Legislature(2009 - 2010)HOUSE FINANCE 519

02/01/2010 01:30 PM House FINANCE

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01:34:42 PM Start
01:36:02 PM HB300 || HB302
03:41:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Governor's FY11 Budget Overview: TELECONFERENCED
Dept. of Health & Social Services
Contract for Budget Support Services
HOUSE BILL NO. 300                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan program expenses of  state government, for certain                                                                    
     programs, and to  capitalize funds; making supplemental                                                                    
     appropriations;  making appropriations  under art.  IX,                                                                    
     sec. 17(c),  Constitution of the  State of  Alaska; and                                                                    
     providing for an effective date."                                                                                          
HOUSE BILL NO. 302                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
1:36:02 PM                                                                                                                    
DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                                      
WILLIAM  HOGAN,  COMMISSIONER,   DEPARTMENT  OF  HEALTH  AND                                                                    
SOCIAL  SERVICES, presented  the department's  FY2011 budget                                                                    
overview. He  referred to the  "Executive Summary"  (copy on                                                                    
file). He  defined the department's mission;  to promote and                                                                    
protect  the  health  and  wellbeing of  all  for  a  strong                                                                    
Alaska.   He   attributed   the  mission   to   the   Alaska                                                                    
Co-Chair  Stoltze asserted  that the  constitution does  not                                                                    
contain  the   word  "wellbeing."  He  felt   that  verbiage                                                                    
advanced "unprovoked good."                                                                                                     
Commissioner Hogan  referred to the document  titled "Alaska                                                                    
Department of  Health and  Social Services  2010 Priorities"                                                                    
(copy on file). He emphasized  that the department's goal is                                                                    
productivity. He  stated the department's focus  has been to                                                                    
help  create   productive  families  and   individuals  that                                                                    
contribute  to  their   communities  and  become  productive                                                                    
members of society.  He pointed out that  the department has                                                                    
studied outcomes  to ensure that  the programs  and services                                                                    
provided produce these results.                                                                                                 
Commissioner  Hogan  outlined  the main  priorities  of  the                                                                    
department:  Substance Abuse,  Health  and Wellness,  Health                                                                    
Care Reform, Long Term Care,  and Vulnerable Populations. He                                                                    
highlighted  that   the  department's  efforts   to  address                                                                    
substance   abuse  have   been   focused   in  four   areas:                                                                    
prevention, early intervention,  treatment, and recovery. He                                                                    
elaborated  that   as  part  of  the   Health  and  Wellness                                                                    
priorities,   the  department   focused   on  program   cost                                                                    
reduction and  prevention. Alaska has high  rates of chronic                                                                    
disease,  sexually transmitted  diseases, and  injuries. The                                                                    
department has  also examined increased health  care access,                                                                    
trauma system  enhancement, emergency preparedness,  and the                                                                    
health and  social service impact  on communities  that will                                                                    
experience  large  economic activity  such  as  a major  gas                                                                    
line. He addressed  federal health care reform  and noted it                                                                    
will spur changes at the federal and state levels.                                                                              
Co-Chair Stoltze asked if the  interests of Alaska are being                                                                    
met in  the proposed  federal legislation  and what  are the                                                                    
department's  concerns.  Commissioner Hogan  explained  that                                                                    
his  office works  actively with  the  governor's office  in                                                                    
Washington  D.C.  and  the   Alaska  delegation  to  solicit                                                                    
Alaska's   interests.   He   exemplified   two   legislative                                                                    
proposals  where   Alaska's  position  is   being  advocated                                                                    
through these  channels. The first  was the  National Health                                                                    
Insurance Exchange.  He believes a  one size fits  all model                                                                    
would  not  work  for  Alaska.  The  Department  is  seeking                                                                    
flexibility  within  the  proposal to  create  Alaska's  own                                                                    
exchange. Secondly,  he expressed concern with  the proposed                                                                    
increase for Medicaid  to 133 percent of  the poverty level.                                                                    
He asserted that  the federal government should  pay for the                                                                    
entire increase.                                                                                                                
Co-Chair  Stoltze characterized  the measure  of success  of                                                                    
the   Department's   lobbying  efforts   as   "fifty/fifty".                                                                    
Commissioner  Hogan  speculated   that  successful  outcomes                                                                    
depend  on the  level  of  influence the  state  has at  the                                                                    
federal level. He concurred with the assessment.                                                                                
Commissioner Hogan  added that a Health  Care Commission has                                                                    
been  established  by  the Department  and  has  released  a                                                                    
report    of   recommendations    for   consideration    and                                                                    
prioritization. He  believes the  Commission is  very useful                                                                    
in deciphering  the federal health care  reform legislation.                                                                    
In  addition, the  Commission thoroughly  examined the  four                                                                    
key  components   of  health  care  and   delivery:  access,                                                                    
quality, cost,  and prevention. He  noted that  the shortage                                                                    
of  health  care  workers  in  the  state  is  a  continuing                                                                    
1:47:08 PM                                                                                                                    
Commissioner  Hogan continued  with  issues concerning  Long                                                                    
Term  Care. He  pointed  out that  seniors  are the  fastest                                                                    
growing  population in  the state.  The department  has been                                                                    
working to  ensure seniors  have access to  in home  care, a                                                                    
high quality nursing home option, and pioneer homes.                                                                            
Commissioner Hogan  announced that  the final  priority area                                                                    
deals  with Vulnerable  Alaskans.  He  stated that  includes                                                                    
situations  of  abuse  and neglect,  juvenile  justice,  the                                                                    
developmentally  disabled,  and   Safety  Net  Programs  run                                                                    
through   the   Division    of   Public   Assistance,   i.e.                                                                    
Supplemental  Nutritional  Assistance Program  (SNAP),  Home                                                                    
Heating  Assistance.  He   highlighted  the  Families  First                                                                    
Initiative  that identifies  individuals with  mental health                                                                    
and  substance  abuse  problems,   who  are  about  to  lose                                                                    
temporary assistance  benefits. The  program offers  help to                                                                    
those individuals and their families.                                                                                           
1:50:25 PM                                                                                                                    
Representative  Austerman asked  for an  explanation of  the                                                                    
"environmental   health   and   tax".   Commissioner   Hogan                                                                    
explained the  concept; as large scale  economic development                                                                    
projects take  place in an  area it impacts  communities and                                                                    
families.  He  cited the  oil  pipeline  and the  associated                                                                    
societal increase  in alcohol  abuse and  domestic violence.                                                                    
The department wants  to take a proactive role  to deal with                                                                    
potential problems during an economic boom cycle.                                                                               
Representative  Austerman asked  for an  explanation of  the                                                                    
steps  taken  to  solve the  fragmented  and  un-coordinated                                                                    
health care system in Alaska.  Commissioner Hogan noted that                                                                    
the  recommendations by  the Health  Care Commission  are an                                                                    
effort  to  address  the problems.  He  identified  a  major                                                                    
problem  as access  to health  care when  needed; trying  to                                                                    
avoid  emergency  room  visits  by increasing  access  to  a                                                                    
primary care physician.                                                                                                         
1:53:32 PM                                                                                                                    
Representative Austerman believed  that regarding Vulnerable                                                                    
Populations the  system is  set up  so that  individuals and                                                                    
families never  break out of  the assistance  cycle. Earning                                                                    
and  saving  money  often   disrupts  benefits  causing  the                                                                    
recipients to lose the personal  gains made and dependent on                                                                    
assistance  programs once  again. He  wondered if  it was  a                                                                    
lack  of coordination  and policy  between  the federal  and                                                                    
state systems.  Commissioner Hogan  stated that some  of the                                                                    
problems are  with federal  requirements. The  department is                                                                    
attempting  to  recognize  the barriers  and  not  let  them                                                                    
interfere  with  the  individual's  successful  outcome.  He                                                                    
stressed  that  the  department's  objective  was  to  avoid                                                                    
creating dependence on programs                                                                                                 
1:56:54 PM                                                                                                                    
Vice-Chair Thomas wondered how the  system can be changed so                                                                    
that convicted felons can be  eligible for the personal care                                                                    
assistant jobs. He related a constituent's situation.                                                                           
Commissioner Hogan  pointed out  that background  checks are                                                                    
required for  all health care and  social service providers.                                                                    
He  noted there  are  "barrier crimes"  that prevent  anyone                                                                    
convicted  of  one  gaining that  type  of  employment.  The                                                                    
department  can grant  waivers depending  on the  situation.                                                                    
The department  might rewrite the  regulations to  allow for                                                                    
more flexibility yet keeping client safety a priority.                                                                          
1:59:18 PM                                                                                                                    
Representative   Gara   remarked   that  the   Health   Care                                                                    
Commission  suggested  that   the  legislature  explore  the                                                                    
expansion  of Community  Health  Care Centers  as  a key  to                                                                    
providing  increased access  to  health care  in Alaska.  He                                                                    
reported that Medicare compensates  Community Health Care at                                                                    
a much  higher rate than  private practice primary  care and                                                                    
provides  low cost  health  care access.  He  felt that  the                                                                    
Commission should have  made a much stronger  proposal as to                                                                    
their role in  a solution to health  care delivery problems.                                                                    
He wondered if there should  be an expanded use of Community                                                                    
Health  Centers to  Medicare beneficiaries  and for  primary                                                                    
2:02:12 PM                                                                                                                    
Commissioner  Hogan agreed  that  the  twenty six  federally                                                                    
qualified  Community  Health  Centers   in  Alaska  are  the                                                                    
foundation  of  the health  care  system  in the  state.  He                                                                    
shared that they have a  role to play in providing increased                                                                    
Medicare  access especially  to seniors.  The department  is                                                                    
looking  at the  creation of  a Medicare  access clinic.  He                                                                    
reported  that  the  state   lobbied  congress  to  increase                                                                    
Medicare rates  by thirty five  percent. However,  even with                                                                    
the increase,  many physicians are  still unwilling  to take                                                                    
Medicare recipients. He was  uncertain that Community Health                                                                    
Centers  get  an  enhanced Medicare  rate  over  physicians.                                                                    
Commissioner Hogan offered that  the Commission was not able                                                                    
to  offer a  definitive  recommendation  to expand  Medicare                                                                    
access at this time.                                                                                                            
2:05:35 PM                                                                                                                    
Representative Gara asked if the  department has a plan this                                                                    
year  to  expand  medical  services  through  the  Community                                                                    
Health Centers.  Commissioner Hogan  related that he  is not                                                                    
aware of a specific increment.                                                                                                  
Co-Chair  Hawker requested  that Commissioner  Hogan discuss                                                                    
the  difference   between  the   tenure  and   longevity  of                                                                    
administratively   appointed  commissions   as  opposed   to                                                                    
legislatively  established  commissions. Commissioner  Hogan                                                                    
replied that  the Health Care Commission  established by the                                                                    
administration  will  disband  at end  of  this  legislative                                                                    
session. The department was working  with the Legislature to                                                                    
establish the  Health Care  Commission in  statute. Co-Chair                                                                    
Hawker wondered if the commission was necessary.                                                                                
2:07:51 PM                                                                                                                    
Representative   Fairclough  wanted   an  overview   of  the                                                                    
department's  use  of  stimulus  funds.  Commissioner  Hogan                                                                    
replied  that an  enhanced  federal  matching percentage  in                                                                    
Medicaid  was part  of the  stimulus  package. He  explained                                                                    
that  the department  received an  increase  in the  federal                                                                    
match  percentage  to 61  percent,  up  from 50  percent  of                                                                    
federal matching  funds. The state's general  fund match has                                                                    
decreased to 39 percent down  from 50 percent. The change is                                                                    
also  due to  Alaska's high  unemployment rate.  He reported                                                                    
that the federal  match increase is set to expire  at end of                                                                    
the calendar  year. He indicated the  department anticipates                                                                    
an additional six month extension of the increase.                                                                              
Co-Chair  Hawker  explained  that  the  governor's  FY  2011                                                                    
budget request  assumed that the Federal  Medical Assistance                                                                    
Percentage  (FMAP)  rate  increase   will  be  extended.  He                                                                    
announced that there would be  an amendment to recognize the                                                                    
higher rate of approximately $50  million if the increase is                                                                    
not authorized.                                                                                                                 
2:11:26 PM                                                                                                                    
Representative  Austerman  asked  if  the  state  saved  $50                                                                    
million  in  last  year's  DHSS   budget  due  to  the  FMAP                                                                    
ALISON   ELGEE,   ASSISTANT    COMMISSIONER,   FINANCE   AND                                                                    
MANAGEMENT  SERVICES,   DEPARTMENT  OF  HEALTH   AND  SOCIAL                                                                    
SERVICES   answered  that   the   savings   last  year   was                                                                    
approximately  $95 million,  coverage for  nine months.  She                                                                    
stated  that $50  million reflects  coverage for  six months                                                                    
and  is too  low.  The annual  state  Medicaid match  totals                                                                    
approximately $120 million.                                                                                                     
Representative  Austerman wondered  what the  FY 2012  total                                                                    
would be. Ms.  Elgee responded that if  the enhanced funding                                                                    
is  removed   from  the  budget  the   state  would  replace                                                                    
approximately  $120 million  in federal  funds with  general                                                                    
2:13:08 PM                                                                                                                    
Representative  Fairclough   asked  why  there  was   not  a                                                                    
personal services line under  the Suicide Prevention Council                                                                    
in the  budget. She  asked if the  position has  been vacant                                                                    
for a  year. Commissioner Hogan replied  that the department                                                                    
moved the  responsibility for coordination and  oversight of                                                                    
the  Council  to  the Division  of  Behavioral  Health.  The                                                                    
position has not been left vacant.                                                                                              
Ms. Elgee  furthered that the  transfer of  staffing support                                                                    
for  the  Council  was  done  in FY  2009  and  was  only  a                                                                    
technical change. Representative  Fairclough stated that the                                                                    
Council  claimed  that they  hire  the  coordinator and  the                                                                    
position is currently vacant.                                                                                                   
Commissioner Hogan pledged to investigate the matter.                                                                           
2:16:36 PM                                                                                                                    
Representative  Gara repeated  his  frustration  that it  is                                                                    
known  that  Community  Health  Centers  were  part  of  the                                                                    
solution to the Medicare crisis.  He wondered why it has not                                                                    
been acted  upon by the  legislature. He contended  that two                                                                    
successive  Commissions  came  to  the  same  recommendation                                                                    
without  resulting  action.  He  asserted  that  seniors  on                                                                    
Medicare  are having  an arduous  time getting  primary care                                                                    
and the  crisis is growing. Commissioner  Hogan replied that                                                                    
a one-time  $1 million increment was  received for Community                                                                    
Health Centers  in FY 2009.  He reiterated that  he believes                                                                    
it is important but lacks funding.                                                                                              
2:18:59 PM                                                                                                                    
Co-Chair  Hawker  asked  if Community  Health  Centers  were                                                                    
intended to  be standalone  private non-profits or  wards of                                                                    
the  government. Commissioner  Hogan replied  that Community                                                                    
Health  Centers are  private  non-profits  and receive  base                                                                    
grants  from the  federal government  of approximately  $650                                                                    
thousand to  provide primary care,  dental and  other health                                                                    
2:21:53 PM                                                                                                                    
Representative Doogan  reflected on the $120  million figure                                                                    
reported   earlier  and   wondered   how   the  number   was                                                                    
Commissioner  Hogan declared  that out  of the  department's                                                                    
$2.1  billion  budget,  approximately $1.2  billion  is  for                                                                    
Ms.  Elgee  shared  that  Medicaid   was  made  up  of  many                                                                    
components  and different  programs require  different match                                                                    
rates. The base match rates  are established and paid for by                                                                    
the  federal  government  and cannot  go  lower  than  fifty                                                                    
percent. In  past years the federal  government has provided                                                                    
more  than  a fifty  percent  match  base rate  but  federal                                                                    
matches have  decreased to the  minimum level of  50 percent                                                                    
in recent years. The American  Recovery and Reinvestment Act                                                                    
(ARRA) funding does not apply  to any program that currently                                                                    
receives  an  enhanced  match  rates,  i.e.,  Tribal  Health                                                                    
reimbursements and the  Children's Health Insurance Program.                                                                    
ARRA  funding  [stimulus  funds] only  applies  to  Medicaid                                                                    
programs  that  receive base  match  rates.  Under the  ARRA                                                                    
legislation  the  state  received  an  increase  to  the  61                                                                    
percent match rate  up from the fifty percent  base rate for                                                                    
some  Medicaid  programs.  The  $120  million  reflects  the                                                                    
difference between a  fifty percent and a  sixty one percent                                                                    
Commissioner  Hogan referenced  the  "Fiscal Year  Strategic                                                                    
Plan"  (copy on  file).  He highlighted  specific goals  and                                                                    
outcomes. He cited substance abuse  as an example of how the                                                                    
department assessed  its programs  by focusing on  goals and                                                                    
outcomes.  The department  is focusing  on four  outcomes in                                                                    
the  area  of substance  abuse:  reducing  the incidence  of                                                                    
fetal  alcohol spectrum  disorder, reducing  substance abuse                                                                    
related accidents, reducing  substance abuse related violent                                                                    
crime, and  reducing substance  abuse related  suicides. The                                                                    
department  uses very  specific measures  and relies  on the                                                                    
data  to determine  progress and  set benchmarks  to achieve                                                                    
reduction in  the rates. He  stressed that  the department's                                                                    
role is to reduce incidents in the population.                                                                                  
2:29:04 PM                                                                                                                    
Co-Chair   Hawker  alluded   to  the   involvement  of   the                                                                    
Department   of   Law,   Department  of   Corrections,   and                                                                    
Department  of Public  Safety with  the Governor's  domestic                                                                    
violence and sexual assault  initiative as the "prosecution"                                                                    
piece of  the initiative. He  asked where DHSS fits  in with                                                                    
the initiative  as the prevention  and protection  piece. He                                                                    
asked  the Commissioner  what  department  should house  the                                                                    
individual that oversees  the initiative. Commissioner Hogan                                                                    
believed  his department  has  a role  to  play in  creating                                                                    
solutions  to  the  problem along  with  the  Department  of                                                                    
Education  and Early  Development. He  identified prevention                                                                    
activities through  the Division  of Public  Health, helping                                                                    
victims of  domestic violence  and tackling  substance abuse                                                                    
through an  array of programs  provided by DHSS as  parts of                                                                    
the   department's  contribution   to  the   initiative.  He                                                                    
believed  that  the  position  should   be  located  in  the                                                                    
Department of Law along with  a steering committee to form a                                                                    
coordinated approach.                                                                                                           
2:33:35 PM                                                                                                                    
Representative   Joule  stated   that  he   appreciated  the                                                                    
spotlight  on  the  domestic  violence  and  sexual  assault                                                                    
problem.  He felt  it  encompassed  tackling other  pressing                                                                    
problems such as substance abuse  in an integrative approach                                                                    
that involves prevention, cure, and punishment.                                                                                 
2:35:52 PM                                                                                                                    
Representative   Fairclough   stated   she   has   been   in                                                                    
communication with  the governor to coordinate  an effort to                                                                    
discuss a  more inclusive approach to  the domestic violence                                                                    
initiative  that  includes  the   areas  of  mental  health,                                                                    
substance abuse, education and health and human services.                                                                       
2:37:35 PM                                                                                                                    
Representative  Gara  asked that  out  of  the $1.2  billion                                                                    
expenditures on Medicaid if roughly  $400 million were state                                                                    
funds  and $800  million  were  federal funds.  Commissioner                                                                    
Hogan affirmed.                                                                                                                 
Representative   Gara  referred   to  the   substance  abuse                                                                    
increment  (page  14 of  the  "Executive  Summary") of  $2.2                                                                    
million  and  noted the  increase  was  devoted to  distinct                                                                    
areas  of substance  abuse.  He wondered  if  any money  was                                                                    
being provided to  reduce the waiting lists  for all alcohol                                                                    
and substance  abuse treatment programs.  Commissioner Hogan                                                                    
reported  that  more  money  may be  needed  to  reduce  the                                                                    
waiting lists.  He stated  that it was  a challenge  to meet                                                                    
all  of  the  needs  with  the funds  provided  and  took  a                                                                    
strategic approach to allocating the  funds. In light of the                                                                    
fiscal  constraints  the  department  focused  on  the  four                                                                    
outcomes stated earlier.                                                                                                        
2:40:57 PM                                                                                                                    
Representative  Gara  reiterated  his frustration  with  the                                                                    
substance  abuse  treatment   waiting  lists.  He  suggested                                                                    
consolidating  the lists  to gain  a complete  assessment of                                                                    
the needs.  Commissioner Hogan agreed  that if the  needs of                                                                    
the  waiting lists  are understood  in its  entirety than  a                                                                    
plan to  provide more services  based on actual need  can be                                                                    
implemented  to  shorten  the  lists.  He  exemplified  that                                                                    
residential  needs  were  in  more  demand  than  outpatient                                                                    
Representative Joule requested  additional information about                                                                    
substance  abusers   on  waiting   lists  by   court  order.                                                                    
Commissioner Hogan stated he  would provide the information.                                                                    
He mentioned  that the department  was creating  a substance                                                                    
abuse Medicaid  waiver. The waiver may  only provide limited                                                                    
services  but the  additional  fifty  percent federal  funds                                                                    
available if established, would help to expand services.                                                                        
2:43:15 PM                                                                                                                    
Commissioner  Hogan referred  to the  Organization Chart  on                                                                    
page  6  of  the  "Executive Summary"  (copy  on  file)  and                                                                    
described  the executive  management  and  structure of  the                                                                    
department.  He identified:  Ward  B.  Hurlburt, M.D.  Chief                                                                    
Medical  Officer/Director  of   Public  Health;  William  J.                                                                    
Streur,  Deputy Commissioner  for Medicaid  and Health  Care                                                                    
Policy;  Clay  Butcher,  Public Information  Manager;  Wilda                                                                    
Laughlin,  Legislative   Relations;  Tara   Horton,  Special                                                                    
Assistant  Patrick Hefley,  Deputy Commissioner  for Family,                                                                    
Community   &  Integrated   Services;   Allison  M.   Elgee,                                                                    
Assistant Commissioner for Finance Management Services.                                                                         
He also  noted that the  department works actively  with the                                                                    
various  boards  and  commissions  particularly  with  those                                                                    
related   to  the   Mental  Health   Trust  Authority.   The                                                                    
department  works  closely  with  the Authority  and  is  in                                                                    
agreement with them ninety five percent of the time.                                                                            
Commissioner Hogan  cited page 7 of  the "Executive Summary"                                                                    
(copy   on   file).    He   highlighted   the   department's                                                                    
accomplishments.  He  listed the  Family-to-Family  Program,                                                                    
Alaska  Heating  Assistance  Program, Bring  the  Kids  Home                                                                    
initiative, Senior  Long Term Care,  and Health  Care Reform                                                                    
as the  department's achievements. Commissioner  Hogan noted                                                                    
that   the   Alaska   Heating  Assistance   Program   serves                                                                    
households  with  incomes  at  225 percent  of  the  federal                                                                    
poverty  guidelines. He  stressed the  success of  the Bring                                                                    
the Kids Home initiative. The  number of children in out-of-                                                                    
state residential placement is now  110 down from 450 over a                                                                    
three year period.                                                                                                              
Commissioner Hogan remarked that  the Senior Long-Term Care,                                                                    
Senior and  Disabilities Services, Home and  Community Based                                                                    
Waivers, and  Adult Preventive Dentistry Programs  are among                                                                    
the  departments successes.  He opined  that the  department                                                                    
excelled in H1N1 [Swine Flu] preparedness.                                                                                      
Commissioner Hogan  noted the  department's efforts  to work                                                                    
with the  tribal health  organizations to  maximize Medicaid                                                                    
revenue and federal reimbursement.                                                                                              
2:51:53 PM                                                                                                                    
Commissioner  Hogan   continued  the  discussion   with  the                                                                    
department's  Key challenges  on  page 9  of the  "Executive                                                                    
Summary" (copy on file). He  mentioned that under Vulnerable                                                                    
Populations,  the   Bring  the   Kids  Home   project  faced                                                                    
challenges in developing  in-state residential and community                                                                    
based  treatment options.  He  added  that workforce  issues                                                                    
continue to be problematic with vulnerable populations.                                                                         
Co-Chair   Hawker   expressed  concern   regarding   federal                                                                    
assessment payments  for non-compliance of the  Indian Child                                                                    
Welfare  Act.  He  queried the  status  of  the  settlement.                                                                    
Commissioner Hogan  reported that the department  is working                                                                    
with tribal  partners to ensure requirements  for the Indian                                                                    
Child  Welfare Act  are implemented  and relations  with the                                                                    
tribal partners  were improved. He pointed  out that results                                                                    
varied around  the state.  He acknowledged  the department's                                                                    
past failure.                                                                                                                   
Co-Chair Hawker  clarified that the settlement  requires the                                                                    
state to pay $1.2 million each  for FY 2010, FY 2011, and FY                                                                    
2012. He  emphasized the  size of  the payments  and thought                                                                    
that the  issue was  significant enough for  discussion with                                                                    
the entire  Finance Committee. He attributed  failure on the                                                                    
part of the Office of Children's Services (OCS).                                                                                
2:57:07 PM                                                                                                                    
Commissioner Hogan  pointed out that child  protection was a                                                                    
difficult job and acknowledged more work had to be done.                                                                        
Representative  Gara talked  about  the need  to add  social                                                                    
workers to OCS as  Independent Living Coordinators for youth                                                                    
coming  out of  foster care.  He noted  that there  are only                                                                    
four for the  entire state.  He  expressed disappointment at                                                                    
the  poor statistics  regarding youth  transitioning out  of                                                                    
foster  care.  He  asked  why  there  are  no  increases  in                                                                    
Independent  Living Coordinators  [social  workers] in  this                                                                    
year's  budget.   Commissioner  Hogan  stated  that   it  is                                                                    
difficult  to retain  social  workers in  the  OCS area.  He                                                                    
found it unreasonable to ask  for increased positions if the                                                                    
department  cannot  retain  enough  OCS  social  workers  at                                                                    
current  staffing   levels.  He  offered  to   have  further                                                                    
discussions  to implement  improvements in  the transitional                                                                    
programs within foster care.  Representative Gara hoped that                                                                    
will continue as  a discussion in the  DHSS subcommittee. He                                                                    
suggested that  "burn out" due  to large caseloads  might be                                                                    
an issue with non-retention  of social workers. Commissioner                                                                    
Hogan replied  that the department has  implemented measures                                                                    
to support social workers.                                                                                                      
3:03:14 PM                                                                                                                    
Representative  Fairclough recalled  that  she  served on  a                                                                    
previous  DHSS  subcommittee  and  discussed  the  retention                                                                    
problem. She  suggested that often  the problem is  not just                                                                    
with caseload but working in  a toxic environment every day.                                                                    
She suggested that  positive professional experiences should                                                                    
be interspersed in their routine.                                                                                               
3:06:01 PM                                                                                                                    
Commissioner Hogan affirmed.                                                                                                    
Commissioner Hogan directed attention  to the Overall Budget                                                                    
Requests  on page  13 of  the "Executive  Summary" (copy  on                                                                    
file). He  pointed out  that the  overall budget  reflects a                                                                    
3.5 percent  increase with a  6 percent increase  in general                                                                    
funds. Most  of the  increase is being  driven by  growth in                                                                    
3:08:33 PM                                                                                                                    
Representative  Kelly wondered  where  the department  would                                                                    
make cuts  if no increase was  available. Commissioner Hogan                                                                    
stated he would  start with Medicaid. It makes  up more than                                                                    
55  percent  of the  budget.  He  offered three  choices  to                                                                    
determine cuts: eligibility, change  the rates providers are                                                                    
paid, and change  access to the type and  amount of services                                                                    
available. The other 45 percent  of the budget would be more                                                                    
difficult  to determine.  The department  would work  toward                                                                    
more performance based funding.                                                                                                 
Representative Kelly  commented that ignoring  the Permanent                                                                    
Fund Dividend,  30 percent of  Alaskans are  being supported                                                                    
by the government.  He wondered if this figure  was high and                                                                    
how to end the "dependence rut."                                                                                                
3:12:43 PM                                                                                                                    
Commissioner  Hogan  stated  the  department  is  trying  to                                                                    
promote independence  through programs like  Families First.                                                                    
He thought that the 30 percent figure was high.                                                                                 
Co-Chair Hawker  recognized the  presence of Anchorage Mayor                                                                    
Dan Sullivan.                                                                                                                   
3:15:36 PM                                                                                                                    
Representative Gara asked  if there was a way  to save money                                                                    
by  having higher  income recipients  receiving services  to                                                                    
pay more.  Commissioner Hogan  answered that  the department                                                                    
was doing that  where allowed such as with  residents of the                                                                    
Pioneer Home.                                                                                                                   
Representative Kelly  wondered about drug testing  for those                                                                    
on  public assistance.  He  felt this  could  help stop  the                                                                    
cycle of dependence.                                                                                                            
3:20:30 PM                                                                                                                    
Commissioner  Hogan appreciated  the comments  and was  also                                                                    
frustrated  by  the addiction  problem.  He  noted that  the                                                                    
Clitheroe  Center   is  a   good  example   for  involuntary                                                                    
treatment.  He also  commented  that this  is  the "Year  of                                                                    
Public Safety" and hopes there  will be a "Year of Substance                                                                    
Abuse, Prevention, Treatment, and Recovery" in the future.                                                                      
3:22:57 PM                                                                                                                    
Co-Chair Stoltze  asked if Representative Keller's  bill [HB
259] requires mandatory drug  testing for public assistance.                                                                    
Commissioner  Hogan   stated  the  department   was  helping                                                                    
Representative  Keller  so  he  can  draft  the  legislation                                                                    
within federal guidelines. He was unsure if it was legal.                                                                       
Co-Chair Stoltze anecdotally  related that medical providers                                                                    
complain  about   Medicaid  patients  not  showing   up  for                                                                    
appointments.  He wondered  if they  can be  charged a  fee.                                                                    
Commissioner  Hogan  reported  that  he  has  heard  similar                                                                    
complaints regarding  Medicaid patients  not showing  up for                                                                    
their appointments.  He speculated  that legally  the doctor                                                                    
cannot  take financial  recourse. He  agreed to  investigate                                                                    
3:26:48 PM                                                                                                                    
Representative Fairclough shared  that a fee was  set up for                                                                    
patients of  the Southcentral Foundation  that did  not show                                                                    
up   for  their   appointments.  She   noted  transportation                                                                    
problems with  disabled and the elderly.  Commissioner Hogan                                                                    
wondered if they were Medicaid patients.                                                                                        
Representative  Fairclough  cited   increases  in  the  DHSS                                                                    
budget  for Information  Technology Services.  She asked  if                                                                    
there   was  unduplicated   numbers  for   people  accessing                                                                    
multiple  services from  DHSS. Commissioner  Hogan announced                                                                    
that the department recently created  a master client index.                                                                    
He  stated  he  would  send her  an  unduplicated  count  of                                                                    
recipients.    Representative    Fairclough    stated    the                                                                    
information  could help  provide more  coordinated care  for                                                                    
individuals or families in need of multiple services.                                                                           
3:30:42 PM                                                                                                                    
Co-Chair  Hawker  directed  attention  to  page  25  of  the                                                                    
"Executive Summary" (copy  on file) that is  a historic look                                                                    
at  Medicaid  expenditures  from  FY 1991  to  FY  2011.  He                                                                    
pointed out  that the expenditures jumped  from $173 million                                                                    
to $1.2  billion in  twenty years.  During the  past several                                                                    
years 2004-2009 the expenditures  were static due to efforts                                                                    
to  control costs.  In  FY  2009 a  spike  occurred and  was                                                                    
maintained in  FY 2010.  He wondered  what the  causes were.                                                                    
Commissioner  Hogan speculated  that the  Medicaid spike  is                                                                    
directly related  to the economic  downturn and  an increase                                                                    
in  utilization. He  added  that there  has  also been  some                                                                    
increase in the rates paid to providers.                                                                                        
Co-Chair Hawker  notified the committee  that he  would like                                                                    
to   reauthorize  the   private  contractor   Janet  Clark's                                                                    
professional services  to help  reconcile the  Medicaid cost                                                                    
projection process.                                                                                                             
3:36:59 PM                                                                                                                    
Co-Chair Stoltze moved that the  House Finance Committee Co-                                                                    
Chair  Hawker  be  authorized  to   enter  into  a  contract                                                                    
extending Janet  Clark's professional services  contract for                                                                    
one year in an amount not  to exceed $25,000. There being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
3:37:48 PM                                                                                                                    
Representative  Gara   observed  that  the   Medicaid  spike                                                                    
mentioned  from  years  2008   until  2011  was  in  federal                                                                    
spending while  state spending remained  unchanged. Co-Chair                                                                    
Hawker replied that he was  referring to the aggregate costs                                                                    
of services provided.                                                                                                           
3:41:04 PM                                                                                                                    
Commissioner Hogan concluded that he attempts to balance                                                                        
the department's social mission with a business mission so                                                                      
Alaska gets the return on its investment in DHSS.                                                                               
Representative Joule offered that if the state wants to                                                                         
make meaningful inroads the focus should be on prevention                                                                       
and job opportunities.                                                                                                          
Co-Chair Hawker emphasized more focus should be placed on                                                                       

Document Name Date/Time Subjects
DHSS 2010 Management Overview.pdf HFIN 2/1/2010 1:30:00 PM
DHSS 2010 Management Overview2.pdf HFIN 2/1/2010 1:30:00 PM
DHSS Overview 2010 Priorities.pdf HFIN 2/1/2010 1:30:00 PM
DHSS Overview 2010 Strategic Plan.pdf HFIN 2/1/2010 1:30:00 PM
DHSS Overview FY11 Executive Summary.pdf HFIN 2/1/2010 1:30:00 PM
HSS Fiscal Plan FY2011 012210 Overview.pdf HFIN 2/1/2010 1:30:00 PM