Legislature(2015 - 2016)HOUSE FINANCE 519

03/28/2016 01:30 PM House FINANCE

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01:31:12 PM Start
01:32:09 PM SB74
04:40:24 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
- Behavioral Health
- Federal Overview, Waivers, & Options
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR SENATE BILL NO. 74(FIN) am                                                                                             
     "An   Act  relating   to   diagnosis,  treatment,   and                                                                    
     prescription  of drugs  without a  physical examination                                                                    
     by a  physician; relating to  the delivery  of services                                                                    
     by  a  licensed  professional counselor,  marriage  and                                                                    
     family    therapist,     psychologist,    psychological                                                                    
     associate, and  social worker by audio,  video, or data                                                                    
     communications;  relating to  the duties  of the  State                                                                    
     Medical  Board;  relating  to limitations  of  actions;                                                                    
     establishing the Alaska  Medical Assistance False Claim                                                                    
     and  Reporting  Act;  relating  to  medical  assistance                                                                    
     programs administered  by the Department of  Health and                                                                    
     Social Services;  relating to the  controlled substance                                                                    
     prescription database;  relating to  the duties  of the                                                                    
     Board  of  Pharmacy;  relating to  the  duties  of  the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     Development;   relating  to   accounting  for   program                                                                    
     receipts; relating  to public record status  of records                                                                    
     related to  the Alaska  Medical Assistance  False Claim                                                                    
     and   Reporting   Act;  establishing   a   telemedicine                                                                    
     business registry; relating  to competitive bidding for                                                                    
     medical assistance  products and services;  relating to                                                                    
     verification  of  eligibility   for  public  assistance                                                                    
     programs administered  by the Department of  Health and                                                                    
     Social  Services; relating  to annual  audits of  state                                                                    
     medical  assistance  providers; relating  to  reporting                                                                    
     overpayments    of    medical   assistance    payments;                                                                    
     establishing  authority to  assess civil  penalties for                                                                    
     violations of medical  assistance program requirements;                                                                    
     relating  to seizure  and  forfeiture  of property  for                                                                    
     medical  assistance fraud;  relating to  the duties  of                                                                    
     the   Department  of   Health   and  Social   Services;                                                                    
     establishing    medical     assistance    demonstration                                                                    
     projects;  relating  to   Alaska  Pioneers'  Homes  and                                                                    
     Alaska Veterans'  Homes; relating to the  duties of the                                                                    
     Department  of Administration;  relating to  the Alaska                                                                    
     Mental Health Trust  Authority; relating to feasibility                                                                    
     studies for the provision  of specified state services;                                                                    
     amending Rules  4, 5, 7,  12, 24,  26, 27, 41,  77, 79,                                                                    
     82, and 89,  Alaska Rules of Civil  Procedure, and Rule                                                                    
     37, Alaska  Rules of Criminal Procedure;  and providing                                                                    
     for an effective date."                                                                                                    
1:32:09 PM                                                                                                                    
HEATHER  SHADDUCK, STAFF,  SENATOR PETE  KELLY, referred  to                                                                    
the   document,   "Medicaid   Reform   Topic   and   Section                                                                    
Reference",  which detailed  which section  and page  number                                                                    
specific Medicaid topics could  be found in the legislation.                                                                    
She said that  the hope was that behavioral  health would be                                                                    
integrated into the reformed Medicaid  system. She said that                                                                    
the  sections that  referred to  behavioral  health were  as                                                                    
     Sec. 28  - Medicaid Reform Program  (b) - Comprehensive                                                                    
     Behavioral Health Program                                                                                                  
Ms. Shadduck read from the section:                                                                                             
     (b)   The  department shall,  in coordination  with the                                                                    
     Alaska  Mental  Health   Trust  Authority,  efficiently                                                                    
     manage  a   comprehensive  and   integrated  behavioral                                                                    
     program    that   uses    evidence-based,   data-driven                                                                    
     practices  to achieve  positive  outcomes  for   people                                                                    
     with  mental   health  or  substance   abuse  disorders                                                                    
     and  children   with  severe   emotional  disturbances.                                                                    
     The  goal of  the program  is to  assist recipients  of                                                                    
     services under the program to  recover by achieving the                                                                    
     highest level of autonomy with  the least dependence on                                                                    
     state-funded services  possible for  each person.   The                                                                    
     program must include                                                                                                       
          (1) a plan  for  providing  a  continuum  of                                                                          
          community-based  services  to   address housing,                                                                      
          employment, criminal  justice, and  other relevant                                                                    
          (2) services  from  a   wide  array   of providers                                                                    
          and    disciplines,    including      licensed  or                                                                    
          certified   mental   health   and   primary   care                                                                    
          professionals; and                                                                                                    
          (3) efforts   to   reduce   operational   barriers                                                                    
          that      fragment      services,         minimize                                                                    
          administrative    burdens,    and    reduce    the                                                                    
          effectiveness  and  efficiency  of  the program.                                                                      
     Sec. 30 - (f) 1115 Waiver for behavioral health                                                                            
Ms.   Shadduck   explained   that   Section   30   pertained                                                                    
specifically to  waivers and would  be discussed  further by                                                                    
the departments.                                                                                                                
     Sec. 31 - ER Project - (a)(4)                                                                                              
Ms. Shadduck relayed  that the section called  for a process                                                                    
for  assisting  users  of emergency  departments  in  making                                                                    
appointments   with  primary   care  or   behavioral  health                                                                    
providers  within 96  hours  after  an emergency  department                                                                    
     Sec. 31 - Coordinated Care Project (a)(1)                                                                                  
Ms.  Shadduck relayed  that behavioral  health  would be  an                                                                    
option under the program.                                                                                                       
     Sec. 33 - Removal of Grantee Requirement for Community                                                                     
     Mental Health Clinics                                                                                                      
     Sec. 34 - Removal of Grantee Requirement for Drug &                                                                        
     Alcohol treatment centers & Community Mental Health                                                                        
Ms. Shadduck explained that Sections  33 and 34 would remove                                                                    
the requirement for a clinic,  or rehabilitative service, to                                                                    
receive a  grant from the  Division of Behavioral  Health in                                                                    
order to bill Medicaid.                                                                                                         
1:35:30 PM                                                                                                                    
Ms.  Shadduck  spoke  to  Section,  "Waivers  (1915  i  &  k                                                                    
options,  1945  Health Homes,  1115  Waivers".  She cited  a                                                                    
document from  the department  that delineated  basic waiver                                                                    
information (copy on file).                                                                                                     
Ms. Shadduck continued to Section  41, "Medicaid State Plan;                                                                    
Waivers; Instructions;  Notice to Revisor of  Statutes". She                                                                    
said that  Section 38, "Implementing  the Federal  Policy on                                                                    
Tribal   Medicaid   Reimbursement"    would   conclude   the                                                                    
Co-Chair  Thompson asked  Ms.  Shadduck for  a  list of  the                                                                    
sections under discussion.                                                                                                      
Ms. Shadduck  referred back  to the  document that  had been                                                                    
previously distributed,  "Medicaid Reform Topic  and Section                                                                    
Reference". She  reiterated that the sections  pertaining to                                                                    
behavioral health were: 28, 30,  31, 33, 34; for waivers: 30                                                                    
and 41; for the federal rule change: 38.                                                                                        
1:37:48 PM                                                                                                                    
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY,  provided context for the  presentation. He                                                                    
asserted  that  beneficiaries  of the  mental  health  trust                                                                    
included more  than people with behavioral  health problems.                                                                    
He avowed that behavioral health  would be a key element for                                                                    
successful Medicaid reform. He  believed in moving away from                                                                    
a  fee-for-services, to  a value  based  system: paying  for                                                                    
outcomes, rather  than activities. He shared  that the trust                                                                    
had  made a  substantial investment  in assisting  the state                                                                    
with  Medicaid  reform, and  had  retained  the services  of                                                                    
experts  on  the matter.  He  introduced  Charlie Curie  and                                                                    
provided information about  his employment background, which                                                                    
involved time spent in Alaska.                                                                                                  
1:40:04 PM                                                                                                                    
CHARLIE  CURIE,  CEO, THE  CURIE  GROUP  LLC, MARYLAND  (via                                                                    
teleconference), provided additional history  of his time in                                                                    
Alaska.  He said  that he  had visited  every corner  of the                                                                    
state  and had  met with  Alaska Native  Corporations during                                                                    
his  research into  healthcare in  Alaska.  He had  formerly                                                                    
been Deputy Secretary for Mental  Health and Substance Abuse                                                                    
Services  for  the  State  of  Pennsylvania,  where  he  had                                                                    
implemented a  behavioral health  Medicaid program.  He said                                                                    
he would  be drawing on all  of his past experiences  in the                                                                    
field to bring his expertise  to our unique, frontier state.                                                                    
He  credited  the  legislature and  the  administration  for                                                                    
prioritizing   the   topic.   He   provided   a   PowerPoint                                                                    
presentation,  "Behavioral   Health  System  Transformation"                                                                    
dated March  28, 2016 (copy on  file). He spoke to  Slide 2,                                                                    
"Trends in Public Behavioral Health":                                                                                           
        · States Facing "Intractable" Challenges                                                                                
        · Opioid Epidemic identified by Public Officials                                                                        
             o Governors and Legislatures Have Prioritized                                                                      
             o Congress Has Identified Issue and Funded                                                                         
             o Issues        with       MAT        Diversion                                                                    
Mr. Curie  informed the committee  that the  opioid epidemic                                                                    
had  been identified  by public  officials  in nearly  every                                                                    
state. He asserted that the  problem needed to be dealt with                                                                    
in  a multi-faceted  manner, both  in terms  of prescription                                                                    
pain  medication,  which  had   contributed  to  the  heroin                                                                    
crisis,  and  the  assurance  of  access  to  treatment  and                                                                    
healthcare.  He  urged  the  employment  of  evidence  based                                                                    
solutions and access to the latest science.                                                                                     
1:44:21 PM                                                                                                                    
Mr.  Curie   addressed  Slide  3,   "Trends  in   Public  BH                                                                    
        · High Profile Mental Health Related Violent                                                                            
          Incidents-Crisis Stabilization Access                                                                                 
        · Prevention & Wellness                                                                                                 
             o Look at what is preventing cost savings                                                                          
                  ƒObesity, diabetes, risk for heart                                                                           
                  ƒEven more expensive when combined with                                                                      
                    BH disorders                                                                                                
             o Focus shifting to health behavior change                                                                         
He  proclaimed  that there  was  a  need in  communities  to                                                                    
examine pathways to the  appropriate assessment of patients,                                                                    
and  crisis stabilization  with  the  training of  frontline                                                                    
workers and members  of the police force.  He explained that                                                                    
people   with  serious   mental   illnesses  and   addictive                                                                    
disorders had  a higher rate  of illness, and  the illnesses                                                                    
were more likely to be detrimental and life threatening.                                                                        
He  directed  attention to  Slide  4,  "Tends in  Public  BH                                                                    
        ƒTechnological Advances                                                                                                
        ƒAddress Provider EHR Capacity                                                                                         
          ƒClinically Driven                                                                                                   
          ƒFacilitate Integrated Care                                                                                          
          ƒEfficient Data Collection                                                                                           
          ƒRequired by ACA                                                                                                     
Mr.  Curie   pointed  out  to   the  committee   that  these                                                                    
priorities  had been  established as  far back  as the  Bush                                                                    
administration in  the 1990s. He  urged that,  regardless of                                                                    
the Affordable  Care Act, these were  priorities that needed                                                                    
to  be  in place  for  a  transformed  system of  care  with                                                                    
greater accountability.                                                                                                         
1:47:17 PM                                                                                                                    
Mr. Curie spoke to Slide 5, "Why Integrated Care?":                                                                             
        ƒBurden of behavioral health disorders is great.                                                                       
        ƒBehavioral and physical health issues are                                                                             
        ƒTreatment Gap behavioral health disorders is                                                                          
        ƒPrimary care in Behavioral Health settings                                                                            
          enhance access                                                                                                        
        ƒProviding MH & SA services in primary care                                                                            
          settings reduces stigma.                                                                                              
Mr.  Curie said  that  data had  reflected  that costs  were                                                                    
reduced  when   behavioral  and  physical   healthcare  were                                                                    
address  simultaneously; emergency  room and  inpatient care                                                                    
were utilized  less if  the right  treatment was  given, the                                                                    
right  way, and  at the  right time.  He stated  that people                                                                    
with serious  mental illness were more  at-risk for diabetes                                                                    
and  other   life-threatening  disorders,  due   in-part  to                                                                    
medications, and  also due to  the challenges they  faced in                                                                    
attempting  to lead  a healthy  lifestyle.  He relayed  that                                                                    
there  were  over 22  million  Americans  afflicted with  an                                                                    
addictive  disorder  at any  given  time,  and less  than  2                                                                    
million per year received treatment.                                                                                            
1:49:27 PM                                                                                                                    
Mr. Curie continued to address integrated care on Slide 6:                                                                      
        ƒTreating "common" behavioral health disorders in                                                                      
         primary care settings is cost effective.                                                                               
        ƒMajority of people with behavioral health                                                                             
          disorders treated in collaborative/integrated                                                                         
         primary care settings have good outcomes.                                                                              
Mr.   Curie  stated   that  screening   was  available   for                                                                    
depression and substance use.                                                                                                   
Mr. Curie spoke Slide 7, "Barriers to Integrated Care":                                                                         
        ƒBH and PH providers operate in "silos"                                                                                
        ƒRare sharing of information                                                                                           
        ƒConfidentiality Laws and Regulations                                                                                  
        ƒPayment and parity issues still persist                                                                               
Mr.  Curie  shared  that, historically,  mental  health  and                                                                    
addiction   services  had   not  been   easily  treated   in                                                                    
mainstream  healthcare  settings.   He  shared  that  mental                                                                    
health  systems  had  evolved out  of  state  mental  health                                                                    
hospitals and community based agencies,  as well as drug and                                                                    
alcohol   centers,  and   were   not   part  of   mainstream                                                                    
healthcare.  He  added that  there  had  been challenges  in                                                                    
information  sharing  between   behavioral  physical  health                                                                    
systems. He  said that there were  confidentiality laws that                                                                    
addressed  mental health  and drug  and  alcohol issues.  He                                                                    
relayed that there  had been parity laws  that required that                                                                    
mental illnesses  and addiction disorders should  be treated                                                                    
on par with  physical health disorders, but  that these laws                                                                    
had not been implemented across the entire county.                                                                              
1:52:35 PM                                                                                                                    
Mr.  Curie  addressed Slide  8,  "What  does this  mean  for                                                                    
        ƒUtilization Control                                                                                                   
        ƒGrant Reformation                                                                                                     
        ƒMedicaid Redesign                                                                                                     
Mr. Curie  stressed that the services  should be streamlined                                                                    
and  not  unduly  bureaucratic.  He said  that  control  and                                                                    
utilization  management  criteria  should  be  in  place  to                                                                    
assure  the  people were  reviewed  and  were receiving  the                                                                    
right  treatment,  at  the  right   time.  He  related  that                                                                    
structures  of accountability  and management  needed to  be                                                                    
put into  place. He  continued to Slide  9, "How  to Achieve                                                                    
the Vision?":                                                                                                                   
        ƒLook at models from other States-MCO, ASO, ACO,                                                                       
          Fee-for-Service, PCCM, PIHP, PAHP, health homes,                                                                      
        ƒMake policy decisions (e.g., populations, system                                                                      
          management, geographic area, benefit package,                                                                         
          risk arrangements)                                                                                                    
        ƒDevelop/improve capacity-at DBH and provider                                                                          
        ƒImplement the systems changes                                                                                         
Mr. Curie said that there were  a range of models that could                                                                    
show what  worked and  what did not  work. He  believed that                                                                    
Alaska could learn  from both the successes  and failures of                                                                    
other states. He  hoped that the state could  build toward a                                                                    
system that  had a  value based  payment system  where there                                                                    
could be risk or shared savings arrangements.                                                                                   
1:55:30 PM                                                                                                                    
Mr.  Curie turned  to  Slide  10, "Assessing  Organizational                                                                    
        ƒCapacity for Change                                                                                                   
        ƒAccess, Services and Outcomes                                                                                         
        ƒBusiness, IT, and Performance                                                                                         
        ƒClinical Infrastructure, CQI, and Sustainability                                                                      
        ƒAt the State level, most important is Contract                                                                        
          Management  (role of state government)                                                                                
Mr.  Curie recommended  that at  the state  level, the  most                                                                    
important  aspect  would  be   in  contract  management  and                                                                    
holding contractors accountable.                                                                                                
Mr.  Curie moved  to  Slide 11,  "What  States have  learned                                                                    
about Contract Management":                                                                                                     
     •Identify people with SMI and Kids with SED                                                                                
          -Mine the data in states                                                                                              
          -Require plans to identify people with SMI & Kids                                                                     
          with SED                                                                                                              
     •Implement ways to incent enrollment of people with                                                                        
     SMI and Kids with SED                                                                                                      
          -Higher rates for people with more complex and/or                                                                     
          chronic conditions                                                                                                    
          -Mitigation of risk approaches                                                                                        
Mr. Curie said  that a range of other states  had found that                                                                    
it  was necessary  to identify  people  with serious  mental                                                                    
illness, and  kids with  serious emotional  disturbances, by                                                                    
requiring plans  to identify  people with  particular needs.                                                                    
He  asserted that  this most  vulnerable population  was the                                                                    
population for which the state was most responsible.                                                                            
He continued to speak to contract management on Slide 12:                                                                       
          -Require acceptance in a plan regardless of                                                                           
          severity of conditions                                                                                                
     •Include the comprehensive array of services needed                                                                        
     for People with SMI and SED                                                                                                
          -Recovery oriented services psycho social rehab                                                                       
          (psycho social necessity)                                                                                             
     •Linkage to: prevention wellness, peer supports                                                                            
Mr. Curie related  that if people were able to  build a life                                                                    
in their  communities, relapses were  less likely  to occur.                                                                    
He believed that it was  important for any managed system of                                                                    
behavioral health  services to  address a  holistic approach                                                                    
to  recovery. He  relayed that  peer support  had become  an                                                                    
important  part   of  both   treating  mental   illness  and                                                                    
addictive disorders.                                                                                                            
1:58:35 PM                                                                                                                    
Mr.  Curie spoke  to Slide  13.  "Behavioral Health  Managed                                                                    
Care Contract Standards":                                                                                                       
    •Incentives to avoid cost shifting to other systems                                                                         
     •Consumer Choice & Protection                                                                                              
     •Assertive outreach and access standards                                                                                   
     •Network and providers should include those with                                                                           
     demonstrated expertise with people with SMI and kids                                                                       
     with SED (CMHC's)                                                                                                          
Mr.  Curie  said   that  it  would  be   important  to  have                                                                    
incentives  for systems  to  assume  responsibility for  the                                                                    
population for  which they were responsible.  He highlighted                                                                    
that  providers in  Alaska had  demonstrated expertise  with                                                                    
severe  mental illness  and children  with severe  emotional                                                                    
disturbances,  and  had  been providing  services  to  those                                                                    
populations for years.                                                                                                          
1:59:59 PM                                                                                                                    
Mr. Curie continued with contract standards on Slide 14:                                                                        
     •Clear   standards    for   treatment    planning   and                                                                    
     coordination consumer driven                                                                                               
     •Integrated BH/PH care standards                                                                                           
     •Consumer involvement                                                                                                      
     •Use of Peers                                                                                                              
     •Reinvestment of cost savings as an expectation                                                                            
Mr.  Curie spoke  to  reinvestment of  cost  savings in  the                                                                    
Pennsylvania program. He continued to Slide 15:                                                                                 
     •Performance measures                                                                                                      
          -Access (timeliness, geography, MH, SU & PC)                                                                          
          -Service utilization (in lieu of ER, IP, more                                                                         
          community based)                                                                                                      
          -Quality (readmission rates, timely follow up,                                                                        
          level     of     independent    living,     school                                                                    
          -Physical health metrics (hbp, cholesterol,                                                                           
          diabetes, med compliance)                                                                                             
          -BH metrics                                                                                                           
Mr.  Curie spoke  to  a white  paper  from the  Pennsylvania                                                                    
program   ["Long-Term   Performance  of   the   Pennsylvania                                                                    
Medicaid  Behavioral  Health   Program"  by  Compass  Health                                                                    
Analytics,  Inc., dated  December 2010  (copy on  file)]. He                                                                    
said that  after the first  10 years of implementation  of a                                                                    
capitated  system in  Pennsylvania there  was $4  billion in                                                                    
realized   cost   savings,   increased  alcohol   and   drug                                                                    
providers, increased access to  care by all populations, and                                                                    
successful quality of care. He  recapped that the key was to                                                                    
evolve  a managed  system in  a way  that helped  the system                                                                    
grow  and  maintain the  capacity  to  be successful,  while                                                                    
preserving  a structure  of  transparent accountability  for                                                                    
all parties involved.                                                                                                           
2:02:07 PM                                                                                                                    
Representative Wilson  queried the  savings by the  State of                                                                    
Mr. Curie  explained that Pennsylvania had  realized savings                                                                    
by moving  from a fee-for-service  system to a  managed care                                                                    
system: $4  billion of  savings realized  over 10  years. He                                                                    
furthered  that experts  in  behavioral  health and  managed                                                                    
care had  been consulted during Pennsylvania's  process, and                                                                    
Philadelphia  had developed  their  own  managed entity.  He                                                                    
said that contracting  with an entity that  had expertise in                                                                    
the field was an essential element to a successful program.                                                                     
Vice-Chair Saddler  asked how much of  the bill accomplished                                                                    
the transformation described by the presentation.                                                                               
Mr.  Curie believed  the bill  gave  the foundational  basis                                                                    
that the state  would need to pursue a  managed care system.                                                                    
He added that  the 1115 waivers would be a  great pathway to                                                                    
Vice-Chair  Saddler pointed  to  Slide 10.  He wondered  how                                                                    
ready the Department of Health  and Social Services Division                                                                    
of Behavioral Health was for the system evolution.                                                                              
Mr.  Curie  responded  that  some  reorganization  would  be                                                                    
necessary and  contractual management capacities  would need                                                                    
to be  assessed. He said that  the key would be  to have the                                                                    
management   oversight,   and  ongoing   implementation   of                                                                    
contract management and accountability.                                                                                         
Vice-Chair   Saddler  queried   the   top  five   behavioral                                                                    
disorders in Alaska.                                                                                                            
Mr.  Curie  replied  that depression,  substance  abuse  and                                                                    
addiction, and  mental illnesses that resulted  in psychosis                                                                    
were they key essentials that needed to be addressed.                                                                           
2:07:15 PM                                                                                                                    
Representative Guttenberg whether  Mr. Curie had experienced                                                                    
resistance to change.                                                                                                           
Mr. Curie  believed that resistance  to change was  based in                                                                    
fear. He relayed  a personal story about  systemic change in                                                                    
Philadelphia. He  said that providers often  resisted change                                                                    
because  they  feared  that  they  lacked  the  capacity  to                                                                    
address the standards.                                                                                                          
2:09:25 PM                                                                                                                    
Representative  Guttenberg spoke  about clients  with mental                                                                    
and behavioral  health disorders. He explored  the idea that                                                                    
change  could be  difficult for  people  with mental  health                                                                    
disorders. He asked whether Mr.  Curie had received feedback                                                                    
from clients.                                                                                                                   
Mr. Curie replied in the  affirmative. He said that consumer                                                                    
satisfaction had  been high  in Pennsylvania;  consumers had                                                                    
felt like  they had  more and better  choices. He  said that                                                                    
consumers  in other  states had  rated  the reform  measures                                                                    
highly and  had felt  like they were  working with  a better                                                                    
Representative  Guttenberg asked  how long  it took  for the                                                                    
issues to settle out related to confidences in the system.                                                                      
Mr.  Curie  replied  that stakeholders  had  to  be  engaged                                                                    
upfront; the  concerns of providers and  consumers should be                                                                    
discussed,   and  the   system  being   set  up   should  be                                                                    
demonstrated.  He stated  that  improvements were  typically                                                                    
seen  within the  first year  of  system implementation.  He                                                                    
felt that the  waivers that the bill  highlighted would give                                                                    
the  state the  opportunity to  address longstanding  issues                                                                    
and   that  people   would  be   attracted   to  those   new                                                                    
opportunities.   He  stated   that  once   the  system   was                                                                    
implemented  and people  became  engaged, positive  outcomes                                                                    
were witnessed within 2 years.                                                                                                  
2:13:43 PM                                                                                                                    
Co-Chair  Thompson referred  to the  white paper  related to                                                                    
Pennsylvania,  which  was  dated  2010. He  asked  if  there                                                                    
continued to be success in the program after 2010.                                                                              
Mr. Curie  answered in the  affirmative. He  elaborated that                                                                    
the Office  of Mental  Health and Substance  Abuse Services,                                                                    
within  their  Department  of Health  and  Social  Services,                                                                    
executed  evaluations each  year. He  noted that  the system                                                                    
had been phased  in in Pennsylvania, which  was something to                                                                    
consider  for Alaska.  He  added that  the  maturing of  the                                                                    
actuarial rate  setting process had  continued to  keep cost                                                                    
2:15:11 PM                                                                                                                    
Mr.  Jessee   testified  that  he  did   not  have  prepared                                                                    
testimony and relayed  that he would speak  to the committee                                                                    
the following day.                                                                                                              
2:15:41 PM                                                                                                                    
KAREN  FORREST, DEPUTY  COMMISSIONER,  DEPARTMENT OF  HEALTH                                                                    
AND SOCIAL  SERVICES, explained that she  would walk through                                                                    
the  significant reforms  in  the  behavioral health  system                                                                    
that were outlined  in SB 74. She mentioned  that the Alaska                                                                    
Behavioral  Health  System  Assessment, completed  in  2015,                                                                    
confirmed that the state had  a fragmented behavioral health                                                                    
system  with significant  gaps,  especially in  the area  of                                                                    
substance abuse services. She said  that there were a number                                                                    
of barriers impeding access and  impacting quality and cost.                                                                    
She  relayed  that  the behavioral  health  reform  projects                                                                    
found in the  bill would help to build out  the continuum of                                                                    
care,  which would  lead to  improved access;  additionally,                                                                    
quality of  care would be improved  through integration with                                                                    
primary care, and barriers  and administrative burdens would                                                                    
be  reduced.  She  stated  that  the  reforms  would  reduce                                                                    
general  fund costs  to other  state agencies,  such as  the                                                                    
Department of Corrections, the Court  System, and the Office                                                                    
of Children's Services.  She related that Sections  1, 2, 6,                                                                    
and 7  of the bill would  expand, and encourage, the  use of                                                                    
telehealth  for behavioral  health by  listened professional                                                                    
counselors,  marital  and family  therapists,  psychologists                                                                    
and psychological associates, and social workers.                                                                               
Representative  Wilson asked  which  document the  testifier                                                                    
was speaking to.                                                                                                                
Ms. Forrest explained that she  would highlight the sections                                                                    
of the  bill that were  connected to the  articulated vision                                                                    
for the changes in  the behavioral health system highlighted                                                                    
by Mr. Curie.                                                                                                                   
Co-Chair  Thompson  asked Ms.  Forrest  to  repeat the  bill                                                                    
sections that she was speaking to.                                                                                              
Ms.  Forrest repeated  the sections  that she  was referring                                                                    
2:19:54 PM                                                                                                                    
Ms. Forrest spoke to Sections 3,  4, and 5, which related to                                                                    
telehealth for physicians. She  anticipated that the changes                                                                    
would help  expand psychiatric coverage.  She said  that the                                                                    
provisions dovetailed  with the provisions in  Section 30 of                                                                    
the   bill,  which   allowed  the   department  to   provide                                                                    
incentives for  telehealth. She stated  that the  first step                                                                    
in  implementing  that  provision  would  be  to  convene  a                                                                    
workgroup  in  order  to identify  legal  technological  and                                                                    
financial  barriers to  increasing  telehealth. She  relayed                                                                    
that Section  28 would create the  Medical Assistance Reform                                                                    
Program; subsection B,  page 26, line 18,  would require the                                                                    
department,  in  coordination   with  AMHTA  to  efficiently                                                                    
manage  a  comprehensive  and integrated  behavioral  health                                                                    
program that  used evidence based and  data driven practices                                                                    
to achieve  positive outcomes. She  said that gaps  would be                                                                    
addressed  in  the  continuum,  particularly  in  the  lower                                                                    
levels of care, but also in  higher levels of care. She said                                                                    
that the  program required under  Section 28 must  include a                                                                    
plan for providing a continuum  of community based services.                                                                    
She  related that  the section  also required  that services                                                                    
should  be  provided from  a  wide  array of  providers  and                                                                    
disciplines.  Regulations  and  practices already  in  place                                                                    
would  be  examined  to   determine  which  providers  could                                                                    
provide which  services, in which settings,  and under which                                                                    
conditions.  She concluded  that the  intent of  the section                                                                    
was  to address  the fragmented  system. She  said that  the                                                                    
program  must also  include  efforts  to reduce  operational                                                                    
barriers and administrative burdens  that impeded access for                                                                    
2:23:16 PM                                                                                                                    
Ms. Forrest addressed  Section 30 of the  bill, beginning on                                                                    
page 29.  She said that the  waivers section was the  key to                                                                    
reform in the  area of behavioral health. She  spoke to Page                                                                    
30, line 9,  which required the department to  apply for the                                                                    
1115 Behavioral Health Medicaid  Waiver from the Centers for                                                                    
Medicare and  Medicaid Services (CMS) in  order to establish                                                                    
a demonstration project focused  on improving the behavioral                                                                    
health system for Medicaid  recipients. The department would                                                                    
be required to engage the  stakeholder in the community. She                                                                    
relayed that  the purpose of  the 1115 waiver was  to create                                                                    
and  evaluate an  innovative  service  delivery system  that                                                                    
improved care,  increased efficiency, and managed  cost. She                                                                    
said  that the  general  criteria that  CMS  used to  review                                                                    
waiver   applications  included   questions  pertaining   to                                                                    
increased  access and  the  stabilization  of providers  and                                                                    
provider  networks. She  stated that  the application  would                                                                    
need to reflect that health  outcomes would be improved, and                                                                    
would be budget neutral. She  relayed that during the course                                                                    
of  the  waiver  federal  Medicaid  expenditures  could  not                                                                    
exceed  federal spending  without the  waiver. The  array of                                                                    
services  proposed would  have  to be  offset by  reductions                                                                    
elsewhere;   such    as   reducing    emergency   department                                                                    
expenditures by  providing lower cost  crisis stabilization.                                                                    
She articulated  that the waivers generally  had a five-year                                                                    
lifespan,  with the  option of  a three-year  extension. She                                                                    
verbalized  that  an  administrative  services  organization                                                                    
would  be  used  to  help   move  the  system  from  program                                                                    
management  to   quality  management;  a  system   based  on                                                                    
outcomes as opposed to fee-for-service.                                                                                         
2:26:12 PM                                                                                                                    
RANDALL  BURNS,  DIRECTOR,  DIVISION OF  BEHAVIORAL  HEALTH,                                                                    
DEPARTMENT OF  HEALTH AND SOCIAL  SERVICES, focused  on what                                                                    
it would  take to  apply for an  1115 waiver.  He reiterated                                                                    
that  the waiver  was for  five  years, and  was a  research                                                                    
demonstration,  required to  have a  foundational hypothesis                                                                    
that  could   be  tested  throughout  the   process  of  the                                                                    
demonstration. He  imparted that the  process had to  have a                                                                    
strong,  ongoing  evaluation  component  that  measured  the                                                                    
effects  of  the   redesign  on  the  system   of  care.  He                                                                    
reiterated  that it  could not  cost the  federal government                                                                    
more than  without the waiver; however,  the cost neutrality                                                                    
could  be shown  at the  end of  the demonstration,  without                                                                    
extending  additional Medicaid.  He  said  that the  various                                                                    
involved  parties would  draft  a concept  paper within  the                                                                    
next  six months  that  would be  introduced  to CMS,  which                                                                    
would mark  the beginning of intense  communication with all                                                                    
of the stakeholders. He highlighted  two other things: there                                                                    
would  be  a readiness  assessment  of  current Division  of                                                                    
Behavioral Health  (DBH) staff,  and a review  of providers.                                                                    
He elaborated on what the  assessments would entail. He said                                                                    
that  once  the  concept  paper  was  filed  with  CMS,  the                                                                    
department   would  begin   drafting  the   application.  He                                                                    
detailed the application particulars.                                                                                           
2:31:12 PM                                                                                                                    
Mr. Burns  relayed that  the application  could take  from a                                                                    
few months  to 3  years. He stated  that as  the application                                                                    
was being  written, the  request for  information concerning                                                                    
the  Administrative  Services  Organization (ASO)  would  be                                                                    
drafted  simultaneously.  He explained  that  an  ASO was  a                                                                    
third  party  with whom  the  department  would contract  to                                                                    
manage  Alaska's redesigned  behavioral  health system.  The                                                                    
ASO  would provide  the department  with national  expertise                                                                    
around  a managed  Medicaid  system of  care,  and help  the                                                                    
transition of  the division to  a program  management model.                                                                    
He  relayed that  the contract  with the  ASO could  include                                                                    
significant  incentives within  the payment  structure, with                                                                    
flexibility for the  ASO to pass on  incentives to providers                                                                    
for  achievement  of  quality  in the  network  targets.  He                                                                    
shared that  a request for  information (RFI) was  often use                                                                    
in the  solicitation of  a request  for proposal  (RFP). The                                                                    
department  intended  to release  the  RFI  for the  ASO  in                                                                    
February  2017.  He stated  that  the  information that  was                                                                    
received during  the RFI process  about the interest  of any                                                                    
ASO in working  in Alaska, and under  what conditions, would                                                                    
help  inform  the drafting  of  the  waiver application.  He                                                                    
warned  that some  of  the  ASO could  take  issue with  the                                                                    
limitations that  were due  to the  geography of  Alaska. He                                                                    
elucidated that based  on the quality and the  nature of the                                                                    
responses,   and  assuming   negotiations   with  CMS   were                                                                    
promising,  the  department would  release  an  RFP for  the                                                                    
services during the first quarter  of FY18. He conveyed that                                                                    
if the  RFP was successful  the ASO would be  contracted and                                                                    
working to  create the networks  and have services  in place                                                                    
by the  time the  1115 waiver  was granted.  He communicated                                                                    
that the integration and primary case management health                                                                         
home models were key to the redesign effort.                                                                                    
2:35:37 PM                                                                                                                    
Mr. Burns relayed that after 1  to 2 years under the waiver,                                                                    
the state  would apply  for a  substance use  disorder (SUD)                                                                    
waiver,   with   the   hope  to   eliminate   the   Medicaid                                                                    
Institutions  for   Mental  Diseases  (IMD)   exclusion  for                                                                    
substance use disorder treatment.                                                                                               
Ms. Forrest spoke to Section 31, pages 30 and 31:                                                                               
     Section 31 (page 30-34)                                                                                                
     AS 47.07.038. Collaborative, hospital-based project to                                                                   
     reduce use of emergency department services.                                                                             
     Requires  the department  to partner  with a  statewide                                                                    
     professional  hospital   organization  to   design  and                                                                    
     implement a demonstration  project to reduce non-urgent                                                                    
     use of emergency departments by Medicaid recipients.                                                                       
          AS   47.07.039.  Coordinated   care  demonstration                                                                  
          AS 47.07.039 (a)                                                                                                      
          Requires DHSS to solicit and  contract with one or                                                                    
          more  third-party  entities for  coordinated  care                                                                    
          demonstration   projects   for   individuals   who                                                                    
          qualify  for   Medicaid  benefits  on   or  before                                                                    
          December  31, 2016.  DHSS  may  use an  innovative                                                                    
          procurement   process   as  described   under   AS                                                                    
          36.30.308.  A  proposal   for  consideration  must                                                                    
          include three or more of the following:                                                                               
               (1)      Comprehensive     primary-care-based                                                                    
               management,   including   behavioral   health                                                                    
               services   and   coordination  of   long-term                                                                    
               services and support;                                                                                            
               (2)   Care    coordination,   including   the                                                                    
               assignment   of  a   primary  care   provider                                                                    
               located in  the local geographic area  of the                                                                    
               (3) Health promotion;                                                                                            
               (4)   Comprehensive  transitional   care  and                                                                    
               follow-up care after inpatient treatment;                                                                        
               (5) Referral to  community and social support                                                                    
               services,  including   career  and  education                                                                    
               training services;                                                                                               
               (6) Sustainability and the ability to                                                                            
               replicate in other regions of the state;                                                                         
               (7)    Integration   and    coordination   of                                                                    
               benefits,    services,     and    utilization                                                                    
               (8) Local accountability for health and                                                                          
               resource allocation.                                                                                             
Ms. Forrest mentioned Section 33, page 35:                                                                                      
    Section 33 (page 35) Removal of Grantee Requirement                                                                   
          Amends  Medicaid  Administration  definitions,  by                                                                    
          removing  the   grantee  status   requirement  for                                                                    
          outpatient   community   mental   health   clinics                                                                    
          serving Medicaid patients.                                                                                            
Ms. Forrest read from Section 34:                                                                                               
    Section 34 (page 35) Removal of Grantee Requirement                                                                   
          AS 47.07.900(17)                                                                                                    
          Amends by  removing the  grantee/contractor status                                                                    
          requirement  from   drug  and   alcohol  treatment                                                                    
          centers  and  outpatient community  mental  health                                                                    
          clinics. This change, and the  one in the previous                                                                    
          section, allows  mental health and  drug treatment                                                                    
          service providers  who do not receive  grants from                                                                    
          the   department  to   become  enrolled   Medicaid                                                                    
          providers   and  deliver   services  to   Medicaid                                                                    
Ms.  Forrest informed  the committee  that the  changes were                                                                    
required  by  CMS.  She  stated that  in  the  last  on-site                                                                    
evaluation,   CMS  had   told   the   department  that   the                                                                    
requirements  had to  be removed.  She furthered  that there                                                                    
was a general provision that  Medicaid allow any willing and                                                                    
qualified provider  to participate in Medicaid,  as directed                                                                    
by  the Freedom  of Choice  provision, the  requirements had                                                                    
restricted Medicaid  recipients in their freedom  of choice.                                                                    
She  relayed  that,  as  the   state  Medicaid  agency,  the                                                                    
department  had  the  ability to  set  reasonable  standards                                                                    
related  to   the  qualifications   of  the   provider;  CMS                                                                    
generally  questioned state  established qualification  that                                                                    
limited  services  only  to  the  providers  of  the  states                                                                    
choosing. She said  that the sections of the  bill needed to                                                                    
remain in order for the state to be able to bill Medicaid.                                                                      
2:38:42 PM                                                                                                                    
Ms. Forrest referred to Section 39:                                                                                             
     Section 39 (page 37-38)                                                                                                
          Uncodified:   Health  Information   Infrastructure                                                                  
          Requires DHSS to develop a  plan to strengthen the                                                                    
          health   information   infrastructure,   including                                                                    
          health  data  analytics   capability,  to  support                                                                    
          transformation of the health system in Alaska.                                                                        
Ms.  Forrest  attested that  there  was  a need  to  connect                                                                    
behavioral health  providers to the Alaska  Statewide Health                                                                    
Information  Exchange,  to  improve care  coordination.  She                                                                    
spoke to Section 40:                                                                                                            
     Section 40 (page 38-39)                                                                                                
          Uncodified: Feasibility Studies  for the Provision                                                                  
          of Specified State Services.                                                                                        
          (a)  Requires DHSS  to conduct  a study  analyzing                                                                    
          the   feasibility   of  privatizing   the   Alaska                                                                    
          Pioneers'  Homes  and  select  facilities  of  the                                                                    
          division of juvenile justice.                                                                                         
          (b) Requires  DHSS in conjunction with  the Alaska                                                                    
          Mental Health  Trust Authority to conduct  a study                                                                    
          analyzing  the  feasibility   of  privatizing  the                                                                    
          Alaska Psychiatric Institute.                                                                                         
          (c) Requires  the Department of  Administration to                                                                    
          conduct  a  study  analyzing  the  feasibility  of                                                                    
          creating  a health  care  Authority to  coordinate                                                                    
          health  care  plans   and  consolidate  purchasing                                                                    
          effectiveness  for  all state  employees,  retired                                                                    
          state   employees,   retired  teachers,   Medicaid                                                                    
          Assistance   recipients,   University  of   Alaska                                                                    
          employees,  employees of  state corporations,  and                                                                    
          school district employees.                                                                                            
          (d)  Provides a  definition for  "school district"                                                                    
          Section 40 (page 38-39)                                                                                               
          Uncodified: Feasibility Studies  for the Provision                                                                    
          of Specified State Services.                                                                                          
          (a)  Requires DHSS  to conduct  a study  analyzing                                                                    
          the   feasibility   of  privatizing   the   Alaska                                                                    
          Pioneers'  Homes  and  select  facilities  of  the                                                                    
          division of juvenile justice.                                                                                         
          (b) Requires  DHSS in conjunction with  the Alaska                                                                    
          Mental Health  Trust Authority to conduct  a study                                                                    
          analyzing  the  feasibility   of  privatizing  the                                                                    
          Alaska Psychiatric Institute.                                                                                         
          (c) Requires  the Department of  Administration to                                                                    
          conduct  a  study  analyzing  the  feasibility  of                                                                    
          creating  a health  care  Authority to  coordinate                                                                    
          health  care  plans   and  consolidate  purchasing                                                                    
          effectiveness  for  all state  employees,  retired                                                                    
          state   employees,   retired  teachers,   Medicaid                                                                    
          Assistance   recipients,   University  of   Alaska                                                                    
          employees,  employees of  state corporations,  and                                                                    
          school district employees.                                                                                            
          (d) Provides a definition for "school district"                                                                       
Ms. Forrest believed  that all sections of the  bill set the                                                                    
stage  for  a  comprehensive  vision  of  behavioral  health                                                                    
reform that would  result in improved access  and quality of                                                                    
healthcare, while reducing overall costs.                                                                                       
2:40:21 PM                                                                                                                    
KATE  BURKHART,  EXECUTIVE  DIRECTOR, ALASKA  MENTAL  HEALTH                                                                    
BOARD  AND  ADVISORY BOARD  ON  ALCOHOLISM  AND DRUG  ABUSE,                                                                    
DIVISION  OF BEHAVIORAL  HEALTH,  DEPARTMENT  OF HEALTH  AND                                                                    
SOCIAL  SERVICES,   testified  that  the  boards   had  been                                                                    
involved in healthcare and Medicaid  reform efforts for many                                                                    
years, the process  over the past 18 to 24  months being the                                                                    
most inclusive. She relayed that  the board had participated                                                                    
in conversations  with stakeholders  and providers,  and had                                                                    
offered  to  engage  with  Medicaid  recipients,  which  the                                                                    
department had  granted. She stated  that the  board engaged                                                                    
in 8 separate  community conversations in fall  of 2015, and                                                                    
had  reviewed   public  input   from  community   town  hall                                                                    
meetings,  other  public   meetings,  and  the  streamlining                                                                    
initiative,  to   compile  consumer  input  to   inform  the                                                                    
process.   She shared that  recipients and experts  had many                                                                    
of  the same  ideas and  concerns for  reform. She  imparted                                                                    
that access to high  quality services, at appropriate levels                                                                    
of care,  made up the  bulk of  the comments. She  said that                                                                    
the community  groups spoke  of the  need to  have increased                                                                    
access  to medication  management  and psychiatry  services.                                                                    
She  explained  that  the telehealth  and  coordinated  care                                                                    
provisions in  the bill  spoke to  the issue  by encouraging                                                                    
increased  access  to  private mental  health  professionals                                                                    
that were not practicing  within community behavioral health                                                                    
centers.  She furthered  that the  ability  to receive  care                                                                    
when  it  was  needed,  and  not  later,  was  essential  to                                                                    
addressing many of the relevant  social problem that stemmed                                                                    
from   unaddressed   behavioral    health   disorders.   She                                                                    
communicated that  the consumers  had talked about  the need                                                                    
to  address the  quality  of primary  and behavioral  health                                                                    
care services  that were currently available.  She said that                                                                    
the quality of the actual  medical services provided had not                                                                    
been an issue, but that the  context for which that care was                                                                    
provided  had  been  mentioned; the  issues  of  stigma  and                                                                    
discrimination, as  well as a  lack of understanding  of how                                                                    
to serve  someone with  a serious   mental illness  who also                                                                    
had some  kind of  co-morbidity. Families,  especially those                                                                    
of children with serious  emotional and behavioral disorders                                                                    
talked  about  how they  had  to  aggressively advocate  for                                                                    
their children's primary care needs  as well as their mental                                                                    
health needs. She said that  SB 74 would provide a framework                                                                    
through which the primary case  care management project, and                                                                    
the  1115   waiver,  would   foster  patient   advocacy  and                                                                    
navigation  through complex  healthcare  systems. She  noted                                                                    
that  the complicated  nature of  insurance was  lamented by                                                                    
testifiers from all  areas of usage. She felt  that the bill                                                                    
would  implement  reforms  that  would make  it  easier  for                                                                    
people to get to the  services that they needed, rather than                                                                    
accessing   acute   care   services.  She   disclosed   that                                                                    
coordination  of   care  was  a  reoccurring   issue  during                                                                    
conversations  with  community  members. She  revealed  that                                                                    
parents and  care providers  often found  themselves without                                                                    
time  and resources  for self-care,  prompting the  need for                                                                    
family-based  care. She  spoke to  primary case  management,                                                                    
and gave the example of  a young man with significant mental                                                                    
health and primary care needs who  did not want to go to all                                                                    
of his necessary appointments;  family members had suggested                                                                    
that someone could be employed  who would make sure that the                                                                    
young man received the care  he needed, which would take the                                                                    
burden  off of  the  family.   She  spoke  to  the need  for                                                                    
administrative  efficiencies. Providers  and  the board  had                                                                    
testified  to  the  need to  streamline  the  administrative                                                                    
burden  in order  to  reduce  costs and  make  it easier  to                                                                    
access  care.  She  said that  when  paperwork  drove  care,                                                                    
rather  than the  person's needs,  patients did  not receive                                                                    
the care  needed to help them  get better. She spoke  to the                                                                    
need for supportive  services, which SB 74  would provide by                                                                    
reforming the Medicaid  system in a way  that correlated the                                                                    
reforms  to   the  healthcare   services  with   the  needed                                                                    
community support. She asserted  that open conversation with                                                                    
all   involved  parties   should  continue   throughout  the                                                                    
development   of   the  1115   waivers   as   well  as   the                                                                    
implementation   of   many   of  the   provisions   in   the                                                                    
legislation.  She said  that the  boards  were committed  to                                                                    
supporting the  implementation of the efforts.  She said the                                                                    
inclusive  nature of  the  reform efforts  so  far had  been                                                                    
greatly appreciated.                                                                                                            
2:50:48 PM                                                                                                                    
Vice-Chair Saddler  asked whether  there were  two different                                                                    
1115 waivers.                                                                                                                   
Ms. Forrest answered in the affirmative.                                                                                        
Vice-Chair Saddler asked whether  all of the same conditions                                                                    
and timelines would apply for both waivers.                                                                                     
MS. Forrest  deferred the question  to Jon  Sherwood, Deputy                                                                    
Commissioner,  Medicaid and  Health Care  Policy, Department                                                                    
of Health and Social Services.                                                                                                  
Vice-Chair Saddler asked whether  the Division of Behavioral                                                                    
Health  was ready  for the  transformation described  in the                                                                    
Mr. Burns  replied in the  affirmative. He said  that people                                                                    
were aware  of the  systemic problems and  that most  of the                                                                    
staff were  program managers who dealt  with services issues                                                                    
on a daily basis. He  said that his employees were committed                                                                    
to improving the system.                                                                                                        
Vice-Chair   Saddler  queried   the  effectiveness   of  the                                                                    
Division of Behavioral Health.                                                                                                  
Mr. Burns replied  that the division was  very effective and                                                                    
had successfully  served many individuals  in the  state. He                                                                    
admitted that there  were gaps in the system,  but that most                                                                    
recently  the  system  had  been  focused  on  treating  the                                                                    
seriously  mentally ill  and severely  emotionally disturbed                                                                    
children, who  were the most  difficult population  to serve                                                                    
because   their  needs   changed   quickly  and   medication                                                                    
management  could   be  difficult.  He  believed   that  the                                                                    
division had done the best  work possible given the range of                                                                    
services  that   were  available  to  their   clientele.  He                                                                    
maintained  that  the  division   was  highly  effective  in                                                                    
providing the services that it was capable of providing.                                                                        
Vice-Chair Saddler referred Page 30,  line 1, which spoke to                                                                    
the 1915(i)  waiver. He asked  how "area" would  be defined,                                                                    
and which  area would most likely  receive the demonstration                                                                    
Ms. Forrest replied  that the geographic area had  yet to be                                                                    
defined.  She  said  that   utilization,  and  needs  within                                                                    
communities, would  be considered.  She added that  the area                                                                    
could be as  large as Anchorage, or an entire  region of the                                                                    
state, she reiterated that it was yet undefined.                                                                                
2:55:32 PM                                                                                                                    
Mr. Burns interjected  that the hope was that  the ASO would                                                                    
be  interested in  a statewide  system,  and subcontract  if                                                                    
there were  entities that were  interested in  providing the                                                                    
services on a regional basis.  He stated that there could be                                                                    
a   statewide  system   with  subcontractors   for  specific                                                                    
Vice-Chair  Saddler worried  that the  bill had  too wide  a                                                                    
scope. He said that he supported the legislation.                                                                               
Mr. Burns  replied that the  goal was to improve  the system                                                                    
while keeping costs under control.                                                                                              
Co-Chair Neuman echoed concerns  made by Vice-Chair Saddler.                                                                    
He  elaborated  that  there   were  many  new  requirements,                                                                    
commitments,  regulation changes,  and requests  for changes                                                                    
that the  legislature could not predict  because regulations                                                                    
had  yet  to  be  written. He  spoke  to  the  collaborative                                                                    
hospital  based project  on Page  30. He  wondered how  many                                                                    
statewide professional hospital  associations existed in the                                                                    
Co-Chair Thompson replied that the answer was one.                                                                              
Co-Chair  Neuman  understood  there were  many  professional                                                                    
organizations that  communicated with each other,  but noted                                                                    
that   the   consumer  had   not   been   involved  in   the                                                                    
conversations.  He  hoped  that  the  effectiveness  of  the                                                                    
regulation  changes  could  be  measured  before  they  were                                                                    
implemented.  He expressed  distain for  federal regulations                                                                    
being tied to federal funds. He  asked for a list of federal                                                                    
requirements that were tied to federal funds.                                                                                   
2:59:54 PM                                                                                                                    
Representative  Kawasaki   asked  whether   federal  statute                                                                    
required going  through a managed  care or  accountable care                                                                    
organization for the 1115 waiver.                                                                                               
Mr.  Burns   answered  in  the   negative.  He   added  that                                                                    
management of the waiver would be entirely up to the state.                                                                     
Representative  Kawasaki surmised  that an  accountable care                                                                    
model was being considered by  the department because it had                                                                    
worked in other states.                                                                                                         
Mr.  Burns  replied that  it  was  part  of the  reason.  He                                                                    
elaborated  that accountable  care  organizations brought  a                                                                    
depth  of expertise  to the  table. He  said that  the state                                                                    
would perform  the RFP  to see what  kind of  interest there                                                                    
was in assisting the state  in moving forward with a managed                                                                    
Medicaid system.                                                                                                                
Representative Kawasaki  asked whether  the state  could run                                                                    
its own managed care organization under the 1115 waiver.                                                                        
Mr.  Burns answered  in the  affirmative. He  explained that                                                                    
the state could decide not to  contract with an ASO, and run                                                                    
it through the department.                                                                                                      
Representative  Kawasaki spoke  about the  Behavioral Access                                                                    
Imitative that was expected to  produce net cost to Medicaid                                                                    
because  of   the  expected  accessibility  of   service  to                                                                    
enrollees.  He asked  about the  five-year term  requirement                                                                    
for the waiver to  prove net-neutrality, and whether general                                                                    
fund savings would be off-set elsewhere.                                                                                        
Mr. Burns  answered that other  savings to the  system would                                                                    
be measured,  like possible  savings from  the demonstration                                                                    
projects   for   emergency   rooms,  which   was   partially                                                                    
associated with behavioral health treatment.                                                                                    
Representative Kawasaki  relayed that he  had a list  of the                                                                    
current optional  and mandatory  waivers and  services under                                                                    
Medicaid. He said that 19  were mandatory for adults, and 26                                                                    
that  the state  had applied  to optionally,  some of  which                                                                    
were waivered. He  asked what the overall cost  would be for                                                                    
the 1115 waivers.                                                                                                               
Co-Chair  Thompson thought  that the  question was  in-depth                                                                    
and may require more time.                                                                                                      
Ms.  Forrest deferred  the  question to  a  later time  when                                                                    
discussing the fiscal notes.                                                                                                    
3:04:20 PM                                                                                                                    
Representative Guttenberg referred to  the final report from                                                                    
Agnew::Beck Consulting, LCC:  "Recommended Medicaid Redesign                                                                    
Expansion Strategies  for Alaska,  which cited the  goals of                                                                    
improved  health, optimizing  access, increasing  value, and                                                                    
containing costs. He hoped that  within the process that the                                                                    
department  would  illustrate  how   those  goals  might  be                                                                    
accomplished.   He  argued   that  there   were  significant                                                                    
barriers  for delivering  telemedicine in  Alaska. He  hoped                                                                    
that  the  state  current broadband  capabilities  would  be                                                                    
considered before performing RFPs.                                                                                              
Ms. Forrest agreed that broadband  capability was a concern.                                                                    
She  added that  an  organized  and structured  conversation                                                                    
should take place about the  capabilities of systems already                                                                    
in place, and  the broadband capabilities of  the state. She                                                                    
added that there had been  success using telemedicine in the                                                                    
Tribal Health System.                                                                                                           
Representative  Guttenberg  referred   to  a  question  from                                                                    
Representative Kawasaki related to  ASOs. He asked about the                                                                    
administrative overburden of too many program managers.                                                                         
3:08:42 PM                                                                                                                    
Mr.  Burns  replied  that other  states  had  managed  their                                                                    
projects   individually  by   region  and   had  not   tried                                                                    
implementing  an overarching  ASO. He  added that  the state                                                                    
could  make  its own  choices  about  the delivery  of  care                                                                    
within the state.                                                                                                               
Representative Guttenberg understood  that the pilot program                                                                    
would  include regional  delivery  of  services. He  worried                                                                    
about the  ability to  translate from  region to  region. He                                                                    
expressed concern that  a program that worked  in one region                                                                    
would not be appropriate for a different region.                                                                                
Mr.  Burns  responded that  one  of  the advantages  of  the                                                                    
system  was  that the  RFP  would  specifically address  the                                                                    
unique needs of different  regions. He stressed that generic                                                                    
RFPs would not be written.                                                                                                      
3:11:10 PM                                                                                                                    
Representative  Wilson   wondered  whether   the  department                                                                    
already  had  the  authority  to   do  some  of  the  things                                                                    
stipulated in the bill.                                                                                                         
Mr.  Burns replied  that the  division could  probably still                                                                    
pursue  an 1115  waiver,  but thought  that  there might  be                                                                    
Medicaid  provisions that  would  require the  authorization                                                                    
extended by the legislation.                                                                                                    
Representative  Wilson  was   disturbed  that  the  Medicaid                                                                    
system  was not  more efficient.  She expressed  interest in                                                                    
the managed  care model. She understood  that the department                                                                    
had not  before had  the authority  to address  the problems                                                                    
through managed care.                                                                                                           
Mr. Burns responded  that one of the reasons for  the gap in                                                                    
service was that  until recently Medicaid had  not covered a                                                                    
large portion of the population.  He said that the expansion                                                                    
had  exposed  the system  on  a  holistic level,  which  had                                                                    
revealed the systemic limitations.                                                                                              
3:14:16 PM                                                                                                                    
Representative Wilson opined that  Medicaid had already been                                                                    
funded with  billions of  state dollars.  She said  that she                                                                    
could not  understand what the  bill would do  without first                                                                    
understanding  all  of  the  issues  with  the  system.  She                                                                    
expressed  apprehension  that   the  system  could  function                                                                    
successfully solely online.                                                                                                     
Ms. Burkhart  stated that  one of  the most  critical issues                                                                    
was workforce capacity. She shared  that one of the goals of                                                                    
the  system redesign  was alleviate  the workforce  capacity                                                                    
issues  in   the  community  behavioral  health   system  by                                                                    
allowing  private practitioners  to bill  Medicaid services.                                                                    
Currently, private  licensed marriage and  family therapists                                                                    
were  not able  to provide  therapy to  Medicaid recipients.                                                                    
Medicaid recipients with mild  to moderate behavioral health                                                                    
disorders often  went without care  until they  developed an                                                                    
acute  mental illness,  and  then  the community  behavioral                                                                    
health center  will serve them  because they become  part of                                                                    
the priority  population. She pointed  out that SB  74 would                                                                    
allow  for private  licensed mental  health professional  to                                                                    
provide reimbursable  services to  Medicaid, which  opens up                                                                    
workforce capacity for the mild  to moderate needs that were                                                                    
currently going  unaddressed. The  hope was that  this would                                                                    
relieve  some of  the pressure  on  community mental  health                                                                    
3:17:33 PM                                                                                                                    
Representative Wilson shared that  her problem with the bill                                                                    
was that  she did not  understand what was  already required                                                                    
by statute.  She wanted  to know  what the  department could                                                                    
currently  do,  without  the bill.  She  requested  a  chart                                                                    
comparing  the department's  current authority,  versus what                                                                    
was proposed in the bill.                                                                                                       
Representative Gara  surmised that  the bill  addressed some                                                                    
reform   issues  by   relieving   workforce  shortages   and                                                                    
leveraging  federal funding.  He  understood  that the  1115                                                                    
waiver was projected to save  the state over $200 million in                                                                    
general funds over the next 5 years.                                                                                            
Ms. Forrest  clarified that  Representative Gara  had spoken                                                                    
to  savings attached  to the  Tribal Policy  portion of  the                                                                    
bill, which did not require a waiver.                                                                                           
Representative  Gara asked  whether the  non-tribal part  of                                                                    
the 1115 waiver leveraged additional federal funds.                                                                             
Ms.  Forrest  answered  that   the  1115  Behavioral  Health                                                                    
Medicaid  waiver  gave  the department  the  opportunity  to                                                                    
provide additional services in an effective manner.                                                                             
Representative Gara asked whether  it would qualify services                                                                    
that could be paid for by Medicaid.                                                                                             
Ms. Forrest answered in the affirmative.                                                                                        
Representative  Gara understood  that  those services  would                                                                    
otherwise be paid for with general funds.                                                                                       
Ms. Forrest replied in the affirmative.                                                                                         
Representative  Gara probed  the dividing  line between  the                                                                    
1115  waiver  and  behavioral  health.  He  understood  that                                                                    
current   law  limited   behavioral   health  treatment   to                                                                    
federally qualified medical centers,  or with a psychiatrist                                                                    
Ms. Forrest answered in the affirmative.                                                                                        
Representative   Gara   recognized   that  the   number   of                                                                    
qualifying psychiatrists in the state was limited.                                                                              
Ms.  Forrest  illuminated  that federal  law  required  that                                                                    
services in  a physician's clinic  had to be  provided under                                                                    
the  general  direction  of  a   physician.  She  said  that                                                                    
regulation had  been established for both  physician clinics                                                                    
and  community mental  health  clinics.  She expressed  that                                                                    
regulations  could  be changed,  and  that  the 1115  waiver                                                                    
would  be examined  for expanding  access while  maintaining                                                                    
budget neutrality.                                                                                                              
3:21:40 PM                                                                                                                    
Representative  Gara surmised  that if  the 1115  waiver was                                                                    
pursued and successful,  the state would be  able to provide                                                                    
behavioral  health services  without  the  supervision of  a                                                                    
physician,  a  phycologist,  and   without  being  inside  a                                                                    
federally qualified medical health center.                                                                                      
Ms. Forrest answered  that that 1115 waiver  would allow the                                                                    
department to  examine its  utilization patterns  across the                                                                    
state and provide the opportunity to refine regulations.                                                                        
Representative  Gara  asked  whether the  behavioral  health                                                                    
treatment   under  the   waiver  included   substance  abuse                                                                    
Ms.  Forrest replied  that it  referred to  clinic services,                                                                    
which could be applied to substance abuse treatment.                                                                            
Representative Gattis  wanted to  have a  broad conversation                                                                    
about  the  26  optional  services  Representative  Kawasaki                                                                    
spoke of, particularly the fiscal aspects of the options.                                                                       
Vice-Chair Saddler understood that  the currently system did                                                                    
not allow for marital or  family therapists to bill Medicaid                                                                    
because  they did  not provide  services under  contract. He                                                                    
spoke  to the  provision on  Page 35,  line 12  and 13  that                                                                    
removed the  requirement for  rehabilitative services  to be                                                                    
provided   by  someone   at   a   community  mental   health                                                                    
establishment  that was  under  contract.  He asked  whether                                                                    
changing that requirement would expand capacity.                                                                                
Ms. Forrest answered in the affirmative.                                                                                        
Vice-Chair Saddler  asked whether there was  enough capacity                                                                    
to maintain  the existing mental behavioral  health services                                                                    
until the bill was implemented.                                                                                                 
Ms. Forrest answered  in the affirmative. She  added that it                                                                    
would   be  a   challenge  to   reform  the   system,  while                                                                    
simultaneously providing  services, and  that it  would take                                                                    
coordinated and concentrated effort and good communication.                                                                     
3:26:15 PM                                                                                                                    
Ms. Burkhart  elaborated that providers had  been working in                                                                    
anticipation of the  change contemplated in SB  74. She said                                                                    
that community  mental health centers and  behavioral health                                                                    
centers  had   added  primary   care  capacity   around  the                                                                    
integration  of  primary  care  and  behavioral  health  and                                                                    
coordination of  care and case management.  She relayed that                                                                    
the Juneau  Alliance for Mental  Health had added  a primary                                                                    
care  clinic  to  their   establishment  and  the  Anchorage                                                                    
Community  Mental  Health  Services  had  had  primary  care                                                                    
capacity  for several  years. She  explained that  providers                                                                    
would  inform through  their experiences  and help  to bring                                                                    
their  peers  along in  the  process.  She stated  that  the                                                                    
department  had  received  a planning  grant  for  certified                                                                    
community behavioral  health clinics, which was  a federally                                                                    
supported model  for integrated and  coordinated healthcare.                                                                    
She related  that the  funds had been  applied for  with the                                                                    
support  of   the  behavioral  health   provider  community;                                                                    
provider  organizations had  a greater  capacity for  change                                                                    
because they had been engaged in preparing for change.                                                                          
Vice-Chair  Saddler  referred to  a  2009  report on  health                                                                    
clinics throughout Alaska. He was  interested in a report on                                                                    
behavioral services.  He asked  how well the  department was                                                                    
staffed to handle the transformation.                                                                                           
Ms. Forrest  answered that the  department could do  it, but                                                                    
that it  would be a  large amount  of work. She  voiced that                                                                    
resources  were  limited, but  the  change  was needed.  She                                                                    
shared that  staff and providers  were enthusiastic  to make                                                                    
the change.                                                                                                                     
Vice-Chair Saddler  asked whether the Indian  Health Service                                                                    
(IHS) provided behavioral health services.                                                                                      
Mr.  Burns replied  in the  affirmative. He  added that  all                                                                    
Tribal  Health  organizations   provided  behavioral  health                                                                    
divisions   and  provided   significant  behavioral   health                                                                    
3:30:12 PM                                                                                                                    
Representative  Munoz  asked  whether  family  and  marriage                                                                    
counselors  had to  be associated  with a  drug and  alcohol                                                                    
treatment center,  or an  out-patient mental  health clinic,                                                                    
in order to bill Medicaid for services.                                                                                         
Mr. Burns answered that currently  the person did have to be                                                                    
associated with a clinic that was managed by a physician.                                                                       
Representative Munoz restated the question.                                                                                     
Ms. Burkhart  clarified that she  was referring  to language                                                                    
in SB 74  that removed language in statute  requiring that a                                                                    
facility be  a grantee. She said  that if SB 74  passed with                                                                    
the  aforementioned  language,   a  licensed  mental  health                                                                    
professional would  be able to bill  Medicaid for behavioral                                                                    
health  clinic services,  both mental  health and  substance                                                                    
Representative  Munoz  asked  for  clarification  concerning                                                                    
marital counselors.                                                                                                             
Ms.  Burkhart answered  that if  the bill  passed individual                                                                    
marital  counselors  would  be  able  to  bill  directly  to                                                                    
3:32:30 PM                                                                                                                    
JON SHERWOOD, DEPUTY COMMISSIONER,  MEDICAID AND HEALTH CARE                                                                    
POLICY, DEPARTMENT OF HEALTH  AND SOCIAL SERVICES, clarified                                                                    
that Section 33 addressed  clinic services, which by federal                                                                    
definition    must   be    supervised   by    a   physician;                                                                    
rehabilitative services did not have the requirement.                                                                           
Representative   Munoz  asked   for   verification  that   a                                                                    
rehabilitative service would include marriage counseling.                                                                       
Mr. Sherwood answered in the affirmative.                                                                                       
3:33:48 PM                                                                                                                    
AT EASE                                                                                                                         
3:43:16 PM                                                                                                                    
Co-Chair Thompson discussed housekeeping.                                                                                       
VALERIE  DAVIDSON, COMMISSIONER,  DEPARTMENT  OF HEALTH  AND                                                                    
SOCIAL SERVICES, spoke  to Section 38, page 37  of the bill,                                                                    
which  dealt  with the  federal  policy  on tribal  Medicaid                                                                    
reimbursement.  She   introduced  her  support   staff.  She                                                                    
reminded the committee  of previous conversations concerning                                                                    
the 100  percent federal match  policy, and stated  that she                                                                    
would   be  giving   an  update   on  recent   developments.                                                                    
Historically, CMS  had allowed  states to claim  100 percent                                                                    
federal  match   for  Medicaid  services  provided   to  IHS                                                                    
beneficiaries  under  certain  circumstances.  In  order  to                                                                    
qualify the  person had to  be an IHS  beneficiary, enrolled                                                                    
in Medicaid,  and the care  must be provided through  an IHS                                                                    
facility. She said that CMS  had construed the words "Indian                                                                    
Health Services" narrowly  in the past; an  IHS facility was                                                                    
construed  as within  the four  walls of  the facility.  She                                                                    
opined  that   what  that  had  meant   was  that  medically                                                                    
necessary  travel and  accommodation  services,  as well  as                                                                    
care  referred  outside of  the  IHS  facility (or  tribally                                                                    
operated facility)  would not be  able to claim  100 percent                                                                    
federal match.  She said  that the  1115 waiver  would allow                                                                    
for  100  percent  federal  match  for  medically  necessary                                                                    
travel  and  accommodation  services,   and  care  that  was                                                                    
provided in  a non  IHS or  tribally operated  facility, but                                                                    
had been a  referral from one of those  entities. She shared                                                                    
that the  Secretary of  the Department  of Health  and Human                                                                    
Services,  Sylvia  Burwell,   had  indicated  that  national                                                                    
policy  could  be  changed,  rather  than  require  an  1115                                                                    
waiver. She said  that CMS had issued a  request for comment                                                                    
and had recently issued a  health official letter, providing                                                                    
additional  guidance   to  states   regarding  reimbursement                                                                    
services  on February  26, 2016.  She relayed  that CMS  had                                                                    
changed  national policy  to accommodate  Alaska, and  would                                                                    
provide 100  percent federal  match for  medically necessary                                                                    
travel and  accommodation services, and full  referrals from                                                                    
IHS  to non-IHS  facilities, as  long as  certain conditions                                                                    
were met. She said that  the department had anticipated that                                                                    
approximately $12.5 million in  savings would be realized in                                                                    
FY17,  which  had  increased  to   $32  million,  and  would                                                                    
increase to $92  million by 2022. She said  that Section 38,                                                                    
lines 2  through 19, required the  department to collaborate                                                                    
with Tribal  Health and the federal  government to implement                                                                    
the  policy,  and  required the  department  to  report  the                                                                    
estimated savings  and to fully implement  the policy within                                                                    
6 months.                                                                                                                       
3:49:33 PM                                                                                                                    
Co-Chair  Thompson  understood  that   there  would  be  100                                                                    
percent  federal  match  for  IHS  travel,  which  meant  50                                                                    
percent state, 50 percent federal.                                                                                              
Commissioner  Davidson  clarified  that under  the  Medicaid                                                                    
program  the federal  government  paid  the Federal  Medical                                                                    
Assistance Percentage (FMAP). For  regular Medicaid it was a                                                                    
50 percent match,  50 percent federal and  50 percent state.                                                                    
However,  for  the  services described  through  the  tribal                                                                    
policy  change,  the match  would  be  100 percent  federal,                                                                    
meaning  that   zero  state  dollars  would   be  used.  She                                                                    
referenced a letter  from CMS dated February  26, 2016 (copy                                                                    
on file). She discussed page 3:                                                                                                 
     Permitting a Wider Scope of Services                                                                                       
     In  this letter,  we are  re-interpreting the  scope of                                                                    
     services  considered   to  be  "received   through"  an                                                                    
     IHS/Tribal     facility.     Under     our     previous                                                                    
     interpretation, in  order to  be "received  through" an                                                                    
     IHS/Tribal  facility, and  therefore,  qualify for  100                                                                    
     percent  FMAP,  the  service  had  to  be  a  "facility                                                                    
     service." By  that, we meant  that it had to  be within                                                                    
     the scope of  services that a Medicaid  facility of the                                                                    
     same   type  (e.g.,   inpatient  hospital,   outpatient                                                                    
     hospital,    clinic,    Federally   Qualified    Health                                                                    
     Center/Rural  Health  Clinic,   nursing  facility)  can                                                                    
     provide under  Medicaid law  and regulation.  Under our                                                                    
     new interpretation, as described  more fully below, the                                                                    
     scope  of  services  that  can   be  considered  to  be                                                                    
     "received through" an  IHS/Tribal facility for purposes                                                                    
     of  100 percent  FMAP  includes any  services that  the                                                                    
     IHS/Tribal facility is  authorized to provide according                                                                    
     to IHS rules, that are  also covered under the approved                                                                    
     Medicaid state  plan, including long-term  services and                                                                    
     supports (LTSS). Medicaid  coverable benefit categories                                                                    
     include all  1905(a), 1915(i), 1915(j),  1915(k), 1945,                                                                    
     and 1915(c)  services set forth  in the state  plan, as                                                                    
     well as  any other authority established  in the future                                                                    
     as a state plan benefit.                                                                                                   
     This   scope  of   service  change   also  applies   to                                                                    
     transportation that  is covered as a  service under the                                                                    
     state  Medicaid  plan.  Under  regulations  at  42  CFR                                                                    
     440.170(a), a  state can elect to  cover transportation                                                                    
     and other related  travel expenses determined necessary                                                                    
     to  secure medical  examinations  and  treatment for  a                                                                    
     beneficiary. Related  travel expenses include  the cost                                                                    
     of  meals and  lodging  en route  to  and from  medical                                                                    
     care, and while receiving medical  care, as well as the                                                                    
     cost for an attendant  to accompany the beneficiary, if                                                                    
     necessary. Covered transportation  services can include                                                                    
     both   emergency   medical  transportation   and   non-                                                                    
     emergency medical transportation.                                                                                          
     Medicaid    Beneficiary    and   IHS/Tribal    Facility                                                                    
     Participation is Voluntary                                                                                                 
     This new interpretation does  not provide authority for                                                                    
     states  to require  any AI/AN  Medicaid beneficiary  to                                                                    
     receive  services   through  an   IHS/Tribal  facility.                                                                    
     Nothing  in  this  letter affects  the  entitlement  of                                                                    
     AI/AN Medicaid  beneficiaries to  freedom of  choice of                                                                    
     provider  under  section   1902(a)(23)  of  the  Social                                                                    
     Security   Act.  State   Medicaid  agencies   may  not,                                                                    
     directly   or  indirectly,   require  AI/ANs   who  are                                                                    
     eligible for Medicaid to  receive covered services from                                                                    
     IHS/Tribal  facilities for  the  purpose of  qualifying                                                                    
     the cost of their services for 100 percent FMAP.                                                                           
     Similarly,   neither   state  Medicaid   agencies   nor                                                                    
     IHS/Tribal  facilities may  require  an AI/AN  Medicaid                                                                    
     beneficiary to  receive services from  a non-IHS/Tribal                                                                    
     provider  to   whom  the  facility  has   referred  the                                                                    
     beneficiary  for  care.  Nor  can  a  state  delay  the                                                                    
     provision  of  medical  assistance  by  requiring  that                                                                    
     beneficiaries   initiate   or    continue   a   patient                                                                    
     relationship  with  the IHS/Tribal  facility.  Finally,                                                                    
     federal   Medicaid   law   does  not   require   either                                                                    
     IHS/Tribal  facilities or  non-IHS/Tribal providers  to                                                                    
     enter  into the  written  care coordination  agreements                                                                    
     described in this SHO.                                                                                                     
Commissioner Davidson continued to Page 4 of the letter:                                                                        
     Request for Services In Accordance  With a Written Care                                                                    
     Coordination Agreement                                                                                                     
     In this letter, CMS  also revises its interpretation to                                                                    
     provide  that a  service  may  be considered  "received                                                                    
     through"  an  IHS/Tribal  facility when  an  IHS/Tribal                                                                    
     facility practitioner requests the  service, for his or                                                                    
     her  patient, from  a non-IHS/Tribal  provider (outside                                                                    
     of  the IHS/Tribal  facility), who  is also  a Medicaid                                                                    
     provider,  in  accordance   with  a  care  coordination                                                                    
     agreement  meeting the  criteria  described below.  The                                                                    
     purpose  of this  revised policy  interpretation is  to                                                                    
     enable  IHS/Tribal facilities  to expand  the scope  of                                                                    
     services  they  are  able  to   offer  to  their  AI/AN                                                                    
     patients  while   ensuring  coordination  of   care  in                                                                    
     accordance with best medical practice standards.                                                                           
     A covered  service will be  considered to  be "received                                                                    
     through"  an  IHS/Tribal  facility not  only  when  the                                                                    
     service  is furnished  directly  by the  facility to  a                                                                    
     Medicaid-eligible  AI/AN  patient,  but also  when  the                                                                    
     service is  furnished by  a non-IHS/Tribal  provider at                                                                    
     the request  of an IHS/Tribal facility  practitioner on                                                                    
     behalf of  his or her  patient and the  patient remains                                                                    
     in   the  Tribal   facility   practitioner's  care   in                                                                    
     accordance with  a written care  coordination agreement                                                                    
     meeting  the requirements  described below.  Under this                                                                    
     policy,  both  the  IHS/Tribal facility  and  the  non-                                                                    
     IHS/Tribal  provider must  be enrolled  in the  state's                                                                    
     Medicaid program as  rendering providers. Second, there                                                                    
     must  be   an  established  relationship   between  the                                                                    
     patient and  a qualified practitioner at  an IHS/Tribal                                                                    
     facility. Third,  care must be  provided pursuant  to a                                                                    
     written   care  coordination   agreement  between   the                                                                    
     IHS/Tribal  facility and  the non-IHS/Tribal  provider,                                                                    
     under  which   the  IHS/Tribal   facility  practitioner                                                                    
     remains   responsible  for   overseeing   his  or   her                                                                    
     patient's  care  and  the IHS/Tribal  facility  retains                                                                    
     control of the patient's medical record.                                                                                   
     A  non-IHS/Tribal  provider  from which  an  IHS/Tribal                                                                    
     facility  practitioner  could  request  services  could                                                                    
     include  an  Urban   Indian  Health  Organization  that                                                                    
     participates  in  Medicaid,   or  any  other  Medicaid-                                                                    
     participating  provider. Furthermore,  the relationship                                                                    
     between  the IHS/Tribal  facility practitioner  and the                                                                    
     patient  could  be  based   on  visits,  including  the                                                                    
     initial visit, through  telehealth procedures that meet                                                                    
     state and/or IHS standards for  such procedures, if the                                                                    
     IHS/Tribal facility has that capacity.                                                                                     
     A self-request by the beneficiary,  or a request from a                                                                    
     non-IHS/Tribal provider, does  not suffice for purposes                                                                    
     of 100 percent FMAP; in such circumstances, the non-                                                                       
     IHS/Tribal provider could furnish  the service and bill                                                                    
     the state  Medicaid program, but the  state expenditure                                                                    
     for  the  service would  not  qualify  for 100  percent                                                                    
     FMAP. Similarly, the  non-IHS/Tribal provider may refer                                                                    
     the   facility   patient  to   another   non-IHS/Tribal                                                                    
     provider; however,  if the  patient receives  a covered                                                                    
     service  from that  other  provider  without a  request                                                                    
     from the IHS/Tribal facility practitioner, or the                                                                          
     IHS/Tribal  facility   practitioner  does   not  remain                                                                    
     responsible   for  the   patient's   care,  the   state                                                                    
     expenditure for  the service would not  qualify for 100                                                                    
     percent FMAP.                                                                                                              
     At a minimum, care coordination will involve:                                                                              
          (1)The IHS/Tribal  facility practitioner providing                                                                    
          a request for specific  services (by electronic or                                                                    
          other verifiable  means) and  relevant information                                                                    
          about  his or  her patient  to the  non-IHS/Tribal                                                                    
          (2)The     non-IHS/Tribal     provider     sending                                                                    
          information  about the  care  it  provides to  the                                                                    
          patient, including  the results of  any screening,                                                                    
          diagnostic   or  treatment   procedures,  to   the                                                                    
          IHS/Tribal facility practitioner;                                                                                     
          (3)The     IHS/Tribal    facility     practitioner                                                                    
          continuing  to   assume  responsibility   for  the                                                                    
          patient's  care by  assessing the  information and                                                                    
          taking   appropriate   action,   including,   when                                                                    
          necessary,  furnishing  or  requesting  additional                                                                    
          services; and                                                                                                         
          (4)The   IHS/Tribal  facility   incorporating  the                                                                    
          patient's  information   in  the   medical  record                                                                    
          through the  Health Information Exchange  or other                                                                    
          agreed-upon means.                                                                                                    
     Written care coordination  agreements under this policy                                                                    
     could take various forms, including  but not limited to                                                                    
     a  formal   contract,  a   provider  agreement,   or  a                                                                    
     memorandum of  understanding and,  to the extent  it is                                                                    
     consistent with  IHS authority,  would not  be governed                                                                    
     by federal  procurement rules. The  IHS/Tribal facility                                                                    
     may decide  the form of  the written agreement  that is                                                                    
     executed with the non-IHS/Tribal provider.                                                                                 
Commissioner Davidson spoke to Page 5:                                                                                          
     Medicaid   Billing  and   Payments  to   Non-IHS/Tribal                                                                    
     For  services   provided  to   Medicaid-eligible  AI/AN                                                                    
     beneficiaries  that are  rendered  by a  non-IHS/Tribal                                                                    
     provider   in   accordance    with   a   written   care                                                                    
     coordination  arrangement,  there are  several  options                                                                    
     regarding  how   those  services   may  be   billed  to                                                                    
     The first option is for  the non-IHS/Tribal provider to                                                                    
     bill the Medicaid agency directly. If the non-                                                                             
     IHS/Tribal  provider bills  the state  Medicaid program                                                                    
     directly, the provider would be  reimbursed at the rate                                                                    
     authorized under the Medicaid  state plan applicable to                                                                    
     the provider type and service  rendered. To support the                                                                    
     application of  the 100 percent FMAP,  the state should                                                                    
     ensure that  claims include  fields that  document that                                                                    
     the  item   or  service   was  "received   through"  an                                                                    
     IHS/Tribal facility.  When a  non-IHS provider  bills a                                                                    
     state directly, the state's payment  rate for a covered                                                                    
     service furnished  by a  non-IHS/Tribal provider  to an                                                                    
     AI/AN  Medicaid   beneficiary  under  a   written  care                                                                    
     coordination  agreement must  be the  same as  the rate                                                                    
     for that service  furnished by that provider  to a non-                                                                    
     AI/AN beneficiary or to an  AI/AN beneficiary who self-                                                                    
     refers  to  the  provider. Similarly,  a  state  agency                                                                    
     cannot  establish one  rate for  services furnished  by                                                                    
     the  facility to  AI/AN beneficiaries  and another  for                                                                    
     the  same services  provided by  that facility  to non-                                                                    
     AI/AN Medicaid beneficiaries.                                                                                              
     A second  option is for  the IHS or Tribal  facility to                                                                    
     handle  all  billing.  In  that  case,  the  IHS/Tribal                                                                    
     facility  would have  to  separately identify  services                                                                    
     provided  by non-IHS/Tribal  providers under  agreement                                                                    
     that  can  be claimed  as  services  of the  IHS/Tribal                                                                    
     facility  ("IHS/Tribal facility  services") from  those                                                                    
     that cannot.  Inpatient services that are  furnished by                                                                    
     non-IHS  providers  outside  of  IHS/Tribal  facilities                                                                    
     could   never  be   claimed   as  IHS/Tribal   facility                                                                    
    services. For IHS, other services provided by non-                                                                          
     IHS  providers outside  of  an  IHS facility  generally                                                                    
     cannot  be claimed  as  IHS  facility services.  Tribal                                                                    
     facilities  generally may  have  more flexibility  than                                                                    
     IHS and  should consult  with their state  to determine                                                                    
     the circumstances  in which other services  provided by                                                                    
     non-Tribal providers can be  claimed as Tribal facility                                                                    
     services.   The   circumstances  under   which   Tribal                                                                    
     facilities  may claim  services  as their  own are  the                                                                    
     same as  those that apply for  other similar facilities                                                                    
     in the state (e.g.,  inpatient or outpatient hospitals,                                                                    
     nursing   facilities,    Federally   Qualified   Health                                                                    
     Centers, etc.).  Services that can properly  be claimed                                                                    
     as IHS/Tribal facility services  may be billed directly                                                                    
     by  the  IHS/Tribal  facility  and   are  paid  at  the                                                                    
     applicable  Medicaid  state  plan  IHS/Tribal  facility                                                                    
     rate.  For   all  other   services  provided   by  non-                                                                    
     IHS/Tribal providers,  IHS or the Tribe  could bill for                                                                    
     these services  as an assigned  claim by  that provider                                                                    
     and  the payment  rate  would be  the  state plan  rate                                                                    
     applicable to the furnishing  provider and the service,                                                                    
     not  the  applicable  Medicaid  state  plan  IHS/Tribal                                                                    
     facility rate.  These services  are still  eligible for                                                                    
     the 100 percent FMAP,  provided other requirements have                                                                    
     been met.                                                                                                                  
     The  billing arrangement  should  be  reflected in  the                                                                    
     written agreement  between the IHS/Tribal  facility and                                                                    
     the non-                                                                                                                   
     IHS/Tribal   provider.    Payment   methodologies   for                                                                    
     facility  services  furnished  by both  the  IHS/Tribal                                                                    
     facility and rate  methodologies paid to non-IHS/Tribal                                                                    
     providers  must  be  set forth  in  an  approved  state                                                                    
     Medicaid  plan. Payment  rates can  reflect the  unique                                                                    
     access  concerns  in  particular geographic  areas,  or                                                                    
     with respect  to certain  types of  providers. However,                                                                    
     rates  may  not  vary  based on  the  applicable  FMAP.                                                                    
     States  should review  existing state  plans to  ensure                                                                    
     compliance with the policy articulated in this letter.                                                                     
3:55:25 PM                                                                                                                    
Commissioner Davidson continued with Page 6:                                                                                    
     Managed Care                                                                                                               
     The discussion above assumes that the Medicaid-                                                                            
     eligible  AI/AN has  "received [services]  through" the                                                                    
     IHS/Tribal  facility  on  a fee-for-service  basis.  In                                                                    
     some  cases, however,  Medicaid-eligible AI/ANs  may be                                                                    
     enrolled   in  a   risk-based  Medicaid   managed  care                                                                    
     organization  (MCO),  prepaid   inpatient  health  plan                                                                    
     (PIHP), or  prepaid ambulatory  health plan  (PAHP), in                                                                    
     which case the state  Medicaid agency is making monthly                                                                    
     capitation payments on behalf  of the AI/AN enrollee to                                                                    
     the  MCO,  PIHP,  or  PAHP. The  state  may  claim  100                                                                    
     percent FMAP for the portion  of the capitation payment                                                                    
     attributable   to  the   cost  of   services  "received                                                                    
     through"  an  IHS/Tribal   facility  if  the  following                                                                    
     conditions are met:                                                                                                        
          (1)The service  is furnished to an  AI/AN Medicaid                                                                    
          beneficiary who  is enrolled  in the  managed care                                                                    
          (2)The service  meets the same requirements  to be                                                                    
          considered   "received   through"  an   IHS/Tribal                                                                    
          facility  as  would  apply  in  a  fee-for-service                                                                    
          delivery   system  and   the  managed   care  plan                                                                    
          maintains  auditable documentation  to demonstrate                                                                    
          that those requirements are met;                                                                                      
          (3)The  non-IHS/Tribal   provider  is   a  network                                                                    
          provider of the enrollee's managed care plan;                                                                         
          (4)The  non-IHS/Tribal  provider  is paid  by  the                                                                    
          managed  care  plan  consistent with  the  network                                                                    
          provider's contractual agreement  with the managed                                                                    
          care plan; and                                                                                                        
          (5)The   state    has   complied    with   section                                                                    
          1932(h)(2)(C)(ii) of  the Act consistent  with CMS                                                                    
     States  would be  permitted to  claim  the 100  percent                                                                    
     FMAP  for  a  portion  of the  capitation  payment  for                                                                    
     AI/ANs who  are enrolled  in managed care,  even though                                                                    
     the  state  itself  has  made  no  direct  payment  for                                                                    
     services "received through" an                                                                                             
     IHS/Tribal facility.  The portion  of the  managed care                                                                    
     payment  eligible to  be claimed  at  100 percent  FMAP                                                                    
     must be based  on the cost of  services attributable to                                                                    
     IHS/Tribal services  or encounters received  through an                                                                    
     IHS/Tribal provider  meeting the  requirements outlined                                                                    
     in this section.                                                                                                           
Commissioner Davidson concluded with Page 7:                                                                                    
     Compliance and Documentation                                                                                               
     To ensure  accountability for program  expenditures, in                                                                    
     states where  IHS/Tribal facilities elect  to implement                                                                    
     the  policy  described  in this  letter,  the  Medicaid                                                                    
     agency   will  need   to   establish   a  process   for                                                                    
     documenting  claims  for   expenditures  for  items  or                                                                    
     services  "received  through" an  IHS/Tribal  facility.                                                                    
     The documentation must be  sufficient to establish that                                                                    
     (1)  the item  or  service was  furnished  to an  AI/AN                                                                    
     patient of an                                                                                                              
     IHS/Tribal facility practitioner  pursuant to a request                                                                    
     for services  from the practitioner; (2)  the requested                                                                    
     service  was  within  the  scope   of  a  written  care                                                                    
     coordination  agreement  under   which  the  IHS/Tribal                                                                    
     facility practitioner maintains  responsibility for the                                                                    
     patient's care;  (3) the rate of  payment is authorized                                                                    
     under  the  state  plan  and  is  consistent  with  the                                                                    
     requirements set  forth in nthis letter;  and (4) there                                                                    
     is no  duplicate billing by  both the facility  and the                                                                    
     provider for the same service to the same beneficiary.                                                                     
     Applicability to Section 1115 Demonstrations                                                                               
     State expenditures  for services covered  under section                                                                    
     1115  demonstration  authority  are  eligible  for  100                                                                    
     percent FMAP  as long as  all of the elements  of being                                                                    
     "received through"  an IHS or Tribal  facility that are                                                                    
     described in this SHO are present.                                                                                         
     Relationship  Between  100   Percent  FMAP  for  Tribal                                                                    
     Services and Other Federal Matching Rates                                                                                  
     The 100  percent FMAP  for services  "received through"                                                                    
     an  IHS/Tribal  facility   is  available  for  services                                                                    
     provided to AI/ANs as described  in this SHO instead of                                                                    
     the regular F                                                                                                              
     MAP rate described  in section 1905(b) of  the Act, the                                                                    
     newly eligible  FMAP rate described in  section 1905(y)                                                                    
     of  the Act,  the  enhanced FMAP  rate  for breast  and                                                                    
     cervical  cancer, or  the enhanced  rate for  Community                                                                    
     First Choice services.                                                                                                     
3:57:08 PM                                                                                                                    
Mr. Sherwood  addressed a document titled  "Federal Medicaid                                                                    
Authorities for Restructuring  Medicaid Health Care Delivery                                                                    
or  Payment" dated  March  25, 2016  (copy  on file),  which                                                                    
explained  each demonstration  waiver  by  the authority  it                                                                    
extended,   a  brief   description   of   the  waiver,   key                                                                    
flexibilities  and /or  limitations, and  where it  could be                                                                    
located  in the  bill.  He explained  that waiver  authority                                                                    
under the  federal Medicaid program  meant that  the federal                                                                    
government  had   the  ability  to  waive   certain  federal                                                                    
provisions that  would normally apply  to Medicaid.  He said                                                                    
that  the three  main  provisions were:  a  service must  be                                                                    
available   statewide   (statewideness),  comparability   of                                                                    
service, and freedom  of choice. He said  that the different                                                                    
waiver authorities  allowed the  waiving of  one or  more of                                                                    
the  requirements. The  1115  demonstration  waiver was  the                                                                    
broadest waiver authority that  extended beyond Medicaid. He                                                                    
said  that   the  waiver  allowed  states   to  test  policy                                                                    
innovations that  were likely to  further the  objectives of                                                                    
the Medicaid program. The waiver  would be granted for up to                                                                    
5 years, and  could be renewed, although  not in perpetuity.                                                                    
He  shared that  the state  of Arizona  operated its  entire                                                                    
Medicaid program under an 1115  waiver and had always been a                                                                    
managed care program.  He relayed that a key  feature of the                                                                    
waiver  was  that   a  demonstration  hypothesis  containing                                                                    
evaluation assessments  had to  be present,  and it  must be                                                                    
budget  neutral to  the federal  government.  He added  that                                                                    
Section  30  of  the  bill  contained  the  2  demonstration                                                                    
waivers;  one  for behavioral  health,  and  another for  an                                                                    
innovative payment  model. He continued to  the Health Homes                                                                    
Option, which  examined care  management, primary  care, and                                                                    
acute behavioral health long-term  services and supports for                                                                    
individuals  with  chronic  illnesses.  He  stated  that  to                                                                    
qualify  individuals had  to have  2  chronic conditions,  1                                                                    
chronic condition  with the  risk of  another, or  a serious                                                                    
and  persistent  mental  health condition.  States  had  the                                                                    
choice  to  select  the  chronic  condition  that  would  be                                                                    
addressed and participation had to  be voluntary and allow a                                                                    
choice of  providers. He  said that  there was  an incentive                                                                    
for states  to start the  waiver; because savings  might not                                                                    
be  immediately   realized  the  federal   government  would                                                                    
provide  90  percent  federal  funds  for  the  Health  Home                                                                    
payments for  the first 8 quarters.  States implementing the                                                                    
waiver  must take  part in  an  impact assessment  involving                                                                    
survey and independent evaluation of the program.                                                                               
4:02:26 PM                                                                                                                    
Mr.  Sherwood  spoke  to  Home  &  Community-Based  Services                                                                    
Waivers and Options on page  2 of the document. He explained                                                                    
that,    historically,    long-term     care    had    meant                                                                    
institutionalization   and   over    the   years   different                                                                    
alternatives had  been provided under the  Medicaid program.                                                                    
The oldest  alternative was the  1915(c) Home  and Community                                                                    
Based  Waiver  Program,  which was  the  program  the  state                                                                    
currently  operated; 4  waivers were  currently offered  for                                                                    
different    populations.   The    waivers   required    the                                                                    
demonstration of  the necessity  for an  institutional level                                                                    
of care  and had to  be offered the choice  of institutional                                                                    
services.  He furthered  that there  were waivers  renewable                                                                    
for 5 year  periods that had to  demonstrate cost neutrality                                                                    
to the  Medicaid program as a  whole and not to  the federal                                                                    
government.  The maximum  number  of  participants for  each                                                                    
waiver had  to be  specified and  the criteria  for entrance                                                                    
selection. He said  that 2 options that were  offered in the                                                                    
bill  similar to  the waiver  were the  Section 1915(i)  and                                                                    
Section 1915(k).  He said that  the 1915(k)  option required                                                                    
individuals  to  meet  an institutional  level  of  care  to                                                                    
receive  services. As  an  incentive to  states  to use  the                                                                    
option, states  were provided a 6  percentage point increase                                                                    
in the federal matching payments  for services. He said that                                                                    
the state  was already  making services available  to people                                                                    
in  the  program  without  issues   of  cost  neutrality  or                                                                    
limitations on  the number of  individuals served.  He noted                                                                    
that the  remainder of the  document discussed  managed care                                                                    
authorities,  both waivers  and options  in federal  statute                                                                    
that were not  specifically cited in the bill.  He said that                                                                    
some  ways of  doing managed  care were  voluntary and  some                                                                    
could mandate participation.                                                                                                    
4:07:42 PM                                                                                                                    
DUANE MAYES,  DIRECTOR, DIVISION OF SENIOR  AND DISABILITIES                                                                    
SERVICES,   DEPARTMENT  OF   HEALTH  AND   SOCIAL  SERVICES,                                                                    
introduced  the presentation  "1915(i)  and 1915(k)  Options                                                                    
for  the State  of Alaska"  dated  March 28,  2016 (copy  on                                                                    
4:08:37 PM                                                                                                                    
SHANE  SPOTTS,   CONTRACTOR,  SENIOR   DISABILITY  SERVICES,                                                                    
HEALTH    MANAGEMENT   ASSOCIATES    (via   teleconference),                                                                    
introduced himself  and spoke to  the presentation.  He read                                                                    
from Slide 3:                                                                                                                   
     · In 2012, 1915(k) became a new option to provide                                                                          
        consumer-directed,    home    and    community-based                                                                    
        attendant services and supports                                                                                         
     · Eligibility                                                                                                              
          o Must meet functional eligibility equal to an                                                                        
             institutional level of care                                                                                        
          o Medicaid eligible                                                                                                   
     · As long as eligibility criteria are met, benefits                                                                        
        are available to  all Alaskans  statewide regardless                                                                    
        of age or diagnosis                                                                                                     
     · Federal government contributes more money (56%                                                                           
        instead of  typical  50%  Medicaid  match  to  state                                                                    
        dollars in Alaska)                                                                                                      
     · Agency model and consumer-directed model at state's                                                                      
4:10:51 PM                                                                                                                    
Mr. Spotts turned to Slide 4 and addressed the PCA state                                                                        
     PCA total spend is $85,200,043.36                                                                                          
        · 49%    ($41,786,777.39)    of   expenditures    by                                                                    
          individuals currently on a waiver                                                                                     
        · 1,603 individuals currently  on a waiver receiving                                                                    
          PCA services                                                                                                          
        · 3,308 individuals receiving PCA  services not on a                                                                    
4:12:27 PM                                                                                                                    
Mr. Spotts moved to Slides 5 and 6 related to 1915(i)                                                                           
background. He addressed Slide 6:                                                                                               
     · State plan option to provide consumer-directed,                                                                          
        home- and  community-based  attendant  services  and                                                                    
     · Individuals do NOT need to be eligible for an                                                                            
        institutional level of care currently required under                                                                    
        1915(c) HCBS  waivers  or  1915(k) (Community  First                                                                    
          o Medicaid eligible                                                                                                   
          o Targeted populations                                                                                                
     · Federal government contributes (50% match to state                                                                       
        dollars in Alaska)                                                                                                      
4:13:33 PM                                                                                                                    
Mr. Spotts continued on Slide 7 related to 1915(i) SDS                                                                          
general fund refinancing:                                                                                                       
     · GR Program: Estimated 349 of 545 recipients eligible                                                                     
        for 1915i program.                                                                                                      
     · Adult Day Grants: Estimated 114 of 423 recipients                                                                        
        eligible for 1915i program.                                                                                             
     · Senior In-home Grants: Estimated 123 of 1,371                                                                            
        recipients eligible for 1915i program.                                                                                  
     · Community Developmental Disability Grants: Estimated                                                                     
        all recipients eligible for 1915i program.                                                                              
     · Estimated savings of shift to 1915i is $8,530,000.                                                                       
4:14:40 PM                                                                                                                    
Mr. Spotts addressed target dates on Slide 8:                                                                                   
     · Implementation Plan Due- 7/31/2016                                                                                       
     · Submit to CMS                                                                                                            
     · CMS Approval                                                                                                             
     · Begin Implementation                                                                                                     
4:15:30 PM                                                                                                                    
Vice-Chair Saddler requested and  estimated timeline for CMS                                                                    
to approve the  1915(i) waiver. He understood  that the wait                                                                    
time could be as short as 3 months and as long as 3 years.                                                                      
Mr. Spotts replied  that the 1115 waivers  were more complex                                                                    
and  required  significant   negotiation  with  the  federal                                                                    
government. He believed that the  (i) option would require 3                                                                    
to 6 months of negotiation with the federal government.                                                                         
Vice-Chair Saddler  understood that the 1915(k)  offered the                                                                    
inventive of  an extra 6  percent on the FMAP,  but wondered                                                                    
whether the Medicaid expansion  population would receive the                                                                    
higher FMAP under the 1915(k).                                                                                                  
Mr. Sherwood replied that it  was a 6 percent enhanced FMAP,                                                                    
50  percent would  be the  default for  most cases.  He said                                                                    
that existing higher match rates  should expect the enhanced                                                                    
6 percent, up to 100 percent.                                                                                                   
Vice-Chair Saddler  clarified that  a beneficiary  under the                                                                    
expanded population  would receive the FMAP  in effect, plus                                                                    
an enhanced 6 percent, up to 100 percent.                                                                                       
Mr. Sherwood replied in the affirmative.                                                                                        
Mr. Spotts concurred.                                                                                                           
4:17:52 PM                                                                                                                    
Representative Gara pointed to  the estimated savings bullet                                                                    
on  Slide 7.  He asked  whether the  shift would  be from  a                                                                    
different  waiver  program, or  a  shift  on to  a  Medicaid                                                                    
waiver altogether.                                                                                                              
Mr.  Spotts answered  that it  was a  shift to  the Medicaid                                                                    
program from a state funded  only program. He explained that                                                                    
100  percent state  dollars were  currently  being paid  for                                                                    
services,  and the  savings would  occur from  receiving the                                                                    
federal matching  percentage of shifting individuals  to the                                                                    
Medicaid program.                                                                                                               
Representative   Gara  asked   about  the   level  of   care                                                                    
requirements to receive the 1915(i) waiver.                                                                                     
Mr. Spotts  answered that  the waiver was  still a  Home and                                                                    
Community Based  option, which meant  that the  services had                                                                    
to be provided  in-home or out in the  community. He relayed                                                                    
that  the waiver  lowered the  institutional  level of  care                                                                    
threshold in  order to give  the states more  flexibility to                                                                    
fill any gaps in underserved populations.                                                                                       
4:20:14 PM                                                                                                                    
Representative  Gara asked  how  long the  1915(i) and  1115                                                                    
waivers had been available.                                                                                                     
Commissioner  Davidson   responded  that  the   1115  waiver                                                                    
authority  had been  around for  a long  time; however,  the                                                                    
1915(i)  and (k)  options had  only  been around  for a  few                                                                    
Vice-Chair  Saddler asked  about  possible difficulties  for                                                                    
waiver renewal after 5 years.                                                                                                   
Mr.  Sherwood replied  that some  states  had operated  1115                                                                    
waivers  for   a  long  time  but   typically  made  program                                                                    
adjustments when  up for  renewal. He said  that if  a state                                                                    
wanted  to execute  the  exact same  program  over and  over                                                                    
again, CMS  could take issue.  He asserted that  if programs                                                                    
were run as intended, with  adjustments being made as states                                                                    
learned what  worked and what didn't,  waiver renewal should                                                                    
not  be a  problem. He  stated  that waivers  that were  not                                                                    
demonstration waivers had no barriers to repeat renewals.                                                                       
Vice-Chair  Saddler  understood  that   if  the  state  went                                                                    
through  the 1915  demonstration then  the program  would be                                                                    
implemented permanently.                                                                                                        
Mr.  Sherwood answered  that  it would  have  to be  renewed                                                                    
after a  five year  period and  there must  be justification                                                                    
for renewal. He  relayed that most managed  care waivers and                                                                    
options had evolved out of 1115 demonstration projects.                                                                         
4:24:23 PM                                                                                                                    
Vice-Chair Saddler  expressed concern  that the  state would                                                                    
enter  into the  demonstration waiver  application and  then                                                                    
not  be  allowed   to  renew,  leaving  a   segment  of  the                                                                    
population without care.                                                                                                        
Mr.  Sherwood  believed  the   concern  was  legitimate.  He                                                                    
elaborated  that  the state  would  be  required under  1115                                                                    
demonstration waivers  to create  a transition plan  in case                                                                    
of termination of the waiver.                                                                                                   
Vice-Chair Saddler  wondered whether  a new CMS  director or                                                                    
Secretary  of  Health  and  Human  Services  could  withdraw                                                                    
approval for a waiver.                                                                                                          
Mr. Sherwood replied that the  waiver could not be withdrawn                                                                    
prior to the end of the five-year period.                                                                                       
Representative Wilson asked if the  state would be forced to                                                                    
keep supporting a  program that was shown to  be working and                                                                    
whether  the  state  would  have  to  pay  for  the  working                                                                    
4:26:46 PM                                                                                                                    
Mr. Sherwood clarified  that the only waiver  that could not                                                                    
be renewed automatically was  the 1115 demonstration waiver.                                                                    
If the federal  government determined that it  was not going                                                                    
to renew the 1115 demonstration  waiver, the state would not                                                                    
be  obligated  to  spend state  money  or  provide  services                                                                    
otherwise  covered   by  Medicaid.  He  reiterated   that  a                                                                    
transition plan would be considered  which would ensure that                                                                    
people were informed of the  changes that were happening and                                                                    
be  made  aware of  other  alternatives  within the  regular                                                                    
Medicaid  program or  within other  programs  that might  be                                                                    
appropriate for their situation.                                                                                                
Representative  Wilson  maintained  concern for  the  future                                                                    
funding of the waivers.                                                                                                         
Mr. Sherwood replied that 1115  demonstration waiver was the                                                                    
only  waiver  where  there  could be  a  renewal  issue.  He                                                                    
reiterated that  the 1915 (i)  and (k) options did  not have                                                                    
the same  demonstration requirement  and in those  cases, if                                                                    
the  state decided  not to  continue and  option, the  state                                                                    
would revert  back to  the original match  of 50/50,  or the                                                                    
legislature  to return  to funding  the grant  programs that                                                                    
had  previously  provided  services. He  stressed  that  the                                                                    
state  would  have no  obligation  to  continue to  pay  for                                                                    
services in  the 1115 demonstration  waivers that  would not                                                                    
otherwise be covered under the regular Medicaid program.                                                                        
Representative Gara  asked whether  managed care  was barred                                                                    
in the private sector in Alaska.                                                                                                
Mr. Sherwood replied no; managed  care was regulated through                                                                    
the Division of  Insurance and the state  had provisions for                                                                    
managed care written in statute.                                                                                                
4:30:33 PM                                                                                                                    
Mr.  Mayes  provided  the Slides,  "Community  Developmental                                                                    
Disabilities Grants 1915(i) Impact"  dated March 4, 2016. He                                                                    
shared that  there were 19  stated that had  implemented the                                                                    
1915(i) option.  He said that  5 states had  implemented the                                                                    
1915(k) option.  He relayed that  it could take the  state 3                                                                    
to 6  months to  get approval for  the option.  He explained                                                                    
that with  the 1915(k)  option CMS required  a developmental                                                                    
council, which  was composed of  11 voting members  who were                                                                    
actual  recipients   of  services,  or  family   members  of                                                                    
recipients  of  services. He  continued  that  there were  8                                                                    
advisory  associations who  were  called  upon after  voting                                                                    
members voiced  their opinions. He shared  that the contract                                                                    
would end  on July  30, 2016, at  which time  the contractor                                                                    
would  provide a  development plan  for the  state to  carry                                                                    
4:34:32 PM                                                                                                                    
Representative Wilson  where the  programs that  the waivers                                                                    
supported generated from.                                                                                                       
Mr. Mayes  replied that the  department was  refinancing all                                                                    
of  its general  fund programs  with the  1915(i) option  so                                                                    
that  it  could draw  down  50  percent federal  match.  The                                                                    
department  was taking  existing  people receiving  services                                                                    
within  the  1915(c)  waiver  and  moving  them  to  receive                                                                    
personal care attendant services  with an additional federal                                                                    
match. He  clarified that the  program was not  growing, the                                                                    
department  was  working  to actualize  deductions  and  not                                                                    
Representative  Wilson  queried  how the  state  managed  to                                                                    
spend nearly  $11.6 million in  general funds  for Community                                                                    
Developmental Disabilities Grants.                                                                                              
Mr. Mayes  replied that  the line item  for the  funding had                                                                    
existed in the Division  of Senior Disabilities Services for                                                                    
several years.                                                                                                                  
Representative  Wilson understood  that the  program was  in                                                                    
the budget but wanted to know the genesis of the program.                                                                       
Mr. Mayes deferred to Mr. Sherwood.                                                                                             
Mr. Sherwood replied  that the programs were  in statute and                                                                    
existed going  back to the  1980s, prior to  the development                                                                    
of the Home and Community  Based waiver system. He said that                                                                    
there  had  been  grant  programs  that  provided  home  and                                                                    
community  based  services  for  people  with  developmental                                                                    
disabilities for at least the past 25 years.                                                                                    
4:37:51 PM                                                                                                                    
Representative Wilson understood that  the programs had been                                                                    
established in  statute and were not  connected to Medicaid,                                                                    
and  that this  new waiver  option under  Medicaid expansion                                                                    
would   continue  the   program,  while   providing  federal                                                                    
matching funds.                                                                                                                 
Mr.  Sherwood responded  that  the one  of  the duties  that                                                                    
Alaska assumed  with statehood was  taking over the  role of                                                                    
providing for people  with developmental disabilities, which                                                                    
the state had  done by building a facility in  Valdez and by                                                                    
funding  grant  programs.  Prior to  statehood  people  with                                                                    
developmental  disabilities  had  been sent  to  Oregon  for                                                                    
CSSB 74(FIN) am was HEARD and HELD in committee for further                                                                     
Co-Chair Thompson addressed housekeeping.