Legislature(1995 - 1996)

04/11/1995 08:40 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HOUSE BILL 301                                                               
       "An Act relating to the medical assistance program; and                 
       providing for an effective date."                                       
  Co-Chair Hanley explained the  intent of HB 301.   The State                 
  of  Alaska at  this  time  has  two methods  of  controlling                 
  Medicaid spending:                                                           
       1.   Regulation of "amount, duration and scope"; and,                   
       2.   Turning  on  and  off  optional  services  through                 
            appropriation levels.                                              
  He continued, the  Department of Health and  Social Services                 
  (DHSS)  has  regulatory control  over "amount,  duration and                 
  scope", whereas the Legislature controls funding of optional                 
  services.  HB  301 was  introduced to lessen  the impact  of                 
  recent short-funding of the optional services list.                          
  Co-Chair  Hanley  stated  that  Medicaid  provides   medical                 
  coverage  under two  service lists, mandatory  and optional.                 
  Federal law requires  DHSS to provide all  eligible Alaskans                 
  mandatory services.  Congress allows  states to provide, and                 
  will help pay for, services not on the mandated list.  Those                 
  services  are included  in  Alaska's  Medicaid plan  through                 
  amendment AS 47.07.035, referred to as the "options list".                   
  Although, Co-Chair Hanley pointed out  that the options list                 
  has  not been  fully  funded for  several fiscal  years, but                 
  advising  that   all  optional  services  are  available  to                 
  children regardless of the appropriation levels.                             
  Co-Chair Hanley summarized that the enclosed attached Letter                 
  of  Intent   would  clarify  that  the   Medical  Assistance                 
  Division, DHSS would  have to live within  the appropriation                 
  level made in the FY96 operating budget.                                     
  Representative Brown asked  if management of the  list would                 
  be determined by the individual need  or a class of service.                 
  Co-Chair Hanley  commented that the  Department should  make                 
  that decision.   He reflected on  the success of the  Oregon                 
  Health Plan and noted information in the file regarding that                 
  SERVICES,  explained  that   there  are  clear   definitions                 
  explaining which services are essential in federal law.  She                 
  stressed that  they should  not be  violated.   Commissioner                 
  Perdue emphasized  that  the 10.6%  growth rate  had been  a                 
  modest projection and noted that it would not be feasible to                 
  "squeeze"  out   significant  coverage  from   the  existing                 
  Medicaid budget.                                                             
  Commissioner Perdue  stressed that  the Department does  not                 
  want  to spend supplementally,  although implementing HB 301                 
  would  create  that  need.   It  would  not  be possible  to                 
  "squeeze" out enough money to cover the variety of mandatory                 
  She added that the legislation  would require the Department                 
  to extensively investigate each option  which would demand a                 
  long  period  of  analysis time.    She  requested that  the                 
  responsibility of rewriting the options be part of  a public                 
  process.  Commissioner Perdue recommended that at this time,                 
  the  focus should  be on  the seven  (7)  options previously                 
  funded.  Commissioner  Perdue requested more  flexibility to                 
  the Department to  investigate those  options as opposed  to                 
  the others.   Commissioner Perdue pointed out  that the most                 
  essential  options  would  be  #9  (optometry  service),  #8                 
  (speech, hearing and  language) and #6 (adult  dental).  She                 
  concluded that all  of the services  are important, but  the                 
  three above mentioned services are the most serious.                         
  provided the Committee with a  handout, "Division of Medical                 
  Assistance".  [Attachment #1].  He explained that the charts                 
  illustrate  the  percentage  of  the  population  covered by                 
  Medicaid in Alaska for the last year.                                        
  Children  represent  the  majority of  those  served  by the                 
  program, although their  services accounted  for 35% of  all                 
  Medicaid eligible payments, whereas the disabled adult group                 
  showed the highest percentage of Medicaid spending.                          
  Mr. Super  continued,  30% of  all Medicaid  payments go  to                 
  hospitals,  then  nursing  homes receive  19%,  followed  by                 
  physicians  receiving  18%.    He  added that  nursing  home                 
  expenditures   for   the  aged   are   the   largest  single                 
  service/assistance category of  Medicaid spending  amounting                 
  to  nearly $30 million for nursing  home services last year.                 
  Alaska  Families with  Dependant Children  (AFDC) recipients                 
  both children and  adults account for the largest amounts of                 
  Medicaid spending  for  hospital,  physician  services,  and                 
  dental care.  He added that disabled persons account for the                 
  most spending followed by pharmacy services; followed by the                 
  intermediate care facilities for the mentally retarded.                      
  Commissioner  Perdue pointed  out  that  those persons  with                 
  disabilities and the  senior citizens are heavy users of the                 
  system and that they have great medical needs.  She stressed                 
  that this creates a large  management challenge even thought                 
  these are the people who really need the services.                           
  Co-Chair  Hanley  requested  more  information  on  how  the                 
  formula and growth rate  were determined.  He  suggested the                 
  inclusion of intent language with the bill.  Co-Chair Hanley                 
  noted his frustration  in determining  the growth cause  and                 
  asked that the Department to  develop more accountability in                 
  that system.                                                                 
  Mr. Super noted that the first ten services listed on Page 7                 
  of the handout are currently not funded.                                     
  HEALTH  AND  SOCIAL SERVICES,  spoke  to the  public hearing                 
  process sponsored by the Department for individuals to voice                 
  their   concerns   regarding   which   programs  should   be                 
  eliminated.  She  advised that  the dental, speech,  hearing                 
  and  vision  services  were  of   greatest  concern  to  the                 
  Department.   Ms. Weller elaborated that there  are no other                 
  providers of these services, consequently, no  other options                 
  for the recipients.                                                          
  The Department  only covered  emergency relief  of pain  and                 
  acute  infection  for  dental problems.    She  reminded the                 
  Committee that the cost of dental  services in Alaska is the                 
  highest in the nation and that many low income people are at                 
  high risk for poor dental  health because of their  poverty.                 
  Ms. Weller stressed that many of these people have disabling                 
  conditions  which  require  them  to  use  medications  that                 
  destroy oral health.  She emphasized  that this was the most                 
  medically necessary service on the list.                                     
  The speech and language limitation creates a negative effect                 
  for  those persons receiving  rehabilitation for  stroke and                 
  traumatic  brain   injuries  necessary   to  restore   their                 
  cognitive abilities.  The only place  that a person would be                 
  able to receive those services would be in a nursing home, a                 
  cost which is inordinately high.                                             
  Ms. Weller continued, hearing loss is a major concern of the                 
  Native  organizations.    The  loss  of those  services  has                 
  removed funding for hearing  aids.  A person not  being able                 
  to purchase a hearing aid becomes a quality of life issue as                 
  hearing aids are very expensive  but can dramatically change                 
  a persons ability to participate.                                            
  Representative Martin  questioned expenses  in the  division                 
  between  those persons qualified  for Public Health Services                 
  and Native hospitals.                                                        
  SOCIAL SERVICES,  explained that many Indian  Health Service                 
  beneficiaries are Medicaid  eligible.   If an Indian  Health                 
  Service beneficiary was also Medicaid eligible, and received                 
  services, the  federal government  would pay  100% for  that                 
  person's service.  He added that  there are certain services                 
  which are not provided by the  Indian Health Service.  There                 
  currently  exists a service  delivery system oriented toward                 
  in-patient services.                                                         
  Commissioner Perdue added that  in-patient services are well                 
  covered by  the Indian Health Services although  many of the                 
  out-patient   services   are  not   fully   covered.     She                 
  acknowledged that a problem  exists with "double  counting",                 
  citing five doors of "eligibility" for Medicaid services.                    
  Commissioner   Perdue  summarized   her  concerns   for  the                 
  Department.   She  stated that  the bill  provides  too much                 
  flexibility, in particular, creation of the scenario that no                 
  other costs should be added to the program.  There currently                 
  exists authority to  "squeeze" costs  from the system  under                 
  that itemized coverage.  She added that the bill would allow                 
  the  Department  to  pick  and  choose  among  the  options.                 
  Although, she felt  that the essential  focus of the  debate                 
  should  be with  items  #9,  #8 and  #6.   She  stated  that                 
  covering those options was most important.                                   
  Commissioner Perdue added, under the  10.6% growth rate, the                 
  Department could not "squeeze" enough  money from the system                 
  to  meaningfully cover options #9,  #8 or #6.   She asked to                 
  return to  the Committee  with a  reduced  amount of  money,                 
  reduced scope and duration  plan of scope in order  to cover                 
  some parts of options #9, #8 and #6.                                         
  Commissioner Perdue  explained that the  Medicare population                 
  of citizens are very desperate.   These are people with high                 
  medical needs, usually disabled or  elderly.  Their need for                 
  some services on the list would be far more than the average                 
  insurance actuarial  pool.   She emphasized  that there  are                 
  currently 25,000 children receiving coverage.                                
  Representative Parnell commented that the list was limiting,                 
  although  was  not  accurately  reflecting  the  priorities.                 
  Commissioner Perdue  responded that the Department  does not                 
  want to or  have the time to  rewrite the option list.   She                 
  emphasized that  this would  be a  major responsibility  and                 
  that it should be a public process.  She asked to  limit the                 
  authority to options agreed upon in advance.                                 
  (Tape Change, HFC 95-82, Side 2).                                            
  Co-Chair  Hanley  observed  the   need  to  reevaluate   the                 
  priorities list.  He  pointed out that 2% of  the population                 
  is  consuming  41%  of  the   funds.    Commissioner  Perdue                 
  acknowledged that the  frustrations are real and  voiced her                 
  enthusiasm to embark  on an Oregon  Plan type process.   She                 
  emphasized to do  this through  a suspension of  regulations                 
  would not be helpful.                                                        
  Representative Parnell questioned the Department's intention                 
  in addressing the Medicaid situation for the next 3.5 years.                 
  Commissioner Perdue  requested  the  opportunity  to  create                 
  dialogue during  the interim  with selected  members of  the                 
  Legislature  regarding  the reasonable  growth  rate of  the                 
  HB 301 was HELD in Committee for further discussion.                         

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