CS FOR HOUSE BILL NO. 96(FIN) "An Act relating to Alaska Pioneers' Home and Alaska Veterans' Home payments, rates, and services." 9:28:37 AM Co-Chair von Imhof shared that the bill had been heard on March 9, 2020. She relayed that a CS had been distributed for consideration. Ms. Lucky discussed the changes in the CS. She spoke to an Explanation of Changes document (copy on file): The criteria for the levels of care are removed from statute and will be defined by regulation. These changes can be seen in sections 7, 10, and 11 of the bill. NEW: Section 1: Changes the word "lease" to "use" to allow Pioneer Homes more flexibility in increasing revenue with excess space. NEW: Section 2: Decreases the age of eligibility to 60 (from 65) for Alaskan residents due to dementia, physical disabilities, and other physical needs. This will allow more flexibility, especially in allowing spouses to move into the home together. AMENDED: Section 7: Two rate caps were increased: 1. the level IV rate was increased to $9,333 (from $8,500) in (4); and 2. the daily rate for "respite" care was increased to $200 (from $160) in (6). NEW: Effective date of July 1, 2020. The changes to the monthly income threshold in the bill are removed; income thresholds will remain as they are in current statute. The language previously appeared in sections 3 and 4 of the bill. Ms. Lucky explained that the monthly threshold change had been made due to concern that the rates would be changed for Pioneer Homes only and similar facilities in the state would have a different rate. 9:32:35 AM Co-Chair Stedman asked for clarity regarding the spendable monthly allowance for residents who received financial assistance. He understood that and earlier version had allowed for $500, the current version allowed for $200. Ms. Lucky replied in the affirmative. She said that the previous bill would have increased the amount a resident could keep to $500 per month. Co-Chair Stedman reminded the committee that the base rates were being changed. He asked about the rate of growth in the current version. Ms. Lucky deferred to the Department of Health and Social Services. 9:33:39 AM Co-Chair von Imhof clarified Co-Chair Stedmans question. CLINTON LASLEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that in the CS the rate was not tied to cost of living increase (COLA). He believed that the bill sponsor could speak to the question. 9:34:41 AM Ms. Lucky stated that the rate of growth had not changed in the CS. The rate of growth remained the same as the original bill. Co-Chair Stedman asked what the calculation was based on. Ms. Lucky specified that the amount was the Social Security benefits cost of living. Co-Chair von Imhof spoke to the Social Security Act: under the Social Security Act the department shall adjust the monthly and daily rates of this section by percentage equal to the percentage increase in the cost of living adjustment provided of the Social Security benefits. 9:35:45 AM Senator Wielechowski asked whether there were provisions in the bill requiring notice for rate increases. Ms. Lucky responded in the negative and deferred to the bill sponsor. Co-Chair von Imhof understood that notification requirements would be discussed my Mr. Lasley. 9:36:23 AM Mr. Lasley stated that residential licensing for the state required at least 30-days' notice be given to a resident prior to a rate increase. He said that the department followed this requirement in their practices. Co-Chair von Imhof understood that residents and their families would receive 30-days notice on rate changes. Mr. Lasley replied in the affirmative. 9:36:55 AM Senator Olson asked whether the sponsor supported the changes in the current CS. Ms. Lucky stated that the sponsor had been involved in the crafting of the CS. She deferred to the sponsor for further clarification. Co-Chair von Imhof suggested inviting the sponsor to the table. 9:37:29 AM REPRESENTATIVE ZACH FIELDS, SPONSOR, expressed support for the CS. 9:37:56 AM Co-Chair Stedman MOVED to ADOPT proposed committee substitute for CSHB 96(FIN), Work Draft 31-LS0646\E (Marx, 3/21/20). There being NO OBJECTION, it was so ordered. 9:38:32 AM AT EASE 9:40:28 AM RECONVENED Co-Chair von Imhof relayed that while the committee was waiting for documents to be distributed Senator Wilson would speak to Amendment 1, regarding a sunset date. Senator Wilson MOVED to ADOPT Amendment 1, 31-LS0646\E.1 (Marx, 3/22/20) [note: due to length, Amendment 1 is not included here. See copy on file]. Senator Wilson spoke to Amendment 1. He explained that the amendment was a sunset date for a five-year repeal. The sunset date was to ensure that rates were on track with the consumer price index (CPI). Representative Fields stated he would defer to the will of the committee. He emphasized that stability and predictability for Pioneer Home residents was important for the Pioneer Homes overall finances. He did not see the need for a sunset, as the legislature could repeal the bill in the future. 9:42:12 AM Co-Chair Stedman was concerned with the aggressiveness that the agency adopted an escalation in fees. He did not think the process had been long enough nor had the public been sufficiently informed. He relayed that he was hesitant to sunset the legislation. He felt that the issue should come back to the table in the future. He contended that the fees were still too high and should be lowered. Co-Chair von Imhof stated that the rate the committee considered was one of the lowest rates, year over year, compared to CPI or medical CPI. She affirmed that if an imbalance was found, the department could alert the legislature and suggest changes. She asked for verification the amendment would implement a sunset date of 2025. Senator Wilson responded affirmatively. Co-Chair von Imhof MAINTAINED her OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Wilson OPPOSED: Olson, Wielechowski, Bishop, Hoffman, Stedman, von Imhof The MOTION to adopt Amendment 1 FAILED (1/6). 9:45:02 AM Senator Wilson MOVED to ADOPT Amendment 2, 31-LS0646\E.2 (Marx, 3/21/20) (copy on file): Page 4, line 9: Delete "$9,333 a month" Insert "a monthly rate the department considers sufficient to compensate the state for the cost of care and support of the person at the home" Co-Chair von Imhof OBJECTED for discussion. Senator Wilson spoke to the amendment. 9:46:57 AM Representative Fields did not support the amendment. He reminded that individuals in Level 4 care were already experiencing large rate increases. He said that the CS contained a sizeable rate increase for those residents who had been at Level 3 under previous rate structures. He did not support uncapping the rate increase and reiterated the need for stability and predictability in rate levels. He said that the state should be trying to get more revenue for skilled nursing level care, but he believed that a better way to do that would be for the department to pursue certification for the nursing home level of care. 9:48:27 AM Senator Wilson lamented that he had not received answers from questions he had submitted to the department. Co-Chair von Imhof queried whether Level 4 patients had left facilitates due to the rate increase. Mr. Lasley stated that the number of individuals that had moved out of the Pioneer Homes system since the announcement of the rate increase on August 1, 2019, was 24. He said that 18 were directly related to the rate increase. He stated that he would get back to the committee about Level 4 patients specifically. Co-Chair von Imhof found it interesting that the state already provided subsidies for various populations such as students, special-needs students, college students, and many kinds of transportations. She acknowledged that the rates in the bill had increased rates for Level 4 care. She recalled conversations about the distribution of PFDs that suggested that $2000 could stand between starvation or hypothermia. She countered that the bill would make elderly people pay an additional $4000, per month, for care. 9:51:29 AM Senator Olson referenced the 24 people that left the Pioneer Homes and asked whether there were currently vacancies. Ms. Lasley confirmed that there were vacancies in all Pioneer Homes across the state. He noted that there was currently about a 91 percent occupancy rate. Senator Olson thought if the idea was to increase revenue to the state, the state should be working to keep that occupancy rate a 99 percent. Co-Chair von Imhof added that when running the numbers, if a person had a certain level of assets, and was charged $13,000 per month rather than $9,000, the state would subsidize them for less time. The assets would last longer paying slightly less than full rate and the state paid less overtime. Senator Olson maintained his opinion. 9:53:06 AM 9:53:08 AM Co-Chair von Imhof MAINTAINED her OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Wilson OPPOSED: Olson, Wielechowski, Bishop, Hoffman, von Imhof, Stedman The MOTION to adopt Amendment 2 FAILED (1/6). 9:53:34 AM AT EASE 9:53:51 AM RECONVENED Co-Chair von Imhof noted that Amendment 2 had failed, and Co-Chair Stedman would offer a conceptual amendment. Co-Chair Stedman MOVED to ADOPT Conceptual Amendment 1. He explained that the original bill had included $500 for spend money for Pioneer Home residents. The amount in the current bill was $200. The amendment would increase the amount by $100 to a total of $300 per month. Co-Chair von Imhof OBJECTED for discussion. Representative Fields asked the department what the maximum level residents could collect without any negative unintended consequences in terms of Medicaid eligibility or other. Ms. Lasley stated that the department would not be opposed to raising the amount. Representative Fields thought the conceptual amendment made sense. 9:55:40 AM Senator Olson reiterated the question about any negative consequences due to the raise from $200 to $300. Mr. Lasley addressed the previously proposed $500 limit for monthly spending. He stated that the long-term unintended consequences for the $500 limit pushed against the limit of assets an elder could have and qualify for Medicaid. The worry was that if the elder could not spend the money each month, they could build up assets that could get them kicked out of the program and disqualify them for the Medicaid program. He did not feel that the $300 amount would have unintended consequences for residents. 9:56:58 AM Co-Chair Stedman recognized that there had been an erosion of purchasing power for seniors and it was good for elders and seniors to participate in gift-giving for birthdays and Christmas or visit a hair salon using their $300 per month spending money. He said that residents in Pioneer Homes would not be able to hoard cash and giving seniors the ability to have spending money was important. 9:58:18 AM Ms. Lucky wanted to confirm that the conceptual amendment would be on page 2, line 7 and on page 2, line 28. The amount of $200 would change to $300 on each of those pages. Co-Chair Stedman thought the amount also appeared on page 4 of the bill, line 13. Ms. Lucky understood that Co-Chair Stedman's reference was to a respite charge and not an asset limit. She deferred to the department for clarification. Ms. Lucky asked if Mr. Lasley could confirm the reference on page 4, line 13. Mr. Lasley confirmed that the $200 respite charge found on page 4, line 13 did not relate to the monthly spending amount referenced in Co-Chair Stedman's amendment. Co-Chair von Imhof WITHDREW her OBJECTION. There being NO further OBJECTION, Conceptual Amendment 1 was ADOPTED. 10:00:37 AM Mr. Lasley announced that an updated fiscal note from the department would be provided to the committee. Co-Chair von Imhof requested a motion to move the bill. Co-Chair Stedman MOVED to report SCS CSHB 96(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SCS CSHB 96(FIN) was REPORTED out of committee with a "do pass" recommendation and with two forthcoming fiscal impact notes from the Department of Health and Social Services.