SB 73-ASSISTED LIVING FACILITIES Number 026 MS. ALISON ELGEE, Deputy Commissioner for the Department of Administration stated the department was asked to prepare draft fiscal notes representing one scenario that would include paying a geographic differential, and one scenario that would exclude paying a geographic differential. The four different fiscal notes in the committee packets include two from the Division of Senior Services (DSS) and two from the Department of Health and Social Services, Division of Mental Health & Developmental Disabilities. She would speak to the DSS fiscal notes, but stated the methodology is similar in both the departments' fiscal notes. At the present time the assisted living rate structure has a base rate of $30, with the department providing a geographic differential to recognize the difference in the cost of doing business throughout the state. This is done on a regional basis, with the geo-differential ranging from a zero base rate in Anchorage and Southeast Alaska to a high of 38% in the rural parts of the state. The Interior region is at 15%, Western Alaska is at 33%, with Northwestern the highest at 38%. The department presently pays a .4% differential in the Palmer-Wasilla area. The difference between the two notes marked "Draft" is the cost if the geographic differential approach is continued with the new rate structure, as proposed for a potential CS, and the cost if the geographic differential were eliminated. MS. ELGEE stated the committee needs to be aware of one anomaly that at the proposed $50 rate for the first year, the department would actually be paying less to the Northwest Alaska region than it presently pays under a $30 base rate with a differential. Number 075 MS. GINA MACDONALD, Division of Mental Health & Developmental Disabilities, agreed that the fiscal note methodology was similar. The only difference was that DHSS uses a personal allowance of $100 per person, while DOA uses a $75 personal allowance, which impacts the amount of money that DHSS needs for the assisted living home provider. She stated this needs to be clarified for a final fiscal note. Number 094 SENATOR ELTON asked the history of the rate differentials. MS. ELGEE replied she was not sure but she thought the differentials have been in place at least since the last rate adjustment in 1984. DOA uses the geo differentials for the statutory pay structure, except the pay structure includes many more differentials than these fiscal notes. The department uses a regional approach and the differential most appropriate for the region. MS. MACDONALD said she did not know the history. SENATOR ELTON commented there have been a lot of changes during the last ten years. Number 118 VICE-CHAIRMAN KELLY repeated that SB 73 would not be passing out today. Senator Miller has not seen the fiscal notes yet, and he wanted the committee to look at them today. SB 73 will be rescheduled and the committee will go through the rest of the bill at the next meeting. He said that Montafaye Lane is on-line in Fairbanks to testify on SB 73. Number 123 MS. MONTAFAYE LANE asked the committee where the state would get the money to put a general relief client she doesn't want in her assisted living home in a nursing home like Denali Center that ranges in cost from $5600 to $9000 a month, depending on the level of care. It's impossible for the small bed assisted living homes to make a living and care for these people at the Fairbanks rate of $34.50 a day. Even with the increase to $70, Alaska would still be below the national average for cost of care. "I say we need the $70 a day and we also need the differential added on because there are parts of this state where it's very high for electricity and fuel. I know, I paid $600 a month for fuel in Fairbanks." The Pioneer Homes are subsidized by the state, with employees getting insurance, retirement and vacation pay. MS. LANE said she has none of that, and also no way to recover on damages and repair bills to her home. MS. LANE emphasized that if the rate increase is not voted in, there's no way she can continue after July 1 on her budget to provide this service to general relief clients. The division has done a good job getting the providers more education and training. But she's been in the business and licensed in Alaska since 1991, and she griped about the rate then. They got a $3.50 increase, bringing it to $34.50 a day. There's been nothing since then. "Have you gone out lately and bought milk and butter? We feed these people. You guys have got to understand why we need the rate increase, and we need it now." Number 205 VICE-CHAIRMAN KELLY told Ms. Lane that Senator Miller had not seen the new fiscal note, and the three-year phase-in is just one scenario being considered. He asked her to track the bill and said that Sharon Clark would work with her. He felt the phase-in is a legitimate discussion, as well as the disparity between what it costs the state to care for these people and what the assisted living homes get paid to do it. He understood her difficulties and thanked her for her testimony. MS. LANE added she appreciates the three-year phase-in but she doesn't see that it's even a possibility. In caring for the general relief clients, the homes are saving the state thousands and even millions of dollars. If the bill passes, she could take in a client for $2,000 a month, compared to $9,000 a month-- a $7,000 a month savings for each person. She demanded, "What is the problem here?" Number 234 VICE-CHAIRMAN KELLY replied that all ideas have to work through the process, and there is progress but whether it will come out exactly as she wants it, no one can say. Everything she said is legitimate and he agrees with a lot of it, yet sixty people down here plus the Governor have to come to agreement on this bill.