SB 76-COMPLEX CARE RESIDENTIAL HOMES  3:58:51 PM CHAIR DUNBAR reconvened the meeting and announced the consideration of SENATE BILL NO. 76 "An Act relating to complex care residential homes; and providing for an effective date." 3:59:24 PM HEIDI HEDBERG, Commissioner, Department of Health, Anchorage, Alaska, provided an opening statement on SB 76 on behalf of the administration. She expressed appreciation to the committee for hearing SB 76, introduced at the governor's request. She said the bill resulted from collaboration between the Department of Family and Community Services and the Department of Health to address gaps in Alaska's system of care for individuals with complex behavioral health and co-occurring needs. She stated Alaska lacks an appropriate setting for these individuals to receive care in a home-like, community-based environment. She said the proposed new license type will fill this critical gap and improve health outcomes for Alaskans. 4:00:36 PM EMILY RICCI, Deputy Commissioner, Department of Health, Anchorage, Alaska, co-presented an introduction on SB 76 and provided the sectional analysis on behalf of the administration. She moved to slide 2 and said the bill will help address and identify gaps in the system of care for individuals with complex needs. She recalled that strengthening the behavioral health system, with a focus on complex care, was one of the department's four key priorities. She emphasized the importance of addressing needs at both the individual and systems levels. She stated the bill reflects the outcome of that effort and the department's collaboration with the Department of Family and Community Services. 4:01:20 PM CLINTON LASLEY, Deputy Commissioner, Department of Family and Community Services, Juneau, Alaska, co-presented an introduction on SB 76 on behalf of the administration. He moved to slide 3 and said the bill resulted from collaboration between the Department of Health and the Department of Family and Community Services, demonstrating that cooperation continued after the departments split two and a half years ago. He stated the Department of Family and Community Services prioritized individuals with complex and co-occurring needs, creating a Coordinated Health and Complex Care Team. He explained that work included forming a case response team to address placement challenges for youth and adults after treatment and holding quarterly complex care committee meetings with the Department of Health to address system-level gaps. He said this bill emerged from those combined efforts. 4:03:16 PM MR. LASLEY stated that complex care involves individuals with complex needs who require a multidisciplinary team to determine diagnoses, develop treatment outcomes, and identify necessary resources. He explained that these individuals often have behavioral challenges and need specialized care settings. He emphasized that the goal is to improve their quality of life and support independent living. 4:04:00 PM MR. LASLEY moved to slide 4 and explained that the team previously presented the complexity of individuals receiving care, emphasizing a person-centered approach. He stated that these individuals often require a multidisciplinary team because they interact with multiple systems, including mental health care, substance use treatment, social services, public safety, and medical care. He noted that although this population is relatively small, they demand a significant share of time and resources due to frequent cycling through systems. He concluded that current care settings, such as assisted living homes, often lack the capacity to meet these individuals' needs, highlighting the need for more specialized, long-term care options. MR. LASLEY stated that many individuals requiring complex care have histories of out-of-state treatment and display disruptive or aggressive behaviors, often linked to co-occurring medical conditions or dementia-related symptoms. He noted that such behaviors, including advanced or sexualized conduct, are difficult to manage in large facilities like Pioneer Homes operated by the Department of Family and Community Services. He emphasized that smaller, home-like settings could better provide the specialized care needed while also protecting other residents. He concluded that creating a complex care residential home license type is essential to strengthening the continuum of care in Alaska and supporting individuals in the least restrictive environment possible. 4:06:52 PM MS. RICCI moved to slide 5, What Does SB 76 Do, and stated that SB 76 establishes the statutory framework needed for the Department of Health to license and regulate a new type of facility called complex care residential homes. She explained that the goal is to create small, home-like community settings designed to meet the complex needs of individuals through multidisciplinary support. These homes would offer appropriate staffing levels and specialized services tailored to the population served. She added that various complex care residential homes could be designed to address different needs within this population 4:07:56 PM MS. RICCI moved to slide 6, CCRHs Fill a Gap in the Care Continuum, and explained the current continuum of care and how complex care residential homes would fill a gap between acute inpatient settings and lower-level community-based care. She described the right side of the continuum as including inpatient psychiatric hospitals, general acute hospitals, residential psychiatric treatment centers for youth, and skilled nursing facilities. The left side includes foster homes, private residences, and assisted living homes, primarily supported through Medicaid's home and community-based waiver services. She noted that individuals with complex needs who do not qualify for an intellectual and developmental disability diagnosis often fall between these levels of care, making it difficult to access appropriate services. She emphasized that complex care residential homes are intended to bridge this gap by providing a long-term, home-like setting tailored to these individuals' needs. 4:09:41 PM MS. RICCI moved to slide 7, Establishing a New Residential Setting, and outlined a four-step approach used to develop a new care model. The steps include identifying individual needs, determining appropriate care settings, defining the services required, and establishing funding mechanisms. She stated that SB 76 addresses the second step: creating a setting where individuals with complex needs can receive care. She clarified that while the Department of Health already has the statutory authority to develop services and funding, it lacks the authority to create a new facility type, which SB 76 aims to establish. She added that work on the remaining steps is ongoing, but the bill is specifically focused on authorizing a new license type for complex care residential homes. 4:11:13 PM ROBERT LAWRENCE, MD, Chief Medical Officer, Department of Health, Anchorage, Alaska, co-presented an introduction on SB 76 on behalf of the administration. He moved to slide 8, Who Would Benefit from CCRHs, and stated that the slide emphasizes the need to broaden the understanding of who could benefit from the proposed facility type, noting that the goal is to design a license that applies across a range of ages and mental health conditions. He described the gap in care for youth, particularly ages eight to twelve, who complete inpatient treatment but lack safe or appropriate placement options, such as foster care or assisted living. He also described older adults, including those with dementia who end up in hospitals or even correctional facilities, as another group lacking appropriate residential care settings. He stressed the need for a community-based facility that can serve various individuals with complex behavioral health needs in a least restrictive environment. 4:13:12 PM DR. LAWRENCE moved to slide 9, Key Features of a CCRH, and explained that SB 76 is designed to be flexible and apply to diverse age groups and needs. He noted that the proposed legislation allows for licensing of facilities with fewer than 15 residents, with the expectation that youth homes would house far fewertypically five or six. He added that the facilities would operate with 24/7 staff support from a multidisciplinary team tailored to the specific needs of the residents. He emphasized that these homes would offer a higher level of support than assisted living but remain less restrictive than inpatient psychiatric settings. Each home would be defined by its residents' individualized treatment plans, including specialized monitoring and interventions. 4:14:35 PM DR. LAWRENCE moved to slide 10, Benefits of a CCRH, and stated that the benefits of establishing these home-like settings include improving care for Alaskans with complex needs without relying on overly restrictive environments. He explained that the bill adds a new license type for clinically appropriate residential settings and enables the development of specialized services through regulation. He concluded by emphasizing that this model enhances community safety in a compassionate, cost- effective manner by providing tailored care in the least restrictive environment. 4:15:40 PM CHAIR DUNBAR stated that he had heard strong support for the concept, noting that many see it as a valuable step-down option to transition individuals out of inappropriate facilities. He commented that the model echoes aspects of de- institutionalization policies from decades ago, with a focus on much smaller residential settings. He then asked whether the proposed license type is intended to be flexible enough to serve a wide range of individualsfrom children placed out of state to seniors exiting the correctional systemor if it would allow for specialized facilities within that license type to serve distinct populations. 4:16:50 PM MS. RICCI responded that the Department envisions specialized homes rather than mixed-population facilities, noting that although the term "complex care population" is used broadly, there are clearly distinct subgroups with differing needs. She gave the example of seniors with dementia and co-occurring conditions like schizophrenia or aggressive behavior, whose care needs differ significantly from youth returning from out-of- state treatment. She explained that the intention is to create separate homes tailored to specific populations. She added that aligning building regulations with existing facility types provides the state flexibility to adapt over time, allowing requirements to be updated through regulation as population needs evolve. 4:18:35 PM MS. RICCI moved to slides 11 -13 and reviewed the sectional analysis for SB 76: [Original punctuation provided.] SECTIONAL ANALYSIS Senate Bill 76: Complex Care Residential Homes Section 1. Amends AS 47.32.010(b) to add "complex care residential homes" to the list of entities regulated by the Department of Health. Section 2. Amends AS 47.32.900(2) to update the definition of "assisted living home" to exclude complex care residential homes. 4:19:15 PM MS. RICCI stated that the department is trying to delineate in statute the difference between assisted living homes and complex care residential homes. Assisted living homes are not meant to serve individuals under the age of 18 and do not have the multidisciplinary focus that is envisioned for complex care residential homes. Section 3. Adds AS 47.32.900(11) to modify the definition of "hospital" to clarify that it does not include complex care residential homes. 4:19:30 PM MS. RICCI said this ensures that hospital or facility requirements are not applied to complex care residential homes and emphasizes the focus on a home-like setting. Section 4. Adds AS 47.32.900(22) to introduce a new definition for "complex care residential home." It is defined as a residential setting that provides 24-hour multi- disciplinary care on a continuing basis for up to 15 individuals with mental, behavioral, medical, or disability-related needs requiring specialized care, services and monitoring. 4:20:17 PM MS. RICCI noted that the 15-bed limit aligns with a federal requirement. She explained that the Department is mindful of current and potential future federal rules as services and funding mechanisms are developed. At the federal level, she highlighted a prohibition on Medicaid coverage for institutions of mental disease, with an exemption available for facilities with 15 beds or fewer. Section 5. Amends the uncodified law by adding a new section that requires the Department of Health to submit for approval by the United States Department of Health and Human Services amendments to the state Medicaid plan or apply for waivers necessary to implement the provisions of Sections 1-4. Section 6. Amends the uncodified law by adding a new section specifying that sections 1-4 of the bill will only take effect if the United States Department of Health and Human Services approves the required Medicaid waivers or amendments by July 1, 2031. The commissioner of health is required to notify the revisor of statutes within 30 days once the necessary approvals are received. Section 7. Provides that sections 1-4 take effect the day after the United States Department of Health and Human Services approves amendments to the state plan or waivers submitted under Section 5. 4:21:51 PM MS. RICCI concluded the presentation. 4:22:05 PM SENATOR GIESSEL asked where the Department would find staff for the complex care residential homes. 4:22:15 PM MS. RICCI responded that workforce challenges exist across nearly all healthcare settings in the state and acknowledged that the Department does not yet have all the answers. She explained that many individuals with complex needs are already receiving care in various settingssuch as assisted living homes, inpatient facilities, or through the general relief programbut without the appropriate alignment of services, settings, and payment structures. She emphasized that staffing difficulties are closely tied to inadequate funding models that fail to reflect the intensity and acuity of care required. She stated that aligning payment with the severity of need, service complexity, and necessary staffing ratios is essential to supporting and sustaining an appropriate workforce for complex care residential homes. 4:24:08 PM SENATOR GIESSEL stated that she is aware personnel costs will be 50 percent federally funded, as noted in the fiscal notes. She expressed interest in the timeline for revising behavioral health reimbursement rates and emphasized the importance of completing that process before staffing begins. She noted that staff in complex care residential homes will likely require competitive compensation, given the intensity of care, and stressed the need for an appropriate pay scale. 4:24:47 PM MS. RICCI stated that rebasing for community behavioral health rates took effect earlier this year. She added that the Department is currently conducting a rate methodology review to evaluate whether behavioral health payment rates and rules align with service needs. She emphasized that the Department is actively responding to concerns from the behavioral health community about significant gaps between service demands and the payment structures available to support them. 4:25:38 PM CHAIR DUNBAR held SB 76 in committee.