CS FOR SENATE BILL NO. 364(HES) "An Act relating to liability for expenses of placement in certain mental health facilities; relating to the mental health treatment assistance program; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated this bill, sponsored by the Senate Rules Committee at the request of the Governor, "provides a mechanism to help contain the costs of Designated Evaluation and Treatment program. The DET program provides psychiatric inpatient care to certain persons enabling them to receive care close to their home and family." He noted the Senate Health and Social Services Committee adopted a letter of intent. JEANNETTE GRASTO, Member, Alaska Mental Health Board and the National Alliance for the Mentally Ill-Alaska, and the National Alliance for the Mentally Ill-Fairbanks, testified via teleconference from Fairbanks about her advocacy for people with mental illness. She read her testimony into the record as follows. SB 364 represents a major philosophical change without discussion. It conflicts with the principles articulated in Alaska Statute 47.36.055 and a shared vision too [of] our current plan for mental health services. It violates the principle that services will be provided in the least restrictive setting and as close to the client's home as possible. If changes in policy are going to be made, it should be made with discussion and input from mental health consumers, mental health courts, hospitals, the Division of Behavioral Health and other stakeholders. The utilization review section of this bill would allow more efficient use of resources and appears to be a positive step, but savings from improved management should be used for added service capacity. The rest of the bill represents a giant step backward. In Fairbanks we are so grateful to have the capacity and quality of programs that we currently have at Fairbanks Memorial Hospital for DET beds in our mental health unit. These beds are a critical part of the community-based services we rely on. Before this unit was expanded to 20 beds, many Fairbankans in acute need have spent up to three days in jail and then were transported to API [Alaska Psychiatric Institute] in Anchorage 300 miles away from their families and natural support system. This was a terrible situation for both consumers and their families and often exacerbated their illness and symptoms. It seems like the dark ages now looking back on it. We've come so far. Our State is currently trying to expand DET beds so people can access services in their community and that was a consensus decision by the mental health community. API is downsizing and could be reserved for the most complex people whose needs can't be met locally. And communities would be expected to take care of their own whenever possible. The people we're talking about in this bill are among the most vulnerable of Alaskans. They're either a danger to themselves or others or they're gravely disabled and unable to take care of themselves. They're the poorest of the poor without even disability income or Medicaid. Alaska clearly has a responsibility to take care of these vulnerable people. I also think its discriminatory because we're denying them access to a community system of care that everyone else uses. They become second-class citizens even among an already marginalized group. Maybe you think it doesn't matter because it won't affect anybody you know. But mental illness affects one in five Alaskan families. It isn't rare and the treatment for mental illness is more effective than heart disease or cancer. I'm always amazed how many of my friends are struggling either with mental illness themselves or with a family member. And it really is a crisis when it happens to you. It isn't uncommon when mental illness first strikes, a person is unable to work and has no other income and is indigent until they either return to work or qualify for disability income. Finally, many DET patients are involuntarily committed. Is it appropriate to take away the civil rights of an indigent individual and then not cover their treatment? What kind of state are we becoming if we pretend to be broke? If Alaska is so broke we cannot take care of these most vulnerable Alaskans then it is imperative that we have a sound fiscal plan that guarantees we can serve their needs. Cuts to State budget must never come from need. Co-Chair Wilken thanked the witness for her on-going volunteer work with the mentally disabled. VERA JAMES, Alaska Native Health Board, testified via teleconference from Anchorage as follows. The ANHB is the over-arching voice representing 229 federally recognized tribes. As part of its mission the AHNB strives to promote the mental wellbeing and pride of Alaska Native people. Some of these people seek mental health treatment and not all patients of mental health facilities are covered under insurance or other third-party resources, including Medicaid, to pay for the cost of evaluation or treatment. The Alaska Native Health Board therefore urges the state of Alaska to provide financial assistance for the liability of expenses of patient placement in certain mental health facilities. The ANHB supports the implementation of SB 364, which mandates that those needing mental health treatment be eligible for financial assistance under the Act. JEFF JESSEE, Executive Director, Alaska Mental Health Trust Authority, testified via teleconference from an offnet location that the Authority supports many provisions in this bill, specifically the "management tools" the Department is seeking. He gave examples of adequate notice and timely applications for services provided. He spoke in favor of efforts to ensure the Department does not pay more for treatment and evaluation than is necessary. Mr. Jessee however, expressed concern that in the event it appears inadequate funds were available during a fiscal year to provide necessary services the Department of Health and Social Services could cease payment. He predicted this would result in the transportation of many patients from areas of the state to the Alaska Psychiatric Institute (API). He reminded that the new API facility was constructed specifically upon the premise that services would be available and would expand over time. He noted that facilities in Fairbanks and Anchorage are equipped to provide diagnosis. Mr. Jessee informed that designated evaluation and treatment facilities are expensive to operate and must have a yearlong business plan. He furthered that hospitals must have certainty of funding and that a hospital considering undertaking a capital investment must consider the possibility that a major fund source might not be guaranteed year round. He also pointed out that as the program expands to more communities, funds would be divided further, as is occurring with the community mental health block grants. He warned that if a facility, such as the program operating in Juneau were to close for a portion of the year, the State would incur the cost of transporting patients to the API facility in Anchorage. SFC 04 # 94, Side B 09:48 AM Mr. Jessee continued that this proposal would do significant damage to the emergency system in the state. He recommended that these sections be omitted from the bill, especially Section 2. Mr. Jessee emphasized that other provisions of this bill are positive, in that they would support additional management tools if the Department found them necessary. Senator Hoffman asked how a patient would be cared for if this bill were implemented and the API facility was at capacity. Mr. Jessee deferred to the Department. However, he predicted this would be a significant problem, noting the limited number of "beds" licensed for mental health care. He reported that in instances of high occupancy, patients are released at the first opportunity, which is often not advisable treatment and that many of these patients must be readmitted. Senator Hoffman asked if capacity limits would be reached more often under the provisions of this legislation. Mr. Jessee affirmed that facilities would reach capacity sooner. He spoke to the difficulties of releasing patients from API who are not Anchorage residents. He explained the importance of a patient's community in outpatient treatment. Co-Chair Wilken recalled these issues were discussed when this bill was heard in the Senate Health and Social Services Committee. He noted the letter of intent adopted by that committee and recommended the Senate Finance Committee also adopt the letter to express the intent that alternative revenue sources should be secured so that the level of services would not be affected. BILL HOGAN, Director, Division of Behavioral Health, Department of Health and Social Services reaffirmed the State is responsible to pay the cost of diagnosis, evaluation and treatment for those individuals who are financially eligible and who need to be involuntarily committed to non-State operated hospitals. He read testimony into the record as follows. The costs of these services and the related transportation have increased dramatically over the past several years. From FY 01 through FY 03, the costs have increased over 100 percent. The rationale for those increases has to do with an increase in the average daily Medicaid rate as well as an increase in the total number of beds utilized between [FY] 01 and [FY] 03. The intent of SB 364 is to reaffirm the importance of DET as the cornerstone our foundation of our community mental health system, but at the same time give us a mechanism to more adequately manage diagnosis, evaluation and treatment services. The bill would give us the capability through a registration process - through hospitals having to register people who come into their facilities within 24 hours - at least a better mechanism to manage costs. Currently it's possible that someone might be admitted to a DET service and the State would not be notified for up to six months after admission. This legislation would require notification within 24 hours. It also would give us the capability of "day 8" which is a critical day when trying to stabilize individuals who serious psychiatric problems or symptoms. It would give us the capability of actively working with the hospitals to ensure that if the person needs to be in the hospital that we would actively or proactively work with the hospital. If the person did not need to be in the hospital, we would actively work to develop a discharge plan to leave the hospital. Again, as you've heard we have worked actively with our partners, including the Alaska State Hospital and Nursing Association, the Alaska Mental Health Board, the Alaska Mental Health Trust [Authority], various advocates, and then members and clients, to come up with language that is for the most part is acceptable to all parties. The one sticking point continues to be Section 2, which essentially stipulates that we will only fund the service up to the appropriation from the legislature. As Senator Wilken has pointed out, in out letter of intent, we clearly commit to looking at all other possible funding sources to ensure that we are able to adequately fund this particular service. However if we are not able to come up with additional dollars, in the worst case scenario, an individual would have to be sent to API. Let me also point out that we want to actively and will continue to actively work with our community mental health providers to find alternative community facilities or programs for individuals before they would have to be transferred to API. Senator Hoffman asked the Division's intent in implementing this legislation. Mr. Hogan listed the first priority as locating services within the patient's community. He stated the Department would try to locate alternative placement if no services were available in the patient's community and API was at capacity. He stressed the intent to ensure patients receive hospital care if needed. Senator Hoffman asked how services would be delivered to patients residing in a community without a treatment facility in the event API had no vacancies. Mr. Hogan replied this scenario occasionally occurs. In these instances, he stated that efforts are made to make space available at API for that individual. Senator Olson asked the number of licensed beds at API. Mr. Hogan answered 92 beds. Senator Olson asked the occupancy rate over the last year. Mr. Hogan replied the 75-80 average daily censuses show the facility averages 75 to 80 percent capacity. Senator Olson expressed concern that if space were not available at mental health facilities, patients would be admitted to a local hospital that is not equipped for the special needs of patients with mental illnesses. He relayed his experience that these patients often require protection from themselves, and at times must be restrained. He remarked that most doctors are not trained in psychiatry and would be required to provide care they are not qualified to administer. Mr. Hogan responded that the intent would not be to transfer those patients who are perceived to be a danger to themselves or others or who have been involuntarily committed. Rather, he stated the intent would be to stabilize patients so they could be transferred to their community. Senator Hoffman asked if the Department has considered the financial risks of liability for failure to provide services. Mr. Hogan indicated extensive discussion within the Department and with the Department of Law has occurred. He furthered that the procedures of other states is being researched and that he would provide information on the findings. Co-Chair Wilken cited the analysis in the fiscal note, which reports that the Designated Evaluation and Treatment (DET) program would no longer receive $724,900 federal funding beginning in FY 05. He surmised this is the impetus of this legislation. Mr. Hogan affirmed that the program would receive a reduction of $700,000 in FY 05, according to the Governor's proposed budget. He expressed intent to secure alternative funding for this program and told of options. He emphasized the need for this legislation to improve management of the program. VERNER STILLNER, Legislative Representative, Alaska Psychiatric Association, read his testimony into the record as follows. The mental health system can best be judged when it is under a state of emergency. And such an emergency in mental health system is covered by this piece of legislation. In other words, when an individual, due to mental illness, is dangerous to self or others, or gravely disabled and unable to care for themselves, a physician or a mental health professional can petition the court for a 72-hour hold. And an involuntary hospitalization takes place. Currently that can take place in Palmer, Ketchikan, Cordova, Homer, Valdez, Sitka, Bethel, Kodiak, Juneau and Fairbanks. And then if the individual needs to be committed for a 30-day evaluation, a longer period of time, that individual can be hospitalized at Fairbanks Memorial Hospital or Bartlett Regional Hospital, or the API. My concern about this piece of legislation is that there may be an unfunded mandate. In other words, you don't fund an emergency system in my estimation with a letter of intent. I predict that when the Committee of next fiscal year comes around and the money has expired for this kind of payment for these hospitals I've mentioned, the hospitals will start saying "no" and pointing to the API. The cuts in the budget that are proposed in the House and in the Senate, cut the budget for institutional care, for community care and for transport of patients to such facilities. So my concern is that if these systems of designated evaluation treatment facilities are not properly assured of funding, they will start saying "no" and start shifting people to the API. And the API by next year will be downsized to a bed census of 72 capacity. And I predict that the current census will be all that they currently will be able to do and these hospitals will be left with individuals to evaluate and treat and possibly not be compensated for. I support the administrative procedures in this provision to better manage those monies, in other words, that these hospitals have to notify the Department when someone is admitted. All that I think needs to be greatly improved and there are some cost savings there. But I'm concerned that the bill currently the way it is funded, will be a unfunded mandate to hospitalize individuals in an emergency basis and therefore I think the mental health of the communities and also the public health of the community may be compromised. Senator Hoffman understood the witness testified that the capacity of API would be reduced in the year 2005. Mr. Stillner affirmed the new facility would contain 72 beds. Mr. Hogan clarified the facility would contain 74 beds with the ability to increase to 80 beds in the event of an emergency. He informed that the new facility is scheduled to open in July 1, 2005. Co-Chair Wilken ordered the bill HELD in Committee.