HB 260-MEDICAID: PREVENTIVE CARE/DISEASE MGT.  3:09:51 PM CO-CHAIR HERRON announced that the next order of business would be HOUSE BILL NO. 260, "An Act relating to preventive care and disease management services for medical assistance recipients; and providing for an effective date." 3:11:14 PM JIM POUND, Staff to Representative Wes Keller, Alaska State Legislature, introduced HB 260 and said "health care by way of prevention would save the state money in the long run. By detecting an acute disease early in the process, the disease can either be stopped or possibly reversed." He stated that the preventative care costs could save money without cutting services. He explained that this would apply to Medicaid recipients. 3:12:54 PM REPRESENTATIVE T. WILSON asked if the state would pay for this or was it in addition to Medicaid. MR. POUND replied that it was a part of Medicaid but that the state would pay for the preventative aspect. He allowed that there would be an increase in upfront costs, but that early prevention and early detection would balance the long term costs. 3:13:46 PM REPRESENTATIVE T. WILSON asked what the cost would be. 3:14:17 PM CO-CHAIR KELLER shared that the bill was not yet in its final format. 3:14:46 PM REPRESENTATIVE SEATON asked to clarify that the preventative care was 100 percent state funded for Medicaid recipients. MR. POUND agreed. REPRESENTATIVE SEATON pointed to page 2, line 11, and read from subsection (d): "The department shall evaluate the projected and actual savings…" and he asked if the referenced annual report would be on the savings and not on the cost. MR. POUND agreed. 3:15:38 PM REPRESENTATIVE CISSNA reported reading that other states had waivers for preventative work, and expressed her delight. She said "this is pioneering." 3:16:13 PM CO-CHAIR KELLER moved to adopt the proposed Committee Substitute (CS) for HB 260, Version 26-LS1128\R, Mischel, 2/4/10 as the working document. Seeing no objection, it was so ordered. 3:16:43 PM REPRESENTATIVE HOLMES asked if the changes had been explained. 3:17:11 PM CO-CHAIR HERRON replied that testimony would be taken first. 3:17:48 PM BILL STREUER, Deputy Commissioner, Director's Office, Division of Health Care Services, Department of Health and Social Services, said that Medicaid expenses would continue to rise and he announced that there needed to be "a better, smarter way to do things." He stated his mantra: "the right care, the right time, the right place, for the right people, at the right price." He offered a basic primer to activities that would fit into this bill. 3:19:04 PM MR. STREUER compared programs for preventive care: the medical home program; all inclusive care for the elderly (PACE); expanded coverage; and, pricing and rate strategies. He stated that he would only speak about the first two programs. The first program, the medical home, was a managed care program which included: physician directed medical practices; a whole person orientation, focusing entirely on the person and their particular health conditions, needs, and wants; integrated and coordinated care; quality and safety; and enhanced access. He shared that the medical home program had been around since 1967. He estimated that it would save $67 billion each year. In 2007, the principles of the patient centered medical home were released: a personal physician, with an ongoing relationship with the individual; physician directed medical practices for the team responsible for care; and whole person orientation, to include all the patient's health care needs. He described this gateway for an individual to receive care to include quality and safety, care planning, evidence based medicine, clinical decision support, and performance measurement. He spoke about open scheduling, which included expanded hours and new communication techniques, on-line and blackberry to blackberry. He stated that the payment needed to be appropriate to the providers. He shared that the Centers for Disease Control (CDC) had concluded that continuous enrollment of children in medical homes resulted in higher vaccination rates, and that medical homes provided better access, improved communication, better satisfaction, reduced duplicate procedures, and lower medical errors. He stated criticism of medical homes to include: a potential shifting of financial and other resources with adverse affects on sectors of the health care system; access to vision care may be restricted; and careful consideration was needed for the role of non-physician providers. He opined that the medical home model needed to take into account all the health care needs of the individual. He opined that the startup costs would be minimal and could be accomplished with existing staff. He reported the necessity of a project coordinator, and that a pilot project with the Indian Health Services should be initiated no later than January 1, 2011. 3:24:40 PM MR. STREUER detailed the Program of All Inclusive Care for the Elderly (PACE), and stated that it was provided by non-profit or public entities. He listed the requirements to include: regulation by the Centers for Medicare and Medicaid Services (CMS), a governing board, a complete service package, a defined service area, safeguards against conflict of interest, and participants must be at least 55 years of age with a need for nursing facility level of care. He expressed that all Medicaid and Medicare services plus 16 additional services had to be provided. 3:26:47 PM REPRESENTATIVE CISSNA asked if the PACE program was structured for rural Alaska. 3:27:30 PM MR. STREUER replied that the PACE program was an urban service model. REPRESENTATIVE T. WILSON asked if this was a new program. MR. STREUER replied that it was a new program in Alaska. REPRESENTATIVE T. WILSON asked what the program would cost. MR. STREUER opined that there would not be an increase in costs over the currently provided services. 3:28:32 PM CO-CHAIR KELLER asked if there was a pilot program for the medical home model. 3:29:13 PM MR. STREUER expressed a desire to develop a program with the community health centers. CO-CHAIR KELLER asked about a timeline for the PACE program, and he offered any help necessary from the committee. MR. STREUER offered his belief that contacts with CMS would begin shortly to initiate the pilot program. 3:30:09 PM REPRESENTATIVE SEATON asked if the wait list for Medicaid waivers would affect the program. MR. STREUER replied that the wait list was for individuals, and that this was a different waiver request. 3:31:41 PM WARREN TODD, Executive Director, International Disease Management Alliance, spoke about his background. 3:34:35 PM MR. TODD said that there was a wealth of experience from the Lower 48 for Alaska to draw on, though it was difficult to decipher. He expressed the difficulty for measuring performance of the programs. He stated that the costs of the programs have been too high as they have been delivered through for-profit organizations. He reflected that management of disease prevention and wellness programs had devoted attention to the current problems of the elderly. He opined that disease management programs had a greater chance to demonstrate economic savings in the short term. 3:37:50 PM MR. TODD shared that the disease management industry would soon expand into prevention and wellness programs. He expressed concern for the core issue that chronic disease was viewed as a medical problem, although it was a social problem, and could not be solved in the medical infrastructure. He expressed his desire for newly designed state programs to address the social issues. He recommended that it was necessary to design medical, social, and economic programs for "the very, very specific and unique needs of your populations throughout your state" in order for there to be any benefit from the programs. 3:40:50 PM MR. TODD, in response to Representative Cissna, said that obesity was a global epidemic. 3:42:45 PM REPRESENTATIVE CISSNA opined that these programs required creativity. MR. TODD agreed. 3:43:44 PM REPRESENTATIVE T. WILSON asked if these PACE management home programs had been offered by the private sector. MR. TODD hesitantly said yes, and referred to the Medicare program to implement the MHS pilot programs for the elderly, which were discontinued. He proposed that it was most important to have an understanding of why these failed. REPRESENTATIVE T. WILSON asked if any there were any successful privately run programs. MR. TODD said that 2 or 3 of the pilot programs generated results which exceeded expectations, a net 5 percent savings. REPRESENTATIVE T. WILSON asked for Mr. Todd to forward a list of these programs. 3:46:42 PM SHELLEY HUGHES, Government Affairs Director, Alaska Primary Care Association (APCA), declared this to be the best bill in the building. She explained that the APCA mission was to promote health care access to all Alaskans, with a focus of support to primary care and safety net providers for underserved and low income populations. She detailed that APCA was the regular source of primary care for 23 percent of the Medicaid population. She pointed out that APCA represented the community health centers which she determined would become the patient centered healthcare home models, and noted that the patient would be personally involved with their own care. She stated that the community health centers were non-profits in the private sector, and that APCA would partner with the state as a solution. She relayed that data from other states indicated a 10 -33 percent savings when Medicaid patients use a health center as the regular source for primary care. She opined that although the savings may not be that high for Alaska, even a 3-5 percent savings on the 2029 projected Medicaid budget of $3.5 billion would be millions of dollars. She stated that this was "a very good bill." She pointed to page 2, and stated support for an annual report as accountability was an important aspect of the bill. She emphasized the importance of disease management and the cost savings generated by prevention. 3:51:34 PM CO-CHAIR KELLER said that this was "an idea whose time has come." He summarized that PACE, medical home, and disease management were ways to improve the quality of life and save money. 3:52:59 PM [HB 260 was held over.]