SB 240-SCHOOL DISTRICT MEDICAL ASSISTANCE  3:51:51 PM CHAIR WILSON reconvened the meeting and announced the consideration of SENATE BILL NO. 240 "An Act relating to medical assistance coverage for rehabilitative, mandatory, and optional services furnished or paid for by a school district on behalf of certain children." 3:52:24 PM HEIDI HEDBERG, Commissioner, Department of Health (DOH), Anchorage, Alaska, introduced SB 240 on behalf of the administration stating it aims to improve access to school-based services for all Medicaid-eligible children. She explained that SB 240 supports access by removing statutory barriers. The bill offers convenient options for parents seeking care for their children, supports parent-directed services within the school setting, promotes early intervention, and eliminates obstacles that prevent schools from leveraging federal Medicaid matching funds. Additionally, it increases the flexibility for schools to seek Medicaid reimbursement for eligible children. 3:53:40 PM EMILY RICCI, Deputy Commissioner, Department of Health (DOH), Anchorage, Alaska, moved to slide 3 and provided a brief overview of school-based services in Alaska under the Medicaid program. She explained that these services, delivered in a school setting as specified in Alaska's Medicaid state plan, include speech-language therapy, occupational therapy, physical therapy, behavioral health, and nursing services. Currently, state law mandates that for a service to be Medicaid reimbursable for a Medicaid-eligible student, it must be outlined in the student's Individual Educational Plan (IEP), and the student must have a disability. 3:55:23 PM MS. RICCI noted that SB 240 would remove the requirement for these services to be covered under an IEP, thus broadening the scope of services for which schools can seek Medicaid reimbursement. She emphasized the challenges schools face in navigating Medicaid reimbursement due to their primary role as educators rather than healthcare providers. She mentioned that SB 240 addresses the administrative barrier of the statutory requirement that the service be covered under an IEP, but acknowledged that other challenges remain, which the department is prepared to help school districts overcome. She stated that currently, only six out of 54 school districts in Alaska leverage Medicaid reimbursement for services, including Anchorage, Delta Greeley, Fairbanks, Juneau, Ketchikan, and Matsu. Kenai participated until the 2019-2020 school year. She noted that speech, occupational, and physical therapy make up about 96 percent of the reimbursed services in schools. 3:57:10 PM MS. RICCI moved to slide 4 and began discussion of the Healthy Families Initiative. She expressed that SB 240 would increase access to care for students in a convenient location for parents, aligning with the governor's Healthy Families initiative, particularly focusing on Healthy Beginnings and healthcare access. 3:57:40 PM LEAH VAN KIRK, Deputy Director, Healthcare Policy Advisor, Department of Health, Juneau, Alaska, moved to slides 5 -6 and said SB 240 allows schools to seek Medicaid reimbursement for services provided to all children covered by Medicaid, enabling access to services in a familiar, daily setting. She emphasized that removing statutory requirements increases schools' flexibility to seek reimbursement when a child is eligible. The federal Medicaid match of 65 percent is crucial for schools, particularly when they already provide some services without seeking reimbursement. Additionally, SB 240 gives schools the option to offer services to children who previously couldn't access them, allowing decisions on service provision to include more children who may not have qualified before. 3:59:08 PM CHAIR WILSON noted that the federal match of 65 percent is a little higher than the usual 50 percent match for most Medicaid services. He asked who pays for the remaining 45 percent. MS. RICCI clarified that the federal match rate could vary between 50 percent and 65 percent, depending on the student's enrollment status, such as whether they are covered by the Children's Health Insurance Program (CHIP) or another Medicaid- qualifying status. She noted that the current system is cumbersome for both school districts and the Division of Healthcare Services. Currently, school districts pre-fund the state's match for services, which the Division then uses to draw down the federal match, passing both the federal and state funds back to the districts. However, under this system, districts must provide the state match upfront, which complicates the process. She mentioned that the presentation would later cover new federal options for Medicaid reimbursement, such as roster billing or a per-student-per-month mechanism, which could be reconciled quarterly, as potential solutions to these challenges. She added that many school systems have failed to leverage federal matching funds due to the complexity of the process. 4:01:25 PM CHAIR WILSON asked that during the presentation the Department discuss billing and why SB 240 has a zero fiscal note. 4:01:40 PM MS. RICCI explained that SB 240 has a zero fiscal note because the services are already available to Medicaid-enrolled children in community settings. SB 240 is removing an administrative barrier that would also make services available in a school setting. The anticipated slow increase in the utilization of school-based services is partly due to the need to resolve administrative challenges in creating a reimbursement system that works for both Medicaid and school districts. She mentioned that workgroups have been established, with the first meeting scheduled for next week, to begin discussions with school districts. Additionally, the Department is applying for a grant to cover implementation costs and necessary contractual support. She emphasized that SB 240 results in a cost shift from acute settings to more early intervention and prevention. Addressing students' needs before they become acute results in a cost shift rather than new costs to the system. 4:03:15 PM SENATOR DUNBAR agreed with Ms. Ricci's final statement, expressing hope that if the bill passes, an economics student or researcher will conduct a dissertation over the next 10 years to track potential cost reductions in other areas due to early intervention. He noted that Alaska is not the first state to implement this type of school-based, non-Individualized Education Program (IEP) dependent services, and it would be interesting to observe if there are downstream cost savings as Alaska joins other states in providing these services. 4:04:01 PM MS. VAN KIRK moved to slide 7 and emphasized that the SB 240 supports parents by providing another setting for their children to receive services, reducing the transportation challenges parents face, such as leaving work to transport their child to and from appointments. She highlighted the importance of this support, especially as children's re-engagement with health services has declined nationally since the pandemic. The Centers for Medicare and Medicaid Services (CMS) is working to increase flexibility for delivering school-based services and simplify the administrative process for schools to submit Medicaid claims. She also pointed out that children are more comfortable receiving services in the familiar school environment, which is beneficial for trauma-informed care. She clarified that the bill does not add any new services but gives schools the option, not a mandate, to submit claims for reimbursement through Medicaid. 4:05:51 PM CHAIR WILSON asked if SB 240 requires school districts to hire mental health professionals directly or can districts contract providers. 4:06:03 PM MS. VAN KIRK responded that services could be provided either by a school district employee or through a contracted provider. 4:06:17 PM MS. RICCI moved to slide 8 and reiterated the benefits SB 240 would provide Alaskans: [Original punctuation provided.] Families and Children  • Provides more convenient choices for parents seeking care for their children • Increases access to services for children • Promotes early intervention and prevention System Efficiencies  • Reduces administrative burden • Maximizes federal Medicaid match MS. RICCI added that early intervention and prevention were consistently emphasized during the Department's work on the behavioral health roadmap. She noted that there was a strong desire for increased school-based services in nearly every region visited, making this bill responsive to stakeholder feedback. She reminded the committee that there are administrative burdens that involve process issues that need to be worked through, such as figuring out how to apply the new Medicaid flexibilities to the current system in a way that provides flexibility to school districts in Alaska. It also provides opportunities to maximize federal matching funds. 4:07:29 PM MS. VAN KIRK moved to slide 9 and noted that new flexibilities were released in May 2023 to encourage schools to claim reimbursement for school-based services. She mentioned that 25 states have updated regulations and statutes to allow reimbursement for services beyond those included in an Individualized Education Program (IEP). She emphasized the state's efforts to connect with stakeholders, including schools, behavioral health organizations, current service providers, and the Department of Education, to identify effective systems and reduce the administrative burden currently limiting participation. With only six school districts currently submitting Medicaid reimbursement claims, the goal is to increase that number, which will take work and require stakeholder engagement. 4:08:57 PM MS. VAN KIRK announced the initiation of a stakeholder engagement process, with the first meeting scheduled for Friday, involving various organizations, divisions, and departments. The state is also applying for a grant from the Centers for Medicare and Medicaid Services (CMS) to support the implementation of school-based services, with a focus on ensuring rural communities can participate. She highlighted concerns about small rural school districts navigating Medicaid and mentioned that the state is exploring models from other states to address these challenges. She reiterated that school-based services were identified as essential in every region during the behavioral health roadmap process and stressed that Medicaid-reimbursable services are a critical component, though not the complete solution, in meeting the needs of youth across the state. 4:10:41 PM CHAIR WILSON asked what the cost to the state is if the grant for starting up the program is not awarded. MS. VAN KIRK explained that the grant provides an opportunity to explore improvements, such as data systems that would enhance schools' ability to submit claims to Medicaid. She described it as a chance to envision and build a more effective system than the current one. She noted that stakeholder engagement and support for this bill were already planned before the grant's release, and consultation support has been engaged to guide the process. 4:11:43 PM MS. RICCI stated that the grant would enhance conversations and bring sophistication to healthcare systems as the department enters the planning phase. However, she assured that even if the grant is not awarded, department staff will continue to support stakeholder engagement, planning, and implementation for school- based services. 4:12:31 PM CHAIR WILSON inquired about the dollar amount of the grant. MS. VAN KIRK replied the grant is $2.5 million over three years. 4:12:47 PM CHAIR WILSON raised concerns about the challenges small healthcare providers, such as independent Licensed Professional Counselors (LPCs), face when billing Medicaid, particularly due to frequent audits. He acknowledged that technical assistance is often provided but questioned whether the state is considering setting up its own billing and claims management service for school districts. He noted that managing billing and denials is a significant resource burden, especially for small clinics, and suggested that a state-supported service could alleviate this burden. He emphasized that while larger districts or third-party providers might manage these tasks efficiently, smaller rural districts might struggle, highlighting concerns from these districts and the need for stakeholder engagement. MS. VAN KIRK stated that stakeholder engagement would address the concerns raised, including topics like billing and Medicaid services. She confirmed that school districts participating in Medicaid billing would help guide the work and contribute to related discussions. 4:14:12 PM MS. RICCI discussed the new flexibilities released by the Centers for Medicare and Medicaid Services (CMS) in May of the previous year, which other states are expanding upon. These flexibilities address the challenges school districts face with traditional Medicaid billing, such as managing billing, denials, and authorizations. She mentioned that some of these flexibilities include waiving the requirement for Medicaid to pursue third-party liability for school-based services, allowing for a larger error rate, extending time for time studies, and exploring alternatives to direct billing, such as a per-pupil- per-month mechanism or roster-based services reconciled quarterly. MS. RICCI emphasized that the department would work with school districts to apply these theoretical flexibilities to their practical needs. She acknowledged the challenges, such as managing documentation and tracking in a roster-based system and expressed optimism that these CMS flexibilities could be translated into a system that is not administratively cumbersome for school districts. 4:16:04 PM MS. RICCI moved to slide 11 and said SB 240 is relatively simple and the sectional analysis has one section: [Original punctuation provided.] Sectional Analysis Section 1  This section removes the requirement that Medicaid services provided in a school setting are limited to those covered under an Individual Education Plan (IEP). 4:16:51 PM CHAIR WILSON expressed a potential concern regarding SB 240. He noted that the bill allows school districts to provide behavioral modification services within the school setting, which might enable schools to bypass the Individualized Education Plan (IEP) process. He pointed out that students on IEPs have a different funding mechanism, with a differential rate of 13 to 1. He questioned whether school districts might opt to avoid the IEP process to access services through the program, which could result in less funding for those schools. 4:17:57 PM MS. VAN KIRK recommended the question be deferred to the Department of Education and Early Development (DEED). She noted that stakeholders have mentioned that children referred for services, such as speech therapy, often do not meet the required level of acuity for those services to be provided in the school setting. She explained that SB 240 would allow and improve access to services for children who currently do not meet that level of need. 4:18:38 PM DEBORAH RIDDLE, Operations Manager, Division of Innovation and Education Excellence, Department of Education and Early Development (DEED), Juneau, Alaska, explained that there are different levels of funding for special education. Intensive special education funding is allocated for students with the most significant disabilities at a rate of 13 times the base student allocation, but most students do not fall into this intensive category. She indicated that allowing students who do not qualify for an IEP to receive needed services would not constitute bypassing the IEP process. CHAIR WILSON asked if there is a difference in the funding rate for students who are not classified at the intensive level of special needs compared to those who are. 4:19:35 PM MS. RIDDLE replied no, they're counted as special education students. That is one of the multipliers. However, the 13 times the base student allocation applies only to students who are two standard deviations away from the norm for their specific disability. CHAIR WILSON asked if there is a multiplier for a special needs child who qualifies for an IEP. MS. RIDDLE replied that is true. 4:20:07 PM CHAIR WILSON asked whether the availability of an easier process for obtaining services might result in fewer children being placed on IEPs, given whatever the rate multiplier is for those children. MS. RIDDLE explained that the Individuals with Disabilities Education Act (IDEA) has specific rules for identifying children and the services provided through an IEP. She offered to follow up with more detailed information but suggested that services like speech therapy would still be provided through an IEP. However, if additional services are needed, such as in the case of her autistic grandson who receives both in-school and outside services, it would be beneficial if all services could be provided within the school setting. She used this as a scenario to illustrate the potential benefits. 4:21:05 PM CHAIR WILSON clarified that his question focused on simpler behavioral health modifications for which some children have IEPs. He noted that the IEP process is not easy to administer, especially in schools with limited resources. Drawing from his experience as a substitute teacher, he observed that teachers often spend significant time on IEP conferences and related tasks, sometimes wishing they could instead focus on teaching while other professionals provide the necessary services. He asked how SB 240 might address the administration of such services to ease the burden on teachers. 4:21:44 PM SENATOR DUNBAR said he found the IEP question intriguing and shared his limited experience with a different school district where too many IEPs were issued, sometimes inappropriately, as a pressure release valve for the district. He clarified that this experience was outside of Alaska and hoped such practices would not occur in Alaska. 4:22:14 PM SENATOR DUNBAR commented on the drafting of SB 240, noting that issues can arise with non-exhaustive lists in legislation. He suggested that in Section 1, line 6, rather than using the phrase "including a child with a disability," it might be clearer to simply delete "with a disability." This change would avoid implying that only children with disabilities are eligible for the services, aligning with the bill's intent to make services available to any eligible child. He clarified that while this was just a drafting note and not significant enough to propose an amendment, he wanted it on record to ensure the correct interpretationthat any eligible child, with or without a disability, can access these services. He asked if he was misinterpreting the intent of that line. 4:23:23 PM MS. VAN KIRK replied that Senator Dunbar was not misinterpreting line 6. SENATOR DUNBAR sought confirmation that deleting the phrase would have had the same effect. 4:23:34 PM MS. VAN KIRK explained that the phrasing in the drafting was intentional to avoid any unintended impact on children with disabilities. The goal was to clearly reference both children with and without disabilities, ensuring that the bill does not negatively affect any existing guidelines or protections for children with disabilities. SENATOR DUNBAR asked for clarification, emphasizing that the dispositive point is whether the child is eligible for the services, regardless of whether they have a disability. He sought confirmation that eligibility, not the presence of a disability, is the key consideration. MS. VAN KIRK replied that is correct. 4:24:24 PM CHAIR WILSON opened public testimony on SB 240. 4:24:49 PM TREVOR STORRS, President, Alaska Children's Trust, Anchorage, Alaska, testified in support of SB 240, which would expand school-based services to all Medicaid-eligible children. As an organization focused on preventing child abuse and neglect, he emphasized that SB 240 would promote the health and well-being of Alaska's children by providing families with better access to healthcare resources, reducing the risk of abuse and neglect. SB 240 aligns state law with federal guidance, allowing schools to be reimbursed for services provided to all Medicaid-eligible students, not just those with an IEP. This expansion supports parent directed services within the school setting, early intervention, prevention, and increased healthcare access, which are vital for Alaska's children and families. 4:27:08 PM CHAIR WILSON closed public testimony on SB 240. 4:27:31 PM MS. RICCI thanked the committee for hearing SB 240. 4:27:59 PM CHAIR WILSON [held SB 240 in committee.]