HOUSE BILL 202 "An Act relating to the medical assistance program; and providing for an effective date." Co-Chair Therriault placed HB 202 in Subcommittee with himself as Chair and with members Representative Hanley and Representative Grussendorf. He requested the Department to present an outline of their concerns. KAREN PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, provided testimony addressing the issues of concern. (Tape Malfunction-for portion of tape HFC 97-111, Side 1). Commissioner Perdue noted that the Department has made a detailed list of the cost management activities which will produce necessary savings. Because of the number of claims and the volume, the Department cannot guarantee those savings. There has been discussion regarding a possible supplemental request. The Medicaid program is currently a large insurance program. There are about thirty-nine hundred Alaskan providers serving roughly seventy thousand patients per year and submitting 1.8 million claims. A small staff of employees and the contractor, co-located in Anchorage, manage that system on a timely basis. The program is run well as an insurance program. The Medicaid program is an entirely general fund supported program which either lapses money into the general fund or over expends. She commented that the margin of error has become increasingly more problematic as the program has gotten larger. The intent language details approximately $21 million dollars in cost savings which the Department will achieve next year. She reiterated that the Department is committed to making the savings. Commissioner Perdue advised that the options list had not been intended to be a tool placed in statute. All the options were not covered. The list was not meant to be a budgetary tool because the lag time needed to make changes to the program is at least six to eight months. She stressed that it would be important to remember that the program must be managed far in advance. Commissioner Perdue concluded noting that the providers 2 stability and the State's need to pay the bills is essential for the patients ongoing access. Co-Chair Therriault explained that it was his intent to have the medical assistance priority list rewritten, and that the Subcommittee would work on those concerns during the interim. HB 202 was HELD in Committee for further consideration.