Legislature(2003 - 2004)
04/30/2004 01:35 PM Senate HES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
April 30, 2004
1:35 p.m.
TAPE (S) 04-25&26
MEMBERS PRESENT
Senator Fred Dyson, Chair
Senator Lyda Green, Vice Chair
Senator Gary Wilken
Senator Bettye Davis
Senator Gretchen Guess
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 425(EDU)
"An Act relating to funding for school districts operating
secondary school boarding programs and to funding for school
districts from which boarding students come; and providing for
an effective date."
MOVED CSHB 425(EDU) OUT OF COMMITTEE
HOUSE BILL NO. 500(title am)
"An Act including the Joint Commission on Accreditation of
Healthcare Organizations under the definition of medical review
organizations."
MOVED HB 500(title am) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 511(HES) am
"An Act relating to the certificate of need program for health
care facilities; and providing for an effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 425
SHORT TITLE: SCHOOL FUNDS RELATED TO BOARDING SCHOOLS
SPONSOR(s): REPRESENTATIVE(s) COGHILL
02/04/04 (H) READ THE FIRST TIME - REFERRALS
02/04/04 (H) EDU, HES, FIN
03/02/04 (H) EDU AT 11:00 AM CAPITOL 124
03/02/04 (H) Heard & Held
03/02/04 (H) MINUTE(EDU)
03/09/04 (H) EDU AT 11:00 AM CAPITOL 124
03/09/04 (H) Moved CSHB 425(EDU) Out of Committee
03/09/04 (H) MINUTE(EDU)
03/18/04 (H) EDU RPT CS(EDU) NT 1DP 2NR 3AM
03/18/04 (H) DP: GARA; NR: OGG, WOLF; AM: SEATON,
03/18/04 (H) WILSON, GATTO
04/01/04 (H) HES AT 3:00 PM CAPITOL 106
04/01/04 (H) Moved CSHB 425(EDU) Out of Committee
04/01/04 (H) MINUTE(HES)
04/05/04 (H) HES RPT CS(EDU) NT 6DP 1NR
04/05/04 (H) DP: GATTO, WOLF, COGHILL, SEATON,
04/05/04 (H) KAPSNER, WILSON; NR: CISSNA
04/14/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/14/04 (H) Heard & Held
04/14/04 (H) MINUTE(FIN)
04/20/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/20/04 (H) Moved CSHB 425(FIN) Out of Committee
04/20/04 (H) MINUTE(FIN)
04/21/04 (H) FIN RPT CS(EDU) NT 4DP 4NR
04/21/04 (H) DP: CROFT, MOSES, FATE, FOSTER;
04/21/04 (H) NR: HAWKER, STOLTZE, HARRIS, WILLIAMS
04/23/04 (H) TRANSMITTED TO (S)
04/23/04 (H) VERSION: CSHB 425(EDU)
04/26/04 (S) READ THE FIRST TIME - REFERRALS
04/26/04 (S) HES, FIN
04/30/04 (S) HES AT 1:30 PM BUTROVICH 205
BILL: HB 500
SHORT TITLE: DEFINITION OF MEDICAL REVIEW ORGANIZATION
SPONSOR(s): REPRESENTATIVE(s) SAMUELS
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) HES
03/25/04 (H) HES AT 3:00 PM CAPITOL 106
03/25/04 (H) Moved Out of Committee
03/25/04 (H) MINUTE(HES)
03/29/04 (H) HES RPT 5DP 2NR
03/29/04 (H) DP: COGHILL, SEATON, CISSNA, KAPSNER,
03/29/04 (H) WILSON; NR: GATTO, WOLF
04/21/04 (H) TRANSMITTED TO (S)
04/21/04 (H) VERSION: HB 500(TITLE AM)
04/22/04 (S) READ THE FIRST TIME - REFERRALS
04/22/04 (S) HES
04/30/04 (S) HES AT 1:30 PM BUTROVICH 205
BILL: HB 511
SHORT TITLE: CERTIFICATE OF NEED PROGRAM
SPONSOR(s): REPRESENTATIVE(s) SAMUELS
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) HES, FIN
03/02/04 (H) HES AT 3:00 PM CAPITOL 106
03/02/04 (H) Heard & Held
03/02/04 (H) MINUTE(HES)
03/04/04 (H) HES AT 3:00 PM CAPITOL 106
03/04/04 (H) Heard & Held
03/04/04 (H) MINUTE(HES)
03/18/04 (H) HES AT 3:00 PM CAPITOL 106
03/18/04 (H) Moved CSHB 511(HES) Out of Committee
03/18/04 (H) MINUTE(HES)
03/24/04 (H) HES RPT CS(HES) 3DP 1DNP 2NR
03/24/04 (H) DP: KAPSNER, CISSNA, WILSON; DNP: WOLF;
03/24/04 (H) NR: GATTO, COGHILL
03/29/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/29/04 (H) Heard & Held
03/29/04 (H) MINUTE(FIN)
03/31/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/31/04 (H) Moved CSHB 511(HES) Out of Committee
03/31/04 (H) MINUTE(FIN)
04/01/04 (H) FIN RPT CS(HES) 4DP 2NR 2AM
04/01/04 (H) DP: MEYER, HAWKER, HARRIS, WILLIAMS;
04/01/04 (H) NR: FATE, FOSTER; AM: STOLTZE, CHENAULT
04/26/04 (H) MOVED TO BOTTOM OF CALENDAR
04/26/04 (H) NOT TAKEN UP 4/26 - ON 4/27 CALENDAR
04/27/04 (H) NOT TAKEN UP 4/27 - ON 4/28 CALENDAR
04/28/04 (H) TRANSMITTED TO (S)
04/28/04 (H) VERSION: CSHB 511(HES) AM
04/29/04 (S) READ THE FIRST TIME - REFERRALS
04/29/04 (S) HES, FIN
04/30/04 (S) HES AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
Karen Lindster
Staff to Representative John Coghill
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced CSHB 425(EDU) for the sponsor
Eddy Jeans
Manager Education Support Services
Department of Education & Early Development
th
801 W 10 St.
Juneau, AK 99801-1894
POSITION STATEMENT: Answered questions on CSHB 425(EDU)
Floyd Brooks
No address provided
POSITION STATEMENT: Testified on HB 425
Lorry Yates
No address provided
POSITION STATEMENT: Testified on CSHB 425(EDU)
Agnes David
No address provided
POSITION STATEMENT: Testified on CSHB 425(EDU)
Sara Nielsen
Staff to Representative Ralph Samuels
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 500(TITLE AM) and CSHB
511(HES) am for the sponsor
Janet Clarke
Department of Health & Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Testified on HB 500(TITLE AM) and CSHB
511(HES) am
Laurie Herman
Regional Director of Government Affairs
3200 Providence Drive
P.O. Box 196604
Anchorage, AK 99510-6604
POSITION STATEMENT: Testified on HB 500(TITLE AM)
Mayor John Williams
City of Kenai Peninsula Borough
144 North Binkley Street
Soldotna, AK 99669
210 Fidalgo Ave., St. 200
Kenai, AK 99601
POSITION STATEMENT: Testified on CSHB 511(HES) am
Paul Fuhs
Alaska Open Imaging Center
POSITION STATEMENT: Testified on CSHB 511(HES) am
ACTION NARRATIVE
TAPE 04-25, SIDE A
CHAIR FRED DYSON called the Senate Health, Education and Social
Services Standing Committee meeting to order at 1:35 p.m.
Present were Senators Wilken, Davis, Guess and Chair Dyson.
Senator Green arrived momentarily.
He announced his intention to take action on HB 425 and HB 500,
but to take no action on HB 511 until the following meeting.
CSHB 425(EDU)-SCHOOL FUNDS RELATED TO BOARDING SCHOOLS (EDU)
CHAIR DYSON asked Ms. Lindster to present CSHB 425(EDU).
KAREN LINDSTER, staff to Representative John Coghill, introduced
herself and advised that she would read the sponsor statement
and some additional information into the record.
HB 425 puts into statute Department of Education's
current practice. This legislation supports existing
programs that are successful. Under this bill a
student wouldn't have to pass the current entrance
standards. The bill would give students a choice of
going to a school that offers something different than
may be available in their hometown.
This legislation by statute reimburses to full school
year secondary boarding schools costs incurred by the
district operating the program.
The legislation limits the program to schools already
operating boarding schools on January 1, 2004.
There are five boarding schools that would qualify for
reimbursement for a per-pupil stipend and one round
trip between the student's community of residence and
the school during the school year if the district
expends money for the trip.
These schools will participate in a five-year pilot
project that the Department of Education will evaluate
for the legislature.
The hold harmless section of this bill allows a
student's district of residence to count a student for
the ADM count even though the student is attending a
secondary boarding school. This avoids the possibility
of paying the base allocation twice for the same
student.
MS. LINDSTER explained the sectional for the committee
substitute:
Section 1
(a) Provides that a school district that was operating
a secondary boarding school prior to January 1, 2004
could be reimbursed for the cost of operating the
boarding school providing they have a suitable student
dormitory and provide daily access to a public school
offering the grades 9-12 classes.
(b) The district may be reimbursed for a per-pupil
stipend determined by the Department of Education and
for one round trip per student that travels from their
community.
(c) Defines district as "a city or borough school
district or a regional educational attendance area.
Also defines district secondary school boarding
program as "a public school operated for a full school
year by a district in which the domiciliary services
are provided for students in grades 9 through 12. The
full school year was added to the language in the
Special Committee on Education and this resulted in a
reduction in the fiscal note of $227,000.
Section 2.
Provides a hold harmless clause for school districts
that have children move out of the district to attend
a secondary boarding school. The students moving from
the district would be counted in the average daily
membership of the home district.
Section 3.
This is a sunset clause that repeals the substance of
this bill on July 1, 2009.
Section 4.
Puts into place an effective date of July 1, 2004.
CHAIR DYSON asked Eddy Jeans to join Ms. Lindster at the table.
EDDY JEANS, finance manager for the Department of Education &
Early Development, introduced himself.
SENATOR GRETCHEN GUESS asked what the stipends are used for and
whether Mount Edgecombe gives a stipend and round trip ticket to
its students.
MR. JEANS said the stipend is to pay for the students' monthly
residential care, which includes meals and supervision 24/7.
Mount Edgecombe does provide a stipend and one round-trip
airfare from home for each student so this provision is
consistent with the way that program is operated. Mount
Edgecombe is not included in this bill because it's a state
operated boarding school that's included in the Department of
Education and Early Development budget.
SENATOR BETTYE DAVIS asked whether the round trip is to and from
a student's home community or did they receive one more trip
than that.
MR. JEANS said it's just one trip.
SENATOR LYDA GREEN stated that she wouldn't define stipend in
the same way. She then asked whether the parents of students
with an IEP would be given transportation to and from the
school.
MR. JEANS replied it would be up to the parents to make
arrangements and pay for their own trip to the school for an IEP
meeting.
SENATOR GREEN asked what happens at Mount Edgecombe.
MR. JEANS said he wasn't sure. He thought that parents
participated via teleconference, but the State didn't provide
them with round trip airfare.
SENATOR GREEN disagreed saying that was an issue that came up
when she was on the governor's council and she recalls that
those parents were provided transportation to the site for IEP
meetings.
MR. JEANS said he'd be happy to clarify that.
SENATOR GARY WILKEN referred to page 2, line 4 and said that if
the Legislature accepts "a per-pupil stipend determined by the
department on a regional basis" then they are giving up their
appropriation power and placing it in the hands of the
department. He said he didn't know that he could be talked into
that. He asked Mr. Jeans whether he was reading that correctly.
MR. JEANS replied the reading is correct, but he wanted the
committee to know that the legislation intentionally mirrors an
existing program the Department of Education has for students
that don't have daily access to a secondary program in their
district or near their residence. Using St. George as an
example, he pointed out that the school there is K through 10 so
the students leave for grads 11 and 12. Then they go into
another community and the state pays a stipend to help pay for
the residential costs. The program has been in place for a
number of years and the department has always set the stipends.
He said he has a list of the stipends by region if that was
helpful.
CHAIR DYSON asked him to distribute copies right then if he
could.
MR. JEANS said he'd be happy to do so.
SENATOR WILKEN said, "That may well be, but the passage of this
legislation is a seat change in the way we look at funding
schools so we may do it that way today. If we allow this with
boarding schools, I'd like to have the Legislature involved."
Referring to page 2, line 12 he said that agreeing to that would
make it possible to have a school of one.
MR. JEANS agreed the example is correct, but it's extreme and
they don't currently have any schools that have fallen into that
category. The intent of the provision is to provide a safety net
for the communities that have a very low student population and
are right on the threshold of ten. Representative Coghill didn't
want the community to be penalized if a secondary school student
elected to take advantage of this program. "We do understand
your concern in having a minimum number and that was discussed
on the House side although they never put a minimum number in
this section."
SENATOR WILKEN asked if this wouldn't result in double counting
the student this way.
MR. JEANS said the foundation formula has a base number of ten
and from 10 to 20 students the funding level for the school
remains the same. "So if you had, for example, 11 kids in a
community and two of them elected to go to one of these boarding
schools, that community would get the same funding that it would
have gotten with 11 students. The school receiving the children
is going to generate additional foundation funds, but they're
generating these funds in these communities now. At Nenana and
at Galena both of these programs are up and running and we're
currently paying for these students in those regions."
SENATOR WILKEN read the last sentence of the sponsor statement
then used the example of a student moving from a 200-student
school to one with 400 and asked if that wouldn't result in a
double count.
MR. JEANS said that example wouldn't work because if a student
attended a school with 200 students and then moved to Nenana,
the first school would no longer receive money for the child.
Funding at the first school would be reduced by one child and
Nenana would receive funding for an additional child. "It's only
for those schools that are very small that may fall under that
threshold of 10 students." Typically in those small schools
there would only be one or two secondary students because the
majority are elementary. He repeated it's just a safety net for
the communities during this pilot program.
SENATOR WILKEN referred to the last sentence of Section 2 of the
analysis and asked if the statement that "students moving from
the district would be counted in the ADM of the home district"
applies only to those schools that would be ten or less.
MR. JEANS said the last sentence of the sponsor statement is not
correct when the school falls below ten students. The base is
the same for 10 to 20 students. That community would continue to
generate the base and Nenana would generate additional
foundation funds for those students that fall into that
category.
SENATOR WILKEN pressed, "So we're paying twice."
MR. JEANS said in that particular case you would, but once you
exceed 20 students you wouldn't pay for the same student twice
because the funding is then based on an individual student
basis. "If you exceed 20 then you will no longer receive funding
for that child if they move."
CHAIR DYSON asked if he was saying that the school with 19 kids
gets the same total amount as the school with 11 kids.
MR. JEANS said that's correct, it's an economy of scale. You
need a certain minimum to operate a school and when SB 36 was
written it was decided that the minimum level would apply to
schools with 10 to 20 students. Beyond 20 students, the per-
student costs begin to decline.
SENATOR WILKEN asked if the fiscal note includes just airfare or
airfare and the stipend.
MR. JEANS said it also includes the monthly stipend for the 180-
day school year.
SENATOR WILKEN asked for the amount of the stipend.
MR. JEANS pointed out the information on page two of the fiscal
note. The spreadsheet lists the school district, the community,
capacity of the program, monthly stipend, yearly cost, estimated
round trip, annual airfare and the estimated grant amount for
the 180-day program. At the bottom of the spreadsheet they
listed other communities that have boarding capacity but aren't
currently operating for 180 days. He pointed that out because
when they started with the bill they included all programs, but
Representative Coghill only wanted to include the communities
that operate a full 180-day program.
CHAIR DYSON asked about the asterisk.
MR. JEANS said that Galena has the capacity for 100 students,
but eight of those students are currently being reimbursed under
the Boarding Home program. The remaining 92 are the number for
which they do not currently pay any stipend.
SENATOR WILKEN said he needed a little more time to evaluate the
data, but:
To answer the question of what we save by doing this,
he said they seem to indicate that we save
$358,939.000. I think they're comparing that to the
$3,958.00 that's a bricks and mortar ADM and I think
the number they should be comparing is $9,667.00 so
Eddy, if you could help me with taking this sheet and
taking a different look at it to make sure we're
comparing apples and apples. When we look at this, two
things we should remember. When this was put in by the
Department of Agriculture it was a grant from the
Department of Agriculture to put in a boarding school
and that's been funding this thing and we've been
trying to help it along with offset grants and I
remember the discussion well what if this doesn't work
or what if it can't pay its own way. They're going to
come to the general fund and we've now arrived at that
day and we're now saying we want to fund boarding
schools across the state and I'm not sure that's the
best application of our education money. This amounts
to a test case. The other thing is that back in 02
they had 1,567 correspondence students and we know
correspondence students are, in my mind, a cash cow.
In 04 they have half of that - 724. So they've lost a
funding source just because their correspondence
program has gone from zero to 1,900 and now it's
dropped down on the other side to 700 so they may just
be having a program problem - trying to attract the
proper number of students to both their correspondence
program and to the boarding school. I appreciate your
patience and although I think this bill is well
intentioned, it's much more expensive than what it
shows and if this Legislature chooses to start funding
boarding schools okay, but I would suggest that that
money becomes competition for all the other schools
that we have in the state and we want to make sure
that investment is well spent.
SENATOR GUESS remarked that she heard that this is a pilot
program yet she also heard that "this is what we do now." If
it's a pilot program, she questioned what would they be
evaluating and what outcome measures were they looking for.
MR. JEANS assured her it is a pilot program, but in terms of
"what we do now" it models the current practice for those
students that don't have daily access to a secondary program.
"These are students that have elected to participate in these
programs, maybe because they come from a small community, maybe
because they have problems with things at home, ... but these
students have elected to go to this program because of the
consistency that's made available to them."
SENATOR GUESS asked for an explanation of the outcome measures
they were looking for in the evaluation.
MR. JEANS said they'd be looking at achievement rates. He
pointed out that this expands program offerings for all the
kids, but particularly for the ones in Nenana because there are
more kids there so more state funding is generated and expanded
programs may be offered.
SENATOR GUESS noted that the military youth academy wasn't
included and asked if there was discussion about including them
in the pilot program.
MR. JEANS reminded her that they have their own separate funding
mechanism, which is why they weren't considered for
participation.
SENATOR GUESS commented that the stipend language was
worrisomely open and initially she assumed that stipend meant
pocket money for the students. She asked whether there was a
reason that they weren't specific.
MR. JEANS replied they didn't have that discussion, but the
monthly stipend comes from regulation. School districts often
are contracting with parents for the residential care so it's a
stipend to the parents that house and feed the students.
CHAIR DYSON clarified the stipend would go to whatever home
that's housing the student.
SENATOR GUESS asked whether there were regulations ensuring the
safety of these kids that go into other people's homes.
MR. JEANS assured her there are regulations under the Department
of Health & Social Services and they're also referenced under
the Department of Education & Early Development boarding home
program and he would provide her a copy of that.
SENATOR GREEN held up a piece of paper and asked if this was the
Department of Education & Early Development regulation on
boarding schools.
MR. JEANS said, "That's our current program that's limited to
students that do not have daily access to a secondary program.
SENATOR GREEN held up a piece of paper and asked it this was a
list of the students who qualified.
MR. JEANS told her that the students on that list have daily
access to a secondary program so they would not qualify under
existing regulations, which is the reason for the proposed
legislation. It would expand the current program to provide
funding for the kids on that list.
SENATOR GREEN said," So these would be rewritten."
MR. JEANS said they'd be modified.
SENATOR GREEN questioned whether the language does that because
the language talks about secondary students who do not have
daily access to a school. She added, "I recognize many school
districts and sites that we clearly pay a lot of money to for
schools, which, to me, is inconsistent."
MR. JEANS said they modeled the language after the existing
program just to keep it simple. "All we're trying to do is
expand an existing program to the kids that do have daily access
that are electing, by choice, to go to these boarding programs.
To provide those boarding programs with some kind of state
support to offset the residential cost."
CHAIR DYSON referred to line three of the sponsor statement and
asked for an explanation of the statement, "...a student would
not have to pass the current entrance standards."
MR. JEANS reiterated that under current regulations, for a
student to qualify for the program, they cannot have daily
access to a secondary program.
CHAIR DYSON turned to Ms. Lindster and said that with this
significant expansion of the program, he would have expected
that she and the sponsor would have limited qualification to
just those students that come from communities that don't have a
secondary school and/or where there was a school that was
failing under the No Child Left Behind Act and an alternative
was required. "Did you consider that?" he asked.
MR. JEANS pointed to Mountain Village to provide an explanation.
The community does offer a K-12 program so, under current
regulations, DEED can't provide Nenana with any state support to
help with the residential costs for the Mountain Village kids
that are attending school in Nenana. That's what this
legislation is trying to do, he said. The Mountain Village kids
that have elected to attend secondary school in Nenana have done
so because they believe the program in Nenana has something to
offer them that they can't get in Mountain Village.
CHAIR DYSON commented that he covered that previously.
MR. JEANS continued saying that if they limited eligibility to
those students that don't have daily access to a secondary
program then there would be no need for this legislation because
current regulation already covers that.
CHAIR DYSON asked if, under this bill or current legislation,
the state is required to offer a boarding school alternative to
students that attend a school that is failing to make progress
under the No Child Left Behind Act.
MR. JEANS replied that within the capacity of the boarding
school to accept the students, if the parents elected to go
there during the pilot program, this legislation allows for the
state to reimburse monthly boarding costs and one roundtrip
airfare.
CHAIR DYSON questioned whether current legislation allowed that
or not.
MR. JEANS replied, "Under our current regulations we cannot."
CHAIR DYSON encouraged the sponsor and Mr. Jeans to tighten the
requirements to those schools that aren't making adequate yearly
progress before the Finance Committee hearing. Another
alternative would be to establish some criteria for schools that
can't offer students very much because they're too small.
He questioned what happens when students decide to move to a
boarding school after the school year begins and the ADM has
been counted because the receiving school typically wouldn't be
reimbursed for the additional student(s).
MR. JEANS agreed that would be the case under this program as
well, but the programs are already operating at capacity so
there probably wouldn't be room for a student that wasn't
enrolled at the beginning of the year.
CHAIR DYSON called a brief at ease then reconvened the meeting.
SENATOR GREEN asked how the parents participate.
MR. JEANS said it varies with the program, but in Nenana some
parents move to help with the student(s). He wasn't sure about
parent participation in Galena.
SENATOR GREEN asked how much each parent is expected to pay.
MR. JEANS told her it varies by community and they don't track
that information.
SENATOR GUESS suggested amending the stipend language to make it
more clear because it really is specific in the regulations. She
then pointed out that it doesn't say this is a pilot project and
the program will be assessed in five years to look for certain
broad outcomes.
CHAIR DYSON announced that the bill would likely move from the
committee that day and he suspected that anyone that was
interested in testifying would have an opportunity to do so in
the Finance Committee. He asked whether there was anyone who
specifically wanted or needed to testify that day.
FLOYD BROOKS testified via teleconference to say he is a single
parent of three students that have the opportunity to attend
school in Nenana. He spoke in strong support of the program. "In
supporting HB 425 everyone wins," he said.
LOTTIE YATES testified via teleconference to say that small
schools are limited in terms of what they are able to offer
students. She said the quality of education in Nenana is high
and she urged support for HB 425.
TAPE 04-25, SIDE B
AGNES DAVIS testified via teleconference to express support for
HB 425.
SENATOR WILKEN asked Mr. Jeans if it is correct that a student
from Mountain Village that is attending the school in Nenana is
counted "in Nenana as just a normal student that is run through
the formula."
MR. JEANS said that's correct.
SENATOR WILKEN then said, "We would be able to go to the ADM
funding for the school district for Nenana to see what that
child costs us in school - in the learning center in Nenana."
MR. JEANS started to reply.
SENATOR WILKEN added, "It's transparent as to whether it's a
boarding school or not."
MR. JEANS said yes.
There were no further questions.
CHAIR DYSON asked for the will of the committee.
SENATOR WILKEN motioned to report CSHB 425(EDU) from committee
with individual recommendations and the attached fiscal note.
There being no objection, it was so ordered.
2:30 pm
HB 500(title am)-DEFINITION OF MEDICAL REVIEW ORGANIZATION
CHAIR DYSON announced the next order of business to be HB
500(title am).
SARA NIELSON, staff to Representative Ralph Samuels, described
HB 500 as a simple bill. She paraphrased from the sponsor
statement as follows:
House Bill 500 simply adds the Joint Commission on
Accreditation of Health Care Organizations (JCAHO) to
the narrow definition of a "review organization."
The Joint Commission on Accreditation of Health Care
Organizations is the principle independent
organization that performs accreditation of hospitals
throughout the United States, including Alaska. JCAHO
recently implemented a new program requiring hospitals
to undergo a Periodic Performance Review (PPR) to
achieve continuous standards compliance, and thus,
continuous provision of safe, high-quality health
care.
The current statute defines a "review organization"
expressly and narrowly and is silent as to the major
organization conducting hospital accreditation in our
state, [which is] JCAHO. Without the change in this
legislation, a party in an unrelated civil action,
could argue vigorously that JCAHO is well known within
the health care community as the primary accreditation
instrument for hospitals in the United States, and
that it would have been a very easy matter for the
legislation to have included it in the definition of a
"review organization." It could be asserted that the
courts have no business re-writing statutes to include
provisions that it thinks the legislature would have
included if it had thought of it at the time that
provision was enacted. Thus, there is a very real
danger that information provided to JCOHO as part of
this process would not be treated as confidential.
This legislation is necessary so that hospitals will
feel free to fully report all the information required
by JCAHO in an open manner and promote quality health
care in Alaska.
CHAIR DYSON asked whether the administration supported the bill.
MS. NIELSON said she didn't believe they had a position, but
Janet Clarke could respond.
JANET CLARKE, Department of Health & Social Services
representative, said they support quality health care and
quality assurance for health care facilities, but she was
unaware of any public position paper on the legislation. She
continued to say, "We run a hospital that is covered by the
Joint Commission Review. We have hospital certification and
licensing and anything that could promote that we would
support."
CHAIR DYSON asked if the organization is credible.
MS. CLARKE replied they are extremely credible.
CHAIR DYSON asked what the legislation would allow that can't be
done now.
MS. CLARKE didn't know of anything, but right now it could be
argued that confidentiality is in question because JCAHO isn't
mentioned as a review organization.
CHAIR DYSON asked Laurie Herman to comment.
LAURIE HERMAN, Regional Director of Government Affairs for
Providence Health System in Alaska, testified via
teleconference. To demonstrate why they believe this legislation
is necessary she explained:
Recently JCAHO redesigned their survey process from
being a once-every-three-year survey to one that
requires hospitals and other health care organizations
to complete a mid-cycle performance review the purpose
of which is to review and make certain that we are
achieving continuous standards of compliance and
continuous provision of safe, high quality health
care.
In addition to the requirement of self-reporting of
deficiencies, this performance review process requires
that a hospital or health care organization complete
an in-depth survey of their policies and procedures.
If the hospital is found to be out of compliance with
accepted standards in any area, an attended corrective
plan has to be submitted to JCAHO. And JCAHO prefers
implementation of both the review and the self-
reporting deficiency to be in an electronic online
communication.
To the extent that anyone would have deficiencies, as
part of this process they must prepare and post the
corrective action plans. Because of the concern that
state statutes do not specifically include JCAHO as a
quality review organization, which would thereby
protect the reporting information from public
accessibility, they may go to a less preferred option
that would allow such organizations to simply certify
that they made corrections on their own without
providing any information to JCAHO. We believe that
the quality of health care would improve if health
care organizations feel free to fully report all the
information required by JCAHO in an open manner.
CHAIR DYSON asked if she had any idea why JHACO wasn't included
in the statutory language.
MS. HERMAN said there aren't any specific organizations that are
mentioned in current statute. The language is quite vague, which
makes it arguable that since they aren't mentioned then the
information should be accessible to the public. That could
certainly deter reporting and/or lead to self-analysis.
There was no further testimony, questions or comments.
CHAIR DYSON asked for a motion.
SENATOR GREEN motioned to report HB 500(title am) from committee
with individual recommendations and accompanying fiscal notes.
There being no objection, it was so ordered.
2:40 pm
CSHB 511 (HES)am-CERTIFICATE OF NEED PROGRAM
CHAIR DYSON announced the next order of business to be CSHB
511(HES)am.
SARA NIELSON, staff to Representative Ralph Samuels, explained
that the bill modifies certain aspects of the Certificate of
Need statute to level the playing field.
She said the following would provide an overview of the changes:
The bill modifies the section of statute that allows
the relocation of an ambulatory surgical facility to
only one time as long as they still would otherwise
meet all the requirements of the original Certificate
of Need.
It also clarifies that a Certificate of Need would not
be needed in an emergency or a temporary case such an
earthquake or some kind of a disaster.
It also adds independent diagnostic testing facility
and residential psychiatric treatment center - would
make them go through the CON process if they fall
within the $1 million expenditure limit.
The bill also reduces the amount of time the
department has to review the application from 90 to 60
days.
On the House floor a letter of intent was adopted to
address the Certificate of Need process by asking that
a task force be assembled to go over the entire
process.
JANET CLARKE, Department of Health & Social Services
representative, identified herself and stated:
I am here to testify in support of HB 511 - Relating
to certificates of need (CON). Certificate of need is
a health planning process that reviews health facility
construction projects that cost over $1 million
dollars to determine whether there is a need for the
project.
This particular bill does not do away with CON; it
keeps the underpinnings of the statute in place. There
are nine sections in the bill and I'll quickly go over
a sectional review.
As Sara stated, Section 1 corrects an inequity for
ambulatory surgery centers related to relocation and
whether a CON is needed for relocation.
Section 2 has two parts. It basically limits the
relocation outlined in the first Section to one time.
It also amends the statute to include equipment that
is purchased through a lease provision that for CON
purposed, the net present value of the lease space or
equipment is used to calculate the cost. Currently, if
you purchase equipment that costs over $1 million, you
go through the CON program. If you lease it, you do
not. This would put those two purchase processes on
the same level playing field.
Section 3 amends the provision for emergency or
temporary CON that's currently in the bill.
Section 4 would add "residential psychiatric treatment
centers" to fall within CON review. The department is
particularly interested in this provision. As you
know, Medicaid is a primary payer for residential
psychiatric treatment centers (RPTC). We have several
we're paying for. We're paying for children in out-of-
state placement. At any one time there's over 500
children who are in these out-of-state residential
psychiatric treatment centers. We have a program to
bring these kids home to Alaska. We want to make sure
that as we built these RPTCs in Alaska that it's done
in a very thoughtful, planned process and that we do
them close to hub communities in Alaska because these
kids do better when they're closer to home. So we
believe that the CON program is the best mechanism to
look at this planning process for RPTCs.
Section 5 adds a new section in law relating to time
standards for review by the department. It shortens
the time period that the department has to review CONs
from 90 to 60 days internally.
Section 6 amends the definition of health care
facilities to include independent diagnostic testing
facilities as well as residential psychiatric
treatment centers.
Section 7 goes along with Section 6. It adds the
definition for what a residential psychiatric
treatment center is.
Section 8 deals with the applicability issues of when
this law is applicable to what.
Section 9 is the effective date clause of the
legislation.
CHAIR DYSON said he appreciates the problem they're trying to
solve in Fairbanks, but he didn't understand why an empty
building should have a CON grandfathered in.
MS CLARKE pointed to Section 1 and said a few years ago the
Legislature added language that was confusing and that is the
language that would be deleted. She reminded members that CON
covers capital construction and services. HB 511 gets rid of the
provision where someone could construct a new ambulatory
surgical center and take their certificate of need with them.
That provision is counter to CON because it's actually a capital
construction review that looks at whether you're spending $1
million on construction or adding a new service.
CHAIR DYSON asked Ms. Nielson to further clarify.
MS. NIELSON reported that according to Legislative Legal
Services, the language in Section 2 makes the last sentence in
Section 1 (c) unnecessary, which is why it would be deleted.
"Basically, you can't have a building - you can't have one
person - have their services in one building and have the
certificate of need and then move over to another one. And then
that building that was left, they still have to go through the
certificate of need process if somebody else wants to move in
there - assuming that those people didn't already have a
certificate of need and are exercising their one time
relocation."
CHAIR DYSON admitted that his blood pressure rises when he
thinks about the issue. Furthermore, he said he's more confused
because Ms. Clarke says this is just for construction and then
the bill says it's okay to relocate. In addition to that, he
heard it's also for the present worth value of leased equipment,
which isn't construction either. Section 1 simply gets rid of
the restrictive and stupid language, but then in Section 2 "you
only eliminate stupid once and if we'd ever done anything else
stupid like this, in law, that we can only [make a] fix once."
MS. NIELSON agreed that the final sentence in Section 1 (c)
wasn't needed. The first part of Section 1, subsection (c) says
a business may relocate an ambulatory surgical facility once
without obtaining a certificate of need as long as bed capacity
and the number of categories of health services remain
unchanged. Any subsequent business or person moving into the
site is no longer addressed, which is what the sponsor intended.
CHAIR DYSON opined it all has to do with capacity and a person
should be able to move from site to site without jumping through
hoops as long as capacity isn't changed.
SENATOR GUESS questioned why the language they propose removing
is problematic except that it is redundant. "You can't use that
site unless you get a certificate of need because they want to
see, 'Is there the capacity for that site to go back up how it
used to be?' so if you take this out, and someone moves from one
site to the other and someone wants to use that previous site,
they should have to go through the certificate of need to ensure
that we're not overcapacity."
MS. NIELSON agreed that the language is redundant and that's why
they propose removing it.
MS. CLARKE said it is a confusing section of law, but she needed
to clarify her previous statement. Although she was focusing on
the construction aspect, certificate of need applies to the
expenditure of $1 million or more for construction, renovation
or the purchase of new equipment.
2:55 pm
CHAIR DYSON asked her to show the committee how, "with the help
of government intervention, we've gotten into this bizarre
situation where having more than adequate capacity drives prices
up and how choices by consumers can drive prices up and then
specifically this section here about mental health and how after
31 days or 30 days, government has to pay and how having choices
there can drive costs up."
MS. CLARKE replied health care isn't as clean cut as other
market forces that we're used to because the decision to go to
one place or another for a particular procedure is divorced from
the economics of that decision. "We might make that decision
related to where our doctor refers us based on the proximity to
a hospital," she said. Furthermore:
As government, and government plays a big part in the
economics of the health care industry in Alaska
whether it's Medicaid or Medicare - we're a big player
in that so we, particularly for certain parts of the
health care system, as the primary payer - you are -
the Legislature appropriates - particularly for long
term care, nursing homes, for mental health services -
we are the primary payers so we have an interest in
looking at this regulation to make sure that it's done
in such a way that the primary payer is not stiffed
with the bill in the end because the individual
decision is not based on economics of the decision.
CHAIR DYSON said that after his discussion with the
commissioner, he understands that if there are several
providers, there's nothing keeping a patient whose costs are
paid by Medicare from selecting the very highest cost treatment
as long as the provider hasn't been disqualified for some
reason.
MS. CLARKE replied there is a mandatory freedom of choice in
both the Medicare and Medicaid programs.
CHAIR DYSON continued to say that he also understands that when
someone is in a mental health residential program for more than
30 or 31 days then Medicaid picks up the entire cost for the
rest of the time the person is in the program. He wasn't clear
whether both adults and children were included or just children.
MS. CLARKE replied she'd have to check on that then clarified
that this is about children and adolescents and just as with any
insurance program, there are certain standards for when
insurance coverage would apply. For an acute care setting, which
is psychiatric hospital treatment, she thought 30 days was the
industry standard. After that, if no placement is available for
the child then the general fund would likely have to cover 100
percent of the cost because Medicaid might decertify them.
CHAIR DYSON asked what decertify means.
MS. CLARKE explained that being decertified means that the 30
days is up and the child typically no longer needs the
psychiatric hospital treatment, but they do need a continuum of
care from mental health facilities. Through careful planning
they are trying to ensure that there is in-home care, outpatient
care, group homes, and residential psychiatric treatment centers
so that the psychiatric hospital isn't the only alternative.
CHAIR DYSON asked if she said that decertify means going from
acute hospital care to a lesser level of care.
MS. CLARKE said decertification means the insurance program
won't pay any more.
SENATOR GUESS referred to Section 1 and asked whether she could
continue operating an original facility without going through a
new CON process if she had also constructed a new facility and
was running it using the original certificate of need.
MS. CLARKE said she thought the answer was yes, one time, but
she would need to verify that. She then asked whether the
language didn't refer to a sale.
SENATOR GUESS said the language doesn't refer to a sale; it
refers to moving. Furthermore, she said it seems that there
could be over capacity if that were allowed.
MS. CLARKE read the existing law that says, "as long as neither
the bed capacity nor the number of categories of health services
provided at the new site is greater."
SENATOR GUESS agreed the new site couldn't have greater
capacity, but she wondered whether she couldn't run both sites
using just the one CON.
CHAIR DYSON opined that you couldn't do that because that would
increase the capacity set in the original CON process.
SENATOR GUESS asked whether the CON controls the capacity.
CHAIR DYSON explained it's like a government license to provide
X amount of service.
CHAIR DYSON announced that he wanted to use the balance of the
time to take public testimony from anyone that wouldn't be
available on Monday.
JOHN WILLIAMS, Mayor of the City of Kenai, testified via
teleconference to say that they are interested because there are
several groups that would like to build a psychiatric facility
for children in Kenai. They applaud Senator Green's work to
bring children home and place them in care units in the state.
Most recently the city has been involved with two capable
companies each of which would like to build a 30-bed unit in
Kenai. Both companies have expended considerable time and money
to get started this year, but he sees many issues in the bill
that would prolong and delay the process.
Pointing to the DHSS fiscal note dated 3/24/04 and prepared by
Sherry Hill he noted it says that 728 children between the ages
of 7 and 19 were served in FY 02 and that it's conceivable that
up to 150 new RPTC beds could be built in Alaska. The 60 beds
that might be built in Kenai would just scratch the surface of
need for these types of facilities and he said he could see no
reason to delay by tying the companies down with a great deal
more paperwork.
In conclusion he said the City of Kenai recommends placing the
effective date of the bill as of January 1, 2005 rather than
making it effective immediately. Doing so would allow the two
companies working in Kenai to begin building the facilities
immediately. He added that he understands there might be 30 to
60 other beds that are in the planning stage that might also be
expedited if the effective date were to be changed. This too is
beneficial to the state since DHSS recognizes an immediate need
for 150 beds.
PAUL FUHS, Alaska Open Imaging representative, said he'd like to
frame some of the issues the first of which is why the bill is
so confusing. The reason, he said, is because it's a bill that's
designed to address a specific lawsuit.
Another point is that this is an effort to restrict what people
can do. For the government to tell you whether or not you can go
into business is the most extreme action that a government can
take, he said, so there'd better be solid justification for
doing that.
He continued to say:
Mr. Chairman, you hit the nail on the head when you
asked, 'Show us where the cost savings are going to
be.' Because what's actually happened is when these
independent testing facilities have resulted in lower
prices - up to 30 percent lower. So then you get into
the argument - well it's not really cost control. Now
it's over to we want a level playing field. And the
hospitals - we need to overcharge on imaging because
we're making up for something else. And in all the
hearings that were held, no one came forward and
showed their economics to show why they needed this.
They didn't come and show why when we went through
this - one hospital, Providence, they made $13.4
million in revenues over expenses last year. So why do
they need that protection and what happened to that
money? And then you get into the smaller hospitals and
they say well it's to protect the smaller hospitals,
but the smaller hospitals themselves said that new
imaging would not develop in small communities where
there are low patient volumes, but only in the largest
markets of Anchorage, Fairbanks, Wasilla, Kenai and
Juneau. So it's not the small hospital. That is a
completely empty argument that the department itself
dismisses. It's really the big hospitals trying to
limit competition. That's what it comes down to.
Although some of these are listed as non-profits, I
pulled off of Moody's or Dun and Bradstreet, some of
the financials on some of these corporations.
Providence - $3.5 billion in revenues last year. This
isn't some mom and pop non-profit. They're also
showing profits of $58 million a year - 38 percent
increase over the previous year. Triad hospitals in
the valley - a $3.8 billion corporation - they're in
the Fortune 500. That's who's managing that. Banner
Corporation for Fairbanks Memorial - $2.1 billion
corporation - a private non-profit corporation. So
before you believe the idea that these are poverty-
stricken operations that need government protection, I
hope that you'll take a look at some of these
financials and maybe some other information will be
brought out.
The other thing I want to mention - you can level the
playing field two ways. You can either increase
government regulation or you could decrease it and
that's what we offered on the House side. We said well
let's relieve the hospitals of this too especially for
imaging. This technology driven sector - it's not a
bed - you want the best technology available. But when
that was offered, it was not even allowed to go to
second reading on the House floor to even have the
amendment considered. So that's how strong it's been
to even try to restrict the discussion on this.
I hope your committee will look into all these issues.
I think you'll hear a lot of testimony and hopefully
we'll have a much clearer discussion on the issues
than occurred in the other body.
TAPE 04-26, SIDE A
3:05 pm
SENATOR GUESS said she looked forward to a discussion with his
client about policies for the uninsured and the underinsured and
whether anyone from those populations gets served in these
facilities. She then remarked that government does get involved
with natural monopolies in situations such as this so it's an
overstatement to say that there isn't a government role in this
type of market. Whether it's appropriate or not is a separate
question.
MR. FUHS reiterated if you restrict people's private activities
then you must have strong justification.
CHAIR DYSON referenced the goal of bringing children with
psychiatric needs home to Alaska and asked Ms. Clarke how long
it would take the two companies already working on the peninsula
to go through the CON process.
MS. CLARKE explained that they would first submit a letter of
intent so that DHSS would send them an application.
CHAIR DYSON asked whether there was a review and culling process
when the letter of intent is filed.
MS. CLARKE said that when the letter of intent is received then
DHSS sends a letter back affirming or denying eligibility.
CHAIR DYSON asked how long that would take.
MS. CLARKE pointed to an example that took one day. The next
step is for the company to submit a CON application for which
DHSS provides some technical assistance. In the example
referenced above, it took two months for the company to complete
the application. At that point, DHSS goes through a process of
declaring the application complete. That took several days in
the example, but could take longer if the application was more
extensive. Once the application is complete there is a noticed
public hearing and in the example used that took about four
weeks. After the public meeting the information is reviewed,
which took four to five weeks in the example. Finally, the
information is submitted to the commissioner's office for a
decision.
According to current statute, 90 days is allowed for the entire
process once an applicant submits a CON. This legislation would
shorten the process to 60 days.
CHAIR DYSON asked if that was from the time the letter of intent
is received to when a decision is issued.
MS. CLARKE clarified it's from when the completed CON
application is received to the decision. She then added that
there is a 30 day comment period included within that time
period.
SENATOR GREEN asked whether the commissioner would issue a
decision within that time.
MS. CLARKE said no, the 90 day period is the time up until the
commissioner receives the information. The commissioner does not
have a time period within which to make a decision and that time
period varies from a day or two up to several months.
CHAIR DYSON asked how to avoid changing the rules in the middle
of the game for the two companies already working in Kenai.
MS. CLARKE said that discussions related to the effective date
came up in the House and she had information in her office to
further that discussion and would bring it to the hearing on
Monday. With regard to Mayor William's testimony she said the
department is interested in having the residential psychiatric
treatment centers covered by CONs so they can be located in many
communities so the residents are able to be close to their
support groups.
CHAIR DYSON asked if is true that the companies would still have
to go through a licensing process before they could receive
children that are either in state custody or in state supported
treatment programs in other states.
MS. CLARKE told him that is correct.
CHAIR DYSON questioned how long the licensing process takes.
MS. CLARKE said she would have to get back with that
information.
CHAIR DYSON pressed for an estimate.
MS. CLARKE said she didn't have an answer.
CHAIR DYSON posited it was months, but he would enjoy receiving
that information at the next hearing. He then asked if DHSS
could combine the licensing and CON processes and announce that
they would only license so many beds within a single region.
MS. CLARKE responded she would have to speak with the licensing
staff.
CHAIR DYSON observed that even someone that was successful in
the CON process would still have to go through the licensing
process.
MS. CLARKE agreed then clarified that the licensing process
looks at different things such as health and safety and the
facility.
CHAIR DYSON continued to say, "In your efforts to provide
facilities where they're needed, in the government's opinion,
you can only restrict people you can't make anything happen in a
new place."
MS. CLARKE told him they are working very hard to encourage
private providers and others to look at a number of facilities
across the state. "The government is doing what it can."
CHAIR DYSON remarked that the answer is still yes.
SENATOR GREEN asked how much longer the meeting would last.
CHAIR DYSON said he'd like to wrap up in five minutes, but he
wanted the committee to make it clear what additional
information they want and what they're struggling with. If any
members were thinking about offering amendments then he would
like them to let people know so they could be prepared on
Monday.
SENATOR GREEN said she would like to review when the $1 million
cap was set.
MS. CLARKE advised that the original CON threshold was $150,000
and that was changed to $1 million in the mid 1980s
SENATOR GREEN said she though the equivalency today was $2.5 or
$2.75 million so if the intent is the same then it's probably
still reliable for most construction. Some new equipment costs
have gone down though so that might be an issue worth talking
about. She then asked about the timeline and asked at what point
the department releases the information publicly.
MS. CLARKE said she thought it was when the review is complete,
but she would get back with the information. There is an
opportunity to publicly notice that someone has applied and this
has been important in the past because there have been
situations in which there were competing applications.
SENATOR GREEN said, "I think it's very inappropriate that there
is any disclosure of information about a CON application until
the application is deemed complete. And I do not think that
information should be posted, that information should not come
from the department that should be a confidential arrangement."
CHAIR DYSON asked whether she wanted to add language to the
bill.
SENATOR GREEN replied that with regard to amending she had a
question because when they last reviewed the CON there were
regulations that were at odds with current statutes. She
questioned whether the regulations had been cleaned up.
MS. CLARKE replied there were attempts to clean them up, but it
wasn't done.
SENATOR GREEN suggested that the committee draft a letter of
intent saying the regulations must comport to current statute
because they are woefully out of date and very misleading. She
announced that she would like the certificate of need director
to attend the next meeting. She then asked what the difference
is between an approved adolescent treatment bed and a
residential psychiatric treatment bed subject to the CON.
MS. CLARKE replied she was referring to the acute care bed,
which is a hospital psychiatric bed. Hospitals and psychiatric
hospitals are covered by CONs. Residential treatment centers are
not acute hospital care and they are not currently covered by
CONs.
SENATOR GREEN said she misunderstood and thought there was a
current process for approving psychiatric treatment beds, but
now she understands that she was talking about acute beds in a
hospital setting.
MS. CLARKE said yes.
SENATOR GREEN asked what other acute psychiatric beds for
adolescents are provided in Alaska.
MS. CLARKE replied she could get that information.
CHAIR DYSON asked Ms. Clarke to provide some discussion as to
why the department can't say they would only license X number of
beds in a community that they would pay for through Medicaid,
Medicare, or general fund.
He announced he would hold the bill in committee for further
discussion on Monday.
CHAIR DYSON adjourned the meeting at 3:30 pm.
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