Legislature(2021 - 2022)BUTROVICH 205

02/10/2022 01:30 PM Senate HEALTH & SOCIAL SERVICES

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01:32:24 PM Start
01:32:53 PM Presentation(s): Bifurcation of the Department of Health and Social Services
03:01:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: EO 121: Department of Health and TELECONFERENCED
Social Services Bifurcation
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
      SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                    
                       February 10, 2022                                                                                        
                           1:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator David Wilson, Chair                                                                                                     
Senator Shelley Hughes, Vice Chair                                                                                              
Senator Lora Reinbold                                                                                                           
Senator Tom Begich                                                                                                              
MEMBERS ABSENT                                                                                                                
Senator Mia Costello                                                                                                            
COMMITTEE CALENDAR                                                                                                            
PRESENTATION(S): BIFURCATION OF THE DEPARTMENT OF HEALTH AND                                                                    
SOCIAL SERVICES                                                                                                                 
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
STACIE KRALY, Director                                                                                                          
Civil Division                                                                                                                  
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided a brief overview of EO 121.                                                                      
ANDREW DUNMIRE, Attorney                                                                                                        
Legislative Legal Services                                                                                                      
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions on EO 121.                                                                             
ADAM CRUM, Commissioner                                                                                                         
Department of Health and Social Services (DHSS)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT: Offered  a  presentation  on Executive  Order                                                            
121 DHSS Reorganization.                                                                                                        
SYLVAN ROBB, Assistant Commissioner                                                                                             
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions on EO 121.                                                                             
BRENDA SHELDEN, Board Member                                                                                                    
Alaska Pioneer Homes Advisory Board                                                                                             
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of EO 121.                                                                           
ACTION NARRATIVE                                                                                                              
1:32:24 PM                                                                                                                    
CHAIR DAVID  WILSON called the  Senate Health and  Social Services                                                            
Standing Committee  meeting to order  at 1:32 p.m. Present  at the                                                              
call to  order were  Senators Begich,  Reinbold, Hughes  and Chair                                                              
^PRESENTATION(S):  Bifurcation  of the  Department  of Health  and                                                              
Social Services                                                                                                                 
  PRESENTATION(S): BIFURCATION OF THE DEPARTMENT OF HEALTH AND                                                              
                        SOCIAL SERVICES                                                                                     
1:32:53 PM                                                                                                                    
CHAIR  WILSON announced  the consideration  of  a presentation  on                                                              
the bifurcation of the Department of Health and Social Services.                                                                
1:34:58 PM                                                                                                                    
STACIE  KRALY,  Director,  Civil   Division,  Department  of  Law,                                                              
Juneau, Alaska,  stated that  she would  present a broad  overview                                                              
of EO  121 in place of  a sectional analysis.  The bulk of  EO 121                                                              
consists  of  three  components.  The first  is  to  separate  the                                                              
Department  of   Health  and  Social  Services  (DHSS)   into  the                                                              
Department  of  Health (DOH)  and  the  Department of  Family  and                                                              
Community  Services (DFCS).  Existing statutes  must be  separated                                                              
to create  the two departments.  Title 44.29 would pertain  to the                                                              
Department  of Health  and  Title 44.30  to  Family and  Community                                                              
Services. Organizational  changes to DOH  and DFCS would  be found                                                              
in Title 47.05 and Title 47.06, respectively.                                                                                   
Boards  and  commissions'  statutory   relocation  is  the  second                                                              
principal component  of EO 121.  Boards and commissions  that were                                                              
not substantive  to the department  were moved from  the statutory                                                              
provisions of Title  47. These boards and commissions  have unique                                                              
roles, responsibilities,  and advocacies,  making placement  under                                                              
Title  47  confusing.   For  example,  the  Mental   Health  Trust                                                              
Authority and  the Long-term Care  Ombudsman were moved  from DHSS                                                              
to the  Department of  Revenue (DOR)  more than  a decade  ago but                                                              
remained under Title 47.                                                                                                        
1:38:25 PM                                                                                                                    
SENATOR  BEGICH asked  if the  Senate Health  and Social  Services                                                              
Standing  Committee  would  no longer  have  the  jurisdiction  to                                                              
review the Mental Health Trust Authority appointees.                                                                            
MS. KRALY  opined that  moving the  Mental Health Trust  Authority                                                              
provisions  into  Title  44  would   not  affect  the  committee's                                                              
jurisdiction  since  the  trust   has  been  affiliated  with  the                                                              
Department of Revenue for some time.                                                                                            
SENATOR BEGICH  stated that moving  the provision from  DHSS could                                                              
effect change. He  found it concerning and requested  a definitive                                                              
CHAIR  WILSON  interjected  that   the  decision  rests  with  the                                                              
presiding  officer, who generally  follows  statute. Title  18 and                                                              
47 are usually  assigned to the Senate Health  and Social Services                                                              
Standing Committee.                                                                                                             
SENATOR  BEGICH replied  that the  Mental  Health Trust  Authority                                                              
Board  would be  under Title  44, not  47, which  would remove  it                                                              
from the committee's jurisdiction.                                                                                              
1:39:32 PM                                                                                                                    
MS.  KRALY asserted  that jurisdiction  would  not change  because                                                              
the  Mental Health  Trust  Authority  has been  under  DOR for  at                                                              
least a  decade. Nothing was  changed but the statutory  reference                                                              
to DOR.                                                                                                                         
SENATOR  BEGICH stated  he supports  the bifurcation  of DHSS  but                                                              
would like an opinion from Legislative Legal Services.                                                                          
CHAIR WILSON  asked Legislative  Legal Services to  answer whether                                                              
changing  the statutory  reference  location to  DOR would  remove                                                              
jurisdiction from the committee.                                                                                                
1:40:29 PM                                                                                                                    
ANDREW    DUNMIRE,   Attorney,    Legislative   Legal    Services,                                                              
Legislative Affairs  Agency, Juneau, Alaska, replied  that Uniform                                                              
Rule  20 states  that  the  Health  and Social  Services  Standing                                                              
Committee  has jurisdiction  over the programs  and activities  of                                                              
the Department of Health and Social Services.                                                                                   
1:41:07 PM                                                                                                                    
SENATOR  BEGICH  clarified that  the  jurisdiction  of the  Mental                                                              
Health  Trust  would no  longer  be  with  the Senate  Health  and                                                              
Social Services  Standing Committee  because its statute  would no                                                              
longer  be under  the  purview of  the  Department  of Health  and                                                              
Social Services.                                                                                                                
CHAIR WILSON replied that would be correct.                                                                                     
SENATOR BEGICH concluded that the change was concerning.                                                                        
MS.  KRALY   stated  that  other   boards  and  commissions   with                                                              
provision  relocations  to DOH  Title  44 include  the  Governor's                                                              
Council on  Disability and  Special Education,  the Commission  on                                                              
Aging,  the  Alaska   Mental  Health  Board,  and   the  Statewide                                                              
Independent Living Council.                                                                                                     
The Advisory  Board  on Alcohol  and Drug Abuse,  and the  Suicide                                                              
Prevention Council  already in Title 44 will be  listed under DOH.                                                              
The  Pioneer Advisory,  also in  Title  44, will  be listed  under                                                              
1:42:42 PM                                                                                                                    
SENATOR  REINBOLD asked  her  to reference  the  bill sections  as                                                              
part of the overview.                                                                                                           
MS.  KRALY  stated  that  a  document   mapping  out  changes  and                                                              
locations  would be  created since  EO 121 is  an extensive  bill.                                                              
Section  35 addresses  all boards  moving to  DOH, except  for the                                                              
Pioneer Home  Advisory Board,  which moves  to DFCS under  Section                                                              
36. Changes  to the  Mental Health  Trust Authority and  long-term                                                              
care ombudsman could be found under Section 27.                                                                                 
1:44:03 PM                                                                                                                    
The  third  component  of  EO  121   entails  all  the  conforming                                                              
technical  edits  and instructions  to  the revisors.  It  ensures                                                              
that all  the previous  references to  DHSS are aligned  correctly                                                              
to DOH or DFCS.                                                                                                                 
1:44:43 PM                                                                                                                    
At ease.                                                                                                                        
1:46:26 PM                                                                                                                    
CHAIR WILSON reconvened the meeting.                                                                                            
1:46:36 PM                                                                                                                    
ADAM  CRUM,   Commissioner,  Department   of  Health   and  Social                                                              
Services (DHSS),  Anchorage, Alaska, offered a  slide presentation                                                              
on  EO  121, the  bifurcation  of  the  Department of  Health  and                                                              
Social Services  (DHSS) into  the Department  of Health  (DOH) and                                                              
the Department  of Family and  Community Services  (DFCS), reading                                                              
his prepared script as follows:                                                                                                 
[Original punctuation provided.]                                                                                                
     Thank you committee members for having us here today                                                                       
     to discuss Executive Order 121 to restructure the                                                                          
     Department of Health and Social Services into two                                                                          
     departments. For the record, I am Adam Crum,                                                                               
     Commissioner for the Department of Health and Social                                                                       
     At Health  and Social  Services, or  DHSS, we really  do                                                                   
     serve  and touch  all Alaskans  at some  point in  their                                                                   
     life:  from  birth  and  death   certificates,  marriage                                                                   
     licenses,  public  health,  Emergency  Medical  Services                                                                   
     (EMS)  to behavioral  health  and more.  Because of  the                                                                   
     breadth  and  depth  of services  we  provide,  at  some                                                                   
     point you WILL interact with DHSS                                                                                          
1:47:11 PM                                                                                                                    
COMMISSIONER CRUM advanced to slide 3 and continued reading:                                                                    
     You'll see on  this slide a 100,000 foot  view of Health                                                                   
     and Social  Services. We are  what our federal  partners                                                                   
     refer to  as a "mega  agency." In  fact, the work  we do                                                                   
     at the  single agency of  DHSS is performed  by multiple                                                                   
     departments  in other states:  South Dakota, one  of our                                                                   
     peer  states for example,  spreads this  work and  these                                                                   
     programs across four state departments.                                                                                    
     And Wyoming    with a  smaller population than  Alaska                                                                     
     performs this work in two departments.                                                                                     
     Seeing  the $3.5 billion  dollar budget  and over  3,000                                                                   
     employees,  it's  clear  that  DHSS  is  a  very  large,                                                                   
     single  department.  But  it's the  number  of  programs                                                                   
     delivered,   the   multifaceted    services,   and   the                                                                   
     vulnerability of  our primary beneficiaries  that really                                                                   
     tell  the story  of just how  complex DHSS  is, and  why                                                                   
     the structure needs to be evaluated.                                                                                       
     Throughout  this  presentation  we will  further  define                                                                   
     the challenges  at DHSS due  to the number  of programs,                                                                   
     staff  and budget size.  Then we  will discuss what  the                                                                   
     proposed solution  is, it's benefits, the work  that has                                                                   
     been  ongoing and  the stakeholder  engagement over  the                                                                   
     past  year, as  well as why  an Executive  Order is  the                                                                   
     proper vehicle to make these changes.                                                                                      
1:48:24 PM                                                                                                                    
SENATOR  REINBOLD  commented  that   slide  3  stated,  "Does  not                                                              
include  COVID funds."  She asked  what  the fund  amount was  for                                                              
COMMISSIONER CRUM deferred the question.                                                                                        
SYLVAN  ROBB, Assistant  Commissioner,  Department  of Health  and                                                              
Social  Services  (DHSS), Juneau,  Alaska,  stated  that DHSS  had                                                              
received  approximately $900  million  in COVID  relief since  the                                                              
pandemic started.                                                                                                               
1:49:07 PM                                                                                                                    
SENATOR  HUGHES  asked  if  DHSS knows  how  many  programs  South                                                              
Dakota  and  Wyoming  provide  to citizens  compared  to  the  100                                                              
programs Alaska provides its citizens.                                                                                          
COMMISSIONER  CRUM  replied  that  he  does  not  know  the  total                                                              
program counts  for South Dakota  and Wyoming. The  comparison was                                                              
made  on  the   similar  services  of  child   welfare,  childcare                                                              
assistance,  Medicaid funding, juvenile  justice, psychiatric  and                                                              
senior care.                                                                                                                    
SENATOR HUGHES stated  she realized her previous  question was not                                                              
related to the  bifurcation of the department.  However, she would                                                              
like  to assess  whether Alaska  offers  more assistance  programs                                                              
than other states and if people relocate for that reason.                                                                       
1:50:37 PM                                                                                                                    
COMMISSIONER  CRUM  returned  to   his  presentation  on  slide  4                                                              
concerning the programs within DHSS:                                                                                            
     Let's start  with DHSS programs?  And this is  only SOME                                                                   
     of  the programs  we offer.  This  helps illustrate  the                                                                   
     truly complex  nature and  size of DHSS,  and why  it is                                                                   
     so difficult,  nigh  impossible, to  get all aspects  of                                                                   
     the  department  running  efficiently  and well  at  the                                                                   
     same time. Just  look at this incomplete list,  and tell                                                                   
     me  what  the commissioner's  office  and  policy  staff                                                                   
     should  make the  priority for  the hour.  Is it  senior                                                                   
     veteran's  care?  Strengthening   families?  What  about                                                                   
     chronic   disease   and   health    promotion?   Suicide                                                                   
     prevention  or  healthy  eating?   I  don't  make  these                                                                   
     remarks to  be dismissive,  but to truly highlight  that                                                                   
     the programs  we offer and  the people we serve  are ALL                                                                   
     high  priority    but they  can't be  addressed as  such                                                                   
     within the current structure.                                                                                              
1:51:14 PM                                                                                                                    
COMMISSIONER CRUM advanced to slide 5:                                                                                          
     As the  structure of  DHSS currently  exists, there  are                                                                   
     119  different federal  funding sources  that flow  into                                                                   
     the department.  119. That's a lot of  overseers. That's                                                                   
     a   lot   of   different    rules,   guidance,   program                                                                   
     limitations?you  name it, that's  a lot  of it. With  so                                                                   
     many and so  varied funding sources there  are limits to                                                                   
     what  and  how  much  can be  delegated.  A  great  many                                                                   
     programs  and funding requests  require commissioner  or                                                                   
     assistant  commissioner  signature.   Because  of  these                                                                   
     federal  funding sources  and rules,  it means that  the                                                                   
     Commissioner  cannot  simply  delegate  down,  and  this                                                                   
     will be  the same problem for  anyone who follows  me in                                                                   
     this position.  To manage  this responsibility  requires                                                                   
     due diligence,  meetings with federal  partners, audits,                                                                   
     corrective actions  addressed, compliance  concerns, etc                                                                   
       creating  a natural  bottleneck in the  organizational                                                                   
     design    one  that can't  be corrected  with just  more                                                                   
     deputies, it  requires new legal lines of  authority and                                                                   
     focus.  On top  of this  there are  state statutes  that                                                                   
     clearly   outline  commissioner   authorities,   further                                                                   
     limiting the ability to delegate.                                                                                          
     This   is  a   problem.  It   was  a   problem  for   my                                                                   
     predecessors and  will continue to be a  problem for any                                                                   
     administrations  that follow  if this current  structure                                                                   
1:52:24 PM                                                                                                                    
COMMISSIONER CRUM continued reading, slide 5.                                                                                   
     And  when you  look  at the  diverse  array of  agencies                                                                   
     that  we  work  with and  receive  funding  from,  which                                                                   
     items should  we make the  most important right  now? Do                                                                   
     I take  the phone call  from Administration  of Children                                                                   
     and  Families  about  helping   to  repatriate  American                                                                   
     citizens  on a flight  from Wuhan, or  do I continue  to                                                                   
     focus  on  Medicaid innovations  and  negotiations  with                                                                   
     CMS?  What about new  federal funding  sources that  ask                                                                   
     states   to  redefine   how   childcare  assistance   is                                                                   
     delivered  and  managed  in   their  states?  Does  that                                                                   
     warrant  more time  and energy  than  recovering from  a                                                                   
     cyberattack  that delays  grant  payments to  behavioral                                                                   
     health  providers?  These  are  painful  decisions,  and                                                                   
     while  leadership roles  are  naturally encumbered  with                                                                   
     difficult  decisions and  time  management concerns,  it                                                                   
     still  hurts when  you know  that Alaskans  in need  are                                                                   
     asking  for help  and the  structure  you work  in is  a                                                                   
     natural   barrier   towards    rapid   and   appropriate                                                                   
1:53:12 PM                                                                                                                    
COMMISSIONER CRUM advanced to slide 6, speaking to the                                                                          
number of employees at DHSS, and continued to read:                                                                             
     We've  talked about  programs  and funding  sources,  so                                                                   
     let's talk about  the number of employees  at DHSS. It's                                                                   
     one  thing  for  large organizations  to  exist  and  be                                                                   
     geographically  spread  out,  but  they  typically  will                                                                   
     have  just  a  handful of  key  services  they  provide,                                                                   
     keeping  the   focus  narrow.   But  it  is   quite  the                                                                   
     managerial  and   administrative  task  to   juggle  all                                                                   
     aspects of  providing the wide  array of services  we do                                                                   
     across  a  state  the  size  of  Alaska  and  with  more                                                                   
     employees than residents of Kotzebue or Petersburg                                                                         
     DHSS   has  as   many  employees   as   5  other   state                                                                   
     departments, the  legislature and the  Governor's office                                                                   
     combined.  There are multiple  DHSS divisions that  have                                                                   
     more employees  than other  departments   and  all these                                                                   
     large divisions  answer back to a single  commissioner's                                                                   
1:54:05 PM                                                                                                                    
SENATOR  REINBOLD  asked  if the  3,259  positions  represent  the                                                              
number of  filled positions within  DHSS or the  allotted quantity                                                              
of position  control numbers  (PCNs). She  further asked  how many                                                              
PCNs are unfilled.                                                                                                              
MS. ROBB replied that 3,259 represents the number of PCNs in the                                                                
department and that because of its size DHSS always has some                                                                    
1:54:40 PM                                                                                                                    
SENATOR  REINBOLD  asked  approximately  how  many  positions  are                                                              
MS. ROBB guesstimated that 200 positions were unfilled.                                                                         
1:55:24 PM                                                                                                                    
COMMISSIONER CRUM  resumed his presentation on slide  8 and stated                                                              
that  at  30 percent  of  the  statewide  budget in  FY23,  DHSS's                                                              
budget is  more than  the legislature,  the governor's  office and                                                              
judiciary  combined. DHSS's  size  and diversity  of duties  means                                                              
DHSS  interacts  with  all  other   state  departments.  Improving                                                              
DHSS    service   delivery  would  assist  other   departments  in                                                              
providing  better service  to Alaskans.  For  example, DHSS  works                                                              
with  the Department  of  Corrections  on reentry  and  behavioral                                                              
health. DHSS  shares a background  check unit with  the Department                                                              
of Public Safety and together they  work on crisis stabilization.                                                               
Whereas Medicaid,  public health, and behavioral  health are areas                                                              
easily associated with  DHSS, other areas, such as  the use of the                                                              
Supplemental  Nutrition  Assistance  Program  (SNAP)  to  purchase                                                              
fishing and  hunting licenses,  and WIC and  SNAP benefits  use at                                                              
farmer's  markets  are  less  noticeable.  The  Kids  Don't  Float                                                              
program  run  by  Department  of   Natural  Resources  started  in                                                              
collaboration with DHSS.                                                                                                        
1:56:38 PM                                                                                                                    
CHAIR WILSON  asked if a department  should focus on the  scope of                                                              
revision  that  solely   pertains  to  it.  He   stated  that  DOC                                                              
requested  a  behavioral health  unit.  He  asked if  that  should                                                              
happen or should  DOC's behavioral healthcare continue  to receive                                                              
assistance from DHSS.                                                                                                           
1:57:49 PM                                                                                                                    
COMMISSIONER CRUM continued reading at slide 11:                                                                                
     All of the  above mentioned programs and  massive budget                                                                   
     are performed under this current structure of DHSS.                                                                        
     So what  can be done to  reduce span of  control, narrow                                                                   
     the focus  of management and  staff, as well as  be more                                                                   
     responsive overtime to stakeholders and employees?                                                                         
     This  is  the  solution. To  reorganize  DHSS  into  two                                                                   
     separate  departments that  reduce span  of control  and                                                                   
     align functionality,  because in the simplest  terms and                                                                   
     100,000  foot view,  there are really  two key  function                                                                   
     areas.  Providing direct  care to  patients or  clients,                                                                   
     24/7  in  facility  or in  the  community.  That's  DFCS                                                                   
     Managing  of Payment,  process,  and  programs    that's                                                                   
     Aligning  these  functions   allows  the  commissioner's                                                                   
     office  and policy staff  to focus  on supporting  staff                                                                   
     through  improved  work  processes,  improving  services                                                                   
     delivered  to   Alaskans  and  creating   the  bandwidth                                                                   
     necessary for  further engagement with  stakeholders and                                                                   
     federal partners to lead towards innovation.                                                                               
1:58:56 PM                                                                                                                    
COMMISSIONER CRUM  said that the left  side of slide 13  shows the                                                              
current structure  of DHSS with its nine  public-facing divisions.                                                              
The divisions  interact with the  community by providing  care and                                                              
services. The  nine divisions were  kept whole, and  assignment to                                                              
a department  was based  on a  division's key  function. This  was                                                              
done  to ensure  services would  not  be disrupted.  On the  right                                                              
side  of the  slide, DOH  consists  of the  Medicaid divisions  of                                                              
Health   Care   Services,   Behavioral  Health,   and   Senior   &                                                              
Disabilities Services. He continued reading:                                                                                    
     This  will align  our payments,  processes and  programs                                                                   
     and  allow future  innovations  such  as moving  towards                                                                   
     value-based  care, further  enhancing the Shared  Vision                                                                   
     of  the DD  community, and  focusing  on chronic  health                                                                   
     prevention efforts.                                                                                                        
     DFCS will  consist of the facility-based  divisions such                                                                   
     as  API, DJJ  and Pioneer  Homes, along  with the  round                                                                   
     the  clock community  services of OCS.  This aligns  the                                                                   
     divisions that  provide direct  care and makes  time for                                                                   
     specific  attention on  issues such  as OCS  recruitment                                                                   
     and retention,  and time  to lead community  discussions                                                                   
     on future  investment at Pioneer  Homes, not  to mention                                                                   
     that  issues  that come  from  facility-based  entities,                                                                   
     such as deferred maintenance and licensing concerns.                                                                       
2:00:37 PM                                                                                                                    
SENATOR  REINBOLD  asked  what  Finance  and  Management  Services                                                              
COMMISSIONER CRUM  stated that Finance and Management  Services is                                                              
sometimes referred  to in budgets  as Department  Support Services                                                              
(DSS).  He said  Finance and  Management  Services (FMS)  includes                                                              
administrative  services,   human  resources,   funding,  finance,                                                              
grants, and information  technology. FMS is the  engine that keeps                                                              
the DHSS machine functioning.                                                                                                   
2:01:40 PM                                                                                                                    
CHAIR WILSON asked  if this is the section that  currently handles                                                              
outside grants and contracts for DHSS.                                                                                          
COMMISSIONER  CRUM replied  yes.  FMS handles  the primary  grants                                                              
and  contracts for  the  department, with  some  managed in  other                                                              
divisions. FMS is the group that processed COVID funds.                                                                         
2:02:14 PM                                                                                                                    
COMMISSIONER CRUM returned to his presentation at slide 14:                                                                     
     This reorg  was designed in  such a way to  minimize any                                                                   
     disruption in  services to beneficiaries or  payments to                                                                   
     providers.  This  was  achieved by  keeping  the  public                                                                   
     facing divisions  intact, no  leadership changes  and no                                                                   
     change  in footprint. It  should be  noted that to  keep                                                                   
     services  aligned, Designated  Evaluation and  Treatment                                                                   
     Services  or DET  services  will be  moved  from DBH  to                                                                   
     DFCS  in order  to  stay closely  aligned  with API  and                                                                   
     help   coordinate   title  47   involuntary   commitment                                                                   
     patient  movement between facilities.  This aligns  with                                                                   
     pointing those statutes to the oversight of DFCS.                                                                          
     The  primary changes  in  the reorg  will  occur to  the                                                                   
     internal  division of  Finance  and Management  Services                                                                   
     (FMS)   which   will   divide  staff   to   cover   each                                                                   
     department. These  involve sections like IT,  Grants and                                                                   
     Contracts,  and finance  and budget.  We are asking  for                                                                   
     some new  positions and  reclassified positions  to fill                                                                   
     out FMS staff and Commissioner's office Staff.                                                                             
2:03:15 PM                                                                                                                    
SENATOR  REINBOLD  asked  what   involuntary  confinement  is  and                                                              
whether it is related to SB 124.                                                                                                
COMMISSIONER  CRUM stated that  SB 124 and  HB 172 involve  crisis                                                              
stabilization  language and  subacute patient  care services  that                                                              
Alaska is looking to provide. The bills are not tied to EO 121.                                                                 
2:03:54 PM                                                                                                                    
SENATOR REINBOLD  proclaimed she was shocked that  DHSS's size was                                                              
being  bragged   about  and  that   expansion  was   desired.  She                                                              
expressed concern  about the issue  of involuntary  confinement in                                                              
SB  124.   She  asked  for   an  explanation  of   DHSS's  current                                                              
involvement with involuntary confinement.                                                                                       
2:04:17 PM                                                                                                                    
COMMISSIONER  CRUM replied  that  the crisis  stabilization  bills                                                              
would  help expand  available services  so  individuals could  get                                                              
crisis  care. SB  124 and  HB 172  are not  tied to  EO 121.  DHSS                                                              
would help facilitate  payment for services to  providers, but the                                                              
providers  would  be the  ones  to  expand services  within  their                                                              
communities. Individuals  a judge determines to be in  need of in-                                                              
patient psychiatric  care can be  sent to a Designated  Evaluation                                                              
Treatment (DET)  facility under Title  47. DETs in  Alaska include                                                              
the Alaska  Psychiatric Institute,  Fairbanks  Memorial, Mat  - Su                                                              
Regional, and Bartlett Regional hospitals.                                                                                      
2:05:09 PM                                                                                                                    
SENATOR REINBOLD asked what the service would cost the state.                                                                   
MS.  ROBB replied  that the  Designated  Evaluation and  Treatment                                                              
(DET) services allocation is approximately $13 million.                                                                         
2:05:28 PM                                                                                                                    
COMMISSIONER CRUM resumed reading:                                                                                              
     DOH,  again,  was designed  to  not disrupt  service  or                                                                   
     payment  delivery. You'll  see no  change in  leadership                                                                   
     or  footprint  [of  the public  facing  divisions].  The                                                                   
     highlighted  groups  of FMS  and  Commissioner's  office                                                                   
     are the ones feeling the brunt of the reorganization.                                                                      
     With   the   current   structure  of   DHSS,   and   its                                                                   
     innumerable  layers, issues  that work  their way up  to                                                                   
     the  Commissioner's  office  aren't little  embers  that                                                                   
     can  quickly be  extinguished,  but roaring  fires  that                                                                   
     require  all  hands on  deck  to  make sure  the  entire                                                                   
     thing doesn't burn down.                                                                                                   
     With an additional  Commissioner's Office and  a focused                                                                   
     span of  control, then leadership  will be able  to more                                                                   
     effectively  work  with stakeholders  and  employees  to                                                                   
     address concerns before they turn to infernos.                                                                             
     Speaking   of  infernos.  We   have  had  plenty.   This                                                                   
     administration  has worked on  crisis after crisis,  and                                                                   
     has shown that  focused leadership and support  can lead                                                                   
     to improved  outcomes for Alaskans?but only  in specific                                                                   
     areas, and  only if less time  and attention is  paid to                                                                   
     other divisions. Some examples are:                                                                                        
     DPA had  a backlog of  15,000 applications and  multiple                                                                   
     letters of  correction from  federal partners,  but with                                                                   
     new  leadership,  capital  support  and  willingness  to                                                                   
     embrace  innovation,  the  backlog  was  eliminated  and                                                                   
     administrative  efficiencies  and savings  were  gained.                                                                   
     Then  COVID hit,  and hundreds  of  millions of  dollars                                                                   
     for  new assistance  programs have  flowed through  DPA,                                                                   
     and  while this  has required  developing new  processes                                                                   
     and  eligibility criteria,  they  were  able to  respond                                                                   
     and move  additional assistance  checks out the  door to                                                                   
     Alaskans?all   while  doing   their  normal  course   of                                                                   
     business    this wouldn't  have been  possible with  the                                                                   
     DPA tools and setup from a couple years ago.                                                                               
2:07:16 PM                                                                                                                    
SENATOR  REINBOLD  said  she is  not  able  to  keep up  with  the                                                              
presentation. She could not find a fiscal note for the new PCNs.                                                                
COMMISSIONER  CRUM  replied  that  a  slide  at  the  end  of  the                                                              
presentation provides the dollar amounts and positions.                                                                         
2:07:46 PM                                                                                                                    
SENATOR  HUGHES asked  if  Commissioner Crum's  name  on slide  15                                                              
indicates that the  governor decided he would be  the commissioner                                                              
of DOH.                                                                                                                         
COMMISSIONER   CRUM  replied   that   he  requested   to  be   the                                                              
commissioner  for DOH. However,  the commissioners  would  need to                                                              
be appointed  by the governor since  the two departments  would be                                                              
legally separate entities.                                                                                                      
2:08:33 PM                                                                                                                    
SENATOR HUGHES  asked why he preferred  to be the  commissioner of                                                              
DOH.  She also  asked  how DHSS's  $3.5  billion  budget would  be                                                              
COMMISSIONER  CRUM said  a slide  at the end  of the  presentation                                                              
provides the costs,  budgets, and PCN counts for  each department.                                                              
He stated  that he would  like to be  commissioner of  DOH because                                                              
he worked  predominantly  with public health  and Medicaid  during                                                              
his tenure as commissioner of DHSS.                                                                                             
2:09:16 PM                                                                                                                    
SENATOR  HUGHES  asked  if  he   feels  comfortable  managing  the                                                              
workload  of the  DOH  commissioner since  it  would still  entail                                                              
more than he expressed having time for as the DHSS commissioner.                                                                
2:09:45 PM                                                                                                                    
COMMISSIONER  CRUM said breaking  up the  department will  make it                                                              
easier  for  the  commissioners   and  policy  staff  because  the                                                              
divisions  will be  aligned. DFCS  has  programs with  significant                                                              
burning issues  that need addressing.  Its programs have a  lot of                                                              
independent and  individual funding  sources. They also  have many                                                              
rules that  go through  different boards  and community  meetings.                                                              
Splitting DHSS  into two  departments with  five and four  public-                                                              
facing  divisions frees  the  capacity and  mental  energy of  the                                                              
commissioner and policy staff.                                                                                                  
SENATOR BEGICH stated  he thought it made sense  that Commissioner                                                              
Crum  would seek  to  be  commissioner of  DOH.  He  asked if  the                                                              
commissioners  of   the  new  departments  would   be  subject  to                                                              
legislative confirmation.                                                                                                       
COMMISSIONER  CRUM  stated  his   belief  that  it  would  require                                                              
legislative confirmation.                                                                                                       
2:11:08 PM                                                                                                                    
SENATOR  REINBOLD  asked if  the  commissioner's  responsibilities                                                              
are just in the highlighted blue box on slide 15.                                                                               
COMMISSIONER  CRUM said the  DOH commissioner  would preside  over                                                              
public  health,  behavioral health,  healthcare  services,  senior                                                              
disabilities services,  and public  assistance. The  changes would                                                              
be to the commissioner's office and finance management.                                                                         
SENATOR  REINBOLD  asked  if  Dr.  Zink's  responsibilities  would                                                              
remain the same under DOH.                                                                                                      
COMMISSIONER  CRUM replied  yes,  her responsibilities  in  public                                                              
health would remain the same.                                                                                                   
2:11:53 PM                                                                                                                    
SENATOR   REINBOLD   asked  if   Dr.   Zink  would   remain   over                                                              
epidemiology,  public  health  nursing,  women's  clinics,  family                                                              
health, and state laboratories.                                                                                                 
2:12:08 PM                                                                                                                    
COMMISSIONER CRUM replied yes.                                                                                                  
2:12:10 PM                                                                                                                    
SENATOR  REINBOLD stated  she agreed  with  Senator Wilson's  bill                                                              
that  addresses  certificate  of  need.  On  DOH's  organizational                                                              
chart,   she   noted  that   Health   Facilities   Licensing   and                                                              
Certification  was listed  under Health Care  Services. She  asked                                                              
if there  was any change to  medical services or the  licensing of                                                              
medical providers  and if  medical licensing  would be  moved from                                                              
the Department of Commerce.                                                                                                     
COMMISSIONER  CRUM   stated  that  professional   licensing  would                                                              
remain with the  Department of Commerce. He explained  that Health                                                              
Facilities  Licensing   and  Certification  perform   surveys  and                                                              
quality control  checks. The certificate  of need process  will be                                                              
under  the   Office  of  Rate  Review,   which  is  part   of  the                                                              
commissioner's staff as noted on slide 15.                                                                                      
2:14:13 PM                                                                                                                    
COMMISSIONER  CRUM said  he spent  a  great deal  of time  working                                                              
through API  licensing issues,  the backlog  at DPA, and  pandemic                                                              
problems. He  stated these were  three examples of  burning issues                                                              
that caused other areas to receive less attention.                                                                              
2:14:42 PM                                                                                                                    
COMMISSIONER   CRUM  continued  sharing   the  merits   of  DHSS's                                                              
bifurcation and advanced to slide 18, reading:                                                                                  
     The sticky  notes are a reminder  that there is  never a                                                                   
     dull moment  at DHSS.  24/7, 365,  there are issues  and                                                                   
     crises. There  will never be  a so to speak  "good" time                                                                   
     to make  a move like  this. But there  is always  a time                                                                   
     and place for decisive action                                                                                              
     The  only   certainties  are   that  with  the   current                                                                   
     structure  we  can  do nothing  but  keep  running  from                                                                   
     crisis to  crisis, we  have no idea  what is around  the                                                                   
     corneranother   earthquake?  Another outbreak?  All  the                                                                   
     ideas  for reorganization  are not  new and  most of  it                                                                   
     came from  division leaders who  have had many  years in                                                                   
     the  system  and  understand   that  Medicaid  and  high                                                                   
     priority public  health issues take  all the air  out of                                                                   
     the  room. As  a  state we  are  not putting  in  enough                                                                   
     energy  into   innovating  for  the   futurefacilities,                                                                    
     programs,  quality of care  etc. since  we are stuck  in                                                                   
     crisis mode  all the time. All change is  stressful. And                                                                   
     All change  is difficult, even  good change.  This isn't                                                                   
     change for change's  sake, down the road this  will mean                                                                   
     more bandwidth for everyone.                                                                                               
     More  bandwidth  for  each   Commissioner's  Office  and                                                                   
     Policy   staff   means   more   meaningful   stakeholder                                                                   
     engagement.  Meaningful engagement  takes time. Time  to                                                                   
     really  listen to  constituents and  advocacy groups  to                                                                   
     address their  concerns. Time  to seriously engage  with                                                                   
     federal    partners    to     seek    Alaska    specific                                                                   
     flexibilities.  And time to  do follow-up reach  outs to                                                                   
     those stakeholders who don't  respond to the first try.                                                                    
     There  is  not enough  time  in  the  day for  a  single                                                                   
     commissioner's   office   and   policy   staff   to   do                                                                   
     meaningful engagement  with that vast and  diverse array                                                                   
     of stakeholders  that DHSS  oversees. This includes  one                                                                   
     of our biggest groups of stakeholders, our employees.                                                                      
2:16:17 PM                                                                                                                    
COMMISSIONER CRUM moved to slide 19 of his presentation and                                                                     
addressed improved employee experience, reading:                                                                                
     There are  over 3,000 Alaskans  at DHSS who  care deeply                                                                   
     about  what they do.  But the  important work  performed                                                                   
     by  staff is  rarely visible,  systems improvements  are                                                                   
     slow   and   cumbersome,   and   this   all   leads   to                                                                   
     frustration,  creating  a  feedback  cycle  of  negative                                                                   
     emotions and concerns.                                                                                                     
     More  time and  bandwidth to  address employee  concerns                                                                   
     and improve  their experience  will facilitate  improved                                                                   
     recruitment  and retention. Currently,  DHSS is  like an                                                                   
     aircraft carrier,  a massive, self-contained  eco system                                                                   
     that  is   everything  to   everybody,  with  a   single                                                                   
     With  so many  facilities,  so many  staff  and so  many                                                                   
     programs,   it's  impossible   for  the   Commissioner's                                                                   
     office  to see  and interact  with all of  them, and  to                                                                   
     see and hear  their concerns. This has been  an issue in                                                                   
     the past  and will  continue to be  an issue for  anyone                                                                   
     who  succeeds   me  if  we  do  not  take   action.  Our                                                                   
     employees deserve better.                                                                                                  
     And  their department  should  be able  to more  readily                                                                   
     respond  to  and  address their  concerns.  But,  to  be                                                                   
     frank,  aircraft  carriers   are  easier  to  turn  than                                                                   
2:17:18 PM                                                                                                                    
COMMISSIONER CRUM moved to slide 20:                                                                                            
     The proposed structure of two smaller departments                                                                          
     allows for a more nimble leadership response to fewer                                                                      
     divisions   we are making the  ships smaller and adding                                                                    
     another captain.                                                                                                           
     Fewer divisions in each department means less                                                                              
     jockeying for position on the priority list, and a                                                                         
     much more intentional approach to interacting with                                                                         
     This will provide a direct benefit to our FMS Staff                                                                        
     this usually unseen support division has to have                                                                           
     expertise to serve all 9 public facing divisions and                                                                       
     fund sources that go with it. With a smaller span of                                                                       
     control, we will be able to recruit and retain                                                                             
     positions better such as our Finance officer and                                                                           
     Grants and Contracts staff  instead of training them up                                                                    
     to take a lateral transfer at a much smaller dept for                                                                      
     the same level of position.  Because of the critical                                                                       
     nature of their work, when  FMS is running full steam                                                                      
     ahead it makes life easier  for the other divisions.                                                                       
2:18:12 PM                                                                                                                    
COMMISSIONER CRUM stated the advantage of using an executive                                                                    
order over a legislative bill beginning at slide 21, reading:                                                                   
     Executive   orders   are  a   useful   tool  that   were                                                                   
     specifically  contemplated  by  Alaska's  Constitutional                                                                   
     Convention.  Article  3, Section  23  says the  Governor                                                                   
     may make  changes in the  organization of the  executive                                                                   
     branch  or in  the  assignment  of functions  among  its                                                                   
     units  which   he  considers  necessary   for  efficient                                                                   
     So why  not a  bill? Because  Executive Orders are  well                                                                   
     defined  and the  process is  prescribed.  EO's can  not                                                                 
     have  substantive law  change, this  means programs  and                                                                   
     services  won't  be changed  by  the EO.  This  provides                                                                   
     certainty to  stakeholders and beneficiaries  that their                                                                   
     programs  will continue on  unaltered throughout  the EO                                                                   
     process.    The  definitive  timeline  as  laid  out  in                                                                   
     Article  3  Section  23 of  the  state  constitution  is                                                                   
     another   touchstone  of   certainty,   as  opposed   to                                                                   
     legislative  process where  timelines  can vary  greatly                                                                   
     and services can be altered via amendments.                                                                                
2:19:16 PM                                                                                                                    
COMMISSIONER CRUM moved to slide 23 discussing executive orders                                                                 
and continued reading his presentation:                                                                                         
     Executive Orders  have been  used many times  to realign                                                                   
     state agencies for better service to the public.                                                                           
     In  2003 the Pioneer  Homes  were in the  Dep of  Admin,                                                                   
     and EO  108 was used to  move them to DHSS.  Corrections                                                                   
     was  historically  a  part  of  DHSS,  and  they  didn't                                                                   
     become  their own department  until 1984  via an  EO. In                                                                   
     fact,  EO 54 to  split out  corrections was put  forward                                                                   
     in 1983  but was  disproved. It was  worked on  and then                                                                   
     reintroduced  the following year  as EO 55 which  became                                                                   
     law.  This really highlights  that the  process works                                                                      
     the  legislature  provided  input, and  then  ultimately                                                                   
     the correct change was made.                                                                                               
2:20:02 PM                                                                                                                    
COMMISSIONER CRUM continued at slide 23:                                                                                        
     Furthermore,  we  know that  there  could be  bumps  and                                                                   
     future legislation  may be needed to fill  some gaps, an                                                                   
     example   of   that  would   be   a  bill   making   the                                                                   
     Commissioner of  DFCS a statutory advisor to  the Mental                                                                   
     Health Trust.   We  appreciate our legislative  partners                                                                   
     and  look forward  to working  together to  set the  two                                                                   
     departments  up  for  success.  That brings  us  to  the                                                                   
     timeline of all this.                                                                                                      
     Governor  Dunleavy  introduced  Executive Order  121  on                                                                   
     the  first   day  of  session,  and  as  you   know  the                                                                   
     legislature  has  60  days  to take  action,  by  coming                                                                   
     together  in a joint  session to  disapprove the  EO. If                                                                   
     no action  in 60 days, then  in it becomes law,  with an                                                                   
     effective  date  of  July  1, 2022.  So  how  does  this                                                                   
     differ from what was brought forward last year?                                                                            
2:20:49 PM                                                                                                                    
COMMISSIONER CRUM advanced to slide 25 to explain what is                                                                       
different in EO 121.                                                                                                            
     Time. Time  is the difference.  The plan put  forward of                                                                   
     which  divisions go to  each department  is the same  as                                                                   
     EO  119 that  was introduced  in 2021,  but then  pulled                                                                   
     when  Legislative Legal  noted  some technical  concerns                                                                   
     in it's  drafting. These  items have  been corrected  by                                                                   
     the  department of  law and  specific  areas of  concern                                                                   
     have  been  addressed  with  Leg  Legal.  Prior  to  its                                                                   
     official  introduction, a  draft was  sent to Leg  Legal                                                                   
     to  make sure  that  issues  from the  previous  session                                                                   
     were addressed in the current version before you all.                                                                      
     You,  as  committee  members, rightly  brought  up  that                                                                   
     stakeholders  needed to  be  engaged more.  So we  spent                                                                   
     the past year  doing robust stakeholder engagement  on a                                                                   
     weekly basis.  We have  done employee townhalls,  public                                                                   
     town  halls,  met  with tribes,  tribal  groups,  tribal                                                                   
     health consortia's,  child welfare partners,  child care                                                                   
     providers  and   advocates,  juvenile  justice   groups,                                                                   
     senior    groups,    disability    groups,    healthcare                                                                   
     providers?we  truly  worked  hard to  meet  with  groups                                                                   
     that represented services that DHSS provides.                                                                              
2:21:53 PM                                                                                                                    
COMMISSIONER CRUM continued reading his presentation at                                                                         
slide 25, regarding outreach and feedback on EO 121.                                                                            
     This  engagement  has  been   in  formal  meetings  both                                                                   
     during  and  after  work hours,  but  also  incorporated                                                                   
     into our  daily interactions  with outside groups,  with                                                                   
     myself,   deputy   commissioners,   policy   staff   and                                                                   
     directors   almost   always  weaving   the   prospective                                                                   
     reorganization  into the  discussion to  find out  their                                                                   
     concerns.  It even became  a running  joke amongst  some                                                                   
     groups, that no  matter the topic, I would  bring up the                                                                   
     reorganization. And  I would say that  these consistent,                                                                   
     informal  interactions  were   very  beneficial  because                                                                   
     they  occurred   in  smaller  groups,  with   much  more                                                                   
     spontaneous and insightful feedback.                                                                                       
2:22:27 PM                                                                                                                    
COMMISSIONER CRUM slide 25 continued:                                                                                           
     Throughout  the   process  we  would  respond   to  many                                                                   
     different  groups'  concerns  and questions  in  writing                                                                   
     and  then  follow  up  again   to  ensure  no  lingering                                                                   
     questions   remained.   From   all  of   this   constant                                                                   
     engagement,  we listened  and  incorporated feedback  as                                                                   
     necessary  into our implementation  plans. And  as we've                                                                   
     demonstrated  throughout  this presentation,  the  sheer                                                                   
     size of  DHSS means its impossible  for us to  meet with                                                                   
     every  provider,  advocate   or  beneficiary  about  the                                                                   
     reorganization.  But I can say  that we finished  all of                                                                   
     our  meetings with  links to  the reorg  website and  an                                                                   
     email  address  where  questions,  concerns  or  meeting                                                                   
     requests  could be sent.  Any groups  that have  reached                                                                   
     out or asked  for meetings we have met with,  and we are                                                                   
     still  continuing  these  outreach   meetings  now.  Our                                                                   
     efforts  in stakeholder  engagement  have been  sincere,                                                                   
     and absolutely necessary.                                                                                                  
2:23:10 PM                                                                                                                    
COMMISSIONER CRUM moved to slide 26, Stakeholder Engagement:                                                                    
     The word cloud  is a nice tool to demonstrate  just some                                                                   
     of the  groups we  were honored to  meet with.  And from                                                                   
     these  efforts  we  engaged  with and  listened  to  the                                                                   
     concerns  of groups  that initially  spoke up about  the                                                                   
     reorganization.  And we also  gained letters of  support                                                                   
     from  key   groups  representing  a  diverse   array  of                                                                   
     beneficiaries,   advocates    and   providers.   Support                                                                   
     letters include:                                                                                                           
          Alaska    State   Hospital    and   Nursing    Home                                                                   
          Alaska Commission on Aging                                                                                            
          AK Pioneer Homes Advisory Board                                                                                       
          Governor's Council on Disabilities and Special                                                                        
          Alaska Geriatric Exchange Network, or AgeNet                                                                          
2:23:45 PM                                                                                                                    
COMMISSIONER CRUM continued his presentation at slide 27:                                                                       
     From  this  engagement  we  definitely  learned  things,                                                                   
     such  as  our  Tribal  Partners  suggesting  a  role  of                                                                   
     Tribal  Liaison  in each  commissioner's  office.  While                                                                   
     each  division has  a  tribal liaison,  they  suggested,                                                                   
     and   we  agreed,   that  having   a   liaison  in   the                                                                   
     commissioner's  office can only  help maintain  the open                                                                   
     lines of  communication that  we have been committed  to                                                                   
     having between the state and our tribal partners.                                                                          
     From the  stakeholder engagement,  it also became  clear                                                                   
     that more  regular and  intentional interaction  between                                                                   
     departmental  leadership  and  outside groups  needs  to                                                                   
     happen,  something  that  will  only  be  possible  with                                                                   
     smaller   departments   and  a   second   commissioner's                                                                   
     The  Alaska  Children's  Trust had  a  great  suggestion                                                                   
     that   we   adopted,   of   having  a   role   in   each                                                                   
     commissioner's   office  of  Reorganization   Transition                                                                   
     Liaison. The  purpose of which  is to have a  single POC                                                                   
     [point   of    contact]   in   each    department   that                                                                   
     stakeholders  can share feedback  on the  implementation                                                                   
     of the  reorg, and  they can  in turn  get that info  to                                                                   
     appropriate   people   within  the   department.   These                                                                   
     transition  liaisons   will  also  help   convene  post-                                                                   
     implementation  meetings or townhalls  where all  have a                                                                   
     chance  to   bring  areas   of  concern  to   department                                                                   
2:24:54 PM                                                                                                                    
COMMISSIONER CRUM  advanced to slide 29 and continued  reading. He                                                              
shared what is needed to bring about EO 121:                                                                                    
     So what  will it take to  make this proposed  solution a                                                                   
     reality? A strategic  investment of $2 million  in total                                                                   
     funds, 11  new positions and 10 reclassified  positions.                                                                   
     As we've told  stakeholders over the past  year, this is                                                                   
     not cost cutting  or job cutting initiative,  this is an                                                                   
     appropriate  size government  initiative. For less  than                                                                   
     0.06%  percent of DHSS'  total budget  we can fund  this                                                                   
     reorganization.     This  is   a  smart  investment   in                                                                   
     prioritizing  how services  are delivered to  vulnerable                                                                   
     Alaskans, and  for allowing time and bandwidth  for each                                                                   
     department  to  meaningfully  engage  with  stakeholders                                                                   
     and   partners  on   current   initiatives  and   future                                                                   
2:25:41 PM                                                                                                                    
SENATOR  REINBOLD  stated  that  Commissioner  Crum  and  Governor                                                              
Dunleavy  campaigned in support  of reducing  DHSS's budget.  Yet,                                                              
$2  million  in additional  funding  and  21 additional  PCNs  are                                                              
requested to make  DHSS more efficient. She stated  her philosophy                                                              
that  a person who  cannot  do well with  a little  should not  be                                                              
given more. She  opined that DHSS was given an  extra $900 million                                                              
in addition  to its  $3.5 billion  budget. Despite the  increases,                                                              
nothing was  done to address chronic  disease, the use  of Vitamin                                                              
D, an  emergency room  for Eagle  River, preventative  healthcare,                                                              
or  substance misuse.  Focus should  have  been on  immunizations,                                                              
fraudulent  COVID claims,  and  the effects  of  isolation on  the                                                              
elderly. She  stated that  Dr. Zink and  Commissioner Crum  are at                                                              
the helm  of these failing and  she would not support  rewarding a                                                              
failing department.                                                                                                             
2:29:42 PM                                                                                                                    
CHAIR WILSON stated  the committee is working with  DHSS and would                                                              
be presenting an address on the state of Alaska's Health.                                                                       
SENATOR REINBOLD  quipped that she  hoped it would be  more honest                                                              
than the State of the State address.                                                                                            
CHAIR  WILSON commented  that while  the  committee would  address                                                              
some of the issues  mentioned, others have been  addressed but not                                                              
2:30:27 PM                                                                                                                    
COMMISSIONER CRUM  clarified that the $900 million  was not liquid                                                              
capital for  the department to use  at its discretion.  Rather, it                                                              
was federal  money for defined programs,  which came out  in funds                                                              
approved  through the legislative  process.  DHSS was tasked  with                                                              
distributing  the   assistance  funds  to  community   groups  and                                                              
COMMISSIONER   CRUM    said   that   focused    improvements   and                                                              
administrative  efficiencies   lead  to  budgetary   savings  that                                                              
exceed  DHSS's request  for $2 million  and 21  PCNs to  implement                                                              
the department's  bifurcation.  For example,  changes made  to the                                                              
Department  of  Public  Assistance  (DPA)  cleared  a  backlog  of                                                              
15,000 applications,  created a budget savings of  $9 million, and                                                              
reduced  121 positions.  He said  a  series of  matrices would  be                                                              
used to evaluate the reorganization of DHSS.                                                                                    
2:31:32 PM                                                                                                                    
SENATOR REINBOLD opined  that DHSS did not spend  its $3.4 billion                                                              
budget  on  items  of  most importance.  OCS  is  in  crisis,  and                                                              
families are weaker  than ever due to COVID vaccinations  and mask                                                              
wearing  requirements. She  stated her  belief that  Alaska is  in                                                              
crisis because DHSS is in crisis.                                                                                               
SENATOR  BEGICH said  legislators  do not  always  share the  same                                                              
opinions.  He has  confidence  in DHSS  employees.  He stated  his                                                              
belief  that  they did  a  superb  job in  handling  COVID-related                                                              
issues. Regarding  DHSS's reorganization,  he expressed  certainty                                                              
that the  department would answer  questions, there would  be some                                                              
debate, and the committee would seek to find common ground.                                                                     
2:34:25 PM                                                                                                                    
SENATOR   HUGHES  said   splitting  DHSS   into  two   departments                                                              
effectually   follows    Senator   Reinbold's    philosophy.   The                                                              
commissioner  of  DOH  will  have a  smaller  assignment  than  is                                                              
currently  held  by the  commissioner  of DHSS.  She  acknowledged                                                              
that  recruitment  and retention  of  employees is  expensive  and                                                              
asked what the  state's expected cost savings would  be because of                                                              
DHSS's bifurcation.                                                                                                             
2:36:22 PM                                                                                                                    
COMMISSIONER  CRUM responded  that OCS  has a  vacancy rate  of 60                                                              
percent.  According  to  a  conservative  estimate  by  the  Casey                                                              
Family Foundation,  this vacancy rate costs the  state between $13                                                              
- 15 million  per year. By  focusing on and addressing  the issues                                                              
of  just one  division  within the  department,  the savings  more                                                              
than  covers  the reorganization  costs.  Furthermore,  trauma  to                                                              
children and  families is reduced  because the problems  that were                                                              
in one  division do not  go on to  affect other divisions.  Grants                                                              
and contract  staff at  Finance Management  Services will  benefit                                                              
from the  split because  managing four or  five divisions  is less                                                              
difficult than managing nine.                                                                                                   
2:37:56 PM                                                                                                                    
SENATOR HUGHES  stated that presenting  the cost savings  from the                                                              
bifurcation of DHSS by division would be helpful.                                                                               
COMMISSIONER CRUM  replied that 12 and 24-month  projections would                                                              
be given to the committee.                                                                                                      
2:38:59 PM                                                                                                                    
COMMISSIONER CRUM  stated that implementing the  reorganization of                                                              
DHSS began  even before  Executive Order  119. The  reorganization                                                              
required  working   with  other   departments  to  determine   how                                                              
programs and  facilities would operate.  Items necessary  to carry                                                              
out the reorganization  were categorized into ongoing,  during the                                                              
legislative  session,  and  post 60-day  consideration.  Slide  31                                                              
provides examples of  items to be done in each  category. The goal                                                              
was for the public  to not notice any change in  service from June                                                              
30  to July  1. Beneficiaries  and  providers  will still  receive                                                              
services  and   payments.  Internally   the  departments   need  a                                                              
transition  time to  complete  the split  and  ferret out  issues.                                                              
This transition  phase occurs  from April to  July 1,  2022. After                                                              
July  1, the  two  departments must  work  together  to close  the                                                              
fiscal year.  The Alaska  Constitution articulates that  executive                                                              
orders must be dropped on the first day of session. Therefore,                                                                  
behind-the-scenes work was ongoing.                                                                                             
2:40:52 PM                                                                                                                    
SENATOR HUGHES asked if tracking would be done so the state                                                                     
could know the extent to which the bifurcation of DHSS was                                                                      
COMMISSIONER CRUM replied that DHSS would submit a list of                                                                      
matrices to the committee that will be used to evaluate both the                                                                
short and long-term impacts of the bifurcation.                                                                                 
2:41:52 PM                                                                                                                    
COMMISSIONER CRUM returned to reading the presentation at slide                                                                 
     Where do  we go from here?  When there is  more capacity                                                                   
     for those  that drive and  lead organizations,  there is                                                                   
     more fuel  in the  tank to travel  further than  we have                                                                   
     ever been  able to  go before. The  items on this  slide                                                                   
     are  not new.  A  lot of  you  have been  involved  with                                                                   
     these issues  for years, yet  we haven't seen  the level                                                                   
     of improvements  or  innovations that  we want and  need                                                                   
     to see.                                                                                                                    
     Despite  the  efforts  of  OCS,  the  governor  and  the                                                                   
     legislature,  we haven't yet  moved the needle  on child                                                                   
     welfare.  The  increasing   vacancy  rate  of  our  case                                                                   
     carrying  workers puts  pressure on  our entire  system,                                                                   
     families  and communities.  To truly  improve our  child                                                                   
     welfare  system  and to  support  community  prevention,                                                                   
     improve  family reunification,  it will require  focused                                                                   
     attention  and  support  from  a  commissioner's  office                                                                   
     that isn't pulled away by Medicaid or public health.                                                                       
     For the Alaska  Pioneer Homes we need to  start having a                                                                   
     long  series  of community  driven  conversations  about                                                                   
     how deferred  maintenance is  addressed and what  future                                                                   
     investment  should we be planning  for. This  requires a                                                                   
     commissioner's office with a smaller span of control.                                                                      
     Currently,  Alaska is  one of the  last Medicaid  states                                                                   
     that  is fee-for-service  and doesn't  have value  based                                                                   
     care.  Also,   one  third   of  Alaskans  are   Medicaid                                                                   
     eligible,  this  greatly  affects   all  healthcare  and                                                                   
     insurance   costs  in  Alaska      shouldn't  these   be                                                                   
     addressed  and  worked  on by  a  commissioner's  office                                                                   
     removed from API and OCS concerns?                                                                                         
2:43:18 PM                                                                                                                    
COMMISSIONER CRUM continued:                                                                                                    
     Prior  experience clearly  shows  us  that the  existing                                                                   
     structure  of a  single department  will  not allow  for                                                                   
     forward   progress   on   all    these   serious   items                                                                   
     simultaneously. Nor  can they be solved  without active,                                                                   
     consistent  engagement   with  community   partners  and                                                                   
     granted flexibilities from federal partners.                                                                               
     The  time and space  created by  having Two  departments                                                                   
     and  two commissioner's  offices  allows these  critical                                                                   
     conversations  to take  place  in earnest.  Yes,  crises                                                                   
     will  occur, but  dealing with  half  as many  divisions                                                                   
     and  issues   allows  the  commissioner's   offices  and                                                                   
     policy  staff  to  facilitate   the  meetings  with  all                                                                   
     parties,  so   we  can  design  our  systems   of  care,                                                                   
2:43:58 PM                                                                                                                    
COMMISSIONER CRUM  stated that suggestions and questions  could be                                                              
emailed to  DHSS and  there is also  a reorganization  website at:                                                              
2:44:12 PM                                                                                                                    
SENATOR  REINBOLD asked  what happened  to last  year's bill  that                                                              
addressed the bifurcation of DHSS.                                                                                              
COMMISSIONER  CRUM  said that  was  Executive  Order 119.  It  was                                                              
introduced,  Legislative   Legal  Services  identified   technical                                                              
errors, and it was  rescinded. It has been reintroduced  as EO 121                                                              
with drafting errors corrected.                                                                                                 
2:44:45 PM                                                                                                                    
SENATOR REINBOLD  asked if technical  errors were the  only issues                                                              
with EO 119.                                                                                                                    
COMMISSIONER CRUM replied yes.                                                                                                  
SENATOR  REINBOLD  asked  if  he  considered  the  changes  to  be                                                              
2:44:56 PM                                                                                                                    
COMMISSIONER  CRUM answered that  the bill  is an Executive  Order                                                              
as specifically contemplated in the constitution.                                                                               
SENATOR  REINBOLD stated  that  the response  did  not answer  her                                                              
question. She said  her question was, "Does this  make legislative                                                              
COMMISSIONER  CRUM  replied,  "This makes  conforming  changes  to                                                              
SENATOR REINBOLD  retorted that, "To  me, it's clear as  day. It's                                                              
statute changes."                                                                                                               
2:45:18 PM                                                                                                                    
CHAIR  WILSON stated  that it  is statutory  changes, through  the                                                              
power of the executive branch, executive order.                                                                                 
SENATOR REINBOLD stated  her belief that EO 121  encroaches on the                                                              
duties of  the Legislative Branch.  She ran for office  to protect                                                              
legislative  supremacy over  budgets and  legislative change.  She                                                              
said she would get a legal opinion.                                                                                             
SENATOR HUGHES  asked if EO 121  would require making  or revising                                                              
any regulations.                                                                                                                
2:46:54 PM                                                                                                                    
MS  KRALY  stated  that regulatory  conforming  changes  would  be                                                              
made.  It is her  understanding  that this would  be done  through                                                              
the  revisor  of  regulations,  and  entails  placing  regulations                                                              
under the appropriate department.                                                                                               
She  added that  an  Executive Order  could  not make  substantive                                                              
changes  to  statutes  under  the  constitution.  She  stated  she                                                              
worked  with  Legislative  Legal   Services,  and  no  substantive                                                              
changes  to  laws  clearly  within   the  purview  of  legislative                                                              
authority were  made. EO  121 would be  inappropriate and  void if                                                              
the changes made were found to be substantive.                                                                                  
SENATOR HUGHES asked  for a summary of what the  constitution says                                                              
regarding   the  governor's   ability   to   reorganize  and   its                                                              
2:48:34 PM                                                                                                                    
COMMISSIONER CRUM stated the reference  is Article 3 Section 23.                                                                
2:48:52 PM                                                                                                                    
SENATOR  BEGICH read  Article 3  Section  23 of  the Alaska  State                                                              
     The  governor may make  changes in  the organization  of                                                                   
     the executive  branch or in the assignment  of functions                                                                   
     among  its  units  which  he   considers  necessary  for                                                                   
     efficient  administration. Where  these changes  require                                                                   
     the force of  law, they shall be set forth  in executive                                                                   
     orders.  The  legislature shall  have  sixty  days of  a                                                                   
     regular  session,  or  a  full  session  if  of  shorter                                                                   
     duration, to  disapprove these executive  orders. Unless                                                                   
     disapproved  by resolution  concurred in  by a  majority                                                                   
     of the  members in  joint session,  these orders  become                                                                   
     effective at  a date thereafter to be designated  by the                                                                   
2:49:44 PM                                                                                                                    
SENATOR  BEGICH asked  what  would happen  to  the bifurcation  of                                                              
DHSS if  the legislature  chose not to  appropriate funds  for the                                                              
new  positions, including  a commissioner  or deputy  commissioner                                                              
COMMISSIONER CRUM replied  that he did not know and  would have to                                                              
defer to a lawyer.                                                                                                              
2:50:21 PM                                                                                                                    
CHAIR WILSON opined  that the positions would be  created when the                                                              
legislature  authorizes  a  power appropriation.  There  would  be                                                              
three allocations  through the  appropriation, and the  department                                                              
can  move  within  those  allocations   to  technically  fund  the                                                              
positions unless a statute says otherwise.                                                                                      
2:50:44 PM                                                                                                                    
SENATOR  BEGICH asked  if that  could be  vetoed or  ignored as  a                                                              
letter of intent.                                                                                                               
CHAIR  WILSON   replied   that  intent  is   like  a   gentleman's                                                              
2:51:09 PM                                                                                                                    
SENATOR  REINBOLD  opined  that the  changes  in  EO 121  are  not                                                              
technical and  expand government. She  stated her belief  that the                                                              
bifurcation  of DHSS is  a substantial  undertaking and  should be                                                              
done under  the authority of  the Legislative Branch.  She desires                                                              
to preserve the duties and authority of the legislature.                                                                        
2:52:40 PM                                                                                                                    
At ease.                                                                                                                        
2:53:03 PM                                                                                                                    
CHAIR WILSON reconvened the meeting.                                                                                            
2:53:11 PM                                                                                                                    
SENATOR  BEGICH recalled  the merging  of  Community and  Regional                                                              
Affairs and Commerce  and Economic Development several  years ago.                                                              
He  asked if  the merging  was done  by  legislation or  executive                                                              
MS. KRALY  replied that  she did  not know but  would get  back to                                                              
the committee.                                                                                                                  
2:53:41 PM                                                                                                                    
CHAIR WILSON opened public testimony.                                                                                           
2:54:06 PM                                                                                                                    
BRENDA  SHELDEN, Alaska  Pioneer  Homes Advisory  Board,  Wasilla,                                                              
Alaska,  stated  that  the  Department  of  Family  and  Community                                                              
Services  (DFCS) would  be  better  able to  focus  on the  Alaska                                                              
pioneer  homes' residents  and  facilities.  Splitting DHSS  would                                                              
increase communication  and allow for  the specific needs  of 24/7                                                              
patient care facilities  to be addressed. Divisions  within (DFCS)                                                              
would  also have  budgets, making  it possible  to champion  needs                                                              
without  competing  against  the  breadth of  divisions  found  in                                                              
2:56:45 PM                                                                                                                    
At ease.                                                                                                                        
2:57:20 PM                                                                                                                    
CHAIR WILSON  reconvened the meeting  and closed  public testimony                                                              
on EO 121.                                                                                                                      
2:57:32 PM                                                                                                                    
SENATOR BEGICH asked  if there was any opposition  from the mental                                                              
health trust authority  user groups, such as the  mental health or                                                              
alcohol boards, or any of the associated committees.                                                                            
COMMISSIONER CRUM replied no.                                                                                                   
2:58:01 PM                                                                                                                    
SENATOR BEGICH  asked that  explicit letters  of support  from the                                                              
various  committees  and  commissions   associated  with  DHSS  be                                                              
submitted to the committee.                                                                                                     
2:58:08 PM                                                                                                                    
COMMISSIONER CRUM  replied that he  does not have letters  at this                                                              
SENATOR  BEGICH  asked  if  there were  letters  of  support  from                                                              
outside organizations besides the Medical Association.                                                                          
COMMISSIONER  CRUM   replied  that  an  outside   organization  is                                                              
working  on a  write-up.  Alaska Native  Health  Board and  Alaska                                                              
Native  Health Consortium  have  expressed that  they will  remain                                                              
2:59:19 PM                                                                                                                    
SENATOR  BEGICH   asked  whether   employee  labor   organizations                                                              
support the reorganization.                                                                                                     
COMMISSIONER  CRUM stated  that  employee  organizations have  not                                                              
disposed  of or  supported the  reorganization. All  organizations                                                              
and staff  are being apprised of  the changes, and  townhalls have                                                              
been held to hear concerns and keep the public informed.                                                                        
2:59:41 PM                                                                                                                    
SENATOR REINBOLD asked if there was any opposition to EO 121.                                                                   
COMMISSIONER CRUM  stated that groups  that previously  opposed EO                                                              
121 are now neutral.                                                                                                            
3:00:18 PM                                                                                                                    
SENATOR REINBOLD  asked for  clarification  that no group  opposes                                                              
EO 121.                                                                                                                         
COMMISSIONER CRUM replied that no group opposes EO 121.                                                                         
3:01:31 PM                                                                                                                    
There  being no  further business  to come  before the  committee,                                                              
Senator Wilson  adjourned  the Senate Health  and Social  Services                                                              
Standing Committee meeting at 3:01 p.m.                                                                                         

Document Name Date/Time Subjects
Attachment B- EO 121 Sectional Analysis (2-7-22).pdf HHSS 2/8/2022 3:00:00 PM
SHSS 2/10/2022 1:30:00 PM
EO 121
Attachment C- EO 121 Stakeholder Engagment FINAL.pdf HHSS 2/8/2022 3:00:00 PM
SHSS 2/10/2022 1:30:00 PM
EO 121
Attachment D- EO 121 Transition Plan (2-6-22).pdf HHSS 2/8/2022 3:00:00 PM
SHSS 2/10/2022 1:30:00 PM
EO 121
Attachment E- EO 121 Summary of New and Reclassified Positions (2-7-22).pdf HHSS 2/8/2022 3:00:00 PM
SHSS 2/10/2022 1:30:00 PM
EO 121
Attachment F- EO 121 DHSS response to House Leadership Chart (2-7-22).pdf HHSS 2/8/2022 3:00:00 PM
SHSS 2/10/2022 1:30:00 PM
EO 121
GCDSE Letter of Support for EO121 V1.0 (002).pdf SHSS 2/10/2022 1:30:00 PM
EO 121
ASHNHA Letter of Support for DHSS Reorg 1-26-22.pdf SHSS 2/10/2022 1:30:00 PM
EO 121
ACoA Letter of Support DHSS Reorganization.pdf SHSS 2/10/2022 1:30:00 PM
EO 121
2021.12.13 PHAB Letter of Support DHSS Reorganization.pdf SHSS 2/10/2022 1:30:00 PM
EO 121
DHSS EO Reorg Presentation SHSS 2.10.22 (v2).pdf SHSS 2/10/2022 1:30:00 PM
EO 121