SENATOR SHARP introduced SB 249 (REGULATION OF ASSISTED LIVING HOMES) as the next order of business before the committee. SENATOR LEMAN moved to adopt for discussion the CSSB 249 (HES), the Lauterbach J version. Hearing no objections, it was adopted. CONNIE SIPE, Executive Director of the Division of Senior Services, stated that the CS appears consistent with their recommendations and the committee's recommendations. SENATOR LEMAN asked if Ms. Sipe was aware of the Anchorage Pioneer Home's desire to be excluded from SB 249. CONNIE SIPE said that she was aware of the Anchorage Pioneer Home's position. She explained that some of the nurses of the Anchorage Pioneer Home seem to be concerned about the gradual shift in Pioneer Homes having more assisted living beds with fewer residential and nursing home beds. They are also concerned that unlicensed staff would be used in pioneer homes to provide nursing care. She referred to the health related services portion of SB 249 which allows a registered nurse to train an unlicensed individual to perform tasks as approved by the State Board of Nursing. She explained that the nurses are confused because the State Board of Nursing, who have the legal power to define the scope and practice of nursing in the state, issued an opinion that goes beyond SB 249. The State Board of Nursing issued an opinion stating that nurses may train and delegate tasks to unlicensed personnel in any setting. This position reverses a 1991 opinion. She specified that the State Board of Nursing 1994 opinion, which is currently in effect, has nothing to do with SB 249. The opinion relates to all nursing practice in the state of Alaska. She asserted that SB 249 does not require the state of Alaska to do assisted living in the Pioneer Homes, SB 249 only licenses what is currently being done and allows it to be done in other settings besides the Pioneer Homes. Number 306 DAVE WILLIAMS, Division of Medical Assistance in the Department of Health and Social Services, reviewed the reasons an assisted living facility which can offer medical services was created. He pointed out that assisted living facilities will increase access to services for which Medicaid will pay. The alternative to assisted living facilities would be nursing homes which are more expensive. Assisted living facilities and pioneer homes would be considerably less. SB 249 increases access which would increase costs. Mr. Williams explained that the fiscal note assumes that a certificate of need would be required prior to conversion of any or part of any assisted living facility into a nursing home. He pointed out that the CS work draft left out some essential suggested language; the words "Not withstanding the expenditure threshold" were left out at the beginning of section 4 on page 27. He explained that someone should not be able to spend $1 million to convert a building into a nursing home when the building is already built, only the new license is needed to convert. He stated that the fiscal note would not be valid without that language because conversion to a nursing home carries a $78,000 yearly cost. SENATOR ELLIS asked why those words were left out of the work draft. CONNIE SIPE said that she read section 4 as stating that no part of the building may be converted without a certificate of need. She explained that the drafter may have felt that the language was strong enough legal language so that "regardless of the expenditure limit" was not necessary. She believed that putting the language in would not hurt the bill. DAVE WILLIAMS explained that perhaps Lauterbach was being economical with words. He reiterated the need to have that language added, especially on a technical level. Number 392 SENATOR ELLIS recommended that Mr. Williams' concerns should be addressed before the bill moves out of the committee. He asked for the number of seniors who qualify under Medicaid waivers now and how many people to date have been served. DAVE WILLIAMS clarified that the waivers come in a graduated scale over the next three years. In the third year, this would come into effect due to the time for an assisted living home to be built. He stated that 401 people could be served under the Aged Person Waiver. CONNIE SIPE stated that nine seniors are being served. There are forty-five slots reserved. She explained that by the end of this fiscal year the half year mark would be reached, sixty people. She noted that the program was six months late because the regulations were in the Department of Law longer than expected. SENATOR ELLIS asked if the Hickel administration had considered any initiative making the Pioneer Homes Medicaid eligible. NANCY USERA, Commissioner of the Department of Administration, explained that the subject of Medicaid has often been a topic of discussion regarding maintaining the quality of service of Pioneer Homes in a cost effective manner. The people eligible for Medicaid in the Pioneer Homes are few under the current structure. If individuals are Medicaid eligible, there are private nursing facilities available for them. She stated that the Pioneer Homes fulfill the moderate income seniors and alzheimers disease or related dementia seniors, who are not Medicaid eligible. She said that they are not pursuing an initiative to make Pioneer Homes Medicaid eligible. SENATOR ELLIS asked if poor individuals would go to private nursing homes, while wealthy individuals would go to Pioneer Homes. NANCY USERA said that Pioneer Home residents cross the spectrum of the senior community. She discussed the change in the Pioneer Homes' population, they do not need twenty-four hour nursing but rather they need the assisted living type of situation. Alzheimers is not a Medicaid eligible diagnosis so currently, there is no funding for them. She reiterated that the Pioneer Homes serve a moderate income level population. SENATOR ELLIS inquired as to what level of the administration was the decision made not to pursue an initiative to make Pioneer Homes Medicaid eligible. NANCY USERA explained that for the past three years the administration has explored, with consideration to budget concerns, how to maintain the financing structure of the Pioneer Homes. The benefits of making Pioneer Homes Medicaid eligible do not out weigh the costs. SENATOR ELLIS pointed out that the rates of the Pioneer Homes have been increasing which indicates, to him, the need to bring in more money in order to lessen the general fund obligation. He stated that there was a lack of consistency. NANCY USERA explained that to convert to a Medicaid system would require significant structural changes to the Pioneer Home. The rates are adjusted on an annual basis with respect to the cost of living in order to keep up with the additional cost of running the homes. She noted that Pioneer Home residents only pay 13 percent of the cost of nursing, they pay 23 percent with assisted living, and 35 percent with residential. She said that these rates are not unreasonable. She believed that the residents are still receiving the best deal in Alaska in terms of quality of care at the price. SENATOR ELLIS disagreed with Ms. Usera on the issue that SB 249 has nothing to do with Pioneer Homes regarding rates and such. Number 492 DAVE WILLIAMS referred to a 1990 December Report which illustrates the avoidance of approximately 200 nursing home constructions by emphasizing home rather than institutional care. Since the current facilities are full, waivers should be acquired and used as well as going forward with assisted living homes. He asserted that unless those alternatives were utilized, nursing homes would be constructed. Such circumstances would leave Medicaid responsible for paying for the nursing homes. SENATOR SHARP asked if Mr. Williams was referring to section C regarding the omitted language. DAVE WILLIAMS said no and specified that the language was omitted in the work draft on page 27, line 11 after subsection (b). He reiterated his recommendation to insert the language, "Not withstanding the expenditure threshold in AS 18.07.031," at the beginning of subsection (b), before "A." SENATOR SALO moved to adopt Mr. Williams suggestion. Page 27, line 11, after "(b)": Insert "Not withstanding the expenditure threshold in AS 18.07.031," Hearing no objections, it was adopted. MARY LOU MIENERS, Chairperson of the State Legislative Committee (SLC) for American Association of Retired Persons (AARP), stated their support for SB 249. She envisioned this as an opportunity to assist seniors in their communities on a smaller scale. She urged passage of SB 249. SENATOR DUNCAN moved CSSB 249 (HES) as amended out of committee with individual recommendations and the accompanying fiscal note. Hearing no objections, it was so ordered.