HJR 20-MEDICAID EXPANSION  3:08:49 PM CHAIR SPOHNHOLZ announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 20, Urging the United States Congress and the President of the United States to maintain health insurance coverage for individuals currently covered by Medicaid expansion. 3:09:04 PM REPRESENTATIVE JUSTIN PARISH, Alaska State Legislature, paraphrased from the Sponsor Statement for HJR 20, which read as follows [original punctuation provided]: This resolution urges our United States Congress and the President of the United States to maintain the Medicaid Expansion to cover individual health insurance coverage. Health care is an essential service for our residents. Health care coverage also benefits employers as healthy employees are more productive. Alaska has the second highest rate of residents without health care in the nation. This expansion has provided coverage to more than 31,000 Alaskans who would otherwise not be covered. As of March 31st, 2017, Alaska has received $413 million total payments made under the expanded program reducing the number of uninsured people visiting emergency rooms and providing necessary funding for behavioral health treatment and treatment for substance abuse. I would appreciate your support for this resolution to maintain the federal funding for Medicaid Expansion. REPRESENTATIVE PARISH pointed out that Alaska had the second highest rate of residents without health care in the United States. 3:11:55 PM REPRESENTATIVE SULLIVAN-LEONARD asked how much money the State of Alaska had paid in order to receive the federal funding for Medicaid Expansion. 3:12:27 PM LISA WORL, Staff, Representative Justin Parrish, Alaska State Legislature, replied that the state match was five percent of the total amount. She added that the Alaska Native population had additional coverage through the Indian Health Service (IHS) at 100 percent. REPRESENTATIVE PARISH noted that for every $1 the state paid, there was a federal match of $19. 3:13:07 PM REPRESENTATIVE SULLIVAN-LEONARD asked if the recent changes to the Patient Protection and Affordable Care Act would have any effect on Alaska. REPRESENTATIVE PARISH offered his belief that Alaska may be moving toward a per capita allocation of funds, which he deemed as not good for Alaska given the disproportionate health care costs and other systemic challenges in the state. REPRESENTATIVE SULLIVAN-LEONARD asked for more explanation to the per capita allocation. REPRESENTATIVE PARISH explained that each state might be allotted a certain amount of funds in proportion to its population rather to than the actual economic and health needs of the state. 3:14:35 PM REPRESENTATIVE JOHNSTON directed attention to page 2, line 11, of the proposed resolution, and read: "the state spends the second lowest percentage of state funds on Medicaid." She asked about the source of this information. MS. WORL deferred to the representative from the Department of Health and Social Services. REPRESENTATIVE JOHNSTON asked about the reduction to uncompensated care through Medicaid Expansion. She reported that although the projection had been for Medicaid expansion to reduce the expensive emergency room care and allow for more preventative care, nationally and in Alaska emergency room care had increased. She declared that the policy was not matching the outcomes. She added that it was not just an increase to emergency room usage but also to emergency room transport. She expressed her concern with the statement on page 2, line 13. 3:16:28 PM REPRESENTATIVE PARISH directed attention to page 2, line 13, which read: "Whereas Medicaid expansion has reduced uncompensated care provided by Alaska hospitals by tens of millions of dollars, which helps reduce costs to all patents," and stated that this did not directly address the issue to which Representative Johnston had referred. He opined that although there was a higher overall use of emergency facilities, previously people would have stayed home and "duct taped over the injury." He stated that 31,000 more people, if an emergency room visit was necessary, would now have some sort of funding instead of receiving uncompensated care. He added that most bankruptcies in the country were the result of medical debt. 3:18:28 PM TOM CHARD, Executive Director, Alaska Behavioral Health Association, explained that the Alaska Behavioral Health Association was a group of leaders from about 60 mental health and drug and alcohol treatment centers across the state. He shared his experience from both before and after Medicaid expansion in Alaska. He said that prior to September 2015, and Medicaid expansion in Alaska, in order to qualify for Medicaid an individual had to fall into one of several different categories, which included: had a child or dependent; or, was deemed to be disabled, which was often a designation through the social security administration. He explained that for people with mental illness, it was necessary to present paperwork to the social security administration to initiate the process to be deemed disabled in order to qualify for Medicaid. For individuals with substance abuse disorders, as the social security administration did not consider this a qualifying disability, it did not make any difference whether a person was poor or disabled. Consequently, there were many people who could not access care, even as the grant system attempted to "put a patch on that" with the use of unrestricted general funds. He pointed out that the effects of untreated behavioral health disorders were "really pressing our system." He explained that Medicaid expansion offered some resources to these individuals to allow access to treatment and care and that although the system was gearing up to provide that access to treatment, it was a heavy lift to transition a system which was financed by grants to a system which was reimbursed by Medicaid. He declared that his group was very supportive of Medicaid expansion because the people who had needed treatment all along could now get access to the necessary treatment. He added that this was keeping families together and keeping people out of the public safety and criminal justice system. He moved on to discuss the national vote regarding the Patient Protection and Affordable Care Act and discussed the opioid crisis and the pandemic problems in the state with alcohol, drugs, and untreated mental illness. He emphasized that there was a "very high degree of uncertainty hanging out there right now." He explained that many individuals had not had access to treatment for years, and now that they had access, it was unknown for whether there would be continued access. He acknowledged that there were things in the Patient Protection and Affordable Care Act that were not working and suggested to fix those things and keep the things that were working. He emphasized that Medicaid expansion was working phenomenally well, especially in Alaska, and he expressed hope that people would receive the care and treatment needed. He stated support for the proposed resolution. 3:25:28 PM REPRESENTATIVE JOHNSTON asked if, once someone received a social security disability, they could return to work. 3:25:34 PM MR. CHARD spoke about a program that attempted to get individuals the necessary benefits counseling, so they could return to work. He said there were therapeutic benefits to work. REPRESENTATIVE JOHNSTON asked about the outcomes for behavioral health in those states that began Medicaid expansion before Alaska. She declared that the problems with behavioral health and homelessness were expanding nationally and asked if any states were "doing it well." MR. CHARD offered his belief that Department of Health and Social Services had done an amazing amount of work on reform of the behavioral health system to meet some of the gaps. He declared that Medicaid expansion was a huge support. He reported that some states were ahead, and that Alaska was studying the health care service delivery systems of other states. REPRESENTATIVE JOHNSTON asked if Alaska was reviewing both states with and without Medicaid expansion in its search for best practices. 3:28:11 PM MR. CHARD said that his group was conferring with associations in the other states, always asking for what could be done with the available resources. He stated that Medicaid expansion offered more available resources. In reference to an earlier question from Representative Sullivan-Leonard, he pointed out that the essential health benefits included in the Patient Protection and Affordable Care Act specifically called for access to mental health and substance abuse treatment. He said that current amendments to the Patient Protection and Affordable Care Act would allow states to option out of or define as they desire the essential health benefits. He asked that everyone consider the impacts on access to mental health and substance abuse treatment services, and what that essential health benefit does for the people in the state. 3:30:07 PM CHAIR SPOHNHOLZ shared her background while working with the Salvation Army programs, and the difficulty for expanding when necessary. She stated that Medicaid expansion met the needs and asked what it could mean to those who need these services if the program was cut back. 3:31:04 PM MR. CHARD stated that as substance abuse was a grant-based treatment system, it had been realized early on that significant federal resource to pay for the same services would help the state with budget problems by reducing the use of unrestricted general funds. He declared that should Medicaid expansion vanish, there would again be a reliance on the grant-based system, currently reduced because of the new resource. He said that the grant reduction had necessitated a need to identify priority populations and that even some of the providers had to limit their referral sources. 3:33:04 PM CHAIR SPOHNHOLZ mused that a contraction of Medicaid expansion would necessitate an increase of the unrestricted general funds contribution. MR. CHARD expressed his agreement. Without a rebalancing of resources, even when pulling out the high-risk pool, there would be increased pressure in the emergency departments, prisons, and other places where unrestricted general funds were spent. 3:34:21 PM VALERIE DAVIDSON, Commissioner, Office of the Commissioner, Department of Health and Social Services (DHSS), relayed that the proposed resolution encouraged the continuation of the Medicaid expansion program, and she shared more details about the program and the experience with it in Alaska. She reported that there were 32,958 Alaskans covered under Medicaid expansion, about 4.48 percent of the state population. She stated that about $445 million in claims had been paid for services in the following areas: $126.4 million for inpatient hospital services; $81.4 million for outpatient hospital services; $109.7 million in professional and clinic services such as specialists; and $30 million in behavioral health services, which included mental health and substance use disorder treatment services. She declared that behavioral health coverage was critical to the criminal justice reform efforts. She added that the claims also included $45.6 million in prescriptions and $20 million in medically necessary travel, which ensured that Alaskans without access to a specialist in their community could be cared for in the next closest community. COMMISSIONER DAVIDSON spoke about the match rate for Medicaid expansion and explained that states which had expanded beginning on January 1, 2014, enjoyed three full calendar years at 100 percent federal match. Beginning in calendar year 2017, the federal match was 95 percent, and the state paid 5 percent. In calendar year 2018, the federal match was 94 percent; in calendar year 2019, the federal match was 93 percent; and in calendar year 2020, the federal match would become 90 percent. She stated that for 2017, although the federal match was 95 percent, the effective state match rate was 3.26 percent because for Indian Health Service (IHS) beneficiaries who were also Medicaid beneficiaries and received services through an IHS facility, the federal match was 100 percent. She reminded the committee that Governor Walker had negotiated an agreement to change the tribal claiming policy and allow 100 percent for travel policy and services which began in an IHS facility but were referred to a non-tribal facility to extend that level of care. She reported that in the current fiscal year, the general fund savings for Alaska had been about $32 million. 3:39:51 PM REPRESENTATIVE SULLIVAN-LEONARD asked about the Medicaid rewrite, and mused that the overall savings would be about $400 million. She noted that as there would be a decrease in federal funding, there would be an increase in state funding. 3:40:36 PM COMMISSIONER DAVIDSON asked to continue speaking about Medicaid expansion and then come back to this question. 3:40:53 PM CHAIR SPOHNHOLZ asked if the committee could hold its questions. 3:41:08 PM COMMISSIONER DAVIDSON added that Medicaid expansion had infused a significant amount of cash into the Alaska economy, almost $445 million most of which was federal dollars. She noted that this had a significant economic impact with a benefit to every community in which health care was provided. She relayed that the biggest beneficiaries of this economic boost were Anchorage and the Matanuska-Susitna area. She reported that the current administration had declared that Medicaid expansion and reform move forward hand in hand, as the additional federal resources from Medicaid expansion provided a cushion for providers to do things more creatively. She shared that currently there were significant gaps in the behavioral health care system, and that over the past year, Department of Health and Social Services had been engaged with providers and stakeholders to develop a new way to provide behavioral health services in Alaska. She stated that more flexibility was desired, as some of the current rules did not provide the flexibility which Alaska needed. She reported that Department of Health and Social Services was negotiating for a 1115 waiver with the Centers for Medicare and Medicaid Services, which would provide this flexibility. She stated that Alaska had been challenged by a rule called the Institutions for Mental Disease exclusion. This federal rule stated that a facility with more than 16 treatment beds could not bill for Medicaid. There had recently been an effort to serve people in a homelike, less restrictive setting, which meant that substance use treatment facilities in Alaska were often too large. She reported that the Centers for Medicare and Medicaid Services had indicated a willingness to amend the existing 1115 Behavioral Health waivers to waive the Institutions for Mental Disease exclusion. She spoke about other reforms included in Senate Bill 74 which provided broad authority for the Department of Health and Social Services to look at new reform opportunities being made available and would allow them to move forward quickly. She stated that there was also provision to address the over-utilization of Medicaid beneficiaries. She explained a voluntary program which would reach out to Medicaid beneficiaries who over-utilized emergency room services to help them find a primary care provider. She shared that beneficiaries love having a primary care provider, and that the department would follow up with these beneficiaries to remind them of appointments, help with transportation, and other issues. She shared that there was another mandatory program for individuals with acute conditions which increased contact; whereas another program pursued by the Alaska State Hospital and Nursing Home Association was a public-private partnership working with emergency departments. She relayed that there was a coordinated care demonstration project looking for interested parties for better care coordination services for Medicaid beneficiaries in Alaska. She stated that the department recognized the opportunity to get people treatment with early intervention and to "build healthier Alaskans." She pointed out that with early intervention for access to health care services upon release from incarceration there was a much better outcome for reduced recidivism. She declared that Medicaid expansion was a critical component of criminal justice reform. REPRESENTATIVE JOHNSTON asked why the cost for uncompensated care in the hospitals had already started to drop prior to Medicaid expansion. COMMISSIONER DAVIDSON said that this information had been provided by the Alaska State Hospital and Nursing Home Association. CHAIR SPOHNHOLZ suggested that Alaska State Hospital and Nursing Home Association be available for questions at the next House Health and Social Services Standing Committee meeting. 3:54:04 PM REPRESENTATIVE JOHNSTON asked if the Indian Health Services (IHS) was fully responsible for the health care for those qualified individuals. 3:54:29 PM COMMISSIONER DAVIDSON explained that the IHS covered its beneficiaries, Alaska Natives or American Indians, and that federal law required IHS and tribally operated health facilities to pursue third party reimbursement from private insurance, Medicaid, Medicare, or any other source. She declared that IHS was considered the payor of last resort under federal law. She explained that the tribal health organizations in Alaska were only funded at about 50 percent of their level of need based on the federal assessment of necessary funding. In response to Representative Johnston, she explained that the federal government reimbursed at 100 percent for IHS beneficiaries who were also Medicaid beneficiaries receiving their care through an IHS facility, in recognition of the federal trust responsibility to tribes and tribal members. 3:57:02 PM REPRESENTATIVE SULLIVAN-LEONARD reflected on the increase of state match for Medicaid expansion and asked how the projected savings of $400 million would be accomplished. COMMISSIONER DAVIDSON explained that the trends in Alaska since 2015 for the Medicaid program showed reduction in the amount of general fund spending with increased federal participation because of Medicaid expansion and the new tribal claiming policy. She said that those referenced savings were over a six- year period with the implementation of the reform opportunities, which had reduced the general funds and increased the federal match. 3:58:59 PM REPRESENTATIVE TARR offered her belief that Medicaid expansion would provide behavioral health services to many who would not have had access to those services. She asked if there was any tracking regarding these outcomes. COMMISSIONER DAVIDSON stated that many people in Alaska had not ever had access to health care. She reiterated that many behavioral health providers offered what they could with the resources they had. She reported that since September 1, 2015, $30 million in behavioral health services had been provided to Alaskans enrolled in Medicaid expansion. She relayed that many of the providers were nonprofit, grass roots organizations, which provided services to the best of their ability. She pointed out that as there was a limit to the amount of charity care offered while still being able to meet expenses, the federal dollars from Medicaid expansion had allowed many organizations to continue to provide services to Alaskans who needed access to care. 4:01:38 PM COMMISSIONER DAVIDSON shared that the department had received letters "that just make you cry from people whose lives have been saved." Without Medicaid expansion, many of these people would not have been able to get the necessary services. She declared that she was excited about the opportunity offered, stating that "people can't work, they can't hunt, and they can't fish, if they're not well enough to do so." She stated that it was necessary to have Alaskans healthy enough to do the work in any resource, and now, for the first time, 32,000 Alaskans had access to health care which they did not have before. 4:03:13 PM CHAIR SPOHNHOLZ offered her belief that health care was what stands between many people and independence, self-sufficiency and a vibrant quality of life. She acknowledged that although there was a care for dollars, the reason was for people to realize their full potential. 4:04:15 PM REPRESENTATIVE TARR reflected on the Medicaid expansion effort and the testimony regarding a pent-up demand from people who had not had access to health care. She offered her belief that there had been an expectation for an early on increase in costs due to initial access and a need to "catch up on all their health care needs." She asked if there was any way to follow that trend. 4:05:23 PM COMMISSIONER DAVIDSON expressed agreement that this had been the experience of Alaska and other states. She pointed out that Alaska had more people eligible for Medicaid expansion than initially anticipated. She noted that also, because the Alaska "economy unfortunately continues to tank," there were more Alaskans eligible for regular Medicaid services. She reported that a significant part of the spending was for inpatient hospital care, as people had been putting off their health care because they could not afford to go. This had included a lot of lifesaving operations. She added that the cost of pharmaceuticals was higher than expected, including treatments for high blood pressure and diabetes. She noted that there was also a high utilization for travel, as it was medically necessary to access specialists who were not in the small villages. 4:07:43 PM CHAIR SPOHNHOLZ announced that HJR 20 would be held over.