HB 114-MEDICAL PROVIDER INCENTIVES/LOAN REPAYM'T  4:50:11 PM CO-CHAIR ZULKOSKY announced that the final order of business would be HOUSE BILL NO. 114, "An Act relating to a workforce enhancement program for health care professionals employed in the state; and providing for an effective date." 4:50:55 PM CO-CHAIR SPOHNHOLZ paraphrased from the Sponsor Statement for HB 114 [Included in members' packets], which read: Health care is one of the largest and most dynamic industries in Alaska, yet many citizens, especially in rural areas, continue to experience challenges with accessing care. The availability of health care services is important for maintaining health, preventing and managing disease, and reducing costs from unnecessary emergency room visits, and hospital readmissions and temporary staffing. One reason access to care is limited, particularly in rural Alaska, is due to shortages of healthcare professionals. Health care sites struggle with recruiting and retaining health care professionals. Further, health care professionals have challenges with large student loan debt and high cost of living in rural and remote locations. To meet the ongoing demand, Alaska must continue to address the shortage of health care professionals. HB 114 (SHARP-3) does this by establishing the Health Care Professionals Workforce Enhancement Program, a public-private partnership that will increase the number of providers while minimizing the use of state funds. Health care professionals agree to work for minimum of three years in Alaska in underserved areas in exchange for repayment of student loans or direct incentives. Employers will fully fund the program, taking advantage of a federal tax exemption available only to a state-run program. The success of healthcare loan repayment and incentive programs in increasing the healthcare workforce in Alaska was demonstrated in SHARP-2. Between 2013 and 2015, SHARP-2 was successful in recruiting and/or retaining 83 clinicians statewide, with most clinicians placed in locations off the road system and emphasizing care for rural and underserved populations. With the sunset of SHARP-2 on June 30, 2019, other healthcare practitioner incentive programs are needed to reduce healthcare workforce shortages throughout Alaska. SHARP-3 builds on the success of SHARP-2 with new practice settings, new occupations, new employers, new locations, and new roles. Employers can hire much- needed staff, providers get assistance with their loan payments which makes it more affordable to work in a rural community, and Alaskans living in rural communities have improved access to health care--all without the use of state general funds. 4:54:22 PM JILL LEWIS, Deputy Director - Juneau, Central Office, Division of Public Health, Department of Health and Social Services, presented a PowerPoint titled "HB 114 Medical Provider Incentives/Loan Repayment." She directed attention to slide 2, "HB 114," which read: Establishes a Health Care Professionals Workforce Enhancement Program to address shortage of health care workforce. Health care professionals agree to work for three years in underserved areas in exchange for repayment of student loans or direct incentives. Employers fully fund the program. No unrestricted general funds are involved. Replaces the existing program in AS 18.29 scheduled for sunset June 30, 2019. 4:55:38 PM MS. LEWIS noted that Representative Spohnholz had already reviewed the challenges listed on slide 3, "Challenges in health care access," and she directed attention to slide 4, "SHARP - 2," which read: Operated 2013 2018 No new contracts after 2015 due to GF budget reductions 83 contracts: 39 Tier 1 and 44 Tier 2 47-53% positions very hard-to-fill $25,560 average payment per contract per year 10-30% employer match 31 employers distributed across 25 communities Primarily non-profit and hospital associated Similar numbers of tribal and non-tribal affiliated organizations MS. LEWIS moved on to paraphrase slide 5, "An innovative solution," which read: A public-private partnership that ensures access to health care by expanding the distribution of health care professionals all Alaskans at no cost to the state. SHARP-3 builds on the success of SHARP-1 and SHARP-2 with new practice settings, new occupations, new employers, new locations, and new roles. Benefit will not be limited to rural areas or primary care; there is also room for specialists and urban health care professionals. Takes advantage of a federal law that exempts loan repayment from federal income tax if awarded through a state-run program. Public-private partnerships increases the number of providers while minimizing the use of state funds. 4:56:56 PM MS. LEWIS shared slide 6, "Benefits," which read: Health care sites can hire much needed staff Health care professionals get assistance with their student loans Alaskans have improved access to health care Access to health care is important for maintain health and reducing costs All without the use of undesignated general funds 4:57:21 PM MS. LEWIS explained slide 7, "SHARP - 3," which read: Health care professionals receive student loan repayment and/or direct incentives for working in underserved areas. Employer sites provide health care services in underserved or health care professional shortage areas. 3 year contract with renewals; 12 year lifetime limit. Employer payments fully cover cost of the professional's program payment and an administrative fee. An advisory council recommends eligibility criteria, prioritization of sites and professionals for participation, and contract awards. 4:58:36 PM REPRESENTATIVE CLAMAN asked whether the 3-year contract with the 12-year lifetime limit was intended to pay the entirety of a loan or only the amount due each year of that contract time. He offered an example of a 20-year loan, asking if a 3-year contract would allow payment for 3 years of the 20-year loan. MS. LEWIS replied that a provision only allowed up to one-third repayment of a loan in each of the 3 years if a person was using the loan repayment option and not a direct incentive. 4:59:31 PM MS. LEWIS directed attention to slide 8, "SHARP - 3," adding that this could further address the question posed by Representative Claman, which read: Tier 1: dentist, pharmacist, physician $35,000/year regular or $47,250 very hard-to-fill Tier 2: dental hygienist, registered nurse, advanced practice registered nurse, physician assistant, physical therapist, clinical psychologist, counseling psychologist, professional counselor, board certified behavior analyst, marital and family therapist, or clinical social worker $20,000/year regular or $27,000 very hard-to-fill Tier 3: not otherwise eligible under Tier 1 or Tier 2 $15,000/year regular or $20,250 very hard-to-fill MS. LEWIS stated that, although these were the current amounts currently set in statute for SHARP 1 and SHARP 2, the amounts could be set by the commissioner. She pointed out that Tier 3 was new with the proposed bill, stating that each tier addressed different levels of educational attainment and practice. 5:01:49 PM MS. LEWIS moved on to the diagram on slide 9, which described the process for the program. She explained that health care professionals who have applied and were accepted would work at an eligible site for a calendar quarter. At the end of that quarter, the site would report back to the SHARP program on that professional's hours worked and the amount of care given. She noted that SHARP could adjust the maximum payments based on the actual hours worked, and that individuals had an option for full or half time. She noted that the service was provided before the employer made any payments. SHARP would invoice the sites for the professional's payment and the administrative fee. The sites would send payment back to the SHARP program with that money being used to make loan payment to the lender, or a direct incentive payment to the professional. She reported that SHARP routinely provided data back to the Advisory Council to prioritize and establish criteria. 5:04:07 PM MS. LEWIS presented slide 10, "In closing..." which read: HB 114  Keeps health care professionals in rural communities Promotes health and economic community stability Ensuring a healthier future for all Alaskans At the lowest possible cost. 5:04:35 PM CO-CHAIR ZULKOSKY referenced slide 4 and noted that the SHARP program offered opportunities to all communities throughout Alaska. 5:05:01 PM REPRESENTATIVE DRUMMOND, directing attention to slide 4, asked if SHARP - 2 was paying an average of $25,500 per year for 83 different contracts. She stated that this was about $2.1 million per year from the general fund and asked if this was before or after the employer match. MS. LEWIS reported that the program had ramped up in 2013 and 2014 and was fully operating in 2015 with more than 40 contracts added each year. After that, as there were no additional general funds, no new contracts were extended. She added that there had been significant state match, with the employers paying between 10 and 30 percent for each of the contracts. REPRESENTATIVE DRUMMOND asked if the $2.1 million was before or after the employer match. MS. LEWIS stated that this was the total cost and included the employer's share. 5:06:53 PM CO-CHAIR SPOHNHOLZ pointed out that there was a "Final Report to the Legislature," dated December 2018, [Included in members' packets] and she directed attention to page 9, which listed the range of health care providers and contract expenses listed under SHARP 2. She emphasized that the proposed current legislation for SHARP 3 was all privately funded. She reported that under SHARP 2 the general fund expense had been $4,909,038 and the employer match was $1,455,438. REPRESENTATIVE DRUMMOND asked where the money was coming from to pay for proposed HB 114. CO-CHAIR SPOHNHOLZ explained that the SHARP 3 program would be entirely funded by the employer community, as there was an interest in recruiting health care providers and providing incentives. She noted that there was a tax benefit to both the employer and the employee. She offered her belief that there was still a state interest to ensure that health care was provided, both in Rural Alaska and underserved populations in urban Alaska. She noted that it was necessary to use "all of the tools in our tool kit to recruit and retain providers in those underserved areas of health care." REPRESENTATIVE DRUMMOND asked what would happen to the health care providers currently covered by the loan repayment program if proposed HB 114 did not pass. 5:09:50 PM MS. LEWIS explained that there would be no new contracts for the SHARP 2 program, and that all the existing contracts have been paid. She reported that SHARP 1, the federal option, was an on- going grant that was not affected by either SHARP 2 or proposed HB 114. 5:10:44 PM RACHEL GEARHART, Co-Chair, SHARP Council, reported on the status of health care professionals in each committee member's district and noted that the proposed bill provided a benefit to all their constituents. She acknowledged how valuable the proposed bill would be for recruiting and retaining quality health care professionals with no additional expenditure to the state. She noted that she had been a SHARP 2 recipient, which had allowed her to be free of student loan, and that she was still working for the same agency as when she had received her benefit. She pointed to the letters of support from SHARP recipients. She shared that the SHARP data from the quarterly work reports offered tracking for important demographics to further recruitment and retention efforts, noting the retention of permanent workers in substance use capacity. She noted that proposed HB 114 would allow the biggest community mental health centers to be eligible sites without also having to be a federally qualified health center. SHARP 3 would expand eligible sites and eligible professions, including respiratory therapists, occupational therapists, case managers, chemical dependency councilors, and training coordinators. She noted that, in mental health work, the therapeutic alliance with a client was considered one of the most important factors for working together. She explained that, when those with high ACEs scores started to connect with a mental health professional, progress was made. She pointed to disruption to service delivery due to staff turnover, which SHARP 3 could help alleviate. 5:16:00 PM NANCY MERRIMAN, Executive Director, Alaska Primary Care Association, stated support for proposed HB 114 to establish the SHARP 3 program and help Health Centers better serve Alaskans. She declared that there was a shortage of health care professionals of all types in Alaska, and that Health Center leaders constantly grappled with vacant health care clinician positions. Although health care jobs remained the fastest growing sector in the Alaska labor force, the demands outpaced the availability and, as Alaskans grew older, there was an increased need for health care with an increased incidence of chronic disease requiring more constant care. She pointed out that health care professionals were not distributed evenly across the state. MS. MERRIMAN declared that the SHARP programs were critical for community health centers, reporting that the SHARP 1 program had issued 172 contracts to health centers since its inception in 2010; the SHARP 2 program had issued 47 contracts with health care providers. She shared that APCA surveys revealed that the most important work force issues were for recruitment and retention, with noted appreciation for SHARP. She relayed that SHARP had also addressed some of the disparity for the distribution of providers. She added that Alaska community health centers had benefited from the SHARP program, sharing that 80 of the 105 candidates awarded into the SHARP 1 program were practicing in community health centers. MS. MERRIMAN stated that SHARP 3 was innovative and did not require any state general fund dollars, while offering a valuable state infrastructure. It would provide the ability to expand the benefits of SHARP to many areas not currently designated as health professional shortage areas. The proposed bill would also expand the provider types eligible for loan repayment. REPRESENTATIVE CLAMAN asked if the increase of funding by employers to 100 percent for the proposed SHARP 3 program would be an issue. MS. MERRIMAN explained that the program funding would not be 100 percent by the employers, as there would be a request to other bodies for a cost share to help support the additional necessary funding. REPRESENTATIVE CLAMAN asked for information as to the other bodies. MS. MERRIMAN suggested that these could be philanthropic organizations, labor unions, or associations. 5:21:56 PM JANE ERICKSON, President, Alaska Nurses Association, stated support of proposed HB 114. She stated that the Alaska Nurses Association strongly believed in the value of the SHARPS program, which improved access to high quality health care by providing incentives to health care professionals to create a more equitable distribution of health professionals throughout Alaska. She reported that Alaska faced continual difficulties in recruitment and retention for a health care workforce, especially in rural and remote communities. She declared that SHARP 3 was a critical need for this recruitment and retention of health care professionals. She declared that the SHARP program had made a tremendous positive difference and was the main state program to support placement of a range of providers. She added that the program was a smart financial move for the state. She pointed out that private funds would be used instead of state dollars and would expand the eligibility beyond the strictures of the previous SHARP programs. This would greatly impact the health and welfare of communities statewide. 5:24:57 PM CONNIE BEEMER, Vice President, Alaska State Hospital and Nursing Home Association (ASHNHA), stated support for proposed HB 114. She paraphrased from a prepared statement [Included in members' packets] which read: The Alaska State Hospital and Nursing Home Association (ASHNHA) is offering this letter of support for SHARP - 3. As a member of the SHARP Council we have been involved with the program since its inception and believe in the value of the program to support high quality care through an equitable distribution of health professionals throughout Alaska. The SHARP program has helped Alaska's hospitals ensure an adequate supply of healthcare providers and is an important tool to help with recruitment and retention. We support the addition of a third component through SHARP - 3 legislation. SHARP - 3 will support a variety of practice settings, locations (especially those not eligible as a HPSA or other federal programs for SHARP - 1) and provider types. We need to use whatever tools are available to support healthcare organizations to recruit and retain employees. SHARP - 3 would expand the use of federal tax exemption for education loan repayment and enhance the number and variety of financial contributors. There is a need to give local control to allow communities to designate funds to support recruitment of providers. SHARP - 3 utilizes the existing SHARP infrastructure while maximizing contributions from local communities or foundations. Money could be contributed from different local sources such as a business, private foundation, trade association, government entity, foundations or employers. SHARP 3 provides valuable state infrastructure, without additional state general funds, and will provide us the ability to expand the benefits of SHARP to areas that are not Health Professional Shortage Areas (HPSAs), a require for SHARP 1. ASHNHA is prepared to support our members in efforts to utilize SHARP 3 as soon as it is available. We're eager to continue the momentum of SHARP and to support workforce development efforts in Alaska in this way. 5:27:56 PM CO-CHAIR ZULKOSKY opened public testimony. 5:28:15 PM CO-CHAIR ZULKOSKY closed public testimony. [HB 114 was held over.]