Legislature(2001 - 2002)
11/08/2001 09:00 AM Senate HES
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE
Health Care and Welfare Subcommittee Hearing
Mat-Su Legislative Information Office
November 8, 2001
9:00 a.m.
MEMBERS PRESENT
Senator Lyda Green, Chair
Senator Bettye Davis
MEMBERS ABSENT
Senator Jerry Ward
OTHER LEGISLATORS PRESENT
Senator Robin Taylor
Representative Fred Dyson
Representative Sharon Cissna
SUBCOMMITTEE CALENDAR
The future of health care costs and welfare reform in Alaska.
WITNESS REGISTER
Mr. Krag Johnson
Denali Commission
510 C St.
Anchorage, AK
Mr. Joel Neimeyer
Denali Commission
510 C St.
Anchorage, AK
Ms. Karen Pearson, Director
Division of Public Health
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
Ms. Cynthia Navarette
Alaska Native Health Board
4201 Tudor Centre, Suite 105
Anchorage, AK 99508
Mr. Dan Winkelman
Yukon Kuskokwim Health Corporation
PO Box 528
Bethel, AK 99559
Mr. Joel Gilbertson
Aide to Senator Murkowski
322 Hart Building
Washington, D.C. 20520-0202
Mr. Bob Labbe, Director
Division of Medical Assistance
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
Mr. Steve Branchflower
Medicaid Fraud Unit
Department of Health and Social Services
310 K St., Suite 300
Anchorage, AK
Mr. Elmer Lindstrom
Deputy Commissioner
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
Mr. Bill Hogan, Executive Director
Lifequest
230 E Paulson
Wasilla, AK 99654
Ms. Lila Berry
Circle of Care
3832 Apollo Drive
Anchorage, AK
Mr. Kris Moore
PO Box 877636
Wasilla, AK
Ms. Elaine Manning
HR01 Box 2437
Glennallen, AK
Ms. Monta Faye Lane
Alaska Caregivers' Association
th
109 E 5 Ave.
North Pole, AK 99705
Ms. Mary Olson
1150 Golden Hills Drive
Palmer, AK 99645
Ms. C. Sue Drover
PO Box 314
Talkeetna, AK 99676
Ms. Ruth Titler
Circle of Care
th
1280 E 17 Ave., No. 222
Anchorage, AK 99501
Dr. Dave Alexander
3340 Providence Dr. No. 466
Anchorage, AK 99508
Mr. Dennis Dunn
Kenai Alternative High School
11247 Frontage Rd., Suite C
Kenai, AK 99611
ACTION NARRATIVE
TAPE 01-47, SIDE A
Number 001
CHAIRWOMAN LYDA GREEN called the Senate Health, Education &
Social Services Subcommittee meeting to order at 9:00 a.m.
Present were Senators Davis, Taylor, and Chairwoman Green.
Chairwoman Green announced that the subcommittee is meeting to
consider in what direction Alaska should go regarding Medicaid
coverage and possible legislation. She noted that priorities
regarding services to be covered under Medicaid have changed
since the events of September 11. She pointed out that one item
on the agenda today is rural health care. When looking through
the budget last year, Senate Finance Committee members noticed
there would be a budget item to provide a service at the state
level that other groups were providing. They tried to find as
many funding sources coming into rural health care sites to get
them aligned and not duplicative. She asked a representative
from the Denali Commission to present to the committee.
MR. KRAG JOHNSON, the Alaska Legislature's staff representative
on the Denali Commission, introduced Joel Neimeyer, the
Commission's rural health expert. He distributed an update on
Denali Commission activities to committee members and the public.
The update contains a generalized list of projects the Denali
Commission has been working on and funding levels for those
projects. He noted Mr. Neimeyer came to the Denali Commission
after 17 years with the Indian Health Service and has worked with
the Alaska Native Tribal Health Consortium.
MR. JOEL NEIMEYER, program manager for the Health Facilities
Program, informed the committee that since September of 1999, he
has been working with the Denali Commission on infrastructure,
originally with rural energy projects. When the health care
program started developing, it was consuming so much time he
became the Health Facilities Program Manager.
CHAIRWOMAN GREEN asked Mr. Neimeyer if he spent all 17 years with
the Indian Health Service (IHS) in rural Alaska.
MR. NEIMEYER said all but three years, which he spent in Western
Washington. He noted that he would address four bullets issues,
one being the role of the state and federal government, the
Denali Commission and Native non-profit health corporations in
rural health care.
First, the Denali Commission was created by federal legislation
in 1998 to look at training, economic development, and
infrastructure development. The legislation allows the Commission
to work with many different partners in many different areas. The
legislation established an administrative cap at 5 percent, which
does not allow the Commission to run its own program. That cap
forces the Commission to find partners who are already doing the
work and have the same mission.
CHAIRWOMAN GREEN asked who a typical partner would be.
MR. NEIMEYER said that varies by interest. In the Denali
Commission's health care program, its two primary partners are
the State of Alaska and the Alaska Native Tribal Health
Consortium. In the Commission's rural energy program, it
primarily partners with the Alaska Energy Authority and the
Alaska Village Electric Authority. He said in 1999, Congress
passed legislation [P.L. 105-277] that amended the Denali
Commission act and focuses it particularly on health care
programs. It gives the Commission the authority to plan, design
and construct hospitals, mental health facilities, elder care,
childcare, and primary care facilities.
MR. NEIMEYER said one of the first things the Denali Commission
did when that legislation passed was to put together a steering
committee to do a needs assessment of primary care. Its original
partners were the Alaska Native Tribal Health Consortium and
Indian Health Service. The goal of the needs assessment was to
quantify what the primary care needs are across the state. They
chose to look at 288 communities without an in-patient care
facility at the hospital and more than 20 year-round residents.
The study results determined a need for $253 million to address
primary care facilities statewide.
CHAIRWOMAN GREEN asked him to describe some typical communities
identified in the study.
MR. NEIMEYER stated that some communities have no health clinics,
but many have very small clinics. The Steering Committee found
that many clinics were built based upon available funds from HUD
community development block grant funds and State of Alaska
community development block grant funds. The Steering Committee
found the small facilities restrict the amount of health care
programs offered in the community so that health care access is
restricted by capital funds, not by health program services that
can be offered. The Steering Committee decided to change its
perspective and requirement of a community for primary care
services based upon geographic isolation and population size.
When the Steering Committee put together the needs assessment, it
found that it could not compare the health care needs of large
and small communities and felt it was unfair to make communities
compete with one another. The outcome was to develop three
funding processes as demonstrated in the following chart. Large
clinics work for communities with a population larger than 750 or
communities that serve as a sub-regional clinic or a multi-
community clinic. Small clinics work in communities where that
clinic is a "stand alone" clinic for that community. The third
funding process is for the repair or renovation of existing
clinics.
MR. NEIMEYER pointed out that none of the Denali Commission's
projects to date have required a Certificate of Need but that
will be incorporated into the program in case one is needed.
Where the Commission goes with funding these projects will be
guided by the Health Care Steering Committee. That Committee was
organized in early 2000 and is made up of four agencies: the
Denali Commission, the IHS, the Alaska Native Tribal Health
Consortium and the State of Alaska. Over time, more partners
were added: the Alaska Primary Care Association, the Alaska
Mental Health Trust, the University of Alaska and the Alaska
Native Health Board. The Steering Committee took on the
responsibility for developing the Request for Proposals process
for capital funding of health care facilities. Recently, the
Committee was restructured so that it takes a more policy
advisory role and less of a work-group function. Karen Perdue
will represent the University of Alaska.
CHAIRWOMAN GREEN asked for a description of the Alaska Primary
Care Association.
MR. NEIMEYER explained that it is a non-profit member
organization made up of about 40 or 50 members, located in
Anchorage.
MR. NEIMEYER informed the subcommittee that Karen Pearson is the
chair of the Steering Committee.
CHAIRWOMAN GREEN noted the presence of Senator Taylor.
MS. KAREN PEARSON informed the committee that the primary role of
the Alaska Primary Care Association (APCA) is to support its
membership, which is made up predominantly of the rural community
health centers and the two larger ones in Fairbanks and
Anchorage. The APCA helps them to do joint purchasing and to
help with board development.
CHAIRWOMAN GREEN asked if the APCA has any members from the
private sector.
MR. NEIMEYER said several decisions were made about who would
have a seat on the Steering Committee, one being that each seat
would be filled by a representative from a statewide
organization. The concern was that if a regional organization
was selected, other regional organizations would fear that funds
would be steered toward that region. The Steering Committee
gives advice to the seven commissioners on the Denali Commission
about what the Commission should be doing in the health care
arena. The Steering Committee gets its advice from the seven
member organizations.
CHAIRWOMAN GREEN asked how a conflict of interest is avoided if
the Steering Committee is funding organizations that belong to
it.
MS. PEARSON said that is a question the Steering Committee has
grappled with and was partly responsible for the restructuring of
the board. She pointed out the State of Alaska, University of
Alaska and Native Health Board will not receive funding and all
members work very hard to be cognizant of that issue.
MR. NEIMEYER said once decisions are made, it has to find
partners because it has a 5 percent limit on administrative
costs.
CHAIRWOMAN GREEN asked for an explanation of the administrative
costs.
MR. NEIMEYER said administrative costs include utilities, staff,
and whatever else it takes to run an operation. To put projects
on the ground in rural Alaska takes more than five percent, so
the Steering Committee finds partners to help. In the health
care arena, the State (the Department of Health and Social
Services - DHSS) is the pre-award partner. Ms. Pearson and her
staff assist the Steering Committee in getting the RFPs out and
in putting together evaluation teams to review the applications.
Once the decision has been made about what projects should be
funded, the Steering Committee works with its post-award partner,
the Alaska Native Tribal Health Consortium (ANTHC), on small
clinic projects and repair projects. The ANTHC represents the
Steering Committee's interests in the individual communities.
The Steering Committee found that many of the proposals for large
clinics are from large organizations.
CHAIRWOMAN GREEN asked for an example of a large organization.
MR. NEIMEYER replied that the Steering Committee funded a large
clinic through the Yukon Kuskokwim Corporation (YKC). YKC has a
health facility manager, professional engineer, and several staff
who run the project. The Steering Committee funded SEARHC
projects in Angoon and Haines, who also have health facilities
managers and contracting departments, so they are capable of
putting the projects on the ground. The Steering Committee
entered into agreements with those organizations for the large
clinic funding. Routinely, small clinics are built in smaller
communities.
CHAIRWOMAN GREEN asked if Mr. Neimeyer is referring to the large
clinic in Kotzebue.
MR. NEIMEYER said he was not and that, in general, a small clinic
is about 1,500 to 2,500 square feet. Large clinics are 2,500 to
10,000 square feet.
CHAIRWOMAN GREEN asked if, in general, a clinic is a 24-hour,
overnight stay facility.
MR. NEIMEYER said they are not. He explained that ANTHC
represents the regional health corporations, such as YKC and the
Tanana Chiefs Conference (TCC). When the Steering Committee
selected ANTHC, it required ANTHC to agree to represent all
communities in the state that the Denali Commission funds.
CHAIRWOMAN GREEN asked if ANTHC was pre-ordained to participate
from the beginning.
MR. NEIMEYER said it was not. The Steering Committee looked into
what different organizations could be program partners and
everything pointed to ANTHC as being the organization most ready
to take on this work. ANTHC agreed to serve all communities that
the Steering Committee recommends projects in.
CHAIRWOMAN GREEN asked if they are audited regularly.
MR. NEIMEYER said they are; they fall under the federal single
audit act so they are monitored regularly. He said this past
fiscal year, the Steering Committee put 12 projects on a fast-
track process; ANTHC represented the Steering Committee on those
projects. Mr. Neimeyer told the committee that if the Denali
Commission decides to expand its program to include health
facilities other than primary care facilities, such as hospitals,
it will have to explore the question of who to partner with.
CHAIRWOMAN GREEN asked if totally different standards would apply
to a hospital program.
MS. PEARSON said that is correct and that is the reason the
Denali Commission has not gone into that arena. The Denali
Commission is only looking at communities that do not have a
hospital. Primary care includes, in addition to physical care,
mental health and substance abuse services. With the maturation
of this process, communities are thinking about their total
primary care needs.
CHAIRWOMAN GREEN asked if the Haines clinic, a one-person outfit,
is an example of a primary care health care facility. She pointed
out that managing a one-person clinic is a very stressful job.
MS. PEARSON said the Haines clinic is an example of a primary
care facility. The Steering Committee is approaching the design
of these facilities in a systematic way that focuses on physical
care first, but will build a one-person mental health facility so
that residents will have total access to primary care.
CHAIRWOMAN GREEN asked Ms. Pearson if her participation is
outside of her job at the Division of Public Health so that she
wears two hats.
MS. PEARSON said that is correct.
CHAIRWOMAN GREEN asked Ms. Pearson how she considers both
perspectives when she works on the division's budget.
MS. PEARSON said she believes it was a wise decision on the part
of the Denali Commission to have the director of the Division of
Public Health chair this group because to have the facility
development work happen separate from the question of how to pay
for services would not have worked well. All participants do the
planning for the facilities and the services together in a
coordinated fashion.
CHAIRWOMAN GREEN stated that she would like to have a follow-up
session, perhaps in April, to update the committee on the impact
of the Steering Committee's work on the budget.
ME. NEIMEYER continued his presentation. For projects managed by
ANTHC, communities have six funding-construction options. A
community, regional health corporation or ANTHC can manage a
project using a force account or by contract. If a community
wants to take the lead, it can, if it can demonstrate that it has
the ability to do so. The Steering Committee has found that when
it partners with ANHTC, it receives quarterly status reports, it
manages the funds, and it has engineers in the field. In fiscal
year 2000, the Steering Committee put $1,000,000 into four
demonstration projects and learned to have the construction plans
in hand and to do site control. Those lessons were applied in
fiscal year 2001, when the Steering Committee had $20 million to
spend. In fiscal year 2002, the Steering Committee has committed
$12.5 million for small clinics. It plans to have $20 to $30
million so it is developing mechanisms to select projects.
TAPE 01-47, SIDE B
MR. NEIMEYER explained that the Steering Committee had to devise
a way to translate services to square footage. Emergency Medical
Services categories are used; the first of three being an
isolated community, which includes most of the 288 communities,
and the two highway communities. Based upon isolation and
population, the Steering Committee decided how large a facility
should be. For example, a community relatively close to a large
urban center with a hospital and other health care service was
deemed to not need as much space as a community far from an urban
center. The Steering Committee designated clinic sizes as small,
medium and large within the small clinic program. A small clinic
is 1500 square feet, a medium is 2000 square feet, and a large
clinic is 2500 square feet. The Steering Committee found, when
developing these guidelines, access to inpatient services became
a much more important factor in the health care needs of larger
communities. For that reason, the Steering Committee created two
categories so that those communities would have to compete
individually and demonstrate their service delivery needs.
CHAIRWOMAN GREEN asked Ms. Pearson if any of the Division of
Public Health's budget is used for the administrative costs of
the Denali Commission.
MS. PEARSON said it does not. The Steering Committee worked out
an arrangement whereby it has about $300,000 that it can tap into
as needed for support activities. It has worked very hard to
dovetail this program with programs already in place, which is
why the Denali Commission asked the division to be the pre-award
partner. The division administers a lot of grants every year and
has a process established that can easily be duplicated. Ms.
Pearson noted that during the past year, the Steering Committee
worked very hard, with support from Senator Stevens' office, to
access federal community health money (Section 330 money). While
the Steering Committee was successful in partnering with certain
clinics to get money directly to communities, it was also
successful in persuading the federal Health Resource Services
Administration (HRSA) that the State of Alaska needs an ongoing
stream of funds to ensure that communities get the necessary
support to compete for Denali Commission dollars or for other
federal dollars. The Steering Committee received $250,000 for
that purpose. That will support the additional work it takes to
support the Denali Commission without using any state funds.
SENATOR TAYLOR referred to the Denali Commission's needs
assessment, which projects a need for $253 million, and asked if
that amount will provide a full clinic in every community in the
state.
MR. NEIMEYER said that amount will provide a full clinic in 288
communities. He pointed out that communities with fewer than 20
year-round residents and communities with hospitals are not on
the Commission's "radar screen."
SENATOR TAYLOR asked if communities are expected to participate
in the needs assessment.
MR. NEIMEYER said there is a required cost share match in
legislation of 25 or 50 percent, depending on the economic status
of the community and the Steering Committee has found that to be
a barrier to getting communities funded.
There was no further testimony from, or questions for, Mr.
Neimeyer.
Number 958
MS. CYNTHIA NAVARRETTE, President and CEO of the Alaska Native
Health Board (ANHB), stated that Sally Smith, the ANHB Chair, was
unable to present to the committee today because of a schedule
conflict. She clarified that the ANTHC is a member organization
of ANHB, which is a privately owned, non-profit organization. It
advocates on behalf of health organizations throughout the state
of Alaska. ANHB was established in 1968 with the sole purpose of
promoting the spiritual, physical, mental, social and cultural
well-being and pride of Alaska Native people. The Board of
Directors include Alaska Native regional and village health
providers from across the state. In most cases, these
organizations are the only health care providers in the
communities and, in fact, they not only serve Native people but
they serve all community members. She informed the committee she
would present her testimony in four parts: an overview of the
Alaska Native health system; an overview of the funding providing
to operate the programs, functions, activities and services; an
overview of Medicaid; and the effects of the IHS beneficiaries in
the use of the Medicaid program.
Overview of The Alaska Native_Statewide_Health Care_Delivery
System
The heart of the Alaska Native Health System is the 468
Community Health Aides working in 178 village clinics throughout
rural Alaska. The IHS beneficiaries in remote villages do not
have daily access to physician care. They rely on the medical
attention of the Health Aide.
There are six regional hospitals operated by the following Native
regional organizations: Maniilaq, Inc. located in Kotzebue,
Yukon-Kuskokwim Health Corporation located in Bethel, Norton
Sound Health Corporation located in Nome, Bristol Bay Area Health
Corporation located in Dillingham, Arctic Slope Native
Association located in Barrow, and Southeast Alaska Regional
Health Consortium located in Sitka.
The Alaska Native Health Care Delivery System consists of both
consortiums and individually operated service units. A typical
consortium infrastructure includes village clinics, possibly
several sub-regional clinics, and a regional hospital. The rural
health organizations typically serve areas as sole community
providers. They may also serve the entire population, regardless
of race.
The Alaska Native Medical Center (ANMC) is located in Anchorage
and provides essential tertiary care, acute care and specific
statewide health services for all Indian Health Service
beneficiaries. The Alaska Native Tribal Health Consortium and
Southcentral Foundation jointly manage the facilities that
provide the full continuum of care within the Alaska Native
Health Campus.
The Alaska Native Health System reflects levels of care available
within the village, the regional hospitals, and the Alaska Native
Medical Center (ANMC), located in Anchorage. The Medivac is
essential to receive the next step up of care from the village to
the regional hospital. If the case is deemed serious enough, a
Medivac can be directed from the village straight to ANMC. There
are Medivac call-outs from regional hospitals to ANMC, and also
from ANMC to more specialized hospitals in the lower-48.
Overview of Funding
With the construction of the new Alaska Native Medical Center and
the Primary Care Center, there is a perception that Alaska Native
Health Services are amply funded. The reality is that the system
is significantly under-funded. Indian people have long
experienced disproportionately low health status and a large gap
in health care resources compared to other Americans. Recently,
Congress requested a health status and resource deficiency report
for each Indian tribe or service unit. The IHS charged a Level of
Need Funded (LNF) Workgroup to develop the necessary methodology.
This report, published April 2001, states that Alaska is only
funded at 61% of the total need compared to the Federal Employee
Health Benefits Package. It is important to know that the
Medicaid reimbursement funding is included in this percentage.
Overview of Medicaid
The Medicaid Program is not out of control. It is a large cost in
every state, second only to public schools. To save the Alaska
Legislature money by reducing the Medicaid Program would actively
harm people receiving care - either by eliminating services for
adults, or cutting reimbursement to providers, which will reduce
access. Medicaid provides insurance to individuals and families
that have no other access to health care services. Reducing the
program would be a huge detriment to the health of Alaskan
citizens.
Additionally, there is the economic impact that would be imposed
on private health care providers to consider. Seventeen percent
of the employees within the private sector are funded due to the
Medicaid Program. Realistically, Medicaid within the State of
Alaska is not a comparatively generous program. Other states in
our nation provide more services and that should be the direction
in which the Alaska Legislature heads as well.
The Effects of IHS Beneficiaries' Use of the Medicaid Program
IHS beneficiaries are a large user of the Medicaid Program.
However, the fiscal reality this imposes on the Medicaid Program
is not what one would think. The State of Alaska receives 100%
reimbursement from the federal government for IHS beneficiaries
that utilize Medicaid. This results in broader user access to a
non-IHS beneficiary population. Additionally, the IHS beneficiary
who utilizes the Medicaid Program actually has a positive impact
on our State's economy. The federally reimbursed dollars create
jobs in the private health care sector that may not be otherwise
available.
The Alaska Native Health Care Delivery System encourages the
Alaska State Legislature not to cut the Medicaid Program and
lower the wellness of Alaskans for the benefit of fiscal
conservation.
MS. SANDRA MIRONOV, health administrator for the Yukon Kuskokwim
Health Corporation, made the following comments. Last spring,
the Legislature had some questions about a budget request unit
and how the money was used. A budget request unit is direct
funding from the State of Alaska to different organizations
across the state. It was established about 20 years ago to
develop services in rural areas to provide better access to
Alaskans that had no services. She noted that she distributed to
members an overview of the Yukon Kuskokwim Health Corporation's
(YKHC) use of the budget request unit and testimony from
consumers in the region, prepared for the Legislature last April.
She provided the following highlights of the handouts. The
budget request unit currently funds about one-third of the
services of all mental health and substance abuse services in the
region provided by YKHC. It also funds a significant portion of
our community health services and the health aide program. It is
the core of YKHC's services. Page 2 contains a graph showing how
much of the actual services are covered by Medicaid that are
provided in the region. The YKHC's concerns about the budget
request unit are that if this funding was cut from the state
budget, YKHC would be put at a very unfair disadvantage in a
rural community. YKHC does not have the capacity to write
competitive grants in the rural communities that are often
available to people in urban areas. The population in rural
villages does not provide the skills necessary. If services are
lost in rural communities, other communities would have to
provide those services. YKHC is concerned that people might not
seek services if they are not available until they get into a
crisis situation, at which time they would have to be transported
several hundred miles from home to get the necessary services.
In addition, those people will have no follow-up services when
they return home.
CHAIRWOMAN GREEN informed participants that today's hearing is
not a budget hearing.
MS. MIRONOV said she understood but that the budget request unit
is a very important income stream to YKHC and she wanted to get
the information on the table for the committee's consideration
throughout its deliberations on Medicaid.
CHAIRWOMAN GREEN asked Ms. Mironov if she is referring to the
non-competitive grants.
MS. MIRONOV's answer was indiscernible.
CHAIRWOMAN GREEN noted that when the non-competitive grant
process began, outline units were not billing or collecting all
reimbursements or co-payments. That circumstance no longer
exists. The Legislature is trying to figure out what to do with
those facilities that are not built [billed], those without
insurance, those without co-pay, yet have the same
responsibilities of YKHC. Many of the larger facilities have the
ability to bill Medicaid. The Legislature needs to decide how to
use that pocket of money to serve those people who have no
ability to get reimbursed. She pointed out the competitive grant
process would still be available for more sophisticated
organizations.
MS. MIRONOV concluded by saying there is still a significant
population in rural Alaska that is not covered by Medicaid. The
budget request unit funding stream helps those people access
services in rural Alaska. It is very important as a supplement
to the Medicaid program for rural Alaskans.
MR. DAN WINKELMAN, legal counsel to the YKHC, gave the following
testimony.
Good afternoon Chair and Subcommittee members. My name
is Dan Winkelman, I am Lega1 Counsel for the Yukon-
Kuskokwim Health Corporation located in Bethel. Thank
you for this opportunity to participate at this
Subcommittee meeting, to discuss the future of our
State's health care and welfare.
YKHC is comprised of 58 federally recognized tribes
operating pursuant to a compact with the federal
government under the Indian Self-Determination
Education and Assistance Act. We operate the only
hospital in Bethel as well as 49 village-based clinics
staffed with community health aide practitioners and 3
sub-regional clinics staffed with community health aide
practitioners, registered nurses and mid-level
practitioners.
YKHC urges this Subcommittee, when considering Medicaid
cost-containment measures for the next fiscal year, to
understand that under the Indian Health Care
Improvement Act, the Federal government subsidizes 100%
of the cost of providing medical services to Medicaid-
eligible Alaska Native patients through Alaska Native
tribe or tribal health organization facilities.
Alaska's Federal Match Percentage, otherwise known as
the Federal Medical Assistance Percentage or "FMAP", is
100% for health care services provided to Medicaid-
eligible Alaska Native patients. Indeed, when Congress
enacted this law, the U.S. Senate Select Committee on
Indian Affairs stated in its Senate Report, and I
quote:
Thus, the Federal Government would pay for
100% of the reimbursements to tribally-owned
health facilities for services provided to
Medicaid-eligible Indian patients. This, in
turn, would reduce the states' current share
of Medicaid expenditures to 0% for these same
facilities. As a result, Native Americans
will have better access to health care
services and will be able to more fully
utilize third party resources to which they
are entitled.
Therefore, 100% of Medicaid costs for Alaska Native
patients is 100% federal pass-through monies resulting
in a State Medicaid expenditure of 0%. Accordingly, any
reduction in Medicaid rates proposed by this
Subcommittee would be a reduction of federal, not state
monies for Medicaid eligible Alaska Native patients
resulting in a decrease of health care services to
Alaska Natives and contrary to Congress' intent. For
the foregoing reasons, YKHC strongly urges this
subcommittee to not reduce the state's Medicaid
Program.
Lastly, I would like to invite the Subcommittee to
personally tour YKHC and meet with your rural
constituents before the Subcommittee proposes health
care legislation that would negatively [affect] rural
Alaska.
Thank you.
CHAIRWOMAN GREEN announced that the committee would hear from a
representative from Senator Murkowski's office.
MR. JOEL GILBERTSON, legislative director for U.S. Senator Frank
Murkowski, stated that today's meeting could not be more timely
because the Senate Finance Committee will be doing a mark-up of
the economic stimulus package as put forth by Senator Baucus. He
did not expect the economic stimulus package to have too much to
do with state health care and welfare programs, but right now the
committee is debating a bill that will provide $75 to $80
billion, to be paired up with $20 billion of direct spending from
floor amendments. Of that, provisions will affect states that
administer Medicaid programs, unemployment insurance, and formula
adjustments for the FMAR program. Those provisions were
unexpected and may have an uphill fight once the bill reaches the
Senate floor.
MR. GILBERTSON said when he first prepared his remarks to the
committee, he focused on bills that have been pending at the
federal level and the prospects for any true changes to some of
the formula-driven, state administered health and welfare
programs. That focus has changed in the last week because of the
adjustment to what will be included in Senator Baucus's economic
stimulus package. Originally, he thought there would be very few
changes made at the federal level. A number of proposals have
been brought forth to address issues with federal [indisc.]
rates, and issues of what Medicaid expansions will be made
optional for states, additional services, and modernization of
the CMS infrastructure in Washington that replaced HCRA. Those
issues were considered to be in a low priority category at the
beginning of this year on the federal level. However, the events
of September 11 have presented new priorities to Congress:
aviation security; the economic stimulus package; a bio-terrorism
bill; a few measures to fight against terrorism; and increased
appropriations for the defense industry and the military. That
put a lot of the health and welfare programs on a back burner and
has created a lot of uncertainty as to what direction will be
taken within the committee of jurisdiction on the Senate side and
the Finance Committee under the new chairman, Senator Baucus. He
pointed out that two days ago, Senator Baucus included the
following provisions:
· temporarily extend and broaden unemployment insurance
benefits,
· create a new federal subsidy of 75 percent for COBRA
continuation coverage,
· give new authority to states to expand the Medicaid program
to cover displaced workers and their families,
· enhance the CHIP match rate for states,
· give states the option to use Medicaid funds at the CHIP
match rate to subsidize the remainder of COBRA premiums for
low-income individuals,
· adjust the federal medical assistance percentage (FMAP) for
all states - it was originally drafted to hold harmless all
states scheduled for an FMAP reduction in the coming year,
· provide a one point bonus for all states, and
· classify all states with an undefined level in the increase
of unemployment debts an additional one point bonus. Last
night that was expanded to a 1½ percent bonus for all states
and another 1 1/2 percent bonus for states deemed to have an
enhanced amount of unemployment as the result of a
compromise with Senator Bingaman.
MR. GILBERTSON said everything has changed in the last 24 hours
so he will answer questions to the best of his ability. In
addition, the bill is undergoing a mark-up in the Senate Finance
Committee right now. He informed the committee that over 140
amendments have been filed and Senator Murkowski has not yet
expressed how he will vote on some of these issues.
MR. GILBERTSON said that Senator Murkowski is very sensitive to
the unfair treatment that the current Medicare formula has
created for rural states, particularly Alaska. The FMAP formula
itself, from Senator Murkowski's position, was poorly drafted and
has not been adjusted to reflect new data that shows that looking
solely at per capita income and ignoring the cost of providing
services is an inaccurate way to determine how states should be
reimbursed for providing health care services. Senator Murkowski
is not supportive of the proposal put forth by Senator Bingaman
that was incorporated into Senator Baucus's bill to give an
across-the-board FMAP increase to all states. Some states already
receive more than they should while others receive less. That is
one reason Senator Murkowski pushed a $200 billion five-year
adjustment last year of the states' FMAP rate. Unfortunately, it
was followed up by a change in the Bureau of Economic Analysis's
definition of "per capita income," which led to an artificial
decrease.
MR. GILBERTSON repeated that Senator Murkowski does not believe
an across-the-board increase in the FMAP rate is the right
approach. First it is only for one year. Second, after it
sunsets, it does nothing to address the underlying problem. The
formula itself has never been adjusted or modified to affect the
realities of preventive care in Alaska. Senator Murkowski has
informed the committee that this approach will waste billions of
federal dollars and delay, for one year, the debate that needs to
occur, that being to focus on fixing the formula so that it
reflects the high cost of providing services in rural areas.
CHAIRWOMAN GREEN pointed out the latest outcome on the FMAP issue
is certainly more optimistic than what she expected from their
conversation several weeks ago.
MR. GILBERTSON said that obviously, if the current language
passes, Alaska will benefit and that, 99 percent of the time, is
the standard Senator Murkowski uses to decide whether to support
legislation. The problem is that it is tied in with many things
that are bad for the program, for example, to bring in a COBRA
subsidy at the federal level to put pressure on states to expand
coverage for displaced workers. He pointed out that this method
of handling the COBRA subsidy issue would create an inefficient
system. The Administration and the Republicans on the committee
feel it is much more efficient to look toward national emergency
grants already established under the energy program system to
distribute funds to states pursuant to Department of Labor
policies developed back in 1982 and refined in 1998. Those
policies allow governors to step in, submit an application, and
certify that the events are September 11 related. The states can
use that money without having to provide matching funds to
establish emergency assistance programs in communities that are
disproportionately harmed. By instead providing a COBRA subsidy,
funds will have to be distributed to the states only after the
Departments of Transportation and Labor promulgate regulations to
set up a program. In addition, states will have to establish
infrastructure capable of administering the funds. New mandates
will be put on states to identify and certify who is COBRA-
eligible. It will require states to make payments to those
recipients or to the insurance carrier. In addition, states may
have to subsidize the cost of COBRA premiums as well. Again,
Senator Murkowski believes a temporary across-the-board FMAP rate
increase is not the right approach to fix Alaska's problem. That
temporary boost will prevent the Senate Finance Committee from
working on the problem over the next year, therefore it will be
placed into another political cycle and will start from ground
zero again.
SENATOR TAYLOR commented that Senator Murkowski has been the lead
person in the Alaska delegation on the rewrite of the FMAP
formula. He stated he appreciates the work of the staff members
who helped with that project.
MR. GILBERTSON noted this has always been an uphill battle and
that delegation members have done well channeling their energies
within their areas of jurisdiction. The state was looking at
some very difficult financial hardships going into 1997. At that
time the match rate was 50/50. Senator Murkowski's first effort
was to raise and get a three-year extension of the Alaska FMAP
rate at 59.8 percent and, after that expired to secure another
extension. He was able to put a five-year extension on to that
which decreased Alaska's per capita income by five percent before
being inserted into the formula. That will generate an extra $40
million for the state over the next five years. Senator
Murkowski's concern is what will happen in 2005 when that
extension expires, which is why he feels it is most appropriate
to fix the FMAP formula now.
CHAIRWOMAN GREEN thanked Mr. Gilbertson for his briefing.
MR. BOB LABBE, Director of the Division of Medical Assistance,
presented a power point presentation on Alaska's Medicaid program
to the commission, of which highlights follow.
TAPE 01-48, SIDE A
MR. LABBE discussed the following overview of the Medicaid
program.
•Administered by each State under a host of federal rules, with
both sharing in the cost of the program.
•Eligible groups per federal law
-Mandatory: Family Medicaid; Newborns and Children in Lowest
Poverty Levels; SSI recipients
-Optional: APA recipients; Denali Kid Care; Pregnant women
•Services allowed per federal law
-Mandatory
-Optional
•Federal law requires each State to have a committee (MCAC) to
advise the Medicaid agency in order to obtain federal matching
funds.
•Established by the Social Security Act Amendments of 1965 to pay
for medical assistance for certain individuals and families with
low incomes and resources.
He explained that those the state is required to cover under
Medicaid are temporary assistance recipients, recipients of
Supplemental Security Income (SSI), pregnant women with incomes
below 133 percent of the federal poverty level, and children who
fall at different income levels depending on age. In addition,
optional groups of people can be served. Currently, children
whose family income is up to 200 percent of the poverty level are
eligible, as well as certain aged and disabled recipients that
fit state-only cash assistance grants. About 40 different
Medicaid-eligible categories exist; states must cover certain
services but can elect to cover others. States are required to
have a medical care advisory committee to receive federal funds.
The Alaska statutes that authorize DHSS to participate in the
Medicaid program fall under AS 47.07 (.020, .030, .035).
MR. LABBE reviewed the eligibility criteria on the following
chart and pointed out, for reference, that DHSS would be required
to cover a pregnant woman in a family of three with an income
under $24,000.
Eligible Persons
Federally mandated groups include:
Family Medicaid
Newborns and children at lowest poverty levels
SSI recipients
Children at lower poverty levels
Pregnant women at lower poverty levels
Optional groups include:
Some APA recipients
Children at higher poverty levels
Pregnant women of higher poverty levels
Eligibility: In Simpler Terms...
Aged
Blind
Disabled
A Child
A Caretaker of a Child
A Pregnant Woman
CHAIRWOMAN GREEN asked if the SSI program is a federal program.
MR. LABBE said it is 100 percent federally funded and operated.
States are required to provide a state supplement, which in
Alaska, is the adult public assistance payment (APA). SSI
recipients are then eligible for Medicaid. Some of the groups
who receive APA payments are required by federal law, some are
optional. The SSI program started in 1974. Prior to that, the
program was administered by states and required a state match.
MR. LABBE pointed out that Alaska's Medicaid program does not
cover everyone who is low-income. Some states have special
grants and demonstration waivers to cover low-income groups that
are excluded from Alaska's program.
REPRESENTATIVE DYSON commented that hospitals must spread the
cost of treating folks without coverage. He asked if other
jurisdictions have figured out how to solve that problem.
MR. LABBE replied that some states have concluded that making
sure that everyone is covered in some way reduces the cost
shifting. That is the theory behind Oregon's health plan that
moved toward universal coverage. That program provides coverage
in several ways; part-Medicaid, buy-in programs, part-insurance.
The idea behind it is that if everyone has coverage, some level
of payment takes place so there is less subsidization from cost-
shifting.
REPRESENTATIVE DYSON asked if those states have seen the costs to
third party payers decrease since cost subsidization isn't
happening within institutions.
MR. LABBE said he does not have the answer to that question but
can look into it. He added that he is not aware of any state in
which everyone is fully covered but Hawaii and Tennessee seem to
have the broadest programs.
CHAIRWOMAN GREEN recognized the arrival of Representative Cissna.
REPRESENTATIVE CISSNA pointed out, in reference to Representative
Dyson's question, that the costs of health care have accelerated
so quickly so that everyone is scrambling to keep up with the
costs while nothing has been done to stabilize those costs. She
asked if that is a correct assessment of what has been happening.
MR. LABBE said the fact that costs have accelerated rapidly is
correct and is a national issue. He noted the rate of increase
slowed down for a few years but it is now accelerating again.
MR. LABBE provided the following chart of federally mandated
services. He pointed out that for children, all the services are
mandatory as the result of a modification of the federal law in
1989. That modification required states to provide necessary
services for a child to correct a condition, even if that service
is not covered in general by the state's Medicaid program. An
example would be physical therapy, which is not listed as a
mandatory service.
Federally Mandated Services - Mandatory Services: Sec. 1905,
Social Security Act
Inpatient hospital services
Outpatient hospital services
Prenatal care
Vaccines for children
Physician services
Nursing facility services
Family planning services and supplies
Rural health clinic services
Home health care for persons eligible for skilled-nursing services
Laboratory and x-ray services
Pediatric and family nurse practitioner services
Nurse-midwife services
Federally qualified health-center (FQHC) services
Early and periodic screening, diagnostic, and treatment (EPSDT)
Children's Services
All medically necessary health care services must be covered for eligible
children.
-Within the scope of mandatory or optional services under Federal law.
-Even if those services are not included as part of the covered services in
that State's plan.
MR. LABBE then discussed the following optional services that
states may elect to cover.
Optional Services
AS 47.07.030
(ç Selected by the Alaska Legislature for coverage)
ç Ambulatory surgery center services
ç Case management services
Chiropractic
Christian Science sanatorium
Clinic services
Community supported living arrangements
ç Dental (adults limited to emergency treatment for pain and infection)
Dentures
Diagnostic services
ç Durable medical equipment
Emergency hospital services (for hospitals not enrolled)
ç Home and community care
ç Home health
ç Hospice services
ç Intermediate Care Facility for the Mentally Retarded (ICF/MR)
ç Services in an inpatient psychiatric facility for age 65 and older
ç Medical supplies
ç Occupational therapy
Optometrist services
ç Personal care services
ç Physical therapy
Podiatry
ç Prescription drugs
Preventive services
Private duty nursing
ç Prosthetics and orthotics
ç Rehabilitation services (mental health and substance abuse)
Respiratory therapy
Screening services
ç Speech, language and hearing services
ç Vision services
MR. LABBE said some of the eligibility groups are up through age
18, but a disabled person who is 20 would be considered a child
for the purpose of the Medicaid package.
CHAIRWOMAN GREEN asked how a minor who is a ward of the state
would be treated.
MR. LABBE said the state currently covers 19 and 20 year olds
under that system. He clarified that home and community based
services are not considered medical services typically so the
state is not required to cover those services for children but it
does have waivers specific to disabled children.
MR. LABBE showed the following list of priority services in
statute.
AS 47.07.035 Priority of medical assistance
Prior Type of Service FY01
-ity
Recipien Cost
ts
1 Clinical Social Workers Services 0 $0
2 Psychologists Services 0 $0
3 Chiropractic Services 0 $0
4 Advanced Nurse Practitioner Services 0 N/A
5 Adult Dental Services 4,798 $1,699,255
6 Emergency Hospital Services 0 $0
7 Midwife Services 0 N/A
8 Treatment of Speech, Hearing, and 1,686 $920,912
Language Disorders
9 Optometrists Services and Eyeglasses 9,407 $1,135,807
10 Occupational Therapy 292 $404,894
11 Mammography Screening 928 $33,733
12 Prosthetic Devices 285 $248,949
13 Medical Supplies and Equipment 1,874 $2,564,022
14 Targeted Case Management Services 0 $0
15 Rehabilitative Services for
Substance Abusers and Emotionally 735 $2,507,124
Disturbed or Chronically Mentally
Ill Adults
16 Clinic Services 4,005 $42,516,123
17 Physical Therapy 9,316 $918,404
18 Personal Care Services in a 1,198 $6,251,068
Recipient's Home
19 Prescribed Drugs 26,664 $27,659,154
20 Hospice Care 5 $7,494
21 Long-Term Care Noninstitutional 2,246 $55,495,465
Services
22 Inpatient Psychiatric Facility 490 $13,845,681
Services
23 Intermediate Care Facility Services 0 $0
for the Mentally Retarded
24 Intermediate Care Facility Services 0 $0
Source: MMIS MARS MR-O-12 Reports
MR. LABBE said the big costs begin with clinic services, which
are the community mental health clinics. The costs are borne by
total fund dollars, not only general fund dollars which pays
about 33 percent.
CHAIRWOMAN GREEN asked if Mr. Labbe has any suggestions regarding
the list.
MR. LABBE said he does not; he showed the list to point out that
when people talk about going down the list, the program will have
to cut one dollar to save 33 cents, and a number of services will
be eliminated, such as medical supplies and equipment. When he
has looked at that approach in the past, the question of whether
the Medicaid program will no longer cover mental health services
or prescription drugs is the kind of question that has to be
answered. He feels that approach is draconian.
REPRESENTATIVE DYSON asked Mr. Labbe to clarify what he meant by
this approach.
MR. LABBE said he was referring to reducing costs by cutting
services. He stated some services cannot be cut; so, to save $50
million in general funds for example, the program would have to
no longer provide prescription drug coverage and other services.
REPRESENTATIVE CISSNA said another way to look at that is to
figure out what the real cost is. When the legislature looks at
any kind of cuts, it needs to know the total cost because the
state will lose if it cuts certain things.
MR. LABBE pointed out the list only shows what DHSS spent in a
particular service. Several years ago, perhaps in 1994, adult
dental services were added back into the program. At that time,
DHSS found it was spending quite a bit of money on outpatient
hospital services because people who could get no dental care
would show up there when they had a dental emergency. He said
although the Adult Dental Services program is not comprehensive,
it provides relief from pain and infection and reduces the
outpatient service cost. He said his point is that if something
is cut, the cost will show up elsewhere.
CHAIRWOMAN GREEN asked if the amounts on the priority list
reflect the amounts actually paid.
MR. LABBE said that is correct.
CHAIRWOMAN GREEN asked how the list of 24 services was
prioritized.
MR. LABBE said the first service on the list would be the first
to go so that the list is in reverse order of the importance of
services. He noted the first three items on the list are not
currently provided. He explained that number 23 refers to
payments to Harborview and number 24 refers to nursing home
payments. DHSS had no expenditures on FY 01. He indicated that
number 24 should probably be removed from the statute since
nursing facility services are mandatory.
CHAIRWOMAN GREEN asked if the first expenditure is number 22.
MR. LABBE said number 22 would be the last service cut.
CHAIRWOMAN GREEN asked, if DHSS ran out of money, would it quit
paying for services for numbers 22, 21, and 20.
MR. LABBE said it would not happen that way and that this is a
difficult issue. When he met with the Finance Committee over the
last several years on this question, they discussed making this
decision before the end of session. The discussion has revolved
around whether it is better to project expenses low and come back
for supplemental funding if necessary. He has found that DHSS
cannot cut services without promulgating regulations and giving
clients notice. In addition, some payments are in the "pipeline"
and there is a payment lag. Therefore, to make a cut effective
and generate the dollar, DHSS has to have this in place at the
first of the fiscal year or shortly thereafter. Once the fiscal
year begins, the regulation process, the client notice process,
and the payment lag run into the next year.
SENATOR TAYLOR commented that legislators have been told during
the session that DHSS will have to cut out adult dental services
and other services if the legislature does not act immediately.
However, that does not occur.
MR. LABBE said that happens when DHSS presents a budget and is
told the program will only be funded at a certain level. DHSS
then does an impact analysis and that is what it would have to
do. He noted that changing the benefit package would not happen
without a discussion with the legislature.
CHAIRWOMAN GREEN asked Mr. Labbe if he is prohibited from pro-
rating payments if he foresees a shortage.
MR. LABBE said he believes there is a federal problem with pro-
ration but he would have to research that further. He said DHSS
has state authority to adjust payment rates but certain rules
apply and the adjustments are not typically across the board.
For example, Alaska statute requires DHSS to pay a fair rate for
health facilities. The same requirement does not exist for
physician rates. He knows in the past, when states have tried to
do across the board cuts, the federal agency says a program
cannot be driven by budget.
REPRESENTATIVE DYSON said he assumes DHSS cannot pro-rate the
qualifying family income.
MR. LABBE said that is correct. Moving on with the presentation,
Mr. Labbe explained each state is required to have a medical care
advisory committee (MCAC), composed of six health care providers
and six consumer representatives. DHSS has aimed for a fair
geographic distribution as well as representatives from the
different user groups and medical fields.
CHAIRWOMAN GREEN asked if a charge of the medical care advisory
committee is to review Medicaid provisions and agencies and
whether it comes up with proposed programs or changes.
MR. LABBE said the committee makes recommendations to DHSS for
regulatory changes and on operational issues. He told committee
members that the MCAC hears from the public and tries to advocate
for all participants, both providers and consumers.
CHAIRWOMAN GREEN asked if the MCAC is supposed to act as an
advocate or lobby.
MR. LABBE said he would not characterize the MCAC that way. He
believes its members are very interested in health care but their
primary role is to make sure the system is working well. For
example, DHSS developed a survey of providers, which the MCAC
reviewed and gave DHSS practical feedback and advice.
REPRESENTATIVE DYSON said he believes, by definition, the role of
the MCAC is advocacy.
MR. LABBE said he brings the MCAC a lot of material for review..
CHAIRWOMAN GREEN asked if the MCAC's role is to advise DHSS or
the legislature.
MR. LABBE thought the federal government envisioned the MCACs to
advise the program and to allow program managers to have some
input into the process.
REPRESENTATIVE CISSNA said she felt compelled to say that it is
"sticky" because every single person in Alaska wants to advocate
7.9%
6.6%
MedicaidMedicarePrivate Insurance
Children Growth
90,000$400,000,000
80,000
$350,000,000
70,000
$300,000,000
60,000
$250,000,000
50,000
$200,000,000
40,000
$150,000,000
30,000
$100,000,000
20,000
$50,000,000
10,000
Eligibles
-$0
FY97 FY98 FY99 FY00 FY01 FY02 FY03FY04FY05FY06
Expenditures
children.
Ø Over the past 4 years, Medicaid's total rate of expenditure growth
has averaged 15%
Ø Over the past 4 years, the average increase in expenditure growth
for children has been 18.8%
Ø 55% of FY 01 expenditure growth was attributable to increased
eligibles
FY04 through FY06 total projections are based on a simple linear trend with a 7.1%
health spending growth rate applied. Source of Rate: March 2001 Center for Medicare
& Medicaid Services' "National Health Care Expenditures Projections: 2000-2001".
These projections assume no changes to the existing program.
MR. LABBE explained the chart projects the growth of the Denali
Kid Care program through FY 06. The rate of growth increased
more than 50 percent in FY 01; the future rate of growth is
projected to be lower. DHSS expanded Medicaid services in the
early 1990s when it began to cover children and pregnant women at
a higher income level. DHSS served 77,422 children last year,
about 24 percent of Alaska's children.
REPRESENTATIVE DYSON asked if any jurisdiction, other than
private health, figured out how to reward and encourage healthy
behaviors.
MR. LABBE said some programs encourage pregnant women to access
prenatal care sooner but he did not think DHSS could reward
certain behaviors.
REPRESENTATIVE CISSNA noted that Native health agencies are
putting a lot of effort into education because many people do not
know what healthy habits are.
SENATOR TAYLOR pointed out that the number of eligible
participants will be less than the funding by FY 06. He asked
for clarification.
MR. LABBE said when the program was implemented, that some of the
costs per person dropped. The later years show that once the
population is well covered, the costs will increase as health
care costs increase so that expenditures will exceed the number
of eligible people. He added that same scenario is more evident
on the next chart with the adult population, where the population
is decreasing but the expenditures are increasing.
Adult Growth
14,000
$100,000,000
12,000
$80,000,000
10,000
$60,000,000
8,000
6,000
$40,000,000
4,000
$20,000,000
2,000
Eligibles
-$0
Expenditures
Elderly Growth
7,000$140,000,000
6,000$120,000,000
5,000$100,000,000
4,000$80,000,000
3,000$60,000,000
2,000$40,000,000
1,000$20,000,000
Eligibles
-$0
FY97 FY98 FY99 FY00 FY01 FY02 FY03FY04FY05FY06
Expenditures
FY04 through FY06 total projections are based on a simple linear
trend with a 7.1% health spending growth rate applied. Source of
Rate: March 2001 Center for Medicare & Medicaid Services'
"National Health Care Expenditures Projections: 2000-2001".
These projections assume no changes to the existing program.
MR. LABBE pointed out the growth of Alaska's senior population in
the Medicaid program has been very consistent. In terms of
• Elderly Eligible Recipient Number:
Ø Elderly eligible growth has averaged 3% for the past 4 years
Ø Elderly Rate of growth is Medicaid's most consistent
Ø FY01 average cost per month per eligible elderly person was $1,209
SENATE HES COMMITTEE -31- November 8, 2001
• Elderly Expenditures
Ø Expenditure growth for the elderly has average 12% for 3 years
Ø 29% of FY01 expenditure growth was attributable to increased eligibles
Disabled Growth
14,000$400,000,000
$350,000,000
12,000
$300,000,000
10,000
$250,000,000
8,000
$200,000,000
6,000
$150,000,000
4,000
$100,000,000
2,000
$50,000,000
Eligibles
-$0
Expenditures
government about retroactive payments. That issue has been under
discussion in the Department of Administration. He stated the
issue is that a person cannot be put on a home and community
based waiver retroactively. If the services begin before a
person has a level of care determination, those services cannot
be paid prior to the date of determination. He said he has no
new information on that issue but will find out.
CHAIRWOMAN GREEN announced that the committee would break in 20
minutes for lunch and reconvene at 1:30 p.m.
MR. LABBE continued his presentation and discussed the disabled
clients in Alaska's Medicaid program. He referred to the
following chart and stated that last year, the Medicaid program
served 12,194 clients, both children and adults with
disabilities.
• Disabled Eligible Recipient Number:
Ø Disabled eligible numbers have maintained a steady
increase of about 5% for 4 years
Ø FY01 average cost per month per disabled recipient was
$1,624
• Disabled Expenditures:
Ø Expenditure growth has averaged more than 17% for 4
years
28% of FY01 expenditure growth was attributable to
increased eligibles
CHAIRWOMAN GREEN stated the Mat-Su Valley is growing faster than
any other area of the state, population-wise. She asked Mr.
Labbe if his charts take that growth into account.
MR. LABBE said the projections are from DHSS data.
CHAIRWOMAN GREEN said the projections could be an underestimate.
MR. LABBE said they could go either way and, in fact, DHSS has
been looking into the growth rate in the number of disability
clients. A researcher suggested the disability growth for the
adult public assistance population followed the birth rate plus
18 years. He suspects that as the birth rate dropped, the rate
could level out. He pointed out this category is the most
expensive on a per person basis. About 50 percent of these
clients also receive Medicare.
REPRESENTATIVE DYSON commented, regarding Senator Taylor's
question about expenditures increasing at a higher rate than
enrollees, the services should be based on the needs of the
people rather than what is available. He asked:
How do we keep new people providing services from being
salesmen who are saying, oh my goodness, there's
another program you can sign up for - you need to do
this - just because the program is available as opposed
to the needs of the client or patient?
MR. LABBE replied in the medical service area, DHSS is quite
dependent on the physician prescribing services. DHSS also has
case management programs to monitor utilization and to assist
families in finding a more efficient use of services. He pointed
out that one of the factors that is driving up the cost of
prescription drugs nationally is not only new technology but
direct advertising. He noted DHSS has a committee that works on
these issues, including education.
REPRESENTATIVE DYSON said he is on a crusade to create a process
where every person who receives assistance from the state only
has to deal with one agency and minimal paperwork. He asked Mr.
Labbe if he believes that is an impractical goal.
MR. LABBE said he believes it is an ambitious goal but it may not
be impractical, especially in some areas. The Division of
Medical Assistance does not directly interact with consumers, for
the most part. Clients submit a public assistance application.
During that process, a client may encounter multiple agents.
REPRESENTATIVE DYSON said he is aware of people who receive
temporary assistance and, in addition, need child care
assistance. Those people have to recap all of their information
and comply with schedules that are very difficult, particularly
in light of the fact that they are dealing with child care and
transportation problems. He said he longs for the day when those
people can fill out one form that would qualify them for several
programs and in which one person acts as the broker for the
family. He asked if any jurisdiction in the country uses such a
process.
MR. LABBE said the State of Oregon is moving into that model and
he believes one or two other states are moving in that direction.
REPRESENTATIVE DYSON said if the state made it work better for
recipients, the delivery of services would become more efficient
and possibly reduce costs.
MR. LABBE pointed out the Division of Public Assistance has a web
page but he has not been involved in that project.
REPRESENTATIVE CISSNA said she did some volunteer work for a
FY99
$100,000,000
FY00
$80,000,000
FY01
SENATOR TAYLOR asked if that is due to Denali Kid Care.
MR. LABBE said it is. DHSS has added about 18,000 to 20,000
children since 1999. DHSS has also added a new group of disabled
workers that can buy into the program. In addition, costs have
increased.
SENATOR TAYLOR said he is floored by the almost 50 percent
increase in costs of physician services over three years and
asked how that can be rationally budgeted for in the next three
years.
REPRESENTATIVE CISSNA maintained that insurance costs are rising
in the same manner.
SENATOR TAYLOR disagreed and said insurance costs have not
increased 50 percent in two years.
MR. LABBE pointed out the chart shows the total dollars expended,
including Indian Health Service costs. The tribal programs have
had an increasing ability to bill the Indian Health Service so
the data is coming in now. In addition, there have been some
rate increases from the federal government.
SENATOR TAYLOR asked Mr. Labbe if those factors may have skewed
those categories a bit.
MR. LABBE said they have.
CHAIRWOMAN GREEN felt the rate of growth should be fairly static
and that the chart is reflective of what she saw on the Finance
Committee last year - a $40 to $60 million increase in one year
in Medicaid participation. That amount equals half of the
Department of Public Safety's budget. She said that regardless
of how endearing these programs are, the legislature has to ask
if this is the best way to provide those services.
MR. LABBE presented four pie charts to demonstrate service use by
the four population groups. He noted the population group of
children includes newborns; he would prefer to split the group in
two because expenses are much higher for the first year of life.
CHAIRWOMAN GREEN asked Mr. Labbe if he would prefer to separate
out the high incidence children.
MR. LABBE said yes and, similarly, he would like to separate out
costs for pregnant women from the adult category. He plans to
split the groups because the current categories mask what is
going on.
REPRESENTATIVE DYSON asked what percentage of the total state
population are disabled, what percentage are children, and what
percentage is classified as adult.
MR. LABBE offered to get that information from the Census Bureau
data.
CHAIRWOMAN GREEN announced the committee would recess until 1:30
p.m.
CHAIRWOMAN GREEN called the subcommittee back to order at 1:40
p.m. and announced the next item on the agenda was an overview of
Medicaid fraud.
MR. STEVE BRANCHFLOWER, Director of the Alaska Medicaid Fraud
Control Unit (MFCU), informed subcommittee members that he
distributed a handout that he prepared in May of 2000 for the
Medical Care Advisory Committee. He explained the essential
difference between Medicaid and Medicare is that Medicaid is a
health care program for low income and disabled people, funded by
the state and federal government, while Medicare is 100 percent
federally funded and provides medical benefits for retired
people. State participation in Medicaid is optional. If states
decide to participate, they must provide certain minimum health
care services, establish a payment structure, and provide for
oversight of the providers. Alaska's split was 50/50 until
Senator Murkowski was able to enact legislation that changed the
split to 60/40. Alaska's statutory scheme for its Medicaid
program is embodied in AS 47.
MR. BRANCHFLOWER explained that each state that participates in
Medicaid must have a Medicaid fraud control unit to investigate
and prosecute crimes against the Medicaid fund. The MFCU is a
separately identifiable legal entity. Although it functions as
part of the Department of Law, it is separate from the Division
of Medical Assistance.
The MFCU has three objectives:
· to conduct a statewide program to investigate and criminally
prosecute providers who steal money;
· to investigate fraud in the administration of the program;
· to review complaints of abuse and neglect against patients
in health care facilities receiving Medicaid funding.
The MFCU was created in 1992. It is funded with 75 percent
federal funds and 25 percent state funds. The office is staffed
with two investigators, an internal auditor, and Mr.
Branchflower. He is cross-designated, meaning he can prosecute
in either state or federal court. Alaska's criminal statutes are
not tailored to the investigation or prosecution of health care
crimes, therefore he often prosecutes in federal court.
REPRESENTATIVE DYSON asked Mr. Branchflower if he recommends
changing Alaska's statutes.
MR. BRANCHFLOWER said he believes there is a lot of room for
improvement and offered to provide suggestions.
REPRESENTATIVE CISSNA maintained that the cost factor of
statutory changes should be taken into consideration.
MR. BRANCHFLOWER informed the subcommittee that the MFCU is
located in the Office of Special Prosecution and Appeals within
the Department of Law. He provided the following statistics to
show the rising costs per participant:
In FY 99 -
- the total number of participating providers was 3,787
- the total number of recipients was 79,777
- the number of claims lines processed equaled 3,091,484
- the total reimbursements paid equaled $378,451,845
equaling $4,783.87 per recipient.
In FY 00 -
- the number of providers escalated to 10,345
- the number of recipients increased to 92,103
- the claims lines processed jumped to 4,683,421
- the total reimbursements paid was $467 million which
equates to $5070 per recipient.
He pointed out the total expenditures progressed from $257
million in FY 95 to $467 million in FY 00. From 1995 to the
present, the Medicaid claims paid amounts to almost $2 billion.
HCRA reports that, nationally, approximately 10 to 20 percent of
health care dollars spent go to fraud, waste and abuse, amounting
to a considerable amount of money.
MR. BRANCHFLOWER explained that DMA contracts with the First
Health Services Corporation, to conduct the day-to-day business
of DMA. They enroll Medicaid providers. He pointed out that any
business that provides a service to a recipient can become an
enrolled provider, such as an airline, hotel, or taxi cab
company. First Health Services Corporation also processes
Medicaid claims. DMA has a term contract with the First Health
Services Corporation, which will soon be up for renewal.
TAPE 01-49, SIDE A
MR. BRANCHFLOWER told the subcommittee that providers can submit
bills to First Health Services Corporation either on paper or
electronically. More and more providers are submitting claims
electronically because the reimbursement process is much faster.
Essentially, a recipient goes to a provider who provides services
and submits a bill to the First Health Services Corporation. The
claim is processed and, if approved, a check is deposited
directly in the provider's checking account. The turnaround time
is relatively short and can take a matter of days. Because of
the high volume of service and claims, the system does not allow
for a check on whether or not services were actually provided.
The whole system runs on good faith. It is only after the fact,
if an effort is made to reconcile the billings with patient
charts, can fraud be found. Many checks have been put into the
system, but the ability to steal large amounts of money in a
short period of time is there.
CHAIRWOMAN GREEN asked if that is the case nationwide.
MR. BRANCHFLOWER said it is. He then noted that Alaska has what
is called a "fee for service" program, as opposed to health
maintenance organizations (HMOs). In the HMO scenario, the
government gives a group of doctors a certain amount of money to
provide services under a contract. Recipients may complain that
the services are not being provided so the HMO is underutilized.
Alaska is one of three states with a fee for service program. The
problem here is over-utilization because anyone who provides a
service gets paid for it.
REPRESENTATIVE DYSON maintained that with a fee for service
system, services may outweigh demand.
MR. BRANCHFLOWER agreed. He said a reasonable medical necessity
must be associated with the service but, from time to time, the
MFCU sees over-utilization with no justification, for example
over prescribing, over testing, and over medication.
REPRESENTATIVE DYSON asked if that occurs in non-profit
organizations.
MR. BRANCHFLOWER said it does. He then went on to explain that
the major components of a Medicaid claim are:
- a recipient number
- a provider number
- date of service
- diagnosis
- procedure code for the treatment provided
- reimbursement
He exhibited a chart of four columns: a description of services,
such as whether the patient is new or established or the
appointment was a consultation; the CPT code; the service
category, which ranges from minimal to comprehensive; a
description of the services provided; and the Medicaid
reimbursement rate. He pointed out that if a doctor codes a bill
for a comprehensive exam when in actuality the doctor only
renewed a prescription, the doctor will be reimbursed at a much
higher rate. In a case that he recently tried, a doctor billed
Medicaid for consultations for almost 80 percent of all of his
billings, which are reimbursed at a higher rate. His billings
equaled $180,000. This doctor did not have the training to
qualify as a consultant, no other physician had referred any
patients to him for a consultation, and no consultation took
place. He maintained that trusting providers to act in good
faith works most of the time, but some people take advantage of
the system.
CHAIRWOMAN GREEN asked if the time lag has always been the case
with Medicaid.
MR. BRANCHFLOWER replied, "I think it's in the nature of the
system because when you have hundreds of hundreds of thousands,
there's no way that you can have a bureaucracy that would ever
require proof of services provided."
He said it is difficult for him to accept because most people are
used to receiving a service before it is paid for.
REPRESENTATIVE DYSON said he assumes the medical profession has
not been proactive about weeding out the charlatans.
MR. BRANCHFLOWER said these cases are very tough to investigate
and prosecute compared to rape and murder cases because there is
no crime scene, no physical evidence, no eye witnesses and no lab
evidence. In addition, everyone is opposed to rape and murder
and jurors have no difficulty understanding the law in those
areas. In Medicaid fraud cases, there is no crime scene, no
witnesses, no physical evidence, and juries are dealing with
issues they are not familiar with, such as quality of care.
These fraud cases end up being a battle of the experts. Often,
medical experts within the state do not want to get involved.
REPRESENTATIVE DYSON asked Mr. Branchflower if the medical
profession is doing much to police itself, for example does the
Alaska Medical Association's disciplinary process work well.
MR. BRANCHFLOWER said he sees a very high level of
professionalism in Alaska's medical community but he does not
know whether the profession is policing itself in an effective
manner. He indicated that the medical board has been very
cooperative.
REPRESENTATIVE DYSON asked if doctors report to the MFCU when
they see fraudulent activity.
MR. BRANCHFLOWER said they do not. He acknowledged that reports
can be made anonymously.
REPRESENTATIVE CISSNA asked if proving whether services have been
provided is part of the problem.
MR. BRANCHFLOWER said it is. He informed the committee that in
1997, the DMA contracted with Deloitte and Touche to do some
random audits over a three-year period. Of the 70 audits done, 40
were on-site. In an on-site audit, the auditing team visits the
provider's office and looks at the patient charts to reconcile
the patient chart entries with the billings. As a condition of
enrollment in the Medicaid program, doctors must agree to make
patient files available. Correspondingly, Medicaid recipients
must waive their doctor-patient privilege. The patient
populations of the doctors are usually considerable. So to do a
full audit would be very costly and ineffective. Instead, the
auditing firm consulted with a statistician about its findings
and projected the loss to the entire patient population. A total
of 164 were done. He maintained the single most effective
deterrent to fraud and abuse of Medicaid funds would be to
continue the audits. The total cost of the three-year audit was
$1,431,750. He has collected and put back into the state
treasury $2,741,126 since July of 1998. Of the total collected,
$2,112,980 came directly from the audits. In addition, he has
eight audits sitting on his desk, which could bring in an
additional $18 million. One provider would be liable for $16
million.
CHAIRWOMAN GREEN asked if the audits began after Mr. Branchflower
became employed.
MR. BRANCHFLOWER said the first audit contract was let in
October, 1997; he began in July of 1998. When he began, the
audits were complete and he was the beneficiary of a great amount
of information.
CHAIRWOMAN GREEN asked if the money collected comes through the
court system.
MR. BRANCHFLOWER said he can do one of two things: he can either
prosecute a person criminally, in which case he would ask for a
jail term with restitution. He acknowledged that does not often
happen because these cases are difficult to investigate and
prove. More often he does civil recoveries. After he reviews an
audit, he meets with the provider and his attorney and share the
information in the audit. Usually, once they have reviewed the
findings they find they have been overpaid. Regulations
governing the Medicaid program require participants to reimburse
for overpayments. Depending on the conduct of the provider, MFCU
can employ a range of options, for example treble damages or
filing a false claim act. He often, when settling a case, asks
for double the reimbursement amount, recovery of investigative
costs, plus interest.
CHAIRWOMAN GREEN asked what happens if the doctor settles but
does not pay.
MR. BRANCHFLOWER said they always pay. He said many bad things
can happen to providers, one being disenrollment from the
program. If a hospital that is part of a national chain is
disenrolled, the entire chain might be disenrolled. He indicated
that most providers want to make restitution because many times
the problems are caused by billing or human errors.
SENATOR DAVIS asked if the settlement money goes directly to the
state or whether it is shared with the federal government.
MR. BRANCHFLOWER said that depends on the settlement but usually
a portion goes to the federal government. In actuality, MFCU
sends the check to the Division of Medical Assistance where the
apportionment is made. Sometimes he also settles with the
federal government in which it keeps the money. In one case, a
national hospital chain settled a national case, which was filed
by the federal government with help from the states. He received
a check from which the federal portion had already been
subtracted.
REPRESENTATIVE CISSNA indicated that Mr. Branchflower said it is
incumbent upon the providers to know the rules but she expressed
concern that when she was more actively involved in the Medicaid
program in the early 1990s, the standards were a moving target.
She maintained that many providers are small non-profit agencies.
MR. BRANCHFLOWER agreed that many providers are very
unsophisticated regarding the rules and regulations.
REPRESENTATIVE CISSNA said that to be a player, a provider almost
has to be affiliated with a national group to be safe and not
make mistakes because of the sophistication that is required.
MR. BRANCHFLOWER responded that the larger the provider, meaning
the more services that are provided, the greater the risk that
when something goes wrong it will involve a major chunk of
change. For that reason, those people hire experts to do their
billing. On the other hand, the "mom and pop" business cannot
afford to do that. That is a legitimate problem because all are
required to play by the same rules. One of the ways the Medicaid
program aids all providers is by drafting a provider manual.
Every enrollee receives one of these "how to" books, depending on
provider type. In his estimation, those manuals need to be
revised. They are out-of-date and lack specificity. He
suggested once revised, the manuals should be reviewed by a
lawyer or someone who could be called upon to prosecute a case.
He cautioned that provider manuals are often an abbreviated form
of the regulations and he believes the manuals should be more "in
sync." He feels a lawyer who might be called upon to prosecute
someone should have a hand in reviewing the provider manual
because a common defense is that the information in the provider
manual was unclear.
MR. BRANCHFLOWER felt another issue that merits follow-up is the
fact that no record is kept when a provider calls First Health
Services Corporation for clarification or information.
Consequently, when he questions a provider about not following a
procedure in the manual, he is told the provider called First
Health Services Corporation and was told what he was doing was
acceptable. The First Health Services Corporation provides
assistance; however, it needs to document those calls.
REPRESENTATIVE CISSNA asked if e-mail responses to questions
would be considered proof in court.
MR. BRANCHFLOWER said it would and that a copy of the message
should be placed in the provider's file.
SENATOR TAYLOR asked what the acronym CPT represents.
MR. BRANCHFLOWER said it is an acronym for a current procedural
terminology code. Providers agree to use a universal language of
services. Each service is assigned a particular number so that
instead of having to fully describe each service, a number can be
assigned.
SENATOR TAYLOR asked if it was derived from the California code.
MR. BRANCHFLOWER said it was derived from the American Medical
Association.
SENATOR TAYLOR commented:
Which was a code that they had to come up with when
they first came up with the system because the gross
abuse and thievery within the system and compounding of
bills was so out of control that they actually went to
California and other places in the United States tried
to figure out what the average high price [indisc.] was
for all services and then said to the doc, you're going
to get to bill this amount for this procedural service.
CHAIRWOMAN GREEN asked who writes the manuals.
MR. LABBE answered, "First Health drafts the manual - it's kind
of a joint effort."
CHAIRWOMAN GREEN asked if the manual is a regulatory
interpretation of state law.
MR. BRANCHFLOWER said it is a summary of statutes and
regulations. He then explained that a major glitch in the system
is that DMA does not send explanation of benefit (EOB) forms to
every recipient. EOB forms are a way of informing recipients of
the services providers are claiming to have performed. Medicaid
patients almost never get an explanation of benefits. A random
sample of 400 EOBs are sent out on a monthly basis by DMA, even
though there are thousands of recipients and recipients are not
required to respond and return the EOBs. Historically, DMA
receives very few responses. Requiring Medicaid recipients to
respond, as a condition of eligibility, would provide another
layer of protection.
CHAIRWOMAN GREEN asked if such a requirement would require
legislation.
MR. BRANCHFLOWER thought that could be done administratively.
CHAIRWOMAN GREEN recalled that in days past, when patients were
expected to pay the bill at the time of service, the patient
would notice when costs increased and payment acted as a form of
approval. She felt that another condition of eligibility could
be to require patients to fill out a form at the time of service.
MR. BRANCHFLOWER said he attends Medicaid conferences nationwide
and is aware of what other states provide. He feels Alaska
provides a "Cadillac" system in the level of services provided to
recipients. He believes if recipients were required to answer
EOBs and the number of EOBs is increased, that action would have
a chilling effect on the ability of providers to file fraudulent
claims.
CHAIRWOMAN GREEN asked Mr. Branchflower if the subcommittee could
look at other states' models regarding what is required of
recipients in relation to verification of services.
MR. BRANCHFLOWER said it could, and recipient responses would be
successful especially if the form is one page and postage paid
envelopes are provided. He noted an added benefit would be that
those who do not respond could be tracked.
CHAIRWOMAN GREEN asked if that would require legislation.
MR. BRANCHFLOWER was not sure. He went on to explain that the
Medicaid program does exclude payment for certain services, those
being:
· expenses not reasonably necessary to the diagnosis and
treatment of an illness;
· items and services not properly described;
· school check-ups;
· cosmetic surgery;
· telephone consultations;
· sex change operations;
· services for inmates who are in custody; and
· weight loss therapy.
MR. BRANCHFLOWER informed the committee that the federal laws are
much more comprehensive than the laws of the State of Alaska.
Federal laws include the False Claims Act, statutes dealing with
false statements, mail fraud, wire fraud, money laundering,
specific statutes that deal with Medicaid and Medicare fraud, the
RICO statutes, the Health Insurance Portability and
Accountability Act (HIPAA), conspiracy, theft of government
property, obstruction of justice and anti-kickback statutes. In
contrast, Alaska has theft statutes that are "one size fits all,"
and statutes dealing with forgery, scheme to defraud, falsifying
business records, and misconduct involving a controlled substance
statutes.
CHAIRWOMAN GREEN asked if Alaska statutes should specifically
address welfare fraud.
MR. BRANCHFLOWER said he believes so. He noted Alaska has no
statutes tailored toward health care crimes.
TAPE 01-49, SIDE B
MR. BRANCHFLOWER said he has been surveying statutes from all 50
jurisdictions during the last few days and when he retires in
June, he plans to go through all of the statutes and come up with
a model statutory scheme. He then listed the following common
rip-offs used in Medicaid fraud:
· billing for goods and services not provided;
· billing for phantom patient visits;
· upcoding;
· unbundling;
· double billing;
· billing for medically unnecessary services;
· billing for non-covered services;
· billing Medicaid higher than other payers; and
· kickbacks.
In terms of crimes against persons and patient abuse, Alaska has
a very good statutory scheme that deals with crimes of violence
and endangering a welfare or vulnerable patient. He noted he
prosecuted a doctor in Fairbanks earlier this year who was
exchanging prescriptions with some of his female patients for
sex. The doctor was billing Medicaid for "services" that he was
not actually providing and Medicaid was paying for the
prescriptions.
MR. BRANCHFLOWER reviewed several slides that listed
investigative tools available to him. Federal law requires DMA
and the Department of Law to have a memorandum of understanding.
The original memorandum of understanding dated back to 1992; in
1999 it was redrafted and renewed. He then informed the
subcommittee that as of this morning, MFCU has 51 investigations
open. He then reviewed a chart of the investigative process.
CHAIRWOMAN GREEN asked about the MFCU budget.
MR. BRANCHFLOWER said that MFCU spent $460,000 last year and the
unit was able to bring in over $2 million. In addition, the MFCU
budget is comprised of 75 percent federal funds and 25 percent
state funds.
CHAIRWOMAN GREEN noted that if 10 to 20 percent of the Medicaid
budget is used fraudulently, it would not take many years to add
up to a few billion dollars. She then asked if anyone has been
administratively sanctioned.
MR. BRANCHFLOWER said that DMA has a regulatory system that
provides for sanctions, meaning the equivalent of an accusation
is filed against a provider and a hearing is held to determine
whether the accusation has merit. The provider can be
disenrolled. He explained that it is similar to the adjudicatory
process but is done at the administrative level.
CHAIRWOMAN GREEN asked if that is a common occurrence.
MR. BRANCHFLOWER stated that, to his knowledge, DMA has
sanctioned one provider since 1995.
CHAIRWOMAN GREEN asked what happened to the others.
MR. BRANCHFLOWER deferred to Mr. Labbe for an answer to that
question. He then indicated that of the 164 Deloitte and Touche
audits, he has taken over less than 20. Federal law says that if
the MFCU refers a case to DMA in which a loss has been
identified, then DMA is required by law to institute an action to
recover the identified overpayment.
CHAIRWOMAN GREEN asked if DMA reports back to the MFCU when cases
have been resolved.
MR. BRANCHFLOWER said it does not. He said in the last three
years, he has identified, with the assistance of the Deloitte and
Touche audits, $22,300,000 in overpayments. He has sent letters
to DMA in each case citing the federal statutes and asking DMA to
undertake administrative hearings to recover that money. He does
not know the status of those cases.
CHAIRWOMAN GREEN asked how many people work in the recovery
effort at DMA.
MR. BRANCHFLOWER said he knows of one person.
CHAIRWOMAN GREEN asked if the federal agency acts as a watchdog
to make sure overpayments are collected or whether that is a
state function.
MR. BRANCHFLOWER said the watchdog agency is the Office of the
Inspector General. Alaska is one of the only states that office
does not have a presence in. In terms of requirements, states
are required to follow federal regulations as a condition of
funding the Medicaid program. One of those regulations says that
if the MFCU refers a case to the DMA for recovery, DMA is
required to try to get the money back. He repeated in the last
three years he sent 140 letters to DMA, amounting to over $22
million. He referred them to DMA because the cases are not
sufficiently strong in terms of evidence for him to pursue in
court. Those cases are better suited to be handled on an
administrative basis. Different standards of proof, rules of
evidence and rules of procedure apply.
CHAIRWOMAN GREEN asked why the Office of the Inspector General
does not have an office in Alaska.
MR. BRANCHFLOWER said it seems to him that Alaska has a
sufficient volume of dollars to merit its presence but he is not
aware of the reason.
REPRESENTATIVE CISSNA asked if, regarding the audits, an appeal
procedure exists.
MR. BRANCHFLOWER said that when he refers a case to DMA, they
meet with the provider and offer them an opportunity to review
the audit. Oftentimes there are explanations for findings,
perhaps an x-ray was missing from a patient's file, so there are
corresponding reductions in the overpayments. The findings are
calculated on the basis of 100 patients. Perhaps the auditor
finds a lack of documentation for $150 worth of services. The
mathematician then extrapolates to the entire patient population
the probability that there are undocumented services throughout
the patient population based upon that number. That formula
motivates providers to get the first figure lowered.
REPRESENTATIVE CISSNA asked if a filtering process exists to
separate those who may have made a mistake from those who
intentionally commit fraud.
MR. BRANCHFLOWER said that Representative Cissna put her finger
on one of the most difficult jobs of his agency. They must judge
the strength of evidence and decide which cases involve egregious
conduct. It is very difficult to prove these cases in court
because they often involve questions of medical necessity and
medical judgment. He said defining fraud is also a matter of
semantics. The problem occurs when one gets away from the extreme
cases. Many of those cases lend themselves well to
administrative hearings.
REPRESENTATIVE DYSON asked if he gets any referrals from the
Ombudsman.
MR. BRANCHFLOWER said he does not. He said his jurisdiction is
limited by institutions funded by federal dollars so he is not
involved with the Pioneers' Homes. He noted that most of the
MFCU's work deals with conduct of providers; recipient problems
are investigated by another lawyer in the Department of Law.
CHAIRWOMAN GREEN asked how to go about continuing the audits.
MR. BRANCHFLOWER said he is unaware of the mechanics of the
initial audits. He thought it was done via an executive
decision.
SENATOR TAYLOR asked Mr. Branchflower when he will "run out" of
new audits.
MR. BRANCHFLOWER said he just finished looking at the last batch
of 33; of those he kept about 8. When he finishes working on
those, the "grist for his mill" will be gone.
CHAIRWOMAN GREEN asked what percentage Deloitte Touche would have
and how many prosecutors would be needed.
MR. BRANCHFLOWER said the first year Deloitte Touche did 70 and
about 30 the second year. He pointed out that is a realistic
number because a lot of factors are considered when selecting
providers. He meets with the auditors once per month to discuss
provider issues and fraud issues. If certain names continue to
come up, an audit may be planned. He surmised that the audits
have a high deterrent value on all providers.
SENATOR TAYLOR told Mr. Branchflower that the Senate Judiciary
Committee would introduce legislation for him. He then asked Mr.
Branchflower his opinion of using partial payment of claims as
another tool to get recipients to respond to the EOBs. He
pointed out if the patient must pay 5 percent of the cost of a
visit, the patient may pay more attention to the amount of the
bill.
MR. BRANCHFLOWER said he feels that is a political question. He
does not disagree with that approach, but said that some
recipients are very poor.
CHAIRWOMAN GREEN thanked Mr. Branchflower for his presentation
and asked Mr. Labbe to complete his.
MR. LABBE continued with his power point presentation (page 19)
and discussed the ten fastest growing categories of service over
the last three years. The number of persons on the "Adults With
Physical Disabilities waiver (APD) grew rapidly, based on pent up
demand.
CHAIRWOMAN GREEN asked when that category of individuals began to
receive services.
MR. LABBE said it was in 1993 or 1994. The first year about 50
people were eligible for the APC waiver and then it went way up.
CHAIRWOMAN GREEN asked what has caused such an increase between
1999 and 2001.
MR. LABBE said that for a number of years the program was
administered by the Division of Mental Health and Developmental
Disabilities and the adult disabled were "submerged" into the
much larger waiver for the developmentally disabled. The program
was moved to the Division of Senior Services where people became
more aware of the backlog. He said in addition, the Supreme
Court issued a decision that stimulated a lot of interest in
community-based services for people with disabilities. He said
he does not believe the same level of growth will continue.
MR. LABBE explained the second fastest growing category of
service is for residential psychiatric treatment centers (RPTC)
for children. Two facilities are located within the state. Last
year about 596 clients were served. Alaska clients are also
being served in about 15 out-of-state facilities. DMA has been
working with the Alaska Mental Health Board on a project to
investigate how Alaska children ended up in out-of-state
facilities. At one point in time, about 75 percent of those
children were in state custody but the opposite is true now. DMA
and the Alaska Mental Health Board are also looking at whether
enough in-state capacity exists.
CHAIRWOMAN GREEN asked for a description of the type of child who
would need these services.
MR. LABBE said these children are generally between 10 and 18
with serious emotional disturbances. They are sometimes
dangerous to themselves.
SENATOR TAYLOR asked, "Usually they are not in the custody of the
state anymore, but the numbers have gone up. That's bizarre."
MR. LABBE said at one point that category was made up
predominantly of children in custody and now about 75 percent are
not in custody. That is one of the issues being studied and
whether there are better ways to approach that.
REPRESENTATIVE DYSON noted that the residential treatment centers
can be very expensive, up to $700 to $800 per day.
MR. LABBE said there have been a few at that level but now the
rates are more uniform. The maximum rate for out-of-state
facilities paid by the state is $330 per day. Costs out-of-state
are typically lower than in state.
REPRESENTATIVE CISSNA asked Mr. Labbe if there are other costs,
such as educational fees.
MR. LABBE said he believes the Department of Education and school
districts pay for educational costs of children in residential
facilities.
REPRESENTATIVE CISSNA clarified that the school district in which
the parents reside pay for the cost. She stated that legislators
need to know the total cost of sending clients to residential
facilities.
CHAIRWOMAN GREEN asked about the CCMC waiver category.
MR. LABBE explained it represents children with complex medical
coverage, such as a child who requires a ventilator. He then
referred to page 20 and explained that it compares waiver and
nursing home costs. Looking at the demographics, Alaska can
expect to have a large segment of its population in need of these
kinds of services in the future. The legislative Long Term Care
Task Force discussed that issue quite a bit. The chart
illustrates the issue of developing community-based services as
an alternative to more expensive institutional services. The
condition to qualify for elderly community-based waiver service
is the same as the condition to qualify for a nursing home. The
chart demonstrates the cost-effectiveness or cost-avoidance of
using community-based services waivers.
SENATOR TAYLOR said that waiver has only been in place for about
two years, as he co-sponsored legislation to create it. He asked
about the status of regulations for that waiver and then
clarified that he was referring to the adult assisted living
program.
MR. ELMER LINDSTROM, Deputy Commissioner, Department of Health
and Social Services (DHSS), said an assisted living licensure
bill first passed in about 1993. Facilities were licensed as
assisted living facilities from that point forward and at this
time, there are more beds in assisted living homes than in
nursing homes. However, the funding mechanism is complicated
because there are some private pay individuals, people who
receive general relief, which is paid with general fund dollars,
and people who receive some reimbursement for assisted living
services through the Medicaid waiver. The bill that passed
several years ago, Senator Mike Miller's bill, increased the
general relief payment, which is outside of the jurisdiction of
DMA. He noted regulations were promulgated with some provisions
relating to licensing requirements and background checks. One
phase of those regulations have been filed; another portion is
still being reviewed internally and have not yet been adopted.
Another set of general relief regulations pertain to general
relief reimbursement. During the public comment period, many
comments were received and a number of changes were proposed by
the agency. The draft regulations then went out again for public
comment. The comment period is now closed and the Departments of
Administration and Health and Social Services are still reviewing
the comments.
CHAIRWOMAN GREEN said one issue she believes will continue to
surface is the concern that licensure falls under the
jurisdiction of DHSS.
MR. LINDSTROM said it is particularly complex when two agencies
are involved. The Department of Administration licenses assisted
living homes primarily for the senior population. DHSS licenses
assisted living homes under the same law and regulations for
mentally ill individuals residing in assisted living homes.
TAPE 01-50, SIDE A
SENATOR TAYLOR said he believes the assisted living home amount
needs to be increased three or four times.
MR. LABBE said, according to the 2000 Census, Alaska's total
population is 626,932. The number of children under 18 is
190,587. The number of adults 18 to 65 equals 400,610. The
number of elderly Alaskans over 65 equals 35,735.
MR. LINDSTROM told subcommittee members that the 2000 Census does
contain disability status for the civilian non-institutionalized
population in Alaska. He was not aware of what definition of
"disability" was used. The Census designated approximately 12
percent of Alaska's population disabled, amounting to 75,735
individuals. That category does not contain a breakdown for
children under the age of 5, but the number of disabled aged 5 to
20 years was 12,387; the number of disabled aged 21 to 64 was
47,357; and the number over the age of 65 was 15,991.
REPRESENTATIVE DYSON asked if the folks that pay their own costs
are included in the chart.
MR. LABBE said they are not; the chart only represents Medicaid
clients. He pointed out the standard used for eligibility for
the disability category is tied to the Social Security
Administration's disability definition, which is fairly rigorous.
Therefore, many people are disabled who do not meet that
standard.
MR. LABBE referred to page 21 of his power point presentation and
said on average, states spent 14.7 percent of their general fund
expenditures on their Medicaid programs in FY 01 while Alaska
th
spent 10.8 percent. Alaska was 46 in the nation for state fund
spending during FY 98. In terms of total expenditures, Alaska
ranks low because it has a small population.
CHAIRWOMAN GREEN asked if Alaska's number is skewed upward
because it does not have a county system.
MR. LABBE said in terms of state Medicaid programs, a few states
have a county share but most programs are centrally administered.
He offered to provide more back-up material from the reports
these numbers were generated from.
SENATOR TAYLOR expressed concern that when comparisons are made
with Alaska's general fund expenditures,
... for the last - gosh I don't know how many years now
- we've been involved in an exercise in Juneau creating
other quote, special funds. And every time a
department or agency wanted to go out and [indisc.] a
little more income for their agency, they went out and
created a new fee schedule and their new fee schedule
became part of their specific fund base for their
agency - whether it was $5 bucks additional per license
for every person who wanted to catch a king salmon so
Total Funds
$2,000
Federal Funds
$1,000
$0
State Funds
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
19911992199319941995199619971998199920002001
the graph is to show that over the last 10 years, the general
fund outlay has not been extreme in terms of increases. Although
the total cost of the program has increased, most of the increase
has been with federal funds. He noted between 1994 and 1999, the
average general fund increase was about 3 percent per year. The
federal increase was 16 or 17 percent per year. He felt that was
primarily due to the match rate change, but also Alaska has been
progressive in maximizing the 100 percent IHS reimbursement and
in taking other cost containment measures. He said he is always
concerned about the cost of the general fund. He stated that a 3
percent increase per year per person is not too bad. Essentially,
the state is cost shifting and trying to avoid cost shifting by
the federal government.
CHAIRWOMAN GREEN said if one looks at the increase from 1991 to
2001 in total funds, it amounts to about a 75 percent increase.
She said she is concerned about accepting a prior year increase
as the norm and that the federal match rate will continue because
at some point, the state will have no control over the cost.
MR. LABBE said he agrees with Mr. Gilbertson's concern that
Congress needs to take an honest look at that match rate. DMA
has been doing some work internally to help support Senator
Murkowski's effort by providing data and looking at what other
private payers pay in Alaska relative to what they pay in other
states. DMA now has access to a program that provides
expenditures by codes in other areas and has started to compile
information that shows that Alaska's payment per beneficiary is
higher than most states. It is also higher for Blue Cross or
Aetna by a similar percentage. He felt that demonstrates that
costs are higher in Alaska, not that the state is overpaying.
SENATOR TAYLOR said:
You are living in a world that is so Alice in
Wonderland, none of us are in Kansas anymore. As your
local hospital what the bill is for a room for a day.
Do you know what the answer is you're going to get
back? You will find out that that local hospital has
probably six or seven schedules for what that room is
worth. It's worth this much if you're a Medicare
patient, it's worth this much if you're a Medicaid
patient, it's worth this much if you're Blue Cross.
You'll find that's right at the top because everybody
else has some advocacy group that comes in and
negotiates with that hospital to set rates. Probably
the most controversial thing I got my little nose stuck
into for the last two or three years was when I took on
you guys on the issue of the revolving door on rate
hearings and when we were going to make some decisions
and how are we going to set them and then Torgy jumped
in too and says, look, if you don't want to just take
care of part of the problem, I'll take care of all of
it and I'll set your rates for you. All of a sudden
people decided to get to the table.
I can guarantee you, the marketplace has absolutely
nothing to do with anything going on out there. It's
all bureaucracy and you as bureaucrats get to negotiate
with hospitals what you're going to pay and they
negotiate back with you guys and then the insurance
industry shows up and they try and do some of the same
stuff. There's literally a rate out there for the guy
who has no insurance but has a business and can pay his
bills. Then there's a separate rate, a different one
for the insurance company and a different rate for each
state agency so why take and compare based on zip codes
what somebody may be paying in Arkansas? It's just
that the Arkansas docs and the hospitals haven't raped
their people down there yet but believe me, they're
coming around the corner just like you guys have so
badly in California that when the federal government
started this whole process, they had to go down there
and take an average because they were seeing a cost -
or bills coming in from doctors, where in a six month
period the price of the same process in surgery and so
on had gone up 200 percent with the same doc because he
was bidding each time to see, well, he'd tell the guy
he's playing golf with, well gosh, I got $200 for an
appendectomy last week and the other guy said, well by
gosh George, you get $200, my appendectomy is worth
$300 so he would charge three and the next week the
other guy charges four and it just kept evolving up.
So, I don't know where any of that gets us - what it
gets me - it gets me very frustrated that we have an
awful lot of state and federal bureaucrats involved in
the process of setting rates which we then have to fund
in the form of a budget that's going to cap out within
the next year or two at a billion dollars just for this
state....
SENATOR TAYLOR said he really believes that if we don't pay
attention to this and find a solution, we will find a lot of
people relying on services that the state will not be able to
provide.
MR. LABBE said that across the nation Alaska ranks number 47 in
total expenditures for Medicaid. He explained that a Supreme
Court decision regarding the Americans With Disabilities Act said
that the state would be required to provide services that would
permit individuals to live in the community rather than an
institution. The case called Olmstead involved a couple of women
in Georgia who were in a state hospital. Their medical providers
felt could leave the hospital, but the state wasn't moving them
out.
The plaintiffs won that and since that time, there has been quite
a bit of work around the country. His division was told by the
federal Medicaid Agency (HCFA) that the Medicaid Program can help
states comply with the Supreme Court decision, because the
federal government will help share in the expense with community
based services. Alaska has moved further along than many states
in terms of our community base care program and closed Harbor
View, consistent with the view that people aren't inappropriately
institutionalized and that there are options. They are still
waiting lists of issues for services and significant capacity
problems in terms of people providing supports in the community,
especially in smaller communities. Medicaid can help these issues
and that's what they have been doing through the home and
community based waivers.
CHAIRMAN GREEN thanked him for his testimony and further
discussions would be needed.
MR. LABBE added that there were several things that Steve
Branchflower mentioned and he wanted to respond to one comment
that was misunderstood. When he said we were only one of three
states that operate in the fee for service Medicaid Program and
all the rest have HMOs, every state has a fee for service
program. Many of them also have an HMO. You have the same dynamic
in 50 states of providers billing and some states have a
percentage of their population signed up on the prepaid plan, but
it's still less than 50% of the total national Medicaid
population involving HMOs.
SENATOR TAYLOR said a Sitka constituent had a question about what
an alcohol counselor can be called and how they get reimbursed
based upon that. The legislature passed a law or there was a
regulation saying that a person needed to have a master's degree
or better to be in alcohol counseling.
MR. LABBE responded that the Mental Health has that kind of rule,
but he didn't think that was required for alcohol.
SENATOR TAYLOR asked him to look into it and he agreed.
SENATOR DAVIS asked him to address the building manual and the
audits.
MR. LABBE replied that they were directed by the legislature in
'97 to initiate a series of cost containment actions, one of
which was the provider audits. They have to work through
backlogs.
SENATOR DAVIS asked if they have administrative procedures for
prosecution and how many people are working in that area. She
also wanted to know how many cases he had been able to get funds
for.
An unidentified woman responded that just doing this in the
spirit of prosecution is sometimes a negative way to look at it,
because there were built-in improvements.
MR. LABBE said that the focus was particularly on the patient and
one of the problems with the $22 million is what Mr. Branchflower
perceives are the draft reports from the contractor concurrently
with the state. The state had to make a number of policy changes,
which is a lengthy process.
For the most part, we didn't do the extrapolation
because this was like our first time really going out.
What we are doing is working on compliance and
correction…If you look at our physician expenditures,
they're practically flat for about three years before
we expand the populations. So, I believe the attempt of
the legislature was to slow the growth of the program.
It was not aimed so much at the recovery mode…We had
some problems with it, too.
SENATOR TAYLOR thanked him for his excellent presentation and
said they would next take public testimony.
4:09
MR. BILL HOGAN, Executive Director, Lifequest Regional Health
Center, said he is also a member of the Alaska Community Mental
Health Services Association, which is the mental health providers
association. Today he is speaking for the Alaska Mental Health
Board. He said:
Programs such as Alaska Temporary Assistance program,
Adult Public Assistance and General Relief provide
basic support for many Alaskans, helping them to meet
fundamental expenses such as food, shelter, clothing
and transportation. Whether transitional or long-term
in nature, these programs allow participants to live as
independently as possible and with dignity in their
community of choice. These programs also help Alaskans
avoid homelessness and minimize higher costs, more
restrictive settings, including hospitalization,
nursing home placement and incarceration.
The Board asked that the subcommittee as they review
programs, do so based on the following principles:
· All Alaskans have the basic human need to achieve
and maintain the highest possible level of
independence.
· The State has a responsibility to address the
basic human needs of individuals who do not have
other means to meet those needs on either a short
or long-term basis.
· Support levels should be sufficient to allow
individual to live with dignity in the community
· Programs should be readily accessible to eligible
applicants.
· Programs and services should be managed to promote
efficiency and maximize resources.
MR. HOGAN recommended they review the programs in a thoughtful
manner.
· None of the proposed changes have a negative impact
on the ability of participants to meet basic living
needs.
· Review of the programs should be on a program-by-
program basis.
· No major changes should be made without meaningful
input from the program recipients.
MR. HOGAN said he firmly believes that as a provider they have an
obligation to the taxpayers of Alaska and the legislature to make
sure they are getting the best bang for the buck. He said they
are concerned about access.
In many instances publicly funded programs are the only
source of health care for many Alaskans and that's not
entirely true for a number of folks who have no
insurance at this point. Without Medicaid and other
publicly funded health care programs, many persons
would have nothing.
He emphasized the importance of treating mental illness and
mental health care in a similar way to physical health. The
Surgeon General's Report on Mental Health from 1999 - 2000
advocates strongly for states passing mental health parity
legislation and the federal government just passed a mental
health parity law.
He wanted to comment on Representative Dyson's suggestion to
begin looking at integrating primary care mental health and
substance abuse. Most mental health and substance abuse providers
feel that makes a lot of sense and many communities need a one-
stop shop where people can go and get everything they need
without being shuffled.
Also, many mental health providers have undertaken an effort to
develop corporate compliance plans in regards to Medicaid and
Medicare fraud. They have had at least one consultant up from
down south to help mental health centers begin to develop their
compliance limits. The Medicaid regulations are very complicated
and they are equally complicated for providers to comply with.
As a Mental Health Board member, they are concerned about out-of-
state placement for kids. There are about 250 kids for about $14
million.
We are committed to develop in-state capacity to keep
kids in Alaska close to their own homes. It's pretty
difficult to do family therapy with a kid and try to
reunite a child with their family of natural origin if
the kid is in Idaho or Montana…
MR.HOGAN next commented on the disabled and his best guess at
prevalence of mentally disabled in Alaska is about 24,000
individuals or about 4% of the population. If the 75,000 figure
is accurate, it might be safe to say about a third of those are
mentally disabled.
An unidentified person asked how many were related to fetal
alcohol syndrome.
MR. HOGAN guessed about 10 - 15 percent, but it could be higher.
MS. LILA BERRY, Manager, Circle of Care, said she wanted to
discuss care coordination. She explained that Circle of Care
began about 12 years ago in response to a community tragedy where
an elderly woman who lived by herself had many people involved in
her care, but no one really knew about her day-to-day activities.
So there was no coordination. She died and was found several days
later.
MS. BERRY said that geriatric care coordinators can be found in
all parts of the United States and many parts of the world. They
assist seniors and adults with physical disabilities with doing
screenings, consultation and assessments to help people get
through mazes of eligibility. She helps them problem solve and
obtain services so that they stay as safe and healthy as
possible. This may mean assisting seniors who cannot afford their
current housing, their food or their medication and protect them
from financial exploitation.
TAPE 01-50, SIDE B
MS. BERRY continued:
Hundreds of seniors and disabled person benefit from
the choice waiver program and as our senior population
is rapidly growing and is predicted to continue to
grow, we need to enhance and improve our menu of
services for seniors and for those with adult physical
disabilities, but there are gaps in services for people
with chronic illnesses. The safety net for people who
are chronically ill is inadequate to meet the needs of
our residents. There is the person who might be $10
over Medicaid or have a chronic illness that's not
covered by the PMO. For example, if you have a
respiratory illness, you're out of luck. You're not
covered. Or there might be the person who hasn't worked
enough quarters to be eligible for disability under
[indisc].
Oregon is one example of innovative ways to meet the
needs of the chronically ill who might not be eligible
for traditional Medicaid. I am asking that some
consideration be given to this population with one
area, the people with respiratory illnesses who are not
currently eligible for Medicaid.
MS. KRIS MOORE, Wasilla parent, said she has four children, two
have been adopted from within the family. She said that parents
should plan to have their children and make sure they have
coverage before they have children. Neither she nor her husband
have jobs that offer reasonable health insurance and she was
recently unexpectedly laid off. "Many families experience these
kinds of unexpected transitions…In the case of a medical
emergency or for the necessary basic care during these times, we
would be set back financially for years were it not for Denali
Kid Care coverage."
CHAIRMAN GREEN asked if she had received a message about Denali
Kid Care.
MS. MOORE replied that she hadn't specifically heard anything.
CHAIRMAN GREEN said that tomorrow's discussion was going to be
about how to find alternative methods of health insurance and get
coverage in places. She did not think the Denali Kid Care model
is the ideal model. She said it might need to be retooled where
people have the ability to participate in the selection, the
types of coverage and phase into a regular health insurance
policy. She did not want to strip the Denali Kid Care. She said,
"The CHIPS Program is in probably going to be changed. What does
that do to Denali Kid Care when it comes down from the feds to
us? I don't know. It's a dilemma."
MS. MOORE responded that her point is that they need to make sure
they are considering the resources parents and families receive
in these programs. She urged them to find a way to deal with the
fraud issues.
MS. ELAINE MANNING said she has a Medicaid waiver. Before it
came, she and her husband didn't know if they could stay in their
home where they want to be. "If we could keep, for instance, 100
people in their home where they want to be, we would save our
state millions of dollars and I think we're going in the right
direction…"
MS. MONTA FAYE LANE, President, Alaska Caregivers Association,
said the assisted living homes are far more cost effective than
they realize. SB 73 had a lot of support in the legislature, but
now it seems that people want to change the intent, which was to
give providers a raise in the daily room and board rate they
receive for taking care of indigent and elderly people,
alcoholics, chronically mentally ill, etc. She explained that
when she worked with Senator Mike Miller on this bill, they were
receiving $34.50 per day room and board to care for these people
and they figured it should be $150 per day. There was no Medicaid
money at that time. It was increased to $50 per day in 2000. In
2001 it went up to $60 and in 2002 it will be $70. She said that
the State wants to take away 60 percent of that. "That's going to
make us receive for room and board for these people less than the
1982 $31.90."
Additionally, people are being kicked out of hospitals quicker
and sicker than they ever have before in the history of the
United States. She said, "I can't see why they can't figure out
what a savings assisted living is to the State of Alaska when you
set and look at the numbers."
MS. LANE told the committee that she was taking care of a
quadriplegic patient for $3,500 a month and he was kicked out of
a nursing home that was charging $15,000. He was an alcoholic and
there was no way to recover any damages he did to their home. She
couldn't just kick him out and continues to take his abuse. She
asked that the legislature:
Redefine the way they handle the Medicaid Program of
the PA numbers. When I talk about PA numbers, I'm
talking about getting paid that little $68.41 a day. I
had to wait 180 days to get my money and I think that's
atrocious. I'm supposed to carry the State of Alaska on
my back?
MS. MARY OLSON, physical therapist, said she worked for 25 years
with children and serves on the National Board of the American
Physical Therapy Association's Pediatric Section. She got an e-
mail stating the committee was going to address the Denali Kid
Care Program and she sees the importance of the program to the
Medicaid waivers. Her first job as a physical therapist was in a
boarding school for kids 5 - 21 years old because they had a
physical disability. The requirement was that they had a physical
disability, but intellectually normal. She has since worked with
other families where the Medicaid waivers have made it possible
for patients to be at home.
The important thing is that the services be financially
accessible to all children, particularly. I'm a strong
believer in early intervention. That's where were going
to make a difference and a kids life…and to pregnant
women…Stop these problems before they occur…If they are
there, get these kids on as soon as possible doing the
best they can.
MS. OLSON said in her private practice that regulation and
paperwork are two-thirds of her cost. "If I would just get paid
for the work I do and I love to do, I would be thoroughly
satisfied, but you've got to pay me for that other stuff you make
me do."
MS. OLSON asked if Medicaid in schools had been addressed. She
said there are many ways people receive assistance and there was
no coordination or any one to take ultimate responsibility.
MS. SUE DROVER said she was not representing anyone and wanted to
talk about Denali Kid Care. Her son tried to commit suicide 14
months ago and the doctors said he needed long-term care. She
would have had to take him home where he would have to be watched
all the time, because she could not afford to send him to a long-
term facility. Fortunately, he qualified for Denali Kid Care
allowing him to get the treatment and round-the-clock care that
he needed and she felt that was the only reason he was alive
today. She requested that they fund an in-state residential
treatment center. She said there is no alcohol or drug abuse
involved in her son's case.
CHAIRMAN GREEN asked someone from the Department if he knew of
any those facilities were being planned. He answered that there
are two facilities in-state that are long-term - North Star
Behavioral Health and Alaska Children's Services Center - and
Providence in short-term.
CHAIRMAN GREEN asked if the two long-term facilities were
residential. He answered that they are and added that they have
vacancies.
MS. DROVER said that at the time it may have been an availability
issue at the time, but now he is so ingrained with the treatment
and doing well in Utah that he wouldn't want to leave.
CHAIRMAN GREEN thanked her for coming in and added that she
thought they would be hearing more about these facilities.
MS. DROVER added that if anything happens outside of the
facility, that their regular medical insurance takes care of it.
Denali Kid Care covers the residential facility fees which are
about $9,000 per month.
MS. RUTH TITLER said she is a 61-year old diabetic and had been
dependent on insulin for 52 years. She has other major
complications directly related to the diabetes. About three years
ago, her physician requested that Circle of Care evaluate her
needs at home. It was determined that she needed additional help
with showers, cooking and laundry. Once she was approved by the
Choice Labor Program, life became better. Her care coordinator
contacts her at least twice a month - one of them is a face to
face visit; they monitor how her outside help is doing. Her
family lives in the Lower 48 and Circle of Care has given her
emotional support as well, which is very important in a person's
outlook on life.
MS. TITLER said because the state opted out of the Social
Security System, she is denied disability and doesn't qualify for
Medicare until she is 65. "If it was not for a Choice waiver,
Medicaid and Circle of Care, I believe I would not be able to
maintain independent living…"
She supported continuing Medicaid money to those who need it
most.
DR. DAVID ALEXANDER, physician member of the Medical Care
Advisory Committee (MCAC), said he faxed them a copy of his
comments. The main thing is that the State Medicaid Program has
been closely reviewed by the MCAC with Bob Labbe meeting with
them for two days four times a year. This Committee came up with
some recommendations. The first one was: "It ain't broke; so
don't try to fix it. Beyond that, it can clearly be tweaked and
improved."
As an example, he said there is money spent for disaster dental
care for adults, but if you're going to do that, there should be
some way to fund preventive care as well, because it's a lot
cheaper in the long run. He said second, the issue of payment for
transportation charges needs review; it's unclear why the state
is trying to be fiscally conservative and insist on paying top
dollar for air tickets, because tickets can only be purchase if
they are totally refundable so they have to wait until the last
minute to buy it.
Speaking as a pediatrician, he said the federal government is
proposing cost neutral health insurance flexibility and
accountability waivers that will allow coverage for more adults,
but only contracting the amount that's available to children
(because it has to be cost neutral). In addition, some of the
current Medicaid money would have to go to set up the program,
which is complex. He thought it was poor economic policy to drop
people from the program when they finally get just above the
poverty level.
MR. DENNIS DUNN, Principal at Kenai Alternative High School, said
that he is here to represent the voiceless. He has about 75 kids
and about a third of them a different times qualify as homeless
and well over half of his population utilize the Denali Kid Care
Program.
Without this program, it's unquestionably clear that
they would not get the medical services that they are
now providing. Now these students have access to vision
services, general medical care and mental health care.
In addition, some of our students are also parents that
have children. In many cases both the student and our
school as well as their child is a recipient of the
Denali Kid Care. I just cannot emphasize the difference
this is making in the lives of these kids. These are
kids who have nowhere to go, no access to any kind of
health care, whatsoever until this program came along.
MR. DUNN said a couple of problems he had with his kids is that
several providers are reluctant to take Denali Kid Care, in
particular dentists. He said some psychologists are now being
allowed to bill. Also, many of his kids are on their own, but
they can't be seen unless they have someone who is over 18. If
they have a Denali Kid Care card, it would help if they could go
without someone 18 years old. He strongly supported continuing
the program.
CHAIRMAN GREEN thanked him and said that emancipation was another
issue they would have to deal with.
SENATOR TAYLOR said, "There's a whole series of things we need to
take up, Madam Chairman. When it comes to parental
responsibility, the idea of a throw away kid in Alaska is more
than offensive to me…"
CHAIRMAN GREEN thanked everyone for their testimony and adjourned
the meeting at 5:05 p.m.
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