SENATE BILL NO. 345                                                                                                        
     "An  Act  relating to  medical  assistance  for rehabilitative                                                             
     services  for certain children  with disabilities; relating  to                                                            
     agreements to pay  medical assistance for covered services paid                                                            
     for or  furnished to eligible  children with disabilities  by a                                                            
      school district; and providing for an effective date."                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Green, the sponsor  of the bill, informed the Committee this                                                            
bill would  allow school  districts to act  as vendors in  supplying                                                            
special services  to Medicaid eligible  students thereby  qualifying                                                            
for  reimbursement  from  the federal  Medicaid  program  for  those                                                            
services. She  noted the passage of this bill would  allow Alaska to                                                            
join 42 other  states already being reimbursed through  this funding                                                            
mechanism.                                                                                                                      
                                                                                                                                
Senator  Green  noted these  services  for  students  with  learning                                                            
disabilities  and  other  special  needs are  already  provided  and                                                            
expensed  in existing  school district  budgets.  She estimated  the                                                            
expected reimbursement  monies could accrue several  million dollars                                                            
for the State's  school districts and supplement their  budgets. She                                                            
stressed  that  school  districts  would  be  held  accountable  for                                                            
establishing  and maintaining  a billing process  for this  Medicaid                                                            
reimbursement program.                                                                                                          
                                                                                                                                
Senator Green  noted the accompanying  fiscal note is the  result of                                                            
the Department  of  Health and  Social  Services' need  to employ  a                                                            
program administrator  to oversee  this program. She voiced  concern                                                            
that small districts might  need assistance from larger districts to                                                            
establish  a  billing   system,  but  clarified   this  would  be  a                                                            
"voluntary"   rather  than  mandatory   program  involving   federal                                                            
receipts.                                                                                                                       
                                                                                                                                
GREGG MALONEY,  Director of Special Education, Division  of Teaching                                                            
and   Learning   Support,   Department   of  Education   and   Early                                                            
Development,  informed  the  Committee  that  school  districts  are                                                            
experiencing  increasing  operating costs,  and  the Medicaid  funds                                                            
generated  from this  program  could  "help offset"  the  increasing                                                            
expenses without requiring "significant" state resources.                                                                       
                                                                                                                                
Co-Chair Kelly  explained the proposed  reimbursement process  would                                                            
entail the  State providing  funding for  the special services  that                                                            
school  districts  provide,  the  federal   Medicaid  program  would                                                            
reimburse the  school districts for  those services, and  the school                                                            
districts would reimburse the State.                                                                                            
                                                                                                                                
Mr. Maloney  responded this  bill does not  mandate the process  Co-                                                            
Chair  Kelly  outlined;  however,  suggests  it as  an  option.  Mr.                                                            
Maloney stated  that each participating  school district  would work                                                            
with the Department to develop a plan.                                                                                          
                                                                                                                                
AT EASE 9:25 AM / 9:27 AM                                                                                                       
                                                                                                                                
BOB LABBE, Director,  Division of Medical Assistance,  Department of                                                            
Health and Social Services,  echoed Mr. Maloney's comments regarding                                                            
the bill.                                                                                                                       
                                                                                                                                
Senator Ward  mentioned that  Mr. Labbe had  previously worked  with                                                            
this Medicaid reimbursement program in Oregon.                                                                                  
                                                                                                                                
Senator  Green offered  a motion to  "move SB  345 out of  Committee                                                            
with accompanying fiscal notes and individual recommendations."                                                                 
                                                                                                                                
There being no  objections, SB 345 was REPORTED from  Committee with                                                            
a  previous $138,000  fiscal  note  dated  3/05/02 from  the  Health                                                            
Purchasing  Group, Division  of  Medical Assistance,  Department  of                                                            
Health and  Social Services,  and a new $787,000  fiscal note  dated                                                            
3/05/02  from Medicaid  Services,  Division of  Medical Assistance,                                                             
Department of Health and Social Services.