts.
Senator von Imhof thought that the slide 22 did not reflect
an apples to apples comparison. She requested that the
information on the slide be enhanced to reflect the total
GF expenditure.
Ms. Martin agreed to provide the additional information.
10:37:54 AM
Ms. Martin continued discussing Slide 22. She noted that
the slide contained the actual and projected GF spend for
FY 17, and projections for FY 18 and FY 19. She said that
areas had been identified where reductions had been made
within the department and in the Department of Corrections.
Ms. Martin looked at Slide 23, "Medicaid Expansion," which
showed a line graph entitled "Monthly Enrollment Growth
Rate." She stated that growth had leveled out beginning in
September of 2017. She said that growth had progressed as
anticipated.
Ms. Martin spoke to Slide 24, "Medicaid GF Cost Saving
Measures." The slide outlined actual savings for FY 17 and
estimates for FY 18. She directed committee attention to
the cost saving measures that were new in FY 17 and FY 18.
Ms. Brodie interjected that the department had exceed
projected savings by $3 million, due to the decrease in
rates for hospitals and physicians.
Co-Chair MacKinnon asked whether Ms. Brodie could explain
why there was $93 million increase in spending for
Medicaid.
Ms. Brodie stated that there had been a large increase in
enrollment that had driven up the costs of care for
hospital services, doctor services, and pharmacy services.
There had been a great deal of growth in needs for
hepatitis-C drugs and other specialty drugs. She lamented
the new drugs were being offered at unprecedented costs to
the Medicaid programs and all health payers. She stated
that the department had worked to curb those costs. She
opined that though the department had realized significant
savings, healthcare costs overall had increased. She
pointed out to the committee that without the savings the
department would be requesting twice as much funding.
10:42:45 AM
Co-Chair MacKinnon asked whether the department could
reiterate the growth of recipients for the public. She
recalled and estimated 240,000 Medicaid recipients in FY
19.
Ms. Martin replied that 215,000 had been the unduplicated
count, potential Alaskans that were receiving Medicaid
benefits and services through the program. She said that
the average monthly enrollment was used as a toll in
averaging and negated some of the seasonal swings in
Medicaid enrollment, as well as recipients briefly on the
program. She said that in FY 16, the average of monthly
total Medicaid enrollment was $151,409; in FY 17 the
average monthly enrollment was 186,748.
Co-Chair MacKinnon asked whether the state was paying out
30,000 claims week or per month.
Ms. Brodie specified that the state paid over 120,000
claims per week, for an average of $35 million.
10:45:29 AM
Senator Micciche thought that the program should be
designed to assist those that were most in need. He
believed that the state could manage healthy individuals on
the program in order to prevent overutilization, rather
than reducing day habitation services for Alaskans that
required more services.
DUANE MAYES, DIRECTOR OF SENIOR AND DISABILITY SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, discussed the
definition of day habilitation services, which meant to
take an individual that was on the developmental disability
waiver out into the community and engaging them in a
variety of activities such as banking, or going to a
medical appointment. He said that day habilitation centered
around active instruction; teaching an individual the skill
that they needed to be as independent as possible. He
shared that over his time as division director he had
noticed a growth in cost for day habilitation services, 40
plus percent over the past 5 years. He said that the day
habilitation cap had been implemented on October 1, 2018,
and 744 plans of care had been reviewed, 8 percent of which
had been denied because they were above the cap. He stated
that that cap was soft but that significant justification
for the services had to be presented. He stressed that the
division had worked thoughtfully to stabilize the service
category.
10:49:49 AM
Senator Micciche wondered why managing the healthcare of
healthy adults was not a priority over managing that of
those most in need. He thought that reducing utilization of
healthy adults would reduce cost for those who had the
greatest need.
Co-Chair MacKinnon expressed appreciation for the
department on behalf of the committee. She lamented that
the state continued to face declining revenues.
Co-Chair MacKinnon discussed housekeeping.
ADJOURNMENT
10:53:12 AM
The meeting was adjourned at 10:53 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 013118 SFC DHSS Medicaid Cost Drivers and Reform .pdf |
SFIN 2/1/2018 9:00:00 AM |
SB 144 |