SENATE BILL NO. 199 "An Act providing for a two-year funding cycle for medical assistance coverage for dentures." 2:24:31 PM 2:24:55 PM AT EASE 2:29:50 PM RECONVENED SENATOR JOHNNIE ELLIS, SPONSOR, explained that the legislation would allow clients covered under the Medicaid Adult Preventative Dental program (APD) to get a complete set of upper and lower dentures in same fiscal year. He remarked that this would allow the client to "chew their food." The plan to divide the denture benefit into two fiscal years was adopted as a cost savings measure. He shared a personal story of a constituent's experience needing dentures under adult dental Medicaid that spurred his involvement with the legislation. He relayed that the constituent was distraught and contemplating suicide because he could not eat or speak clearly without teeth. Acquiring half a set of dentures was useless and prolonged his misery for an entire year. He believed that there will be a cost savings to the program with the legislation. 2:33:17 PM Representative Foster wondered what the intent of the original legislation was; to divide the denture benefit into two fiscal years. Senator Ellis restated that it was a cost containment measure intended to divide the benefit over fiscal years. He felt that overall the program was "great" and well intended but this aspect was not properly considered. He believed that this type of situation created public skepticism toward government and could be easily remedied to restore credibility. DR. DAVID LOGAN, DDS, DENTIST, ALASKA DENTAL SOCIETY (via teleconference), testified in favor of the legislation. He indicated that the program benefits all parties involved. The patient's dignity and quality of health would be restored. The dentist would deliver the denture service more effectively by performing the same procedures for a set of dentures once, rather than individually; that also reduces patient travel expenses for multiple visits from rural areas. The efficiency would create cost savings to the state. There would also be a preventative benefit by the removal of diseased and abscessed teeth before infection sets in and requires additional dental and expensive(i.e. emergency room visits) medical services; creating additional cost savings. Co-Chair Hawker cited the fiscal note for the Department of Health and Social Services, FN2 (DHSS), in the amount of $935 thousand for FY 2011. He noted that the expenditure decreases to $467.5 thousand in FY 2012 and is zero for the subsequent years. He wondered if the program has a sunset provision and asked for an explanation of the fiscal note. JON SHERWOOD, MEDICAID SPECIAL PROJECTS, DIVISION OF HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, answered that the sunset on the Adult Preventive Dental program had been eliminated. He furthered that the fiscal note reflects an initial anticipated increase in expenditures as APD provides both upper and lower dentures in the same fiscal year for the first two years. There will be patients receiving their second year denture along with new patients entitled to both dentures in the same fiscal year. The department feels that by the third year the program will have caught up with the initial impacts of the expanded benefit. 2:43:11 PM Co-Chair Hawker asked if the demand for the APD program was expected to decline. Mr. Sherwood replied that the fiscal note does not assume a decrease in the out years. Co-Chair Hawker recalled that in the early years of the APD program costs were overestimated. Co-Chair Hawker wondered if the same situation applied to the fiscal note. Mr. Sherwood explained that fiscal notes reflect the department's best reasonable estimate of costs. Representative Austerman asked what the original estimate of the program's cost was. Mr. Sherwood guessed that it was approximately $10 million. Co-Chair Hawker remembered that the original APD bill placed a limit on the aggregate amount of funds available for the program in a year. The aggregate cap was removed from the program when the sunset was eliminated. The utilization of the program was under anticipated costs at approximately $7.5 million, half of the amount was federal funds and half was general funds. Representative Austerman asked how much money is currently appropriated for the APD program excluding the fiscal note. Mr. Sherwood did not know. He wanted to clarify that the APD program included many other services besides dentures. 2:48:54 PM Co-Chair Hawker reported that the FY 2009 actual expense level was $5.9 million, and the FY 2010 total appropriation was $7.3 million. The FY 2008 governors request was $8.1 million. Representative Austerman felt that the department should know the amount currently appropriated in the budget for the program. Co-Chair Hawker agreed that the fiscal note request appeared speculative. Mr. Sherwood explained that the benefit is relatively new and the fiscal note amount was based on a best estimate of the legislations impact regardless of the base amount appropriated. Representative Gara observed that out of the $935 thousand fiscal note (FN 2 (DHS)) expenditure, $626.5 thousand are federal funds and $308.6 thousand are general funds. He discerned that the "upfront" additional cost for both dentures this year means the expenditures will be that much less next year. He felt that over the long term the same amount of money will be spent and the fiscal note was misleading; it only appears there will be extra costs. He deduced that the initial costs will be leveled out to a zero dollar increment over the long term. He surmised that the department should request additional funds for services provided this year but request less for next year. 2:53:46 PM Representative Kelly commented that he agreed with Rep. Gara that the increment "washes out" over time and supports the legislation. Co-Chair Hawker shared that he authored the initial APD bill because the only dental Medicaid services available for adults was for a crisis situation which the patient had to experience infection or acute pain. He felt that was a "barbaric" system. Representative Fairclough asked about differences of sixty percent and fifty seven percent in the federal match rate between FY 2011 and FY 2012 depicted on the fiscal note. Mr. Sherwood explained that the decline in the federal match rate in FY 2012 is due to the phasing out of the stimulus funds. Vice-Chair Thomas asked about the annual denture benefit limit in terms of lost dentures. 2:58:33 PM Mr. Sherwood answered that there is a dollar limit on the amount of annual dental benefit, if replacement dentures exceeds the limit a patient would have to wait until the second year. The annual monetary limit is only enough for an upper or lower denture. Co-Chair Hawker directed attention to the fiscal note, FN 1 (DHS) that was zeroed out in Senate Finance. He noted that the fiscal note had requested a personal services expenditure of $183.3 thousand for two full time employees. He cited a new fiscal note, from the department in the amount of $147.9 thousand dollars for one employee for one year. He asked for an explanation of the request. Mr. Sherwood indicated that originally the department thought that the claims processing system could not handle a two year spending limit and that claims would be processed manually. Subsequently, the department was able to come up with a programming solution. The new fiscal note reflects a request for $50 thousand to enhance the existing claims processing system or the new system that is currently being developed. The remaining amount is for one person to track and process authorizations until the new system can accommodate automated processing. The person will not be hired if the automated system is working. Co-Chair Hawker asked if the position should be classified as temporary on the fiscal note. Mr. Sherwood affirmed. Co-Chair Hawker noted that the new fiscal note will become number four when published and adjusted to reflect the position as temporary. Representative Fairclough informed the committee that dental issues contribute to the suicide rate in the state and she will support the bill. Co-Chair Hawker MOVED to report SB 199 out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SB 199 was REPORTED out of Committee with a "do pass" recommendation and with attached new fiscal note by the Department of Health and Social Services and previously published fiscal note: FN2 (DHS). 3:08:34 PM AT EASE 6:25:56 PM RECONVENED