Legislature(2015 - 2016)HOUSE FINANCE 519

04/13/2015 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Moved HB 154 Out of Committee
Moved CSHB 123(JUD) Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 190                                                                                                            
     "An  Act  relating  to   a  medical  assistance  reform                                                                    
     program; relating  to the duties  of the  Department of                                                                    
     Health  and   Social  Services;   establishing  medical                                                                    
     assistance  demonstration projects;  relating to  civil                                                                    
     penalties  for medical  assistance  fraud; relating  to                                                                    
     studies  by   the  Department  of  Health   and  Social                                                                    
     Services;  relating  to cost-containment  measures  for                                                                    
     medical  assistance;  and  providing for  an  effective                                                                    
1:36:20 PM                                                                                                                  
HEATHER SHADDUCK, STAFF, SENATOR PETE KELLY, read from a                                                                        
prepared statement:                                                                                                             
     HB  190   begins  the  process   of  reform   and  cost                                                                    
     containment  needed to  slow the  growth of  the Alaska                                                                    
     Medicaid program.   Medicaid has grown  to $1.8 Billion                                                                    
     of the  annual operating budget, and  has accounted for                                                                    
     22%  of  the total  UGF  increases  over the  last  ten                                                                    
     years.   The  current and  former administrations  have                                                                    
     testified the  Medicaid program,  as it stands,  is not                                                                    
     sustainable.   Low oil prices  and billions  of dollars                                                                    
     in revenue shortfalls  have forced us to  change how we                                                                    
     do business.   In July 2013, the  Medicaid Budget Group                                                                    
     of  the  Department  of   Health  and  Social  Services                                                                    
     reported the  total spending on Medicaid  services will                                                                    
     reach $6.3  billion in 2032, including  $2.8 billion in                                                                    
     state matching funds.  If we  don't act now to bend the                                                                    
     growth curve  of Medicaid, many  of our  most venerable                                                                    
     Alaskans will be without  critical health care services                                                                    
     they need.                                                                                                                 
Ms. Shadduck provided a sectional analysis (copy on file)                                                                       
of the bill. She read from the document:                                                                                        
     Section  1:   Adds  new  sections   establishing  civil                                                                    
     penalties for  false claims for medical  assistance and                                                                    
     authorizing  the   Department  of  Health   and  Social                                                                    
     Services  (the  department)  to asses  civil  penalties                                                                    
     against medical assistance providers.                                                                                      
Ms. Shadduck noted that Section 1  was found on page 1, line                                                                    
7 of the  bill and commented that every  dollar averted from                                                                    
fraud  translated into  more money  available  to serve  the                                                                    
"most vulnerable" citizens.                                                                                                     
Ms. Shadduck turned to Section 2  that began on page 3, line                                                                    
5 of the legislation:                                                                                                           
     Section  2:   Requires  the  Department  of Health  and                                                                    
     Social Services (the department)  to design, adopt, and                                                                    
     implement  a   medical  assistance   (Medicaid)  reform                                                                    
     program. Requires the department  to prepare and submit                                                                    
     a report  about reforms, savings, and  costs related to                                                                    
     the  Medicaid program.   Provides  for a  definition of                                                                    
Ms.  Shadduck explained  that subsection  (a) mandated  that                                                                    
the reform program  must include ten items.  She read number                                                                    
one from the legislation:                                                                                                       
     (1)   referrals  to   community   and  social   support                                                                    
     services,  including  career   and  education  training                                                                    
     services available through the  Department of Labor and                                                                    
     Workforce  Development under  AS 23.15,  the University                                                                    
     of Alaska, or other sources;                                                                                               
Ms. Shadduck related  that the state had a  multitude of job                                                                    
training  available  through  its  job  centers,  vocational                                                                    
rehabilitation offices,  Workforce Investment  Act programs,                                                                    
vocational training programs, and support from non-profits.                                                                     
Ms. Shadduck continued beginning with item two:                                                                                 
     (2)   distribution  of   an   explanation  of   medical                                                                    
     assistance  benefits  to  recipients  for  health  care                                                                    
     services received under the program;                                                                                       
     (3)  expanding  the  use of  telemedicine  for  primary                                                                    
     care, behavioral health, and urgent care;                                                                                  
     (4)   enhancing   fraud  prevention,   detection,   and                                                                    
     (5)  reducing the  cost of  behavioral health,  senior,                                                                    
     and  disabilities services  provided  to recipients  of                                                                    
     medical   assistance  under   the   state's  home   and                                                                    
    community-based services waiver under AS 47.07.045;                                                                         
Ms. Shadduck  detailed that  number five  related to  a 1915                                                                    
"K"  or  "I"  option  [federal  regulation  related  to  the                                                                    
Community  Choice  Act]  which  was a  way  to  enhance  the                                                                    
current  federal match  from 50  percent to  56 percent  for                                                                    
option "K"  and no federal  match to  a match of  50 percent                                                                    
for option  "I". The options were  eligible for telemedicine                                                                    
for individuals receiving home care.                                                                                            
Ms. Shadduck continued to read:                                                                                                 
     (6) pharmacy initiatives;                                                                                                  
     (7) enhanced care management;                                                                                              
Ms.  Shadduck defined  that  enhanced  care management  were                                                                    
methods that  taught individuals  how to use  the healthcare                                                                    
system.  She noted  that Medicaide  recipients often  needed                                                                    
guidance  on  how to  approach  healthcare.  She added  that                                                                    
enhanced care  management did not detract  from preventative                                                                    
care and  included primary  healthcare, vaccines,  flu shots                                                                    
and all other appropriate care.                                                                                                 
Ms. Shadduck moved to the next item on line 22:                                                                                 
     (8)  redesigning the  payment  process by  implementing                                                                    
     fee  agreements  based  on  performance  measures  that                                                                    
     include  premium  payments  for centers  of  excellence                                                                    
     according   to  nationally   acceptable  criteria   and                                                                    
     penalties    for    hospital    acquired    infections,                                                                    
     readmissions, and failures of outcomes;                                                                                    
Ms.  Shadduck  related that  the  Department  of Health  and                                                                    
Social Services (DHSS) would study  the use of bundled rates                                                                    
for physicians  and diagnosis related groups  for hospitals.                                                                    
She   exemplified  that   the  provision   would  foster   a                                                                    
streamlined approach  instead of  the fee for  service model                                                                    
resulting  in one  bundled rate  for a  procedure such  as a                                                                    
knee  replacement. Alaska  was one  of the  only states  not                                                                    
currently using the practice in its Medicaid program.                                                                           
Ms. Shadduck turned to the following items:                                                                                     
     (9) stakeholder  involvement in setting  annual targets                                                                    
     for quality and cost-effectiveness;                                                                                        
     (10)  to  the  extent   consistent  with  federal  law,                                                                    
     reducing  travel  costs  by requiring  a  recipient  to                                                                    
     obtain  medical   services  in  the   recipient's  home                                                                    
     community,  to  the  extent  appropriate  services  are                                                                    
     available in the recipient's home community.                                                                               
Ms. Shadduck stated  that travel costs needed  to be reduced                                                                    
where possible.  She pointed to incidences  of consolidating                                                                    
different needs within one family  to make one trip to cover                                                                    
various   appointments  as   one   example.  She   addressed                                                                    
subsection (b) beginning on page  3, line 31 that related to                                                                    
the  department's improvements  in  access to  telemedicine.                                                                    
She  related that  the  state's  willingness to  collaborate                                                                    
with  the Alaska  Native Tribal  Health Consortium  (ANTHC),                                                                    
which   had   an   "extensive"  network   for   telemedicine                                                                    
throughout  the  state  to increase  access.  She  moved  to                                                                    
subsection c on page 7  of the bill. The subsection required                                                                    
that DHSS  submit a report  to the  legislature on or before                                                                    
October  15  of each  year  that  contained everything  that                                                                    
legislators needed  to monitor for continuing  reform of the                                                                    
Medicaid   system.  She   listed   some   of  the   required                                                                    
information:  realized  cost   savings  related  to  reform;                                                                    
realized  cost  savings  undertaken  by  the  department;  a                                                                    
statement  of  whether  DHSS  had  met  annual  targets  for                                                                    
quality   and    cost-effectiveness;   recommendations   for                                                                    
legislative  or  budgetary  changes:  impacts  from  federal                                                                    
laws; and  the results of demonstration  projects. She noted                                                                    
that subsection (d) [page 5,  line 10] provided a definition                                                                    
for telemedicine.                                                                                                               
Ms. Shadduck cited Section 3 located  on page 5, line 15 and                                                                    
     Section 3:  Requires the department to design and                                                                          
     implement a demonstration project to reduce nonurgent                                                                      
     use of emergency departments by Medicaid recipients.                                                                       
Ms. Shadduck  remarked that the provision  enhanced what the                                                                    
department  had   already  done  with   its  "super-utilizer                                                                    
program" for individuals using the  ER for primary care. The                                                                    
program  directed individuals  to  the  appropriate type  of                                                                    
care or  provider. She noted  that subsection (5)on  page 6,                                                                    
line  1  delineated  a  process  for  referring  a  frequent                                                                    
emergency room  user (or super-utilizer)  to a  primary care                                                                    
provider within 96 hours after  an emergency room (ER) visit                                                                    
directed  at. The  program  included  strict guidelines  for                                                                    
prescribing  narcotics and  a  prescription drug  monitoring                                                                    
program. She  continued with  Section 4 on  page 6,  line 12                                                                    
and read:                                                                                                                       
     Section 4:  Requires the department and the attorney                                                                       
     general to annually prepare a report regarding fraud                                                                       
     prevention, abuse, prosecution, and vulnerabilities in                                                                     
     the Medicaid program.                                                                                                      
Ms.  Shadduck directed  attention to  Section 5  on page  7,                                                                    
line 6:                                                                                                                         
     Section 5:   Requires the department to  develop one or                                                                    
     more  managed  care  or case  management  demonstration                                                                    
     projects through  a contract with  a third party.   The                                                                    
     managed care program would  be for individuals enrolled                                                                    
     in all Medicaid programs.                                                                                                  
Ms. Shadduck examined  subsection (a) [page 7,  line 9]. She                                                                    
shared  that Alaska  was one  of seven  states that  did not                                                                    
utilize a "managed health  plan" within Medicaid. Recipients                                                                    
would  be managed  by traditional  insurance carriers,  i.e.                                                                    
Aetna or  Premera. Improved outcomes  and more "one  on one"                                                                    
care  were cited  as  benefits of  the  managed health  care                                                                    
model. The provision  included comprehensive care management                                                                    
and  care coordination.  She  exemplified  a pregnant  woman                                                                    
enrolled  in  the  Denali  Kidcare   Program  who  would  be                                                                    
assigned  a primary  care case  manager  and would  check-in                                                                    
regularly with  the manager, in order  to build relationship                                                                    
and  trust.   The  relationship   enabled  the   manager  to                                                                    
encourage healthy  behavior for  the most  positive outcome.                                                                    
The  program  was  focused  on the  whole  person  and  also                                                                    
required  individual  and  family support  and  referral  to                                                                    
community  and  social  support services,  including  career                                                                    
1:49:23 PM                                                                                                                    
Ms. Shadduck noted  subsection (b) starting on  page 7, line                                                                    
29  that required  the department  to  enter into  contracts                                                                    
with one or more  third-party administrators for the managed                                                                    
care program.  Subsection (c),  on page  8, line  5 outlined                                                                    
the  requirements   for  services   and  fees   between  the                                                                    
department  and the  third  party  administrator. She  added                                                                    
that  Subsection  (d)  [on  page 8  line  12]  mandated  the                                                                    
department to  include additional cost-saving  measures that                                                                    
included  innovations  through  a demonstration  project  by                                                                    
reducing  travel through  the expanded  use of  telemedicine                                                                    
for   primary   care.   The  subsection   also   "simplified                                                                    
administrative    procedures   for    providers,   including                                                                    
streamlined  audit,  payment,   and  stakeholder  engagement                                                                    
procedures." She turned to Section 6 on page 8, line 20:                                                                        
     Section 6:  Requires the  department to conduct a study                                                                    
     analyzing  the   feasibility  of   privatizing  certain                                                                    
Ms. Shadduck  reminded the committee  that before  any state                                                                    
service  can  be  privatized a  feasibility  study  must  be                                                                    
performed. The  provision was aimed at  the Alaska Pioneers'                                                                    
Homes,   the  Alaska   Psychiatric  Institute,   and  select                                                                    
facilities of  the Division of  Juvenile Justice  (DJJ). She                                                                    
expounded  that  the  studies  would  be  tailored  for  the                                                                    
specific service.  She exemplified that the  division had an                                                                    
underutilized  facility  in  Nome  where  the  Norton  Sound                                                                    
Health  Corporation  also  operated.  The  state's  facility                                                                    
could  be  handed   over  to  Norton  Sound  to   run  as  a                                                                    
residential  psychiatric  treatment  center,  thus  avoiding                                                                    
forcing  juveniles  to  leave their  community  and  receive                                                                    
"culturally  relevant  care"  paid  for with  a  50  percent                                                                    
Medicaid funding  match instead  of the 100  percent general                                                                    
fund  costs incurred  at DJJ  facilities. She  remarked that                                                                    
the three entities listed employed 1,192 state employees.                                                                       
Ms. Shadduck continued with Sections  7, beginning on page 8                                                                    
line 30:                                                                                                                        
     Section 7:  Requires the  department to amend the state                                                                    
     Medicaid plan  and apply for  any waivers  necessary to                                                                    
     implement the  projects and  programs described  in the                                                                    
     bill.   Requires the Commissioner of  Health and Social                                                                    
     Services to certify to the  reviser of statutes federal                                                                    
     approval of specified measures.                                                                                            
Ms. Shadduck moved to Section 8 [page 9 line 10]:                                                                               
     Section 8:  Allows  the department to adopt regulations                                                                    
     necessary  to implement  the changes  made by  the Act.                                                                    
     The regulations  may not take  effect before  the dates                                                                    
     the relevant provision of the Act takes effect.                                                                            
Ms. Shadduck cited Section 9 located on page 9, line 18:                                                                        
     Section 9:  Conditional effects.                                                                                           
Ms.  Shadduck explained  that conditional  effects protected                                                                    
the  department from  having to  follow a  law in  the event                                                                    
that  the federal  government did  not authorize  a specific                                                                    
state   plan   or   amendments    or   waiver   needed   for                                                                    
implementation.  She  identified   Sections  10  through  14                                                                    
[beginning on page 10, line 7] and read:                                                                                        
     Sections 10  - 14:   Provides  for effective  dates for                                                                    
     provisos that  require waiver and state  plan amendment                                                                    
     approvals from  the United States Department  of Health                                                                    
     and Human Services.                                                                                                        
Ms. Shadduck cited the final section [page 10, line 22]:                                                                        
     Section 15:   Provides an immediate  effective date for                                                                    
     sections 6, 7, and 8.                                                                                                      
HB  190  was  HEARD  and   HELD  in  committee  for  further                                                                    

Document Name Date/Time Subjects
HB 154 Additional Documentation--ALSC Restrictions Clarification.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--Alaska Childrens Trust.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Additional Documentation--Civil Legal Services Fact Sheet.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--Alaska Coalition on Housing.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--Alaska Mental Health Board.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--ANDVSA.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--Facing Foster Care in Alaska.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--Governor's Council on Disabilities.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support for Senate Companion Legislation--VCI.jpg HFIN 4/13/2015 1:30:00 PM
HB 154
HB 154 Support Letter ACoA.pdf HFIN 4/13/2015 1:30:00 PM
HB 154
CS for proposed CS HB 105 H-Fin ver N Sectional Analysis AIDEA 4-13-15.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
Explaination of changes HB 105 version E to version N.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
Explaination of changes HB 105 version H to version E.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
HB 105 CS WORKDRAFT FIN.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
HB 105 HFIN AIDEA IEP.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
Waterfall Creek-King Cove HB143.pdf HFIN 4/13/2015 1:30:00 PM
HB 143
HB 105 Juneau Hydropower.pdf HFIN 4/13/2015 1:30:00 PM
HB 105
HB 190 Sponsor Statement.pdf HFIN 4/13/2015 1:30:00 PM
HB 190
HB 190 Sectional.pdf HFIN 4/13/2015 1:30:00 PM
HB 190