Legislature(2021 - 2022)SENATE FINANCE 532
03/15/2022 01:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Medicaid Update by Department of Health and Social Services | |
| Presentation: Clean Water Act Section 404 Primacy/resource Conservation and Recovery Act | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
March 15, 2022
1:02 p.m.
1:02:02 PM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 1:02 p.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Natasha von Imhof
Senator Bill Wielechowski
MEMBERS ABSENT
Senator David Wilson
ALSO PRESENT
Adam Crum, Commissioner, Department of Health and Social
Services; Sylvan Robb, Assistant Commissioner, Department
of Health and Social Services; Albert Wall, Deputy
Commissioner, Department of Health and Social Services;
Randy Bates, Division of Water, Department of Environmental
Conservation; Jason Brune, Commissioner, Department of
Environmental Conservation.
SUMMARY
PRESENTATION: MEDICAID UPDATE BY DEPARTMENT OF HEALTH and
SOCIAL SERVICES
PRESENTATION: CLEAN WATER ACT SECTION 404 PRIMACY/RESOURCE
CONSERVATION and RECOVERY ACT
^PRESENTATION: MEDICAID UPDATE BY DEPARTMENT OF HEALTH and
SOCIAL SERVICES
1:03:46 PM
ADAM CRUM, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, (DHSS) discussed the presentation, "Alaska
Department of Health" (copy on file).
1:04:02 PM
SYLVAN ROBB, ASSISTANT COMMISSIONER, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES, pointed to slide 2, "Medicaid Services
Operating Budget Comparison FY2019-FY2023 (in thousands)."
She announced that the proposed budget for FY 23 was $2.4
billion, with $656 million in undesignated general funds
(UGF). She reminded the committee that since the beginning
of January 2020 the department at had received increased
FMAP, related to the public health emergency beginning
January 2020.
1:04:48 PM
Co-Chair Stedman queried the definition of FMAP.
1:04:54 PM
Ms. Robb replied that it was the Federal Medical Assistance
Percentage (FMAP), which was the share of Medicaid services
paid for by the federal government.
1:05:08 PM
Co-Chair Stedman advised against the use of acronyms for
the duration of the presentation. He requested a brief
overview of what was to come in the presentation.
1:05:39 PM
Ms. Robb shared that the presentation would cover the
proposed FY 23 Medicaid budget, the department's
projections for Medicaid costs, and const saving proposals
that would decrease that cost. She noted that slides at the
end of the presentation showed historical and projected
Medicaid costs.
1:06:14 PM
Co-Chair Stedman asked for an explanation of Medicaid
versus Medicare.
1:06:24 PM
ALBERT WALL, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, explained that Medicaid was the largest
healthcare insurer for the state. The program covered
264,000 Alaskans and was broken down into many different
types of services. He relayed that Medicaid waivers were
available for seniors and those with disabilities, as well
as those seeking mental heath care (1115 waivers). He
shared that Medicaid was complex and numbers associated
with it, such as the 1115 waiver, either referenced the
regulation on the federal level or the law that described
the section.
1:07:29 PM
Co-Chair Stedman asked for a definition of Medicare.
1:07:32 PM
Mr. Wall replied that Medicare was an entirely different
program that generally covered the elderly and was not
administered by the department.
1:07:40 PM
Co-Chair Stedman stressed that the definitions were
important to provide clarity to the listening public.
1:08:30 PM
Ms. Robb highlighted slide 3, "FY2023 Medicaid":
FY2023 projection: $72.0 million shortfall if no cost
containment actions are taken
Cost containment activities (Public Consulting Group
recommendations and other)
? $17.0 million projected to be captured once Medicaid
eligibility redetermination can resume
? $6.5 million Implementation of Section 1945 Health
Homes
? $3.5 million Pay for Performance for Hospitals
? $4.6 million Implementation of Indian Health
Service (IHS) reclaiming by the Administrative
Services Organization
? $31.6M of cost containment activities
$45.0M increment request (allows for $4.6M flexibility
for implementation challenges)
Ms. Robb stated that the budget had been built based on the
assumption that the enhanced FMAP would end at the end of
FY 22. During the public health emergency, in exchange for
not removing individuals from Medicaid rolls, the state had
received an additional 6.2 percent FMAP. She said that
instead of paying 50 percent the federal government had
been paying 56.2 percent. She shared that not all elements
of the projected savings reflected on the slide were within
the departments control because they had to work the
Centers for Medicare and Medicaid Services; the department
had allowed themselves approximately $5 million in
flexibility in the event of unforeseen variables.
1:11:57 PM
Co-Chair Stedman recalled past challenges for projected
Medicaid savings that had resulted in large supplemental
budget requests. He hoped to avoid future supplemental
requests by focusing on current projections and whether
those projections would result in future supplemental. He
explained that the state would be responsible for some of
the medical expenses of those on Medicaid. He stressed that
projected savings were not guaranteed.
1:13:15 PM
Senator von Imhof understood that Medicaid eligibility had
been frozen by the federal government due to Covid-19. She
relayed that the state had not had the ability to review
the Medicaid membership eligibility and was largely
responsible for user expenses. She felt that there was an
issue with the state being unfairly dictated by the federal
government due to the freeze brough on by the Covid-19
pandemic.
1:14:23 PM
Co-Chair Stedman asked for comment on the flexibility the
department had when determining eligibility.
1:14:35 PM
Commissioner Crum replied that the plan was that states
would resume the redetermination process once the public
health crisis came to an end. He said that the process
would require multiple notifications to individuals to make
sure that those that were truly eligible were receiving
services. He anticipated that CMS would require a 12-month,
rolling redetermination basis, which meant that one-twelfth
of the population could be processed each month. He
believed that without a public health emergency, the
department may have individuals on the rolls that did not
meet the statutory or regulatory definitions of Medicaid
eligible. He said that this would require the facilitation
of an ask for top cover from federal partners for the state
to continue the program. He said that the conversation was
ongoing and the federal public health emergency expired
April 12, 2022. Any extension would be on a 90-day basis
and would provide FMAP until the end of the quarter. He
said that the issue redetermination was a significant
challenge for the state.
1:16:41 PM
Co-Chair Stedman reiterated that the presenters should
avoid using acronyms during the presentation.
1:16:59 PM
Ms. Robb addressed slide 4, "FY2023 Medicaid if enhanced
Federal Medical":
Assistance Percentage is extended for one quarter of
FY2023
FY2023 projection: $54.5 million (original $72.0
million offset by $17.5 million for enhanced FMAP)
shortfall if no cost containment actions are taken
Cost containment activities (Public Consulting Group
recommendations and other)
? $12.8 million projected to be captured once Medicaid
eligibility redetermination can resume
? $6.5 million Implementation of Section 1945 Health
Homes
? $3.5 million Pay for Performance for Hospitals
? $4.6 million Implementation of Indian Health
Service (IHS) reclaiming by the Administrative
Services Organization
? $27.4 million of cost containment activities
$45.0 million increment request (allows for additional
flexibility for implementation delays caused by the
extension of the Public Health Emergency)
1:18:49 PM
Co-Chair Stedman said that the committee would work with
the department on the language to minimize the future
supplemental requests. He said that there could be possible
contingent language in the budget for FY 23.
1:19:23 PM
Mr. Wall looked at slide 5, "FY2023 Medicaid":
? $17.0 million GF projected to be captured once
Medicaid eligibility redetermination can resume
5 Tuesday, March 15, 2022
? During the public health emergency (PHE), the state
received 6.2 percent enhanced Federal Medical
Assistance Percentage (FMAP) in exchange for
maintaining all Medicaid enrollees (with limited
exceptions)
? At the conclusion of the federally declared COVID
PHE, complete a review of all current Medicaid
enrollment files to identify ineligible cases. Savings
estimate based on Urban Institute post-PHE report and
other state third-party data matching experience.
Mr. Wall shared that Medicaid redetermination was an annual
federal requirement. He reiterated that during the
beginning of the Covid-19 pandemic Medicaid eligibility
redetermination was suspended. The normal redetermination
process would begin 60 days prior to the ending of the
public health emergency. He said that the department had
worked with the contractor public consulting group, which
had projected $17 million in general funds for the
redetermination process.
1:20:56 PM
Co-Chair Bishop wondered whether the redetermination would
be done digitally or by individual intake on phone lines.
1:21:21 PM
Mr. Wall replied that the Division of Public Assistance
would use a combination of phone calls and online resources
to meet the redetermination needs.
1:21:42 PM
Co-Chair Bishop wondered how many people would be surveyed
for redetermination.
1:21:51 PM
Mr. Wall replied 264,000 plus.
1:21:58 PM
Co-Chair Stedman interjected that was a large section of
the states population.
1:22:06 PM
Mr. Wall addressed slide 6, "FY2023 Medicaid":
? $17.0 million GF projected to be captured once
Medicaid eligibility redetermination can resume
Mr. Wall explained that the slide illustrated the various
grouping of the cost savings projections.
1:22:34 PM
Co-Chair Stedman remarked asked about the Aged, Blind, and
Disabled category and wondered whether the amount of
savings projected was due to the ease of which those
Alaskans could be removed from the rolls.
1:22:39 PM
Mr. Wall replied that the chart reflected the normal
process and did not look for people to remove from the
program. He stressed that the department had to maintain
compliance with federal regulations. He said that the
Aged, Blind, and Disabled category included Home and
Community Based Services Waivers. He noted that the left-
hand column reflected the average cost for each group:
Adults
Est. Average annual Spend (State Share)
$2,068
Est. Enrollment -
48,436
Est. Disenrollments at 3 percent ineligibility
1,453
Est. Cost Savings at 3 percent ineligibility
$3,004,959
Children
Est. Average annual Spend (State Share)
$1,541
Est. Enrollment -
119,101
Est. Disenrollments at 3 percent ineligibility
3,573
Est. Cost Savings at 3 percent ineligibility
$5,505,039
Aged, Blind, and Disabled
Est. Average annual Spend (State Share)
$8,228
Est. Enrollment -
34,972
Est. Disenrollments at 3 percent ineligibility
1,049
Est. Cost Savings at 3 percent ineligibility
$8,632,488
1:23:37 PM
Co-Chair Stedman asked about the Aged, Blind, and
Disabled and what might cause those Alaskans to be
ineligible.
1:23:44 PM
Mr. Wall replied that each case would be examined on a
case-by-case basis and redetermination would be based on
income, family size, and disability or condition.
1:24:04 PM
Senator Wielechowski asked how the eligibility
redetermination requirements were changing with the ending
of the PHE
1:24:21 PM
Mr. Wall replied that eligibility requirements were not
changing. He said that during the PHE the entire
redetermination process had been waived; there was no
change in the requirements for eligibility, only a
reinstatement of the original federal regulatory process.
1:24:56 PM
Senator Wielechowski surmised that there were certain
groups that had people who enrolled during the time when
the eligibility requirements were waived, who would no
longer be eligible without the PHE waiver.
1:25:27 PM
Mr. Wall reiterated that eligibility redetermination was
required annually for all Medicaid groups. He furthered
that the process was set in regulatory requirement by the
federal government. He restated that during the PHE the
process was stopped; the eligibility requirements were not
changed, but under the waiver were not considered for
enrollment. He said that the requirements had not changed.
What had changed was that during the PHE the
redetermination were not processed.
1:26:19 PM
Senator Wielechowski wondered how those who would be
disenrolled would receive healthcare and health insurance.
1:26:31 PM
Mr. Wall replied that anyone who loses eligibility could
receive counselling or assistance in seeking alternative
methods for healthcare and health insurance.
1:27:20 PM
Mr. Wall pointed to slide 7, "FY2023 Medicaid":
? $6.5 million GF Implementation of Section 1945
Health Homes
? Provides authority for care coordination
initiatives within fee-for-service payment system
while engaging care entities to perform specific
services at 90 percent FMAP for eight quarters.
Targets people with chronic conditions.
? Community Health Centers (CHCs) say they are
ready and willing partners to do this. Converting
the Providence initiative to a Health Home would
convert 90 percent of care fees to federal.
? This is a state plan option and may be
implemented regionally. The State may establish
provider eligibility standards by region.
Steps to Implementation:
? Draft and submit a State Plan Amendment (SPA)
to the Centers for Medicare and Medicaid Services
(CMS)
? CMS reviews and approves SPA
? Update regulations (concurrent with CMS review
period)
Begin to realize savings: As soon as possible
pending CMS approval and adopted regulations
Mr. Wall explained that he health home was not a physical
location but a concept of centralized care, leading to more
efficient healthcare and better outcomes with less
expensive treatments. He said that health homes targeted
those with greatest need and chronic conditions (two or
more), and those with serious and persistent mental health
conditions. He related that once a person was enrolled into
a health home, the services provided were augmented by care
management, care coordination, health promotion,
transitional care and follow-up, patient and family
support, and referral to community and social support
services. He relayed that referral to the support services
led to the use of fewer, more costly medical services due
to a better coordination of cross providers. He said that
SB 74 specifically provided for the 1945 Health Home option
of the Medicaid program. He offered a brief description of
the pilot program. He said that lessons learned form the
pilot would be brought into the health home concept for
implementation.
1:30:03 PM
Senator von Imhof surmised that the state plan amendment
would be a significant document that would take some time
to craft. She wondered whether work had begun on the
document.
1:30:15 PM
Mr. Wall replied that he described Medicaid as a contract
between the federal government and states, which required a
negotiation project for all changes to the project. He
continued that the amendment crafting would be complicated
and time consuming. He explained the drafting and editing
process of an amendment.
Senator von Imhof aske whether a first draft had been
started.
Mr. Wall replied that it would be filed in the summer.
1:31:10 PM
Co-Chair Bishop asked about SB 74, which was a Medicaid
reform bill passed in a previous legislative session. He
asked whether the statute change had been fully implemented
and whether savings had been realized.
1:31:36 PM
Mr. Wall thought that the bill was intended to be an
ongoing process and could not be specifically implemented.
He said that options were continually considered and
discussed with providers and vendors. He said that the cost
containment initiatives that were in the presentation came
out of the collaborative process to seek cost containment.
He pointed to the 1115 Behavioral Health Waiver as a
successful outcome of the legislation.
1:33:08 PM
Mr. Wall addressed slide 8, "FY2023 Medicaid":
? $3.5 million GF Pay for Performance for Hospitals
? Establish authority under the State Plan for the
annual hospital rate setting method to include a
budget adjustment factor that effectively manages cost
growth to and incentivizes hospital efficiency.
? Pair the Budget Adjustment Factor with Quality based
payments to incentivize both resource efficiency and
positive patient outcomes. Possible pay for reporting
in Year 1.
? Plan for Transitioning to Rate Methods that Weigh
Resource Utilization: This would include Diagnostic
Related Groupers (DRGs) for inpatient and Ambulatory
Patient Groupers (APGs) or Enhanced Ambulatory Patient
Groupers (EAPGs) for outpatient.
Steps to Implementation:
? Draft and submit a State Plan Amendment (SPA) to the
Centers for Medicare and Medicaid Services (CMS)
? CMS reviews and approves SPA
? Update regulations (concurrent with CMS review
period)
Begin to realize savings: As soon as possible pending
CMS approval and adopted regulations
1:35:10 PM
Mr. Wall looked at slide 9, "FY2023 Medicaid":
? $4.6 million GF Implementation of Indian Health
Service (IHS) reclaiming by the Administrative
Services Organization (ASO)
? IHS reclaiming has not been submitted for Medicaid
claims processed by the Administrative
Services Organization (processing claims for the 1115
Behavioral Health Waiver)
? ASO initially focused on ensuring smooth onboarding
and prompt payments to providers
? CMS allows retroactive claiming for the current
quarter and the previous seven quarters
Estimated Effective Date: Begin processing April 1,
2022
Approval Required: Does not require approval from the
Centers for Medicare and Medicaid Services
(CMS)
1:36:16 PM
Senator von Imhof recalled $4.6 million in projected
savings.
1:36:54 PM
Mr. Wall replied in the affirmative.
Senator von Imhof asked how the reclamation had helped in
the way of cost, better value, and coordination.
1:38:39 PM
Mr. Wall did not have the numbers on hand but thought the
savings had been significant.
Senator von Imhof asked whether there was an agreement for
payment between the state and Tribal systems and were
patients using both systems tracked.
Mr. Wall said that a coordinated care agreement would be
established between Tribes and the state and a unit within
Healthcare Services would track the claims through the
claims process.
Senator von Imhof understood that the savings were twofold:
IHS received the higher federal reimbursement and the pay
for performance. She said it was less than a fee-for-
service and more of a bundling.
1:39:22 PM
Mr. Wall replied that the issue was still being worked out
with the federal government.
1:39:29 PM
Co-Chair Stedman asked about the timeline for the state
plan amendment.
1:39:48 PM
Mr. Wall replied that the HIS reclaiming did not require a
state plan amendment and would be initiated on April 1,
2022.
1:40:11 PM
Co-Chair Stedman asked whether there was a risk of plan
modifications in the timing.
1:40:33 PM
Mr. Wall replied that the biggest risk was new information
coming from the federal government. He said that the date
set for the PHE to expire could be extended, which provided
the department some wiggle room in their budget proposal.
1:41:23 PM
Co-Chair Stedman remarked that the committee remained
cautious of delivering savings and not facing a
supplemental request next year.
1:41:40 PM
Mr. Wall understood that al states were in the same
situation and awaiting guidance from the CMS task force.
1:42:46 PM
Mr. Wall pointed to slide 10, "Medicaid Spending Actuals
and Projected." He noted that the slide was derived from
Medicaid enrollment and Spending in Alaska, or the MESA
Report. The source of analysis was Evergreen Economics. He
relayed that the blue dotted line on the chart was what as
originally projected as the exponential growth of the
program in 2005. The red line represented what the actual
costs had been after the cost containment items had been
added for each successive administration. He said that
significant work had been done over the years to stem the
growth of Medicaid. He said that when SB 74 was introduced
the curve had flattened and the chart showed year-by-year
the effects of each cost containment item. The green dashed
line reflected the current projection and were considered
point in time moving forward and did not include cost
containment items under current discussion.
1:45:20 PM
Co-Chair Bishop queried what multiplier for inflation had
been used on the slide.
1:45:32 PM
Mr. Wall replied that the number was 4.2 percent.
1:45:41 PM
Ms. Robb interjected that Evergreen Economic projected 3.5
percent overall, which was broken out by the state and
federal portions.
1:46:11 PM
Senator von Imhof asked whether the cost inflation for
health care had grown at 3.5 percent over the last two
decades.
1:46:27 PM
Ms. Robb replied that reading further into the report
showed that Medicaid had been paying below the rate of
inflation.
1:46:53 PM
Senator von Imhof understood that the cost of healthcare in
the state had increased more than 3.5 percent each year.
1:47:12 PM
Mr. Wall agreed. He said that the full MESA report could be
provided to the committee. He furthered that the author of
the report had been before a committee in the other body
and had discussed the difference between the growth rate of
healthcare overall and the growth rate of Medicaid. He
offered to make that presentation available to the
committee.
1:48:08 PM
th
Senator von Imhof asked whether Medicaid followed the 80
percentile rule in Alaska.
1:48:10 PM
Commissioner Crum replied in the negative.
1:48:29 PM
Co-Chair Stedman asked for an explanation of the 80
percentile rule.
1:48:35 PM
Commissioner Crum said that the rule was initially designed
as a consumer protection model to ensure providers were
th
paying at the 80 percentile payment within a geographical
region. He said that under the federal No Surprise Act the
rule now protected providers more that consumers. He
offered to get back to the committee in writing.
1:49:20 PM
th
Senator von Imhof wondered whether under the 80 percentile
rule, insurance companies were responsible for 80 percent
of a patients bill from a medical provider. She understood
that the insurance company would continue to pay 80 percent
of the bill for same patient, same provider, same
procedure, despite prices rising yearly due to inflation.
She knew that Blue Cross paid the 80 percent and wondered
who was paying for rising medical costs if Medicaid was not
increasing payments with inflation.
1:50:26 PM
Mr. Wall replied that there was variation between rates and
provider types. He said the department set the Medicaid
rates and told providers in advance how much they would get
for a particular service. He said that providers enrolled
as Medicaid providers with the knowledge of how much the
state was willing to pay. He said that providers could
chose to enroll as a Medicaid provider and accept the set
payment, or not.
Senator von Imhof understood that AK was the only state
with the 80th percentile rule, which had contributed to the
overall cost of the Medicaid system. She thought that the
Medicaid costs contributed to growth in spending and
wondered who was paying the difference if insurance
companies were not. She expressed concern for the rising
cost of healthcare.
1:52:31 PM
Senator Wielechowski asked whether analysis had been done
on the cost of preventable illnesses.
Mr. Wall replied that the report did not reflect that
information.
Senator Wielechowski expressed interested in seeing numbers
for preventable illnesses. He thought that a large
percentage of the costs were from health issues that could
be curbed through better health education.
Commissioner Crum said that the cost of chronic health
issues was a major part of the overall cost. He noted it
was a minority of the population and most of the cost. He
spoke of the initiatives in place to encourage healthy
habits. He said that the Medicaid program was limited
because it only paid for medically diagnosed issues. He
called this the Prevention Paradox as the federal
government did not match state dollars for prevention
programs. He spoke of 1115 waivers and the possibility of
other waivers to support prevention programs.
1:55:53 PM
Mr. Wall addressed slide 11, "Spending on Medicaid
Services, Enrollment in the Medicaid Program, and
Recipients of Medicaid Services, By Date of Service, FY2012
FY2021." The slide contained information from the MESA
report. He explained that the green line indicated the
enrollee count, which was currently the highest it had ever
been, primarily due to the PHE and the inability to do
redeterminations. He pointed to the blue line, which
indicated the number of recipients. He said that there were
a number of people enrolled in Medicaid that did not use
services. He directed committee attention to the red
section of the bars, which was the spending in federal
funds; the blue section of the bars indicated state
spending. He relayed that general funds had been reduced
and federal funding had increased during the time charted
on the slide.
1:57:18 PM
Co-Chair Stedman asked about the numeric on recipients.
Mr. Wall replied 200,001.
Co-Chair Stedman commented that that was a healthy number
of Alaskans.
1:57:59 PM
Ms. Robb pointed to slide 12, "Medicaid Services
Appropriation." She highlighted that UGF, since FY13, had
been relatively flat. She thought that this was due to the
departments aggressive efforts to contain costs.
1:58:41 PM
Senator Wielechowski asked about the decrease in DGF funds
reflected on the slide.
Ms. Robb replied that the decrease was the result of a fund
source change related to the reverse sweep.
Co-Chair Stedman asked Ms. Robb to repeat her answer.
Ms. Robb reiterated that the change in DGF from FY 20 to FY
23 was due to the fund source changes implemented by the
administration were related to the budget not being built
around the reverse sweep; sweepable funds had been moved to
UGF fund sources.
Co-Chair Stedman thought that the issue would be considered
during the current budget process. He said that the reverse
sweep issue would be discussed further in committee. He
asked Ms. Robb to expound on her answer.
Ms. Robb explained that in the past the budget had been
built around the assumption of the reverse sweep taking
place. When fuds that were deemed sweepable were used it
was assumed that those funds would be swept back and
available for subsequent years. The administration decided
to forego the reverse sweep for FY 22 and the sweepable
funds could not be counted on in FY 23.
Co-Chair Stedman added that the funds that were swept June
th
30 were normally expected as an account balance on July 1.
He wondered how a projected account balance for the end of
the fiscal year was determined in the absence of the
reverse sweep funds.
2:01:37 PM
Ms. Robb discussed the anticipated revenue for FY 23. She
said that the Department of Revenue projected what each
fund would generate form fund sources during the year, and
FY 23 budget request was based on that projection.
2:02:11 PM
Senator Wielechowski asked about the transfer of $472.5
million DGF funds to UGF. He noted that the slide reflected
an increase of $45 million UGH and wondered what happened
to the other $430 million.
Ms. Robb noted the DGF reduction of $500 thousand and
questioned Senator Wielechowskis numbers.
Senator Wielechowski admitted he misread the numbers.
2:03:07 PM
Co-Chair Stedman noted the disagreement with the
administration regarding the reverse sweep.
2:03:44 PM
Senator von Imhof surmised that the funds the transferred
to UGF were from the Marijuana Education and Treatment
funds, Recidivism and Reduction funds, and Tobacco
Cessation funds. She noted that all those funds were lost
due to the failure of the administration to honor the
reverse sweep.
2:04:09 PM
Ms. Robb looked at slide 13, "Comparison of UGF Medicaid
Expenditure Projections ($millions)." She noted that the
slide was created by the Legislative Finance Division
(LFD). The slide was intended to show the inflation
projections related to the long-term forecast of MESA
report. She said that the departments projections differed
from that of the report. The MESA report based its
projections on the assumption that there were no additional
cost containment measures. The department was actively
trying to contain the cost of Medicaid. She said that the
MEAS projected increase in costs was related to increased
cost of healthcare in the state and changes in the
population.
2:05:59 PM
Co-Chair Stedman remarked that there was a concern that the
10-year projections would not be conservative enough. He
lamented that projections by the consultants showed
significant growth changes and accounted for approximately
$1.3 billion in increased costs over the years.
2:07:24 PM
Mr. Wall replied that there were several different ways to
anticipate costs for Medicaid. He said national economists
looked at the overall cost growth of healthcare, inflation,
and different projected eligibility group when casting
their projections. He said that economist did not add in
cost savings plans. He economists assumed that the
department would do the work of cost containment.
2:09:04 PM
Co-Chair Stedman asked whether the 1 percent, relative to
the 6 percent, should be considered each year when crafting
the states budget.
2:09:39 PM
Mr. Wall said he had never seen a 1 percent increase in his
lifetime and that it should not be counted on. He stressed
that healthcare costs were increasing at a greater rate
year after year.
2:10:11 PM
Mr. Wall looked back on slide 10, which showed historical
cost containment efforts employed by the department. He
felt that those efforts had been successful. He reiterated
that the consultants projections did not consider cost
containment efforts by the department.
2:11:09 PM
Co-Chair Stedman asked that a projection using 1 percent
growth be added to the chart.
2:11:19 PM
Ms. Robb agreed to provide that information.
2:11:25 PM
Co-Chair Stedman stressed that neither the red nor green
line was horizontal. He thought that the argument that
there was going to be very low growth rates after cost
containment efforts by the department was unrealistic and
that the committee should benchmark the number between the
consultant's projections, with no cost containment, and
those of the department.
2:12:27 PM
Commissioner Crum looked at slide 12. He said that it
showed and illustration between FY 13 and FY 23 that the
UGF had maintained flat. He stressed that the UGF spend had
remained flat over those fiscal years.
2:13:14 PM
Co-Chair Stedman said that the concern was that there was a
limit to the reductions and the projections should consider
that fact. He expected that LFD would be adjusting the
numbers on the slide to achieve a more realistic
projection.
2:15:36 PM
AT EASE
2:20:53 PM
RECONVENED
^PRESENTATION: CLEAN WATER ACT SECTION 404 PRIMACY/RESOURCE
CONSERVATION and RECOVERY ACT
2:21:49 PM
RANDY BATES, DIVISION OF WATER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, (DEC) continued to discuss the presentation
from the previous day, "Department of Environmental
Conservation; Senate Finance Committee" (copy on file).
2:22:25 PM
Mr. Bates recapped the conversation from the previous day.
2:24:20 PM
JASON BRUNE, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, introduced himself.
2:24:30 PM
Mr. Bates discussed slide 11, " 404 Primacy Costs (in
thousands)":
• Increment Request
o $4,904.0 UGF
o 28 FT Positions
o Training, equipment, and travel
o Contractual support including legal
consultation
o Coordination with DFG and DNR
• Anticipate four additional positions in FY2024
• Two-year application process
Mr. Bates recalled a question the previous day about the
2013 fiscal note. He said that the department anticipated a
relationship with sister agencies, which would include RSAs
and a potential state mitigation bank. He discussed the
Environmental Protection Agencys (EPA) review and approval
process for programs.
Mr. Bates highlighted slide 12, "Section 404 Assumable
Waters:
• US Army Corps of Engineers (USACE) will retain
permitting authority over the following Waters of
the US (WOTUS)
o Waters which are presently used for interstate
or foreign commerce
o Waters which are susceptible to use for
interstate or foreign commerce
o Waters which are subject to the ebb and flow of
the tide (i.e., coastal waters)
o Wetlands adjacent to the above waters
• Alaska would assume permitting authority over the
remaining WOTUS
2:29:14 PM
Senator Wielechowski asked about the state assumed water
areas. He wondered whether the state could change how the
Clean Water Act was implemented in certain areas.
2:29:27 PM
Mr. Bates replied that the state had to follow the
404(b)(1) guidelines in the Clean Water Act but could
tailor it to the needs of the state.
2:30:03 PM
Senator Wielechowski asked whether the EPA retained
oversight of those areas to ensure that the Clean Water Act
was followed.
2:30:14 PM
Mr. Bates replied in the affirmative.
2:31:21 PM
Senator Wielechowski asked whether Alaska Native tribes had
government to government consultation rights with the EPA.
Mr. Bates responded in the affirmative. He said that DEC
had a consultation policy with Tribes to consult and work
with Tribes early in the process. He stated that Tribal
consultation had been laid out in the language of the 404
programs plan.
2:32:44 PM
Senator Wielechowski understood that under the state run
402 program Alaska Native Tribes were always given
government consultation.
2:33:06 PM
Commissioner Brune replied that the department met with
Tribes when requested and encouraged Tribes to reach out to
the department to address concerns. He said that Tribes
were an integral part of the process.
2:33:35 PM
Senator Wielechowski asked whether Tribes had the same
rights under the state run 402 program as they would under
the EPA.
Commissioner Brune responded that formal government to
government consultation occurred between the EPA and the
Tribes. He asserted DEC made meeting with Tribes a priority
but that the process was not the same as under the EPA.
2:34:45 PM
Mr. Bates furthered that the policy could be found on the
departments website. He read from the site:
The department is committed to consulting with tribes
as early in the department's decision-making process
as practicable, and as permitted by law, before taking
department action, except that the department is not
committed to consulting with tribes in those instances
described in "Limitations on Consultation" below.
Consultation will provide meaningful participation by
the affected tribe, with the goal of achieving
informed decision-making.
2:35:18 PM
Senator Olson interjected that he had heard from a Tribal
lawyer that there would be an eventual erosion of Tribal
decision capabilities.
2:35:41 PM
Mr. Bate disagreed.
2:35:51 PM
Senator von Imhof queried why 28 positions were needed for
the program.
2:36:01 PM
Mr. Bates replied that in 2013, 5 to 8 individuals had been
established for the development of the program. He shared
that binders had been created in 2014, containing
information about what was necessary for an effective and
efficient 404 program. When the funding ended in 2014, the
group had identified the number of employees necessary to
implement the plan going forward. He related that the
binders contained information related to how the plan would
be developed, permitting expertise, enforcement and
inspection capacity, and administrative support needs. The
positions required were established after assessing these
needs. He described the program staff flow chart. He noted
that the staffing plan was not comparable to other states.
2:38:25 PM
Co-Chair Bishop asked whether the funding for the program
would with to DGF in the future.
Mr. Bates replied that as of now the program was a fully
funded UGF program. He said that as the program matured a
fee for service concept should be considered. He thought
that the funding would be a hybrid of DGF and UGF funds.
2:39:28 PM
Commissioner Brune interjected that the department was
committed to talking with the regulated community to get
their input as the proposal was developed.
2:39:49 PM
Senator Hoffman asked whether there was a definition of
Tribes for DEC and was it the same as the definition
under U.S. Congress.
2:40:11 PM
Commissioner Brune responded that the department met with
various Tribal entities to discuss issues of concern.
2:41:08 PM
Senator Hoffman understood that the definition as Mr. Brune
described it was the expanded version as recognized by
Congress.
2:41:40 PM
Commissioner Brune did not know the specifical Tribal
entities that the department worked with. He stressed that
any Tribal group that approached the department would be
heard.
2:42:10 PM
Senator Hoffman requested the list of Tribal entities
recognized under the departments definition of Tribal
Entity.
2:42:48 PM
Senator Wielechowski asked whether the state would be
willing to give the tribes the same government to
government recognition as offered by the EPA.
2:43:00 PM
Commissioner Brune thought that that would be up to the
legislature to decide.
2:43:20 PM
Mr. Bates addressed slide 13, "Example of Jurisdictional
Waters." The slide showed the administrative boundary line,
which was to be negotiated item. The line would distinguish
who had 404 permitting for the area. He said that the state
would be as aggressive as possible to limit the Corps of
Engineers authority in Alaska. He walked through the
projects on the slide: Project 1 USACE review, Project 2
state review, Project 3 options: A split
State/USACE review, B USACE review. He described the span
of the various projects form marine waters into the
interior, which mixed jurisdictions. He hoped to create and
option for applicants to choose whether they wanted to be
under the state and the USACE, which could allow for
flexibility, or solely under the USACE.
2:49:29 PM
Co-Chair Stedman assumed that the islands in Southeast
would span both jurisdictions.
Mr. Bates agreed.
2:49:54 PM
Co-Chair Stedman queried the size of the project that would
require compliance.
Mr. Bates responded that it would depend on whether it was
an activity under the Clean Water Act. He did not believe
something like a woodshed would require a 404 permit.
Activities like roads would require a permit.
2:51:17 PM
Co-Chair Stedman understood commercial use of tidelands
would fall under the 404 permitting. He asked about
personal use trapper cabins built within 300 feet of
tidelands.
2:51:38 PM
Mr. Bates replied that they may not require a permit.
Co-Chair Stedman requested further clarity on the 300 feet
issue.
2:53:34 PM
Commissioner Brune interjected that there was a case in
Idaho where people wanted to build a house on wetlands that
was currently being litigated by the Supreme Court.
Senator Olson asked whether the state of Idaho had 404
primacy jurisdiction.
Commissioner Brune shared that only 3 states had 404
primacy Michigan, New Jersey, and Florida.
2:53:49 PM
Mr. Bates related that said that if industry was unaware
that they were subject to a 404 permit, they would apply
for one because of liability issues. He said that if a
permit was not procured and courts decided that one had
been necessary there were legal penalties. He stressed the
need for clarity on the matter.
Mr. Bates pointed to slide 14, "404 Primacy Requirements":
Alaska's Section 404 program will:
Be consistent with and no less stringent than the
Clean Water Act and its implementing regulations
Have sufficient authority to regulate all waters
of the U.S. that may be assumed
Regulate at least the same activities as listed
in the Clean Water Act and its implementing
regulations
Provide for sufficient public participation and
tribal consultation
Ensure compliance with the Section 404(b)(1)
guidelines which provide criteria for permit
decisions
Have adequate enforcement authority
2:54:42 PM
Mr. Bates looked at slide 15, "Benefits of a 404 Primacy
Part 1":
Accountable to Alaskans and the legislature Alaska
will have control of its permitting priorities
Enables the State to integrate the dredge and fill
program with other related land and water management
programs
Increases permitting efficiency by reducing
duplicative State and federal reviews, requirements,
and permit conditions
State implementation and flexibility for compensatory
mitigation requirements
2:57:20 PM
Mr. Bates pointed to slide 16, "Benefits of a 404 Primacy
Part 2
Significant time and cost savings for large projects
in state assumed waters no costly and time intensive
federal National Environmental Policy Act provisions
and processes
Permits issued will reflect Alaska's unique conditions
with Alaska-specific program guidance
State 404 Program would reduce the uncertainty
resulting from shifting national policies (i.e.,
waters of the U.S.)
2:58:46 PM
Senator Hoffman thought that Coastal Zone Management
program had minimized the time effort of permitting and
wondered why the program was not being reinstated.
2:59:14 PM
Senator Olson commented that his constituency was skeptical
of the state taking over the program.
Mr. Bates concluded that the department believed that a
state 404 program gave Alaska the control and leadership
necessary for the future of resource development and long-
term management of wetlands and waters.
Co-Chair Stedman requested that the department reach out to
Senator Wielechowskis office for additional questions. He
stressed that there were communities that would be
financially impacted by the plan that would require more
information and further discussion of the matter.
3:02:43 PM
Senator Hoffman requested that, since the program was
already embedded in the budget, a fiscal note be presented
that detailed how the funds for the program would be
distributed.
ADJOURNMENT
3:03:32 PM
The meeting was adjourned at 3:03 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 031522 SFIN Medicaid Presentation 3.15.22 w Leg Fin Slides.pdf |
SFIN 3/15/2022 1:00:00 PM |
|
| 031422 DEC SB 27 Fiscal Note 2013.pdf |
SFIN 3/15/2022 1:00:00 PM |
SB 27 |
| 031422 DEC Wetlands Status map.png |
SFIN 3/15/2022 1:00:00 PM |
|
| 031422 DEC 07who_owns_alaska_poster (1).pdf |
SFIN 3/15/2022 1:00:00 PM |
|
| 031422 SFIN DEC RCRA 404 Primacy.pdf |
SFIN 3/15/2022 1:00:00 PM |