HB 78-INCENTIVES FOR CERTAIN MEDICAL PROVIDERS 3:41:29 PM CHAIR KELLER announced that the final order of business would be HOUSE BILL NO. 78, "An Act establishing a loan repayment program and employment incentive program for certain health care professionals employed in the state; and providing for an effective date." [In front of the committee was CSHB 78, Version I, which had been adopted as the working draft by House Health and Social Services Standing Committee on March 8, 2011.] REPRESENTATIVE HERRON moved to adopt the proposed Committee Substitute (CS) for HB 78, 27-LS0147\D, Mischel, 3/11/11, as the working document. There being no objection, Version D was before the committee. 3:42:26 PM LIZ CLEMENT, Staff, Representative Bob Herron, Alaska State Legislature, explained the changes from Version I to the proposed Version D. She pointed out that Section 1 of Version I had been deleted, as it was found to be unnecessary. She directed attention to Version D, page 1, line 7, and said that it had been reworded to clearly reflect the loan repayment plan. She moved on in Version D, to page 3, lines 1-8, and explained that this now consolidated criteria for the employers matching payment from two places in Version I. 3:45:10 PM MS. CLEMENT, referring to Version D, page 2, line 19, established that a new (b)(9) had been added to direct the Department of Health and Social Services (DHSS) to include procedures for allowable leaves of absence for the providers participating in the program. Continuing to discuss Version D, she pointed to page 3, lines 11-30, which elaborated on the 12 year lifetime maximum for a medical provider program participant. She said that this allowed, after the initial three year period, for an additional three year cycle of participation in the program should the provider like to continue, and if DHSS agreed with the eligibility. She clarified that even if a participant was in the program for all six years, and then returned to school for further training, that they could return upon completion of this training for an additional three year period, with the possibility of another three year renewal. 3:47:21 PM REPRESENTATIVE SEATON, referring to page 3, line 15, asked if there was a limitation to the three year renewal period. MS. CLEMENT replied that the intent was for one initial period and one renewal period, for a maximum of six years within the first participation span. REPRESENTATIVE SEATON asked if this was the only mention for the maximum six year participation. 3:48:42 PM REPRESENTATIVE HERRON, in response to Representative Seaton, directed attention to page 3, line 27. MS. CLEMENT, directing attention to page 3, line 31 through page 4, line 4, declared that new language ensured that DHSS will have the capability to prorate loan repayments and direct incentive payments to providers for the percentage of the calendar quarter which they worked. She opined that it would most likely be in effect during the first and the last quarter of work. She confirmed that allowing payment on a calendar quarterly basis would add efficiency. 3:50:23 PM MS. CLEMENT indicated page 4, line 27, Version D, which now read "education loans held by or made to eligible tier I and tier II health care professionals..." She explained that this increased the eligibility for the loan repayment portion of the program to include loans other than those from the State of Alaska. She announced that consultant remarks to this idea had ranged from neutral to supportive. 3:51:22 PM REPRESENTATIVE SEATON asked for a reason to include the complexity of a loan repayment program, as opposed to an incentive payment which would allow the participants to pay the loans themselves. MS. CLEMENT replied that other states with similar programs had found that participants in loan repayment programs were sometimes exempt from federal income tax on this repayment. 3:52:32 PM MS. CLEMENT explained page 4, line 25, Version D, which added "and loan repayment amount, if any, under AS 18.29.025." She stated that this would allow the loan repayment participant to complete a three year cycle, and if the loan repayment had been completed, then to continue work for an additional three year cycle, if eligible, under the direct incentive program. 3:53:44 PM MS. CLEMENT, moving on to page 5, line 23, Version D, clarified that eligibility was determined by the approval of the application by the commissioner. 3:54:32 PM REPRESENTATIVE SEATON asked if the intent was for an applicant to submit an application which, after meeting all the criteria, could then be approved by the commissioner. MS. CLEMENT concurred. 3:55:06 PM MS. CLEMENT directed attention to page 6, line 2, Version D, and explained that eligibility for the loan repayment program was contingent on the applicant having an unpaid balance on one or more eligible educational loans, as verified by the Alaska Commission on Postsecondary Education (ACPE). 3:55:55 PM REPRESENTATIVE SEATON asked to clarify that ACPE would gather data and verify it to be an eligible education loan, even if the loan did not originate from ACPE. MS. CLEMENT agreed, and shared that ACPE had suggested this process. REPRESENTATIVE SEATON referred to page 5, line 30, noted the definition of eligibility for loan repayment, and asked if there was a definition for an eligible education loan. 3:57:43 PM MS. CLEMENT replied that proposed HB 78 did not contain a written definition for an eligible education loan, and she offered to supply one. 3:59:36 PM MS. CLEMENT reviewed page 6, line 6, Version D, and stated that this would allow DHSS to prioritize sites, and the physicians at those sites, for eligibility of participation in the program based on remoteness and/or a percentage of federal health care, Medicaid, or Medicare program beneficiaries. 4:01:26 PM REPRESENTATIVE SEATON asked if the prioritization was in conflict with the definition for eligible site on page 6, line 18-20. CHAIR KELLER requested that the question be held for later response. 4:02:24 PM MS. CLEMENT directed attention to page 6, line 31 through page 7, line 5, Version D, and shared that the words "licensed or exempt from licensure in the state" had been added to both definitions. She said that this would ensure the program was open to qualified, trained health care providers. She noted that Indian Health Services health care providers were exempt from licensure in the state. 4:03:42 PM MS. CLEMENT pointed out that a few grammatical changes with no impact had also been changed in proposed HB 78. 4:03:53 PM MARGARET SODEN, Pharmacist, Alaska Pharmacist Association, offered her belief that proposed HB 78 would encourage medical professionals to come to Alaska to work. She expressed her support of proposed HB 78. CHAIR KELLER closed public testimony. 4:07:02 PM REPRESENTATIVE SEATON, pointing to page 6, asked about the prioritization criteria and the criteria for site eligibility. He asked if the needs assessment and the employment statistics required for site eligibility would also be considered in the prioritization criteria. 4:08:42 PM MS. CLEMENT replied that this was not intended and she offered to clarify this section. She opined that the needs assessment would be included in the consideration for remoteness of site and the percentage of underserved patients. 4:09:35 PM CHAIR KELLER, referring to page 6, line 29, asked if it would be more appropriate for qualified employment to include not less than 70 percent of time on direct patient health care services, as opposed to 50 percent as currently written. REPRESENTATIVE HERRON agreed that there was room for clarification, but that smaller clinics required that a medical professional do more than direct patient services. 4:11:10 PM REPRESENTATIVE SEATON reminded the Chair of his earlier request for further clarification on eligible education loans. He referred to page 2, line 19, and asked for an explanation on the procedures for allowable leaves of absence. 4:12:39 PM REPRESENTATIVE HERRON asked that the DHSS respond to this. 4:13:02 PM CHAIR KELLER, indicating page 3, line 4, asked why the employer would not pay more than 50 percent of the combined incentive. 4:13:32 PM MS. CLEMENT replied that the value of up to 50 percent was a carryover from previous versions of the bill. She suggested that the percentage could be increased to match the ability of a facility to pay. REPRESENTATIVE HERRON relayed that the range could be as broad as 0 percent to 100 percent. CHAIR KELLER reflected that this was aligned with the needs assessment by the Commissioner of DHSS. 4:15:16 PM CHAIR KELLER moved to adopt Amendment 1, labeled 27-LS0147\D.1, Mishcel, 3/15/11, which read: Page 3, line 2, following "department": Insert "for deposit in the general fund" Page 3, line 10, following "department": Insert "from money appropriated for the purpose" Page 4, following line 6: Insert a new subsection to read: "(i) Direct incentive payments, loan repayments, and matching payments shall be made with funds appropriated by the legislature for that purpose." Page 4, lines 30 - 31: Delete all material. Reletter the following subsections accordingly. Page 5, following line 20: Insert a new subsection to read: "(c) If insufficient funds are appropriated in a fiscal year, the department shall prorate payments based on the number of approved participants in the program." REPRESENTATIVE HERRON objected for discussion. CHAIR KELLER clarified that this was not the conceptual amendment [Included in members' packets.] CHAIR KELLER, explaining proposed Amendment 1 and referring to page 3, line 1, asked if the "nonrefundable quarterly matching payments to the department" could be construed as either a tax or a dedicated fund. He suggested that "for deposit in the general fund" be inserted on page 3, line 2. 4:18:18 PM REPRESENTATIVE SEATON asked that if the money were paid to the general fund, would the funds then not be available until the legislature appropriated the money. CHAIR KELLER asked to leave the question open. 4:18:57 PM CHAIR KELLER opined that adding "from money appropriated for the purpose" following "department" on page 3, line 10 would better clarify it. 4:19:07 PM CHAIR KELLER, continuing his discussion of proposed Amendment 1, moved on to page 4, line 6, where he proposed to add a new subsection (i). 4:19:32 PM CHAIR KELLER suggested deletion of all the material on page 4, line 30-31. 4:19:51 PM CHAIR KELLER endorsed that proposed Amendment 1 add a new subsection (c) on page 5, following line 20. He suggested that proposed Amendment 1 answered Representative Seaton's question. 4:20:48 PM REPRESENTATIVE SEATON asked for an explanation for the proposal to delete lines 30-31 on page 4, and he asked if that had been deleted elsewhere. CHAIR KELLER, in response, explained that proposed Amendment 1 inserted a new subsection (i), on page 4, following line 6, as well as a new subsection (c) on page 5, following line 20. He confirmed that the proposed deletion had been from the loan repayment section, but was now included in the description of the entire program. 4:22:51 PM REPRESENTATIVE HERRON asked if deleting it from AS 18.29.025 and inserting it into AS 18.29.015 accomplished the same thing. He opined that the drafter of the amendment would not do something which they should not do. CHAIR KELLER replied that Legislative Legal and Research Services would need to answer that. 4:23:29 PM CHAIR KELLER announced that proposed HB 78 and proposed Amendment 1 would be held over. He offered to work with the bill sponsor on the amendment, and he asked Representative Seaton to further investigate the questions regarding leave of absence. 4:24:28 PM DIANE BARRANS, Executive Director, Alaska Commission on Postsecondary Education, offered her belief that it would be beneficial to include a definition for "eligible loans." She confirmed that similar definitions were contained in related federal loan repayment programs. 4:25:09 PM MS. BARRANS, in response to Chair Keller, said that she did not know about leave of absence. 4:25:35 PM CHAIR KELLER suggested that Representative Herron, as the bill sponsor, work with Ms. Barrans and Representative Seaton to formulate a definition. 4:26:04 PM REPRESENTATIVE SEATON asked about the quarterly repayment of loans, especially in conjunction with leaves of absence. 4:26:53 PM PAT CARR, Chief, Health Planning and Infrastructure, Division of Health Care Services, Department of Health and Social Services, explained that quarterly payments were more efficient. She agreed that a mid quarter entrance or departure to the program allowed the department to pro rate that quarterly payment, which would be the same for any unpaid leave of absence. REPRESENTATIVE SEATON clarified that payments for the calendar quarter defined when the payments were to be made, and that they would be prorated to the actual time. He established that unpaid leaves of absence were allowed under special conditions, such as an emergency or a medically necessity. [HB 78 was held over.]