SENATE BILL NO. 32 "An Act relating to medical assistance payments for home and community-based services." 9:09:21 AM Co-Chair Hoffman MOVED to ADOPT CSSB 32 (FIN), version M out of Committee with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. Senator Ellis reviewed the Committee Substitute (CS). He explained that his aide Max Hensley will explain the legislation. HENSLEY, MAX, STAFF, SENATOR ELLIS, reviewed the legislation. He thanked the staff of the Co-chair for the work done in developing the CS. He stated that the CS is a simpler bill which greatly reduces the forecasted fiscal impact to the state. The CS removes the general relief medical programs formerly in the Health and Social Services committee's work version. The intention is focus on the Medicaid sector. He noted Page 2, Line 5 replacing the word "consider" for "use" and Page 2, Line 6 replacing the word "cost" with "periodic cost surveys." Both changes achieve the goals of the original legislation with less overhead and administrative burden. He noted two new fiscal notes; the first maintains funding for three existing positions not included in the FY10 operating budget, the second includes updated assumptions for rates whose funding is appropriated by the legislature. He defined the new fiscal notes as predictive assumptions. 9:12:49 AM Co-Chair Stedman requested a brief explanation of the bill's purpose for constituents at home. Mr. Hensley stated that SB 32 provides regular and periodic rate review for the providers of home and community based services under the Medicaid waiver program. Co-Chair Stedman addressed the fiscal notes. The first note is from Support Services in an annual general fund match of $182 thousand to fund three new full time positions. The second note is from Senior and Disability Services illustrating zero cost for FY10 and FY11, and a $3 million cost in FY12 for increased Medicaid benefit on appropriation. Senator Ellis noted appreciation for the work done on the bill. He expressed satisfaction at the improved legislation. 9:14:50 AM JON SHERWOOD, DIRECTOR, OFFICE OF PROGRAM REVIEW, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (DHSS), represented the administration. He appreciated the bill in the current draft. He felt that there was flexibility present in the amended draft and he felt it worthy of statute. Co-Chair Stedman reminded of public testimony taken at the previous hearing. Co-Chair Hoffman informed that the fiscal notes stating the amounts do not include inflation unless otherwise noted. Mr. Sherwood answered that there is not inflation on the administrative cost of the fiscal note, but there is a specific inflation rate for the Medicare home health care market basket index. In an effort to give the best approximation of the impact of the bill showed the inflation rate moving forward from FY12. 9:17:44 AM Co-Chair Hoffman asked if the inflation rate was 2.8 percent. Mr. Sherwood confirmed 2.8 percent. Senator Olson asked the department's view on Section 3. Mr. Sherwood responded that Section 3 would repeal the provision that the department must report on the rate setting process by 2014. By 2014, he opined the progress will be well established and functional. He stated that the department did not anticipate the need to provide annual progress reports. He stated that reporting would prove redundant each year although the department is willing to present reports at the will of the legislature. Senator Olson asked how to ensure that the community service providers continue to receive compensation for fair market value. Mr. Hensley explained that the sunset provision removes the reporting provision fee, but the rate setting provision remains in statute. 9:19:30 AM Co-Chair Hoffman asked about the additional personnel requested. Mr. Sherwood answered that the department sought information regarding reports from providers learning that the providers neglect to report accurate costs. He suggested that the legislation must inform providers about surveys. Surveys and analysis must occur prior to new rate setting. Co-Chair Hoffman asked why the department requests continuation of the three new positions following the process of survey and analysis. Mr. Sherwood replied that cost surveys are anticipated periodically. The ongoing process ensures current information required for rate setting. He mentioned that hiring new providers requires training. Mr. Hensley explained that the three positions exist currently and therefore maintenance rather than creation is the goal. 9:22:27 AM Co-Chair Hoffman asked for verification of Mr. Hensley's comment. Mr. Sherwood responded that the requested positions are currently filled and funded under the previous SB 61 efforts addressing Medicaid reform. Senator Ellis MOVED to report CSSB 32 out of Committee with individual recommendations and the accompanying fiscal note there being NO OBJECTION, it was so ordered. 9:23:50 AM