Legislature(2015 - 2016)HOUSE FINANCE 519

03/29/2016 05:00 PM House FINANCE

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Audio Topic
05:08:11 PM Start
05:08:38 PM SB74
05:08:55 PM Public Testiomony
06:31:40 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time --
Heard & Held
-- Public Testimony --
5:00 - 7:00 p.m.
+ 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."                                                                                                    
5:08:38 PM                                                                                                                    
Co-Chair Thompson discussed the meeting agenda.                                                                                 
^PUBLIC TESTIOMONY                                                                                                            
5:08:55 PM                                                                                                                    
ROBIN  MINARD,   MAT-SU  HEALTH  FOUNDATION,   WASILLA  (via                                                                    
teleconference),  testified   in  support  of  SB   74.  She                                                                    
communicated  that  the   Mat-Su  Health  Foundation  shared                                                                    
ownership  in Mat-Su  Regional Medical  Center and  invested                                                                    
its profits back into the  community in order to improve the                                                                    
health and wellness of Alaskans  in the region. She detailed                                                                    
that the foundation  co-owned a hospital to  care for people                                                                    
when  illness and  injury was  not prevented;  it also  made                                                                    
grants to create a healthier  population. The foundation had                                                                    
supported Medicaid expansion in  order to increase access to                                                                    
behavioral  health  and  primary  care  for  more  Alaskans;                                                                    
however,  they  had  supported  expansion  only  if  it  was                                                                    
coupled  with reform.  She spoke  to the  need for  Medicaid                                                                    
reform  measures. She  relayed that  expansion had  improved                                                                    
access  to  care  for behavioral  health  issues  and  could                                                                    
prevent   costly  emergency   department  visits.   Medicaid                                                                    
expansion  and  reform  could help  the  foundation  provide                                                                    
better care for individuals,  better health for populations,                                                                    
and  lower  per  capita  costs.  She  stated  that  Medicaid                                                                    
expansion and  reform could bring  more care to  more people                                                                    
at a lower  cost. The foundation strongly  supported the use                                                                    
of   telemedicine.  She   highlighted   the  difficulty   of                                                                    
recruiting  and  retaining  an effective  behavioral  health                                                                    
workforce in states with large  populations like Alaska. She                                                                    
pointed to Alaska's lower  rates of psychiatrists, substance                                                                    
abuse counselors,  and other. She  stressed that  Alaska was                                                                    
designated  as federal  mental  health  shortage areas.  The                                                                    
foundation  also supported  the  implementation of  stronger                                                                    
prescription drug  monitoring to  help battle  opioid abuse.                                                                    
Lastly, the foundation supported  the use of case management                                                                    
services in order to  incentivize patient-centered care that                                                                    
would   result  in   cost   savings.   The  foundation   was                                                                    
particularly interested in case  management targeted to high                                                                    
utilizers of  emergency care. In  2013 there were  more than                                                                    
6,000  visits to  the  local  hospital emergency  department                                                                    
with  charges of  $23 million  by  patients with  behavioral                                                                    
health needs -  the figure did not include  $1.6 million for                                                                    
law  enforcement,  911  dispatch,  and  transportation.  She                                                                    
noted  that only  a  portion  of the  patients  had been  on                                                                    
Medicaid,  but the  numbers  were  still significant.  There                                                                    
were 66  super utilizers (someone  with more than  10 visits                                                                    
to  the   emergency  room  annually).  She   reiterated  the                                                                    
foundation's support for the legislation.                                                                                       
5:12:55 PM                                                                                                                    
DANIEL  NELSON,  PHARMACIST  and MEMBER  ALASKA  PHARMACISTS                                                                    
ASSOCIATION,  FAIRBANKS   (via  teleconference),   spoke  in                                                                    
support of the legislation  with a modification. He believed                                                                    
that overall  SB 74 was  a good  bill; however, he  had some                                                                    
significant   concerns   related    to   prescription   drug                                                                    
monitoring  changes.   The  believed  the   requirement  for                                                                    
pharmacists  to check  the database  before they  dispense a                                                                    
controlled  substance   was  onerous  and   unnecessary.  He                                                                    
believed the  check was redundant  when it had  already been                                                                    
checked  by  a  prescribing  physician.  He  asked  for  the                                                                    
language be removed.                                                                                                            
5:14:52 PM                                                                                                                    
MARGARET  SODEN,   RETIRED  PHARMACIST  and   MEMBER  ALASKA                                                                    
PHARMACISTS  ASSOCIATION,  FAIRBANKS  (via  teleconference),                                                                    
testified  in  favor  of   the  legislation,  but  requested                                                                    
changes to portions. She shared  that when she had served on                                                                    
the  Board  of  Pharmacy  they  had  begun  working  on  the                                                                    
prescription  drug  monitoring  statutes. She  believed  the                                                                    
changes had  made a big  difference in trying to  deter some                                                                    
of the  controlled prescription  substance abuse  in Alaska.                                                                    
She had some  concerns over some of the  proposed changes to                                                                    
the bill related to prescription  drugs. She believed it was                                                                    
important to  allow prescribers and pharmacists  to delegate                                                                    
authority to another person to  access the database, but she                                                                    
believed the delegated authority  should only be to licensed                                                                    
personnel. She did  not believe a pharmacist  should have to                                                                    
check the  database each time  they received  a prescription                                                                    
for  a controlled  substance -  the physician  or prescriber                                                                    
should have  already checked. She reasoned  that pharmacists                                                                    
could always check the database  if they had concerns with a                                                                    
patient presenting  a prescription. She did  not believe the                                                                    
emergency room should be exempt  from checking the database.                                                                    
She  explained  that often  "doctor  shoppers"  went to  the                                                                    
emergency   room  to   get   additional  prescriptions   for                                                                    
controlled substances.  She reiterated  her support  for the                                                                    
legislation with minor changes.                                                                                                 
5:18:34 PM                                                                                                                    
BECKY  HULTBERG, PRESIDENT  and CEO,  ALASKA STATE  HOSPITAL                                                                    
AND NURSING  HOME ASSOCIATION, JUNEAU,  spoke in  support of                                                                    
the legislation.  She shared  that earlier  in the  week the                                                                    
association had  provided comments  on managed care  and the                                                                    
coordinated  care demo  project in  the bill.  She addressed                                                                    
specific questions from the  morning House Finance Committee                                                                    
meeting related to the emergency  room project in Section 31                                                                    
of the legislation. She communicated  that the project was a                                                                    
collaborative    effort    between   hospitals,    emergency                                                                    
physicians,  and the  state,  with a  goal  of reducing  the                                                                    
number  of  unnecessary   emergency  department  visits  and                                                                    
improving patient outcomes. She  spoke to the shared savings                                                                    
component of the bill specifically  related to why the state                                                                    
would  share  the   savings  -  from  the   project  -  with                                                                    
hospitals.  Through the  project  that  the association  had                                                                    
brought forward,  hospitals would be spending  money to lose                                                                    
money. She stressed that it  was not a great business model;                                                                    
however, it was  the right thing to do. One  of the problems                                                                    
with the  healthcare system was  that the  payment structure                                                                    
incentivized  the  wrong things  -  volume  over value.  She                                                                    
explained that the hospitals  received revenue from Medicaid                                                                    
patients  who inappropriately  use the  emergency room.  She                                                                    
furthered  that  they  would  lose  money  in  finding  less                                                                    
expensive  ways  to  address   the  patients  behavioral  or                                                                    
physical health issues. The end  result would be better care                                                                    
for  the patient  and savings  to the  state. She  explained                                                                    
that hospitals were asking (in  the legislation) to have the                                                                    
opportunity to  negotiate shared  savings with the  state in                                                                    
order  to  offset some  of  the  costs the  hospitals  would                                                                    
invest  in  the  program.  Hospitals would  be  hiring  care                                                                    
coordinators,  dedicating   staff  time  to   implement  the                                                                    
project,  and  their  revenue  would  be  reduced  from  the                                                                    
specific   patients.  Currently   there  was   no  financial                                                                    
incentive for the hospitals to do  any of the things she had                                                                    
mentioned, but through shared  savings negotiations with the                                                                    
state, the  hospitals could at  least recoup the  costs they                                                                    
would spend on  implementing the program. She  stated it was                                                                    
a  baby   step  towards  paying  for   value;  aligning  the                                                                    
financial  interests of  providers with  those of  the state                                                                    
would  help achieve  the goal  of cost  savings and  improve                                                                    
patient care.                                                                                                                   
Representative Gara  relayed that he had  a question related                                                                    
to an emergency room issue.                                                                                                     
Co-Chair  Thompson noted  that the  committee would  address                                                                    
the question at a later time.                                                                                                   
5:21:47 PM                                                                                                                    
NANCY  MERRIMAN,  EXECUTIVE  DIRECTOR, ALASKA  PRIMARY  CARE                                                                    
ASSOCIATION, JUNEAU  (via teleconference), spoke  in support                                                                    
of the bill.  She communicated that the  association was the                                                                    
statewide  technical assistance  and  training provider  for                                                                    
community  health centers  across  the  state. She  provided                                                                    
additional  detail  about  the association.  She  urged  the                                                                    
committee to retain  the pilot language in  Section 31, page                                                                    
33  of  the  bill.  The association  had  heard  from  other                                                                    
experts and colleagues nationwide  that moving from a volume                                                                    
to  value-based payments  for  providers  would protect  and                                                                    
preserve the  state's providers  (especially the  safety net                                                                    
providers).  She explained  that  the  healthcare system  in                                                                    
Alaska  had  no  experience  in  value-based  payments.  She                                                                    
furthered  that moving  from  volume-based  - which  counted                                                                    
visits, tests,  and procedures for  their mode of  payment -                                                                    
to value-based was very different.  She believed it was wise                                                                    
to provide  transition time  for providers.  The association                                                                    
believed   that   Accountable  Care   Organizations   (ACO),                                                                    
demonstrations,  and pilots  were  a good  way  to give  the                                                                    
opportunity - for the  infrastructure and patient engagement                                                                    
-  to   change  Aetna's  practices.  She   advocated  for  a                                                                    
provider-led network  would be founded in  care coordination                                                                    
for the high cost, high  utilizers of healthcare; the health                                                                    
centers served those patients on  a regular basis. She spoke                                                                    
to the importance of a  data warehouse, data analytics, care                                                                    
coordination, practice  management, understanding workflows,                                                                    
and  other. The  association  believed  the bill's  language                                                                    
would  allow for  development of  the practices,  providers,                                                                    
staff, and  patients to go from  one end of the  spectrum to                                                                    
the other. The  end goal was to allow  the smooth transition                                                                    
to the "triple aim."                                                                                                            
5:25:01 PM                                                                                                                    
TARA  RUFFNER, ALASKA  PHARMACISTS  ASSOCIATION, KENAI  (via                                                                    
teleconference),  testified in  support  of the  legislation                                                                    
with   opposition  to   certain  aspects   related  to   the                                                                    
Prescription  Drug Monitoring  Program (PDMP).  She referred                                                                    
to Section 18 of the  legislation related to pharmacists and                                                                    
prescribers checking the database  for each prescription and                                                                    
relayed her  belief that the requirement  was redundant. She                                                                    
explained   that  if   prescribers   were  checking   before                                                                    
prescribing,  pharmacists   had  other  means   of  ensuring                                                                    
patients   were  not   double  dipping.   She  stated   that                                                                    
pharmacists would  check any prescription they  had concerns                                                                    
about. Additionally,  she strongly  felt that  only licensed                                                                    
individuals  should have  access  to the  database. She  was                                                                    
concerned  that a  pharmacist could  lose their  license for                                                                    
not  checking  the  database, which  she  believed  was  too                                                                    
stringent and not congruent with the bill's intent.                                                                             
5:28:01 PM                                                                                                                    
SHANNON  HILTON, ALASKA  NURSE PRACTITIONER  ASSOCIATION AND                                                                    
ADVANCED   NURSE  PRACTITIONER   ALLIANCE,  ANCHORAGE   (via                                                                    
teleconference), spoke  in support  of the  legislation, but                                                                    
had comment about  the PDMP portion of  the legislation. The                                                                    
association had some concerns about  the intended mandate of                                                                    
the prescription  drug monitoring database.  The association                                                                    
felt that  the mandate would  cause undo financial  and time                                                                    
constraints, while trying to provide  the best care possible                                                                    
in busy clinics.  She elaborated that it  would impact nurse                                                                    
practitioners, surgeons, physicians'  assistants, and other.                                                                    
The association  recognized that  opioid abuse was  a multi-                                                                    
factorial  crisis; however,  the  intention  to help  combat                                                                    
over prescribing  opioids and early  detection was  only one                                                                    
facet of  a much  larger crisis. Alaska  nurse practitioners                                                                    
had   expressed   major   concern  that   the   system   was                                                                    
consistently  inefficient,  which  led  providers  to  spend                                                                    
considerable   time   accessing   the  database   prior   to                                                                    
prescribing.   Additionally,  the   association  felt   that                                                                    
punitive  sanctions  on  providers  who fail  to  check  the                                                                    
database prior to filling a  prescription was concerning for                                                                    
a number of reasons. She  detailed that evaluations of other                                                                    
state's PDMP  mandates had shown  mixed data on  the effects                                                                    
of   prescribing   habits   and  mortality   outcomes.   The                                                                    
association  felt  there  was  the  potential  for  risk  of                                                                    
inappropriate clinical decisions.  She stated that mandating                                                                    
the use  of such  a program and  imposing the  sanctions for                                                                    
failure  of use  was inconsistent  with current  guidelines.                                                                    
Mandates  would  also  impose financial  constraint  on  the                                                                    
licensing and regulatory boards. She  stated that the use of                                                                    
the PDMP  should be performed at  the provider's discretion.                                                                    
She provided an example based on her work experience.                                                                           
5:31:47 PM                                                                                                                    
LIS   HOUCHEN,   NORTHWEST   REGIONAL   DIRECTOR,   NATIONAL                                                                    
ASSOCIATION  OF CHAIN  DRUGSTORES, BRINNON,  WASHINGTON (via                                                                    
teleconference), was  very supportive  of the  bill overall;                                                                    
however, she suggested  changes to Sections 14,  15, 18, and                                                                    
19. She shared that the  association had worked closely with                                                                    
the Alaska  Pharmacy Association  on the initial  passage of                                                                    
the PDMP. She stated that the  PDMP had become a useful tool                                                                    
in deterring the abuse of  legal prescriptions of controlled                                                                    
substances.  She spoke  to current  pharmacist requirements.                                                                    
She shared that  members of the association  were willing to                                                                    
increase the frequency to within  one business day from when                                                                    
the  prescription  was  sold. She  shared  that  pharmacists                                                                    
often  filled   prescriptions  that  were  not   picked  up;                                                                    
therefore,  the  association  requested  that  the  language                                                                    
reflect  that reporting  be upon  when the  prescription was                                                                    
actually picked up; the change  would need to be included in                                                                    
Sections  14 and  19. The  biggest  concern for  association                                                                    
members was the  requirement in Section 18  for a pharmacist                                                                    
or practitioner  to check the  database prior  to dispensing                                                                    
or  writing a  prescription. She  asked that  prescribers be                                                                    
required  to   check  the  database   prior  to   issuing  a                                                                    
prescription for  a controlled substance. She  stressed that                                                                    
pharmacists  could  only   dispense  controlled  substances.                                                                    
Checking the  database in advance would  eliminate confusion                                                                    
at the  pharmacy counter. The  additional workload  could be                                                                    
detrimental to  the patient waiting for  a prescription. She                                                                    
noted that pharmacists would continue  to check the database                                                                    
based  on their  professional judgement.  She requested  the                                                                    
deletion of  a provision that would  exempt emergency rooms.                                                                    
Based  on   information  received  from   pharmacists,  drug                                                                    
seekers  often   used  emergency   rooms  (ER)   to  acquire                                                                    
controlled substances due to the  frenetic nature of the ER.                                                                    
She  requested  that  pharmacists and  practitioners  should                                                                    
only have the ability to  delegate access to the database to                                                                    
licensed  individuals, which  would  allow for  disciplinary                                                                    
action   to  be   taken  if   the   database  was   accessed                                                                    
inappropriately.  Lastly,   she  asked  that   the  language                                                                    
following the  word "substance" be deleted  from Section 14,                                                                    
subsection  (B)(8).  She  explained   that  there  had  been                                                                    
significant  changes  in  reporting the  pharmacist  license                                                                    
number, which  was currently  required and  unnecessary; the                                                                    
information was  not required in other  states. She provided                                                                    
a summary of concerns.                                                                                                          
Co-Chair Thompson asked testifiers  to send in their written                                                                    
5:36:51 PM                                                                                                                    
DIRK WHITE,  PHARMACIST, SITKA (via  teleconference), agreed                                                                    
with much  of the  prior testimony.  He was  concerned about                                                                    
the exemption  of emergency room  doctors from  checking the                                                                    
PDMP. He  had witnessed the ER  as the main source  of drug-                                                                    
seeking and  doctor shopping patients.  He reasoned  that if                                                                    
an ER doctor  found that a person had been  seeking drugs it                                                                    
would  put  an  end  to the  situation  if  the  requirement                                                                    
applied to  emergency rooms.  He pointed  to Section  14 and                                                                    
believed language  related to the date  the prescription was                                                                    
filled and method  of payment should be  deleted. He thought                                                                    
the language  was unnecessary. He believed  delegates should                                                                    
be licensed  and authorized  (Section 15);  if a  person was                                                                    
not licensed  and there was  a leak in information  he noted                                                                    
there would be no recourse.                                                                                                     
5:40:13 PM                                                                                                                    
TIMOTHY  NOAH LAUFER,  MD,  ANCHORAGE (via  teleconference),                                                                    
spoke in  general support of  the bill, with  some concerns.                                                                    
He provided  information about his  professional background.                                                                    
He applauded the  idea of reforming Medicaid in  order to do                                                                    
a better job of rationally  taking care of people. He stated                                                                    
that primary  care doctors were not  represented at meetings                                                                    
that impacted  primary care doctors.  He spoke to  the issue                                                                    
of  controlled  substances,  which  he  believed  should  be                                                                    
limited to  opiates. He stated  that all drugs were  not the                                                                    
same and  opiates were  the problem.  He furthered  that the                                                                    
database  was  very useful,  but  it  would be  onerous  and                                                                    
expensive to  require its use for  all scheduled substances.                                                                    
He  discussed  that  telemedicine  could be  a  great  tool;                                                                    
however,  he  provided  a scenario  that  included  a  well-                                                                    
trained provider out-of-state making  a judgement call about                                                                    
a  patient  they  had  never  met.  He  explained  that  the                                                                    
doctor's threshold for  sending the patient to  the ER would                                                                    
be substantially lower,  which would result in  an uptick in                                                                    
costs and  utilization of emergency  rooms. He  relayed that                                                                    
cost  and  utilization  increased immediately;  he  believed                                                                    
individuals would be going straight  to the ER. He discussed                                                                    
savings that  occurred when a  person saw  their established                                                                    
primary care doctor.                                                                                                            
5:43:41 PM                                                                                                                    
DICK  HUBBS,  COO,  GENEVA WOODS  PHARMACY,  ANCHORAGE  (via                                                                    
teleconference), testified in support  of Medicaid reform to                                                                    
improve care and reduce costs  for Alaskans. He believed the                                                                    
bill  as proposed  included  several  provisions that  would                                                                    
result  in  unintended   consequences  that  would  severely                                                                    
impact Alaskans  and local  businesses. Section  23 proposed                                                                    
to  clarify  the  department's   ability  to  enter  into  a                                                                    
competitively  bid contract  for durable  medical equipment.                                                                    
He concurred  with the clarification,  but believed  it must                                                                    
be to a company serving  Alaskan patients in all aspects; if                                                                    
select portions  of service were  removed and only  very low                                                                    
services remained,  local providers would be  forced to stop                                                                    
providing the  services. He  stressed there  was no  way the                                                                    
state could allow  high volume items to be  outsourced to an                                                                    
out-of-state provider that was  unable to service and repair                                                                    
the  equipment. He  supported competition,  but  not if  the                                                                    
playing  field  was  not  equal. The  bill  proposed  a  new                                                                    
provision in Section  17 that would require  the adoption of                                                                    
regulations to  design and implement the  medical assistance                                                                    
reform  program. He  proposed  adding  language intended  to                                                                    
maximize the benefit that pharmacy  initiatives could add to                                                                    
the  program. He  suggested  adding  the following  language                                                                    
"including  paid  comprehensive  medication review,  use  of                                                                    
pharmacy  transitional  services  by  hospitals,  and  other                                                                    
services with the proven  record of reducing hospitalization                                                                    
and readmissions."  Section 10 spoke to  penalties and legal                                                                    
fees  related to  false claims.  He believed  that penalties                                                                    
less  than  actual  fraud  could  result  in  a  significant                                                                    
negative consequence. The language  referred to false claims                                                                    
in the  bill and could  easily be misinterpreted.  He stated                                                                    
that in many  cases the concept of overpayment  due to false                                                                    
claims was combined with the  concept of fraud; however, the                                                                    
two  concepts were  different. He  recommended removing  the                                                                    
term "false" and limiting the penalties to cases of fraud.                                                                      
5:47:15 PM                                                                                                                    
ILONA  FARR,  FAMILY   PRACTICE  PHYSICIAN,  ANCHORAGE  (via                                                                    
teleconference), relayed  that had  many concerns  about the                                                                    
bill. She  believed the  bill included  good things,  but it                                                                    
also included  provisions that could potentially  force many                                                                    
private practitioners  out of business. She  shared that she                                                                    
personally  wrote  between  six and  ten  prescriptions  for                                                                    
controlled substances  per day.  She stated that  people did                                                                    
not  look  to see  what  controlled  substances were  before                                                                    
dealing  with the  bill because  they could  include seizure                                                                    
medication,  diabetes medication,  cough  syrup, and  other.                                                                    
She explained  that patients getting  an MRI would  also now                                                                    
be  included  in  the  database. She  stated  that  the  new                                                                    
provision would  cost her  about an hour  per day  and would                                                                    
cost  her  practice  approximately  $125,000  annually.  She                                                                    
stressed that it could be  a negative impact of $100 million                                                                    
to the  private sector. She  stated that the  current system                                                                    
worked - she was  able to look at the database  if she had a                                                                    
patient she was concerned about.  She stated that Schedule 3                                                                    
and 4  drugs had very low  risk of abuse. She  had looked at                                                                    
studies  on preventing  drug abuse  -  in 2014  less than  1                                                                    
percent  of drug  abuse cases  were related  to prescription                                                                    
abuse. She recommended that the  provision should be limited                                                                    
to opiates  in quantities of  more than 40 pills.  She asked                                                                    
what  the database  would be  used  for in  the future.  She                                                                    
mentioned    the   difference    between   telehealth    and                                                                    
telemedicine. She did not believe  there would be continuity                                                                    
of care  under a system  of telehealth. She stated  that the                                                                    
physicians  treating people  would be  out-of-state and  the                                                                    
hands-on  treatment  would  be   lost.  She  reiterated  her                                                                    
concern about the impact of the provisions.                                                                                     
5:52:22 PM                                                                                                                    
DAVE  DONLEY,  HOPE   COMMUNITY  RESOURCES,  ANCHORAGE  (via                                                                    
teleconference), read from a prepared statement:                                                                                
     Hope community  resources supports the  state's efforts                                                                    
     toward Medicaid  reform and  appreciates the  work that                                                                    
     has  gone into  SB 74.  We were  disappointed to  learn                                                                    
     last  week that  the  language contained  in the  false                                                                    
     claims  and  reporting  act   has  been  submitted  for                                                                    
     federal  approval months  ago, without  the opportunity                                                                    
     for public comments and input.                                                                                             
     We remain concerned that the  current language does not                                                                    
     adequately protect  honest providers  against liability                                                                    
     for  the  bad  acts  of rouge  employees  and  provides                                                                    
     insufficient protections for self-reporting and self-                                                                      
     correction of  problems. The vast majority  of Medicaid                                                                    
     providers seek to provide quality  services and are the                                                                    
     first line  of defense  against false claims  and fraud                                                                    
     against Medicaid.                                                                                                          
     The senate, instead of addressing  some of our specific                                                                    
     suggestions,  chose to  place  a three  year sunset  on                                                                    
     portions  of the  Medicaid fraud  act  section. We  are                                                                    
     grateful  for that  sunset  provision  but continue  to                                                                    
     believe  it  would  be  much   better  to  address  the                                                                    
     specific concerns prior to passing new law.                                                                                
     We believe we  and other providers have  asked for very                                                                    
     reasonable   safeguards   for    honest   law   abiding                                                                    
Mr.  Donley  relayed  that   Hope  Community  Resources  had                                                                    
provided three  specific suggestions  to the  committee. The                                                                    
organization  wanted  to  see  provisions  protecting  self-                                                                    
reporting within the  Medicaid Fraud Act (Section  10 of the                                                                    
legislation).  He  recommended  the  following  language  on                                                                    
Section 27, page 23 to be included in Section 3, page 7:                                                                        
     The Department  of Health and  Social Services  may not                                                                    
     assess interest  or penalties  on an  overpayment self-                                                                    
     identified and repaid by  a medical assistance provider                                                                    
     under this section.                                                                                                        
Mr. Donley  stated there had  been prior testimony  by state                                                                    
officials that similar  language in the bill  would apply to                                                                    
the Fraud  Act sections, but  how it would work  was unclear                                                                    
because the Fraud  Act appeared to stand  alone. He believed                                                                    
the  language should  be clarified  because the  safe harbor                                                                    
was  important to  encourage  providers  to self-report  and                                                                    
correct.  The organization  requested  that  a more  precise                                                                    
definition of "agent" be used  in the definitions section of                                                                    
the bill. He suggested the following definition:                                                                                
     An  agent  with  apparent authority  does  not  include                                                                    
     someone  acting   in  violation  of  the   policies  or                                                                    
     instruction  of  the  principal provider  without  that                                                                    
     provider's knowledge.                                                                                                      
Mr. Donley elaborated that the  organization would like some                                                                    
protection  against  liability.  Lastly,  he  requested  the                                                                    
addition  of language  related to  the False  Claims Act  in                                                                    
Section 10, page 8 of the legislation as follows:                                                                               
     ...unless the evidence shows that the agent or                                                                             
     apparent agent acted with intent to deceive the                                                                            
Mr. Donley expounded that the  suggested language would help                                                                    
protect  the state  against "rouge  agents" acting  on their                                                                    
own against instructions.                                                                                                       
5:56:06 PM                                                                                                                    
ROSS   BIELING,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
reminded  the committee  that the  purpose of  the bill  was                                                                    
reform -  to save  money for the  state through  process. He                                                                    
spoke  to   cost  reductions  and  earlier   testimony  that                                                                    
hospitals were spending  money to lose money  and that there                                                                    
should be shared  savings with the state.  He countered that                                                                    
if hospitals were  losing money none of "us"  would be here.                                                                    
He  stressed  that  there  was  a  crisis  in  the  cost  of                                                                    
healthcare in  Alaska. He  stated that  Premera had  lost $9                                                                    
million to  $12 million  the preceding  year and  Moda could                                                                    
not  pay its  bills.  He  stated that  the  crisis was  cost                                                                    
based.  He spoke  to telehealth.  He believed  consideration                                                                    
should  be given  to tort  claims that  would flow  from the                                                                    
cost of  patients - the  issues were difficult to  fine tune                                                                    
but  they would  happen. He  thanked the  committee for  its                                                                    
attention to detail in the bill.                                                                                                
5:58:45 PM                                                                                                                    
MICHAEL  BAILEY,  VICE   PRESIDENT,  ALASKA  ASSOCIATION  ON                                                                    
DEVELOPMENT  DISABILITIES,  ANCHORAGE (via  teleconference),                                                                    
provided information about  the association. The association                                                                    
supported the  concept of Medicaid  reform; however,  it was                                                                    
disappointed to  learn that language  had been  submitted to                                                                    
the Centers for Medicare  and Medicaid Services (CMS) months                                                                    
earlier  without the  opportunity  for  public comment.  The                                                                    
association  requested  that  the public  hearing  at  least                                                                    
record the concerns of  providers. The association supported                                                                    
the conviction of providers  who intentionally commit fraud,                                                                    
but   it  was   unreasonable  to   assume  from   publicized                                                                    
convictions  that all  providers were  committing fraud.  He                                                                    
stated  that  providers  were  the  first  line  of  defense                                                                    
against false claims  and fraud; many of  the providers were                                                                    
nationally accredited and  had implemented policies designed                                                                    
to prevent false claims.  Some examples included pre-billing                                                                    
controls  and post-billing  controls  (i.e. external  audits                                                                    
and   accreditation  reviews).   He   agreed  with   earlier                                                                    
testimony  about adding  protections for  self-reporting. He                                                                    
stated that the  remoteness of Alaska did not  allow for the                                                                    
micromanagement  of  every  field  worker;  therefore,  many                                                                    
providers  had  established  standard  operating  procedures                                                                    
that  were required  for accreditation  compliance; expected                                                                    
behavior  of  employees  included  fraud  and  false  claims                                                                    
prevention.  He supported  language to  Section 10,  page 14                                                                    
proposed  by Mr.  Donley -  that an  agent with  an apparent                                                                    
authority  did not  include someone  acting in  violation of                                                                    
the  policies  or  instruction  of  the  principal  provider                                                                    
without  that  provider's  knowledge. The  association  also                                                                    
supported  language specifying  that  there  should be  some                                                                    
relief  for the  provider when  rogue employees  intended to                                                                    
deceive the principal.                                                                                                          
6:02:09 PM                                                                                                                    
JUDY  ELEDGE,  SELF,  ANCHORAGE  (via  teleconference),  was                                                                    
disappointed  that the  legislature  could  not locate  more                                                                    
than $30 million  to cut in the reform. She  shared that she                                                                    
was on Medicare  and had very few services  and choices. She                                                                    
was  concerned that  someone on  Medicaid had  the "Cadillac                                                                    
plan." She believed  the bill was an opportunity  to look at                                                                    
some  of  the  services  that  were  offered  to  people  on                                                                    
Medicaid that were not offered  to anyone else. She had paid                                                                    
into  Medicare   and  was  bothered  when   people  received                                                                    
something they  were not  paying for  - she  did not  have a                                                                    
problem  with it  if the  individuals were  extremely needy,                                                                    
disabled,  or had  children in  need; however,  she did  not                                                                    
support unique Medicaid services  going to people who worked                                                                    
who may  not want to  be covered on insurance.  She believed                                                                    
there had  been $222  million in optional  Medicaid services                                                                    
in  2014. She  recommended looking  closely at  some of  the                                                                    
optional services  offered. She did not  believe the options                                                                    
should all be available when  people working and paying into                                                                    
something else did not receive the benefits.                                                                                    
6:05:01 PM                                                                                                                    
AT EASE                                                                                                                         
6:21:59 PM                                                                                                                    
Co-Chair  Thompson  noted  that  there  were  no  testifiers                                                                    
present  or online.  He relayed  that he  would adjourn  the                                                                    
meeting   at  6:30   p.m.  if   there  were   no  additional                                                                    
6:22:27 PM                                                                                                                    
AT EASE                                                                                                                         
6:30:34 PM                                                                                                                    
Co-Chair Thompson relayed that there were no additional                                                                         
CSSB 74(FIN) am was HEARD and HELD in committee for further                                                                     
Co-Chair Thompson discussed the agenda for the following                                                                        

Document Name Date/Time Subjects
SB 74 Testimony.pdf HFIN 3/29/2016 5:00:00 PM
SB 74
SB 74 RMadison Testimony.pdf HFIN 3/29/2016 5:00:00 PM
SB 74
SB 74 Testimony provided by Thomas Behan- District 2.pdf HFIN 3/29/2016 5:00:00 PM
SB 74
SB 74 Dr. Farr Testimony pt 2.pdf HFIN 3/29/2016 5:00:00 PM
SB 74
SB 74 Dr. Farr Testimony pt 1.pdf HFIN 3/29/2016 5:00:00 PM
SB 74
SB 74