HB 176-GROUND EMER. MEDICAL TRANSPORT PAYMENTS    3:54:44 PM CHAIR SPOHNHOLZ announced that the final order of business would be HOUSE BILL NO. 176, "An Act relating to medical assistance reimbursement for ground emergency medical transportation services; and providing for an effective date." 3:55:47 PM REPRESENTATIVE EDGMON moved to adopt the proposed committee substitute (CS) for HB 176, labeled 30-LS0705\J, Glover, 4/7/17, as the working draft. 3:56:08 PM CHAIR SPOHNHOLZ objected for discussion. 3:56:17 PM REPRESENTATIVE ZACH FANSLER, Alaska State Legislature, paraphrased from the Sponsor Statement [Included in members' packets], which read: "An Act relating to medical assistance reimbursement for emergency medical transportation services; and providing for an effective date." Emergency Medical Transportation Services (EMTS) relates to the emergency transportation of patients. For what is traditionally considered an ambulance ride, EMTS reflects Alaska's unique geographical challenges to include air, water, and other approved medical transport services. As it currently stands, Alaska's emergency medical service providers incur additional uncompensated costs when providing services to Medicaid beneficiaries, by as much as sixty percent. Reimbursement for ground emergency medical transportation services occurs when the providers submit a billing to the department (specifically to the Medicaid fiscal agent Conduent) for eligible services provided; the department reimburses the provider using the established Medicaid methodology and rate; the department submits documentation supporting the payment of the federal financial participation (FFP) to Centers for Medicare and Medicaid Services (CMS); and once it is approved, the department receives reimbursement for the FFP from CMS that amounts to the appropriate federal assistance percentage (FMAP). By enacting this legislation along with an amendment to the state Medicaid plan, public EMS providers are eligible to access enhanced federal funding for emergency medical transportation of Medicaid patients. The use of transfers is clearly authorized in federal statute and is both legal and useful. Further, CMS provides reimbursement for the administrative costs associated with administrating EMTS by as much as twenty percent. Anchorage, Juneau, Kenai, and Ketchikan, combined serve approximately forty-eight percent of the state's population. In 2015 (for Kenai) and 2016 for the others, these departments provided 7,035 transports to Medicaid patients, without EMTS, the departments received just $2.1 million in reimbursements; a total collective under-compensation of roughly $3.9 million. Were they EMTS eligible, they could have collected a total of $6 million. HB 176 would allow EMS providers around the state to collect underfunded costs from the effective date, providing a financial boon to those organizations and communities. Even smaller communities such as Bethel can see over a quarter of a million dollars in EMTS reimbursements per year. As you can see from the attached bill packet, there is widespread support for HB 176 throughout the state to help our local communities receive payments to actively cover the services they provide. 4:01:46 PM REPRESENTATIVE KITO asked if the entities that would be eligible for reimbursement had to meet any licensing or registration status. REPRESENTATIVE FANSLER replied that they did have to meet certain requirements. REPRESENTATIVE KITO offered his belief that there was a significance difference between ground and air ambulance transportation for how the services were provided and paid. He asked to better understand these cost and payment structures. REPRESENTATIVE FANSLER deferred to the Department of Health and Social Services and directed attention to the different codes for transportation [Included in members' packets]. 4:03:58 PM REPRESENTATIVE SULLIVAN-LEONARD asked how many people who used the ambulances paid cash or billed insurance. She asked if there was a large number of patients who used Medicare or Medicaid, hence the need for this proposed bill. REPRESENTATIVE FANSLER offered his belief that there was an average of 15,000 transports processed annually throughout the state. He opined that, in Bethel, there was flexibility in the municipal code to waive the fee for those who did not have insurance and were not a Medicaid recipient, rather than leave the patient behind. 4:06:32 PM REPRESENTATIVE KITO asked how the transport services were regulated as a designated carrier for emergency services, whether there was any licensing or affiliation with a medical facility. 4:07:14 PM MARGARET BRODIE, Director, Director's Office, Division of Health Care Services, Department of Health and Social Services, explained that the proposed bill was addressing government entities which provide these services. These providers would have to be a government entity, as well as a Medicaid provider. REPRESENTATIVE KITO asked how many communities this included, noting that several communities had both non-profit and for profit medical service providers. MS. BRODIE offered to research the exact number. REPRESENTATIVE KITO asked about the air ambulances. MS. BRODIE said that she did not know if any rescue units were run by municipalities or government entities. 4:09:01 PM REPRESENTATIVE SULLIVAN-LEONARD asked how many of the 15,000 annual transports were eligible for insurance reimbursement, Medicaid or Medicare reimbursement, or were self-payment. MS. BRODIE replied that she could only report on the annual amount of Medicaid paid for ground transportation, $50,362. She said she did not have the figures for private insurance or Medicare. 4:10:22 PM CHAIR SPOHNHOLZ removed her objection. There being no further objection, the proposed committee substitute (CS) for HB 176, labeled 30-LS0705\J, Glover, 4/7/17, was adopted as the working draft. 4:10:52 PM BILL HOWELL, Fire Chief, City of Bethel, reported that he had been with the department for 25 years and had been the fire chief for the past two years. He shared some of the challenges for providing emergency medical care in Bethel, and stated support for proposed HB 176. He stated that the proposed bill would have a positive, significant, and long-lasting impact on the Emergency Medical Service (EMS) providers. He shared that the Bethel Fire Department EMS call volume had increased by 10 percent over the past six years. He reported that the majority of funding to the City of Bethel was from local sales, lodging, and alcohol taxes, with the balance coming from community support and fees for services, including ambulance service. He declared that a recent analysis had shown that the ambulance service was losing about $972,000 per year, noting that Medicaid recipients were the largest users of the service in 2016. He reported that, as Medicaid paid an average of $455 per call toward an overall cost per transport of $1287, there was a heavy burden on the City of Bethel. He stated that the financial needs of the Bethel Fire Department were significant, pointing out that additional staff were necessary to cover the increased EMS call volume and that about $1.5 million was necessary to replace an aging ambulance, a 1980 tanker, and a 1980 ladder truck. He added that the fleet would frequently break down and not allow for response, as they did not have any back-up or mutual aid. He shared that there had been efforts to increase revenue, which included an increase in ambulance fees and close work with the third-party biller to ensure proper documentation for the services and reception of the maximum allowed. He said that funds were raised through the volunteer group and from grants for staffing and equipment. He added that the City of Bethel had also made capital requests to the Alaska State Legislature for a new tanker and ladder truck. He pointed out that the proposed bill would reimburse local EMS providers for the uncompensated costs of providing care to Medicaid recipients. He listed support for the proposed bill from the Bethel City Council, the Alaska Fire Chiefs, and the Bethel Fire Department. 4:15:02 PM ALEX BOYD, Assistant Chief, Anchorage Fire Department, emphasized that the scale of the issue was growing exponentially and was impacting the Anchorage Fire Department to an almost unmanageable level. He reported that there had been a 74 percent increase in transport for Medicaid recipients during the past year, resulting in an unrecovered cost of nearly $3 million. He stated that the proposed bill would provide a dramatic impact on the service to the municipality and would allow the department to improve its system delivery and its impact on the city. He noted that this current trend would result in unrecovered expenses of $3.2 million for more than 7,000 transports during the calendar year 2017. He said that Anchorage currently collected about $440 of the $926 fee. He pointed out that this significant impact on the budget brought challenges for the expansion of staffing to meet these growing needs. 4:18:12 PM RICHARD ETHERIDGE, Fire Chief, Juneau, Alaska, shared that Alaska had the most complex, diverse EMS delivery system in the nation, as there were challenges unlike most other areas, including the often high expenses for even getting to a patient. He reported that there had been an increase in demand for EMS services, which made it difficult for fire departments. He stated that the proposed bill provided the authorization to develop a program where local agencies could recover some of their costs for the provision of EMS. He acknowledged that the Medicaid Expansion had an impact on emergency services, noting that in Juneau the number of Medicaid patients transported had more than doubled. He added that the call volumes across the state were increasing, in Juneau there had been a 13 percent increase last year, an amount not uncommon across the state. He pointed out that Medicaid did not reimburse for all expenses, sharing that the average cost of basic life support transport was $1,680, of which Medicaid paid about $455. The balance due was absorbed by the fire department, the local community, and the tax payers. He reported that the program utilized funds set aside by the federal Medicaid program just for this purpose and was not tied to the Patient Protection and Affordable Care Act or Medicaid Expansion. He reported that the state could also collect administrative fees, up to 20 percent, an estimated $2.5 - $3 million back to the state. He estimated that this could put between $12 - $15 million into the local economies for fire departments. He shared that California was already setting up this program. He stated that Alaska relied heavily on the EMS, and that the proposed bill provided a foundation for first responders in local communities to recover "some of the desperately needed financial support and stability across the state." 4:22:36 PM REPRESENTATIVE SULLIVAN-LEONARD asked if the borough paid reimbursement of transportation services through local sales and property tax. MR. ETHERIDGE replied that fire departments were funded out of general fund or fire service area funds. REPRESENTATIVE SULLIVAN-LEONARD asked if implementation of the proposed bill would free funds from local taxation. MR. ETHERIDGE replied that this would be up to each municipality, although it would provide money back to the local municipalities. REPRESENTATIVE SULLIVAN-LEONARD asked how much this would be. MR. ETHERIDGE said that each community was different, stating that Anchorage could receive up to $4 million annually, Nome could receive up to $16,000 annually, and Juneau could receive between $600,000 and $1 million. 4:24:01 PM REPRESENTATIVE KITO reflected on the increase in calls statewide and asked what was driving this increase. MR. ETHERIDGE said that this was actively being researched. He mused that more people were eligible for health care and were no longer self-payers, and that, as it was more difficult to access primary care providers, more people came to emergency rooms and EMS for primary care. 4:24:45 PM REPRESENTATIVE JOHNSTON shared that she had read that the impact of Medicaid Expansion on emergency rooms had been far greater than anticipated. She acknowledged that emergency rooms were now being reimbursed, but that the desired policy was not happening. She asked if volunteer fire departments could also participate. MR. ETHERIDGE said that any fire department which was eligible to bill and did bill for EMS services could participate in the program. 4:26:28 PM SCOTT CLOUGH, AP Triton, Retired Fire Chief, explained that he was a retired assistant fire chief from Sacramento and was now a consultant with fire agencies looking to pursue this legislation. He pointed to his initial research in Alaska, which had identified 55 agencies eligible to participate in the program, including the university system and a health care district. He clarified that some public agencies had been identified as eligible to participate in the program, although it did not preclude that private enterprise also benefit. He said that municipalities which utilized the services of a private provider, as well as non-profit and volunteer agencies, could structure to use these revenues. He added that it was important to understand that this was an emergency medical transport bill tied to a federal cost structure for providing these services. He explained that provider programs, if related to the EMS, could count as a cost. He offered an example for Juneau investing in new extrication equipment, and a new squad for this equipment. Even though this was not a transport vehicle, it was a unit and equipment utilized for delivery of emergency medical services and could be rolled into the new cost of service for a draw down of federal funding. He said there were tremendous benefits to the communities and the Medicaid beneficiaries as it allowed for an opportunity to expand the services and recoup some of that investment. He declared that Alaska was unique, and it was important to include both land and air transport. 4:32:25 PM CHAIR SPOHNHOLZ announced that HB 176 would be held over.