ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 11, 2023
3:02 p.m.
MEMBERS PRESENT
Representative Mike Prax, Chair
Representative Justin Ruffridge, Vice Chair
Representative CJ McCormick
Representative Dan Saddler
Representative Jesse Sumner
Representative Genevieve Mina
MEMBERS ABSENT
Representative Zack Fields
COMMITTEE CALENDAR
HOUSE BILL NO. 47
"An Act relating to insurance; relating to direct health care
agreements; and relating to unfair trade practices."
- MOVED HB 47 OUT OF COMMITTEE
HOUSE BILL NO. 56
"An Act exempting controlled substances prescribed or dispensed
by a veterinarian to treat an animal from the requirements of
the controlled substance prescription database."
- MOVED HB 56 OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 16
"An Act requiring the state medical assistance program to
provide certain services; relating to cost containment measures
for the state medical assistance program; relating to payment
for adult dental services; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 47
SHORT TITLE: DIRECT HEALTH AGREEMENT: NOT INSURANCE
SPONSOR(s): REPRESENTATIVE(s) MCCABE
01/25/23 (H) READ THE FIRST TIME - REFERRALS
01/25/23 (H) HSS, L&C
02/18/23 (H) HSS AT 3:00 PM DAVIS 106
02/18/23 (H) -- MEETING CANCELED --
02/28/23 (H) HSS AT 3:00 PM DAVIS 106
02/28/23 (H) Heard & Held
02/28/23 (H) MINUTE(HSS)
03/11/23 (H) HSS AT 3:00 PM DAVIS 106
BILL: HB 56
SHORT TITLE: CONTROLLED SUB. DATA: EXEMPT ANIMAL RX
SPONSOR(s): REPRESENTATIVE(s) RUFFRIDGE
02/03/23 (H) READ THE FIRST TIME - REFERRALS
02/03/23 (H) HSS, L&C
02/18/23 (H) HSS AT 3:00 PM DAVIS 106
02/18/23 (H) -- MEETING CANCELED --
03/02/23 (H) HSS AT 3:00 PM DAVIS 106
03/02/23 (H) Heard & Held
03/02/23 (H) MINUTE(HSS)
03/11/23 (H) HSS AT 3:00 PM DAVIS 106
BILL: HB 16
SHORT TITLE: MEDICAID OPTIONAL SVCS & COST CONTAINMENT
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/19/23 (H) PREFILE RELEASED 1/9/23
01/19/23 (H) READ THE FIRST TIME - REFERRALS
01/19/23 (H) HSS, FIN
03/08/23 (H) SPONSOR SUBSTITUTE INTRODUCED
03/08/23 (H) READ THE FIRST TIME - REFERRALS
03/08/23 (H) HSS, FIN
03/11/23 (H) HSS AT 3:00 PM DAVIS 106
WITNESS REGISTER
REPRESENTATIVE KEVIN MCCABE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the prime sponsor, presented HB 47.
BUDDY WHITT, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
47, on behalf of Representative McCabe, prime sponsor.
PETER DIEMER, Lawyer
Clayton and Diemer, LLC
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
47.
WADE ERICKSON, MD
Capstone Family Medicine
Wasilla, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
47.
KRYSTAL TODD, Veterinarian Technician
North Pole Veterinarian Hospital
North Pole, Alaska
POSITION STATEMENT: Testified in support of HB 56.
MERCEDES PINTO, DVM, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 56.
KATRINA BACKUS, DVM, Medical Director
North Pole Veterinarian Hospital
North Pole, Alaska
POSITION STATEMENT: Testified in support of HB 56.
GABRIEL SASSOON, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 56.
SYLVAN ROBB, Director,
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community, and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding HB 56.
RACHEL BERNGARTT, DVM
Board of Veterinary Examiners
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding HB 56.
REPRESENTATIVE ANDY JOSEPHSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the prime sponsor, presented SSHB 16.
ACTION NARRATIVE
3:02:04 PM
CHAIR MIKE PRAX called the House Health and Social Services
Standing Committee meeting to order at 3:02 p.m.
Representatives Ruffridge, McCormick, Saddler, Sumner, Mina and
Prax were present at the call to order.
HB 47-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:04:03 PM
CHAIR PRAX announced that the first order of business would be
HOUSE BILL NO. 47, "An Act relating to insurance; relating to
direct health care agreements; and relating to unfair trade
practices."
3:04:47 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, presented HB 47. He read the sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
House Bill 47 establishes guidelines for direct health
care agreements between medical providers and
patients. Direct Health Care (DHC) is a subscription
for health care services in which patients or
employers pay primary care providers a flat, simple
periodic fee in exchange for access to a clearly
established broad range of health care services.
DHC removes some of the financial barriers patients
encounter in accessing routine primary care, including
preventive, wellness, and chronic care services. With
a DHC plan, health care providers aren't burdened with
time-consuming insurance paperwork, leaving more time
to spend with patients. Under DHC agreements (there
are currently over 1,400 direct primary care practices
in 48 states), patients typically get same day access
or next day visits and the option to call or text
their clinic 24/7.
Health outcomes for patients improve under direct
health as there is a focus on routine and preventative
health care. Patients also feel less restrained from
interacting with their provider and typically seek
care before their symptoms become serious.
House Bill 47 clearly spells out the elements of a DHC
agreement and emphasizes consumer protections against
discriminatory practices. Further, the bill clearly
defines that Direct Health Care agreements are not
insurance. They do, however, lower the hurdles to
access for many Alaskans.
Alaskans spend more on health care per capita than any
other state in the union. At a time when many Alaskans
fear the uncertainties of the economy, pandemic, and
global instability, direct health care agreements can
provide an option for quality healthcare at an
affordable rate.
Please join me in supporting this health care option
for Alaskans.
3:06:18 PM
CHAIR PRAX opened public testimony on HB 47. After ascertaining
there was no one who wished to testify, he closed public
testimony.
3:07:05 PM
REPRESENTATIVE SADDLER directed attention to language on page 2,
line 13, regarding complaints from a patient or representative
of a patient, and he pointed out that this is the only instance
where just the patient alone was referenced; all other
references referred only to representative of a patient. He
inquired whether the language was deliberately omitted in this
one instance.
3:07:57 PM
BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor
of HB 47, referred to page 1, lines 5-11 of the proposed
legislation, as this addresses direct health care agreements as
something that a patient, or someone on behalf of the patient,
can enter into. He said that language on page 2, line 19,
directs what these health care agreements must include. He said
the issue might be in the drafting, and how the law works, as
someone may enter into a direct health care agreement on behalf
of the patient, with the rights of the patient focused on in the
mechanism of the agreement itself. He requested that Peter
Diemer further elaborate.
3:09:33 PM
PETER DIEMER, Lawyer, Clayton and Diemer, LLC, concurred with
the explanation. He listed subsection (b), paragraphs (2)
through (5) as using different terms. He concurred with the
Legislative Legal Service's methodology, as it fits in the
framework, and the language allows a complaint to be brought
forward by either the patient or the patient's representative.
3:10:38 PM
REPRESENTATIVE SADDLER asked about language allowing providers
to charge for services that are not part of the periodic fee.
He offered his understanding that should a health care agreement
be terminated under HB 47, the one who initiated the termination
would have to pay a prorated cost of the monthly service fee, as
well as additional fees for services not included. He further
offered the understanding that direct health care agreements
would cover all services. He asked whether a person would be
obligated to pay any fees on services outside of the agreement.
MR. WHITT answered that a direct health care agreement would
charge a fee for a specified number of services. He said there
could be services provided by a health care provider that are
outside of what is included in the set fee. He invited other
speakers to address the health care model.
3:12:26 PM
MR. DIEMER responded that, within the framework of the
legislation, there would be a requirement that all the services
included in the periodic fee must be stated within the
agreement. He said this ensures the patient knows the scope of
the services to be received for the periodic fee. He added that
on the occasion where the medical service required falls outside
of the agreement's scope, it would be considered a traditional
fee for service.
3:13:26 PM
WADE ERICKSON, MD, Capstone Family Medicine, explained that the
agreements would be written in such a way to include laboratory
services to a certain amount, and if the patient requires more
specialty services not available in the clinic itself, then
these would be billed to a laboratory company and passed through
to the patient.
3:14:59 PM
REPRESENTATIVE MINA asked for an outline of the cost-saving
aspects of the bill.
REPRESENTATIVE MCCABE posed the following hypothetical: a
person wants to pay for [the continuation of health coverage]
through the Consolidated Omnibus Budget Reconciliation Act
(COBRA), where COBRA family services would cost more than $1,000
a month. He opined that with a direct health care agreement,
this person could establish an agreement with a medical clinic
at a rate of $100 a month, covering everything in the agreement.
He suggested the savings would be immense for a person who lost
their job, or a younger person who cannot afford medical care.
3:18:25 PM
DR. ERICKSON added that the direct health care payment model
allows for access to primary care in the Lower 48, as well as
dental and optometry, at a reasonable monthly rate. He said
that, while it is not insurance, it is another method of payment
for certain services; it is recommended that people still apply
for insurance or catastrophic plans, on top of the direct plan.
He said the savings to the health care would be through
heightened access to primary care, and costs would be decreased
in light of the decreased severity of disease, as it may be
discovered sooner.
REPRESENTATIVE MINA questioned how many providers would be
interested in pursuing such agreements.
3:21:30 PM
REPRESENTATIVE MCCABE responded that he has spoken to three
different providers who are interested.
DR. ERICKSON explained that anytime there is an additional
option for patients to pay for services, there will be an
uptick, and each practice will determine what its capabilities
are. He suggested that some are already making these agreements
"under the radar;" therefore, the proposed legislation would
allow providers who have not been doing this to offer a similar
service. He stated that this payment model would allow
physicians or practitioners to skirt standard fee-for-service
administrative burdens.
REPRESENTATIVE MCCABE offered his understanding that as of 2020,
1,969 practices in 48 states are doing direct primary care, with
physicians or groups of physicians owning all these practices.
Furthermore, 32 states had legislation like HB 47 in 2020, with
12 pending.
3:25:16 PM
REPRESENTATIVE RUFFRIDGE read page 4, line 25, of the proposed
legislation, which read as follows:
"health care business" means a business licensed by
the state that is 25 entirely owned by health care
providers;
REPRESENTATIVE RUFFRIDGE asked whether this would be limiting to
the state, as not all health care businesses are owned by health
care providers.
MR. DIEMER answered that the definition of health care business
was intentional, as it is designed to be for businesses
completely owned by health care providers and is accusatory to
any type of business ownership structure. He said the
definition ensures that health care businesses that offer direct
health care agreements and are owned by licensed health care
providers would be subject to the state's professional licensing
and board regulations. He explained that this adds a layer of
patient protection because all the providers are subject to such
regulations.
REPRESENTATIVE RUFFRIDGE shared that in his district many
clinics were small and operated by a couple of individuals;
however, over time a larger hospital system acquired the
clinics. He asked whether a hospital system that owns separate
clinics operating primary care would be prohibited from offering
a direct health care agreement.
MR. DIEMER responded that the answer depends on the ownership
structure of the hospital. He said that some hospitals are
physician owned, while some are operated by nonprofit
corporations and do not have a physician-ownership structure
that would meet the proposed definition.
3:29:45 PM
MR. WHITT directed attention to page 4, line 28 of the proposed
legislation, which gives the definition of "health care
provider" in AS 21.07.250, as follows:
(6) "health care provider" means a person licensed in
this state or another state of the United States to
provide medical care services;
MR. WHITT said that medical care services are not limited just
to a doctor, as someone who is licensed to provide medical care
services is considered the medical care provider and would be
able to enter into agreements.
3:30:43 PM
REPRESENTATIVE SUMNER asked whether the term "person" in this
context would include corporate personhood.
3:31:05 PM
CHAIR PRAX added to the question by posing a hypothetical in
which individuals not licensed as health care providers form a
corporation or a partnership but employing a licensed health
care provider. He asked whether the bill would allow this
situation.
3:31:50 PM
REPRESENTATIVE MCCABE answered that the language was put in
place as patient protection. He said a concern was raised at a
previous meeting that businesses, as they grow and become
moneymaking businesses, would be taken over by big health care
consortiums. He stated that HB 47 would seek to return to the
physician-patient relationship rather than "corporate medicine."
He surmised that the language was added into the proposed bill
for this reason.
3:33:39 PM
CHAIR PRAX offered his view that the language opens the door to
more providers, and if it is not opening the door wide enough,
the language can be fixed later.
3:33:53 PM
REPRESENTATIVE SADDLER sought confirmation that the bill would
allow the patient or the provider to cancel an existing health
care agreement on a no-fault basis.
3:34:19 PM
REPRESENTATIVE MCCABE responded in the affirmative and asked Mr.
Diemer to explain.
3:34:43 PM
MR. DIEMER confirmed that Representative Saddler is correct, in
that either party can terminate the agreement with the
appropriate notice. Regarding the composition of a health care
business, he said it is restricted to natural persons who are
licensed health care providers.
REPRESENTATIVE SADDLER asked about the suggestion that it is
possible to have a direct care service agreement, as well as
catastrophic medical insurance. He asked how many providers are
likely to have patients who are dually insured.
DR. ERICKSON responded that the majority of those in the Lower
48 are doing health care this way, where there is a big plan on
top and a direct health plan underneath.
3:36:58 PM
REPRESENTATIVE MINA asked what the status would be of
catastrophic care in Alaska if the state were to implement a
direct health care model.
REPRESENTATIVE MCCABE answered that he has a neighbor who has a
catastrophic policy and is interested in [direct health care]
plans because he recognizes that he does not have any health
coverage.
3:38:10 PM
MR. WHITT pointed to a study by the John Locke Foundation
[included in the committee packet] regarding direct primary
care. He stated that the study relates to implementation and
results [of direct health care] in North Carolina. He conveyed
the study's findings regarding an average direct primary care
agreement, as follows: 55 percent are those that have one
chronic disease and substantial insurance coverage and are on a
direct care agreement and 44 percent are considered low risk and
have a care agreement as a supplement to their current
insurance. He referenced the Primary Institute of Public Policy
Research, which covers research on direct health care
agreements. He stated that it has found that those most
impacted by direct health care agreements are low-income working
families.
REPRESENTATIVE MINA asked whether the implementation of direct
health care agreements in other states has changed the rate of
people shifting from the individual market to these agreements.
MR. WHITT responded that he has not seen any indication that
there has been full-scale movement from the individual market to
direct health care agreements. He said that data suggests that
such agreements are made as add-ons to existing insurance
policies.
REPRESENTATIVE MINA commented that, as a benefit of an
agreement, the contract incentivizes consumers to have more
access to a provider. She asked for a comparison between those
who have agreements and do annual visits with those who use a
traditional fee-for-service model.
3:43:37 PM
DR. ERICKSON explained that in the Lower 48 the impetus is on
the provider to have the patients be seen as quickly as possible
for an evaluation, as this would get the person assessed early
in the contract. He pointed out that direct primary care
providers in the Lower 48 reach out proactively so that patients
would visit sooner and start their care.
3:45:56 PM
MR. DIEMER said that deductibles in insurance are designed to be
implemented to reduce consumption; direct health care is the
opposite, as it is designed to decrease consumption of health
care for a fixed cost, while increasing access. He explained
that those who have a high deductible insurance plan would
benefit from these agreements, as a host of services can be
provided to families at a price not even close to the
deductible. Furthermore, in the event of a catastrophic injury,
people would then have catastrophic insurance in place. He said
that insurers embrace the model because it improves access and
results in a healthier patient population, thereby reducing
claims. He elaborated that the patient benefits from health
care access at a fixed fee for a defined scope rather than a
fee-for-service with the uncertainty of cost.
3:48:40 PM
CHAIR PRAX opined that the bill would correct the misconception
of insurance, in that, insurance is financial protection, and
since people are choosing lower and lower deductibles, it
becomes prepaid medical; therefore, driving up the cost of
medical care because of the extra paperwork. He said that the
health insurance contracts separate that, making insurance
return to being financial protection, and the contract becomes a
lower way to provide the same level of medical service.
3:49:45 PM
REPRESENTATIVE RUFFRIDGE moved to report HB 47 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 47 was reported out of the
House Health and Social Services Standing Committee.
3:50:24 PM
The committee took an at-ease from 3:50 p.m. to 3:53 p.m.
HB 56-CONTROLLED SUB. DATA: EXEMPT ANIMAL RX
3:53:57 PM
CHAIR PRAX announced that the next order of business would be
HOUSE BILL NO. 56, "An Act exempting controlled substances
prescribed or dispensed by a veterinarian to treat an animal
from the requirements of the controlled substance prescription
database."
3:54:49 PM
REPRESENTATIVE RUFFRIDGE, as prime sponsor, spoke to HB 56. He
stated that the proposed legislation would exempt veterinarians
from the Prescription Drug Monitoring Program (PDMP). He
reasoned that veterinarians who participate in this program
cause privacy concerns. He explained that veterinarians do not
deal with human medicine and are not trained under the Health
Insurance Portability and Accountability Act (HIPAA). He also
pointed out that veterinarians should be exempt because the
program is cumbersome to use, and they rarely dispense the
controlled substances the program was created to control. He
pointed out that even though they are not dispensing these
drugs, veterinarians are required to report to the program
daily.
3:56:22 PM
[Public testimony on HB 56 was opened.]
3:57:05 PM
KRYSTAL TODD, Veterinarian Technician, North Pole Veterinarian
Hospital, provided testimony in support of HB 56. She explained
that many requirements for PDMP do not work for veterinarians,
such as the daily reporting. She described the busy schedule at
the hospital and stated that as a lead surgery technician, after
10 surgeries a day, she has to do this reporting, which "does
not help the human side of the PDMP." She argued that often
there is no way to know the association of the human who brought
the pet to the hospital. She expressed the opinion that it does
not make sense to track [human] personal information for
[animal] patients being treated.
3:59:07 PM
MERCEDES PINTO, DVM, representing self, provided testimony in
support of HB 56. As a shelter veterinarian, she stated that it
is "impossible ... to meet requirements" of PDMP. She gave the
example of a dog dropped off in a kennel during the night, along
with three pills left in a bottle and a note advising that the
dog has seizures, and it is not wanted back. She explained that
a refill would be needed, but there is no paperwork, so it is
impossible for the veterinarian to find the information on PDMP.
In another example, she stated that she provides medical support
during sled dog races. In the case where she has a patient on
the scene who needs a controlled drug, she would most likely be
off the grid and could not look up the required information.
She continued that often the owner of the dog is not there;
therefore, she does not know the individual to track on PDMP to
access the medication.
4:02:23 PM
KATRINA BACKUS, DVM, Medical Director, North Pole Veterinarian
Hospital, provided testimony in support of HB 56. She said that
most states have determined that veterinarians are exempt from
the PDMP because "there really isn't a way for us to query the
people associated with pets with these drugs." She noted that
veterinarians do not prescribe the types of drugs abused by
humans. She stated that she has no business inquiring as to
what medications her clients use and why, as the medications she
prescribes are for the pet.
4:05:00 PM
GABRIEL SASSOON, representing self, provided invited testimony
in support of HB 56. He shared that he is the owner of a law
firm in Southeast Alaska, and during his time in law school, he
was diagnosed with an ocular condition that renders a person
blind within two years. He said that his treatment leaves him
with chronic pain that is managed by a physician through a "pain
contract." He argued that his pet's treatment with pain
medication could be delayed because of his own pain treatment.
He expressed difficulty understanding this, especially when the
veterinarian is not monitoring his care. He suggested that the
goals of PDMP are not executed efficiently in the context of
what the program currently obligates veterinarians to do. He
asked that veterinarians not be subject to PDMP.
4:09:04 PM
CHAIR PRAX, after ascertaining that there was no one else who
wished to testify, closed public testimony on HB 56.
4:09:26 PM
REPRESENTATIVE SADDLER asked how often there are investigations
of veterinarians related to PDMP issues.
SYLVAN ROBB, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community, and
Economic Development answered that she does not have the exact
number but offered to follow up regarding the frequency. She
shared that there are fewer than 15 investigations but said she
does not know how many are related to PDMP.
4:11:34 PM
RACHEL BERNGARTT, DVM, Board of Veterinary Examiners, Division
of Corporations, Business, and Professional Licensing,
Department of Commerce, Community and Economic Development said
the amount of PDMP investigations have been variable. She
explained that starting in about 2018 there was a large increase
in investigations, but it was determined that these were not
because of veterinary impropriety. She expressed the
understanding that some investigation reports have been created,
despite the veterinarian doing nothing wrong. She said such
investigations have declined because of filtering system
improvements. She stated that as of February there are no
pending investigations into veterinary drug misuse.
4:13:42 PM
REPRESENTATIVE MINA commented that she appreciates the work
veterinarians and others have done related to HB 56.
4:14:22 PM
REPRESENTATIVE SUMNER moved to report HB 56 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 56 was reported out of the
House Health and Social Services Standing Committee.
4:14:56 PM
The committee took an at-ease from 4:14 p.m. to 4:17 p.m.
HB 16-MEDICAID OPTIONAL SVCS & COST CONTAINMENT
4:17:28 PM
CHAIR PRAX announced that the final order of business would be
the SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 16 "An Act requiring
the state medical assistance program to provide certain
services; relating to cost containment measures for the state
medical assistance program; relating to payment for adult dental
services; and providing for an effective date."
4:18:02 PM
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, as
prime sponsor of SSHB 16, paraphrased the sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
Medicaid offers a myriad of optional services, many of
which Alaska chooses to offer to program recipients in
our state. As listed in AS 47.07.030(b), these
services cover a wide variety of health care needs,
whether preventative (e.g. nutrition services for
pregnant women, clinic services, and low-dose
mammography screening), chronic (e.g. long-term care
and hospice care), or emergent (e.g. emergency
hospital services), or combinations thereof. Alaska
also chooses to cover dental services, both
preventative and restorative, for eligible adults.
In June of 2019, all funds appropriated towards adult
dental Medicaid benefits were vetoed days prior to the
beginning of the new fiscal year. This forced numerous
program recipients to cease treatment, leaving
multiple Alaskans who were in the process of receiving
dentures literally toothless. Ultimately, reinstated
funding ensured that this program would continue, but
not until months after the initial veto.
HB 16 aims to prevent such uncertainty to program
recipients in the future. This bill ensures that the
listed services in AS 47.07.030(b) would be maintained
in future years and not be subject to similar future
cuts. Please join me in maintaining coverage for these
individuals by supporting HB 16.
4:28:39 PM
REPRESENTATIVE JOSEPHSON gave the PowerPoint presentation,
titled "House Bill 16" [hard copy included in the committee
packet]. On slide 2, he showed a graph of Alaska Medicaid
funding from fiscal year 2012 (FY 12) to (FY 21) and pointed out
that there was an increase in FY 15. He moved to slide 3 to
present a list of mandatory and optional Medicaid services. He
said the bill would add two services, and this would cost $35
million. He moved to slide 4 and showed a table that lists
Medicaid optional services by state. The table indicates the
services each state has selected, and he indicated that the red
denotes rejected services. He pointed out that Maine and
Wisconsin are more generous with the services selected. He
moved to slide 5 to explain Medicaid eligibility in Alaska. On
slide 6, he explained that optional services have already been a
target for cost-cutting measures, and he referred to an action
by the governor to remove adult dental services, which was
rejected by the legislature.
REPRESENTATIVE JOSEPHSON showed slide 7, which listed intended
Medicaid cuts in 2020. He expressed the opinion that the
administration would need flexibility; therefore, nothing in the
proposed legislation would stop cost-containing measures. He
informed members that he would have to confirm whether the $102
million total was the governor's goal in FY 20. He moved to
slide 9 and explained that the legislature had weighed many
options, while slide 10 depicted a graph of annual Medicaid
funding and the governor's proposed reductions. He advanced to
slide 13 to explain Maine's Medicaid law. He said slide 14
provides a breakdown of the states that have, in one form or
another, a required check in order to modify a state's plan. He
concluded on slide 15 and expressed eagerness to see the
proposed bill move to the next committee, because in some states
the governor alone can make significant changes.
4:38:32 PM
REPRESENTATIVE MINA shared that she has spoken with residents
who voiced that adult dental should be a necessary part of
primary care and not just an optional service. She offered the
understanding that amendments to the state's Medicaid plan must
be subject to legislative approval, and this is why there is a
proposed bill to allow post-partum treatment under Medicaid.
She questioned which [parts of the Medicaid plan] are currently
subject to legislative approval.
REPRESENTATIVE JOSEPHSON expressed the opinion that the question
highlights the point that there is a need for authority;
otherwise, the governor would have filed a bill. He expressed
uncertainty concerning why the governor removed adult dental
[services from the Medicaid plan] without filing a bill
requesting it. He further elaborated that little in the
Medicaid program is subject to legislative authority, and he
relayed that AS 47.07 provides that the department "may" offer
the following optional services.
REPRESENTATIVE MINA asked what else is subject to legislative
approval besides optional services.
REPRESENTATIVE JOSEPHSON answered that cost-containment measures
in AS 47.07.036 are also at the administration's discretion. He
referred to slide 6 of the presentation regarding cost-cutting
measures and said that the governor made the changes so he could
reach the $102 million; however, the legislature rejected this
action. He read from AS 47.07.036, which read as follows:
If the department finds that the costs of medical
assistance for all persons eligible under this chapter
will exceed the amount allocated in the state budget
for a fiscal year, the department may implement cost
containment measures to reduce anticipated program
costs
4:44:47 PM
REPRESENTATIVE SUMNER asked what the effect would be if there
was a reduction in Medicaid funding. He opined that if the
department "shall" instead of "may" do optional services, and it
did not have the funding, it would have to cut some fraction of
all services, rather than selectively.
REPRESENTATIVE JOSEPHSON responded that the administration was
going to the Centers for Medicare and Medicaid Services (CMS) to
cut adult dental service. He explained that the bill was
written at the time of the adult dental cut.
REPRESENTATIVE SUMNER suggested that instead of focusing on the
veto, the focus should be on a potential situation where the
earnings reserve account goes empty. He asked whether, under
SSHB 16, the state would not be allowing the selection of
prioritized vital health services.
REPRESENTATIVE JOSEPHSON responded that, under SSHB 16, members
would not be allowed to change who is eligible, nor eliminate
optional programs; the bill would have the legislature involved
in the process.
4:49:01 PM
REPRESENTATIVE SADDLER referred to Representative Josephson's
suggestion that the governor opted in 2019 not to fund optional
dental services in order to create a larger permanent fund
dividend (PFD). He expressed the understanding that on the
floor of the House of Representatives, no one should ascribe
motives to people, and members can debate the merits of SSHB 16
without ascribing the governor's motives.
4:49:53 PM
REPRESENTATIVE RUFFRIDGE inquired whether, if the bill were to
pass but the state cannot pay the necessary services on
Medicaid, no individual programs would be cut, but rather, the
cuts would be across the board because all services would be
required. He asked for confirmation that in order to make a
cut, the legislature would need to convene and move to cut the
service.
REPRESENTATIVE JOSEPHSON responded in the affirmative.
4:50:50 PM
REPRESENTATIVE MINA, looking at the list of optional services
provided under AS 47.07.30(b), questioned whether the federal
match rate is just 70/30.
REPRESENTATIVE JOSEPHSON expressed uncertainty and suggested
that for some services the state's share may be higher.
REPRESENTATIVE MINA asked about the fiscal note and how brain-
injury case management would be funded, as it is not currently
funded by general fund grants.
REPRESENTATIVE JOSEPHSON offered his understanding that it is
not funded through the Medicaid program. He said this was added
because of the concern that the governor wanted to cut $250
million from Medicaid. He expressed the opinion that there must
be some way for the legislature to be involved.
REPRESENTATIVE MINA offered her understanding that brain-injury
case management, as well as pregnant women case management, are
listed in statute; however, these services are not in the
current state plan, which is why there is the fiscal note. She
expressed the desire not to ascribe the worth of one service
over another. She questioned whether there is a way to narrow
the bill, so it focuses on the services that are currently in
the state plan.
REPRESENTATIVE JOSEPHSON concurred that the cost comes from
putting a service into the state plan. He observed that the
2019 administration is not the same as the 2023 administration,
and he reiterated that SSHB 16 is a legacy bill.
REPRESENTATIVE MINA offered her understanding that the intent of
the bill is that optional Medicaid services, whether cut or
changed by the executive branch, would require legislative
authority. She noted that the bill would also add two new
services to the state plan.
REPRESENTATIVE JOSEPHSON concurred that the intent of drafting
the bill was to not allow the governor alone to strip away
programs. Furthermore, he noted that there is a $30 million
savings to the state because the proposed sponsor substitute
would remove chiropractic care.
REPRESENTATIVE MINA commented that the biggest impact from
cutting Medicaid and optional services is losing the federal
dollars.
REPRESENTATIVE JOSEPHSON suggested removing the two programs
that he added, because they are costly. He suggested
implementing a Wisconsin- or Maine-style amendment, which would
add the involvement of the legislature.
4:58:43 PM
REPRESENTATIVE SUMNER questioned whether chiropractic care was
removed because of the fiscal note or because of the
reimbursement rate.
REPRESENTATIVE JOSEPHSON answered that it was removed because of
the cost on the fiscal note.
4:59:07 PM
REPRESENTATIVE RUFFRIDGE asked whether chiropractic services
fall under the language "may offer".
REPRESENTATIVE JOSEPHSON responded that it does fall under this
language, but the state does not.
4:59:32 PM
REPRESENTATIVE SUMNER asked whether it would require legislative
action to remove chiropractic care from the "may offer" list and
add it to the "shall offer" list.
REPRESENTATIVE JOSEPHSON suggested that it could be taken off
the "may offer list," and then the legislature could move
forward with the Wisconsin- and Maine-style of reform.
REPRESENTATIVE SUMNER offered his understanding that the bill
just changes "may" to "shall", striking chiropractic from the
list; however, it would take a future legislative act to make it
possible. He further opined that the reason there needs to be a
bill for post-partum care is that it is an eligibility issue,
not a service issue.
5:01:11 PM
REPRESENTATIVE MINA pointed out that an amendment to the state
Medicaid plan requires legislative action.
REPRESENTATIVE JOSEPHSON suggested that Representative Mina
knows more than the bill sponsor does.
5:02:25 PM
CHAIR PRAX announced that SSHB 16 was held over.
5:02:37 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 5:02 p.m.