HOUSE BILL NO. 187 An Act relating to the certificate of need program for nursing care facilities and other facilities; and providing for an effective date. Co-Chair Therriault advised that the committee substitute would provide for a "tighter" title. Representative Bunde MOVED to adopt work draft, 1-LS0708\D, Lauterbach, 5/6/99, as the version before the Committee. There being NO OBJECTION, it was adopted. Representative Bunde noted that he had been involved with the Long Term Health Care Task Force which spent much time discussing nursing concerns and costs related to nursing home facilities. He pointed out that the legislation would address the State's need for a nursing home facility. SHEILA PETERSON, STAFF, SENATOR GARY WILKEN, stated that Alaska has had a Certificate of Need (CON) law since 1976. The purpose of that law is to insure the development of an accessible, cost-effective health care system with quality service. Currently, the Department of Health and Social Services reviews all nursing home expansion projects with an estimated cost of over $1 million dollars. The review of each request is limited to factors of accessibility and quality in order to determine if the service is available and could be provided in a quality manner. Under the proposed legislation, a new standard of need would be adopted for nursing home CON requests. The revised standard allows decisions to be made based on additional criteria such as need, financial feasibility and availability of alternatives. Under the change, a new nursing home project would need to demonstrate cost effectiveness and appropriateness of the service. Ms. Peterson advised that the Department of Health and Social Services estimates that on the average, ten new nursing home beds would increase the Medicaid budget by about $1 million dollars annually. The decision to expand existing nursing home facilities has long-term implications to both the State treasury, senior citizens and those with disabilities. The legislation will give the Department of Health and Social Services the tools necessary to make informed decisions. Co-Chair Therriault pointed out that a primary concern is that the beds are eligible for Medicaid participation. If a facility over bills and has fixed costs, those costs are passed on to the State through Medicaid billings. The proposed method allows front-end participation. Representative Bunde recommended that it is financially advisable to limit the number of nursing home beds. The legislation would encourage more home and community care. Co-Chair Therriault referenced Page 4, asking if CON would continue to be in place for other medical facilities. Representative G. Davis asked how the proposed legislation would apply to HB 161. Co-Chair Therriault explained that Medicaid considerations are exempt from HB 161 because they are exempt from statute mechanisms addressing costs and the options list. JAY LIVELY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICESS pointed out that language had been included to clarify that existing standards would apply to acute care and that new standards will only apply to long term care. Mr. Lively commented that the Department strongly supports the legislation. In response to Representative J. Davies, Mr. Lively stipulated that some home care provided for individuals who would have been eligible through the nursing home component, would now be eligible through home and community based services. Waiver costs are considerably less than nursing home costs. The legislation provides for alternative use to the most expensive care. Representative Bunde pointed out that in order to be Medicaid eligible, a person would need to be impoverished. Representative J. Davies elaborated that it would ultimately be cheaper for those people to stay in their own homes. Representative Bunde noted that group would still require State payment. RICK SOLIE, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS MEMORIAL HOSPITAL, FAIRBANKS, spoke in support of the legislation. He reiterated that this bill is the product of the Long-Term Care Task Force recommendations and would also represent a good effort on the part of providers and users, to address future problems of a growing elderly population. LISA WOLF, (TESTIFIED VIA TELECONFERENCE), DIRECTOR OF PLANNING, PRIVIDENCE MEDICAL CENTER, ANCHORAGE, voiced support of the proposed legislation. Representative Kohring asked if a certificate would be required of all nursing care facilities which receive Medicaid funds. Mr. Lively replied that would be a portion of any nursing home cost. He added that the nursing homes in Alaska are primarily funded (about 85%-90%) by Medicaid. Care in this State is so expensive that most people can not afford to pay for it privately. Representative Foster MOVED to report CS HB 187 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 187 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by Department of Health and Social Services dated 4/26/99.