Legislature(2017 - 2018)ADAMS ROOM 519
02/21/2018 01:30 PM House FINANCE
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HOUSE BILL NO. 176 "An Act relating to medical assistance reimbursement for ground emergency medical transportation services; and providing for an effective date." 1:54:34 PM ROB EARL, STAFF, REPRESENTATIVE ADAM WOOL, reviewed a flow chart titled "HB 176; IGT Flow Chart" (copy on file). He noted that the providers signified as a blue circle encompassed municipalities, fire departments, and tribal organizations. He exemplified a scenario of a patient transport cost of $1 thousand that was reimbursed via state Medicaid for $400 leaving $600 in uncompensated costs. He indicated that the scenario represented the current reimbursement schedule. The blue circle to the right of the provider's circle represented state Department of Health and Social Services (DHSS) supplemental reimbursement proposed in HB 176. He expounded that the provider [in the scenario] would submit a total of $300, which represented half of the uncompensated cost or non-federal share plus a 20 percent administrative fee charged by DHSS totaling $360. He remarked that the CS language specified "up to" 20 percent for the administrative fee. The department submitted a bill to federal Medicaid who would reimburse the department for $360. He referenced page 2, lines 3 through 7 of the legislation that delineated that "the provider may not exceed the provider's actual cost for providing emergency medical transportation?." He noted that the reimbursement provision was explained in a box on the lower right of flow chart. He pointed to what the provider would recoup under the scenario. The department kept the $120 in administrative fees and the provider recouped $640 out of $1,000 total cost. 1:58:46 PM Representative Kawasaki asked how the administrative fee was calculated and who received the fee. He believed the 20 percent fee was high. Mr. Earl answered that the fee was higher than the actual administrative cost. He explained that federal rules allowed the embellished administrative fee. He pointed out that under the scenario the administrative fee was matched by the federal government. Representative Kawasaki wondered why the state did not charge an even higher administrative fee. Mr. Earl responded that the amount was determined by the amount the Centers for Medicare & Medicaid Services (CMS) would likely allow under the state plan amendment negotiations. Representative Kawasaki asked for the reason the fee was set at 20 percent. He wondered if it was linked to the ambulance fee. He asked whether there was a nexus between the administrative fee and the total amount. Mr. Earl replied in the negative and added that the 20 percent was predicated on a guess regarding a likely allowable amount. The actual administrative cost was roughly 2.6 percent. Representative Kawasaki surmised that the state was "getting more money from the federal government" at 20 percent. 2:02:00 PM REPRESENTATIVE ADAM WOOL, SPONSOR, concurred that the actual administrative cost was quite a bit less than 20 percent. He elaborated that consultants in other states had relayed that 20 percent was common, with some states charging 27 percent. He presumed that 20 percent would be approved by CMS. The extra money would help the department and "relieve pressure on the UGF the state was currently providing." The idea was to not "look a gift horse in the mouth." Representative Kawasaki asked how much of the reimbursement funding would go to the provider doing the transportation. Mr. Earl answered that under the scenario none of the administrative fee reimbursement was given to the provider. Representative Kawasaki surmised that even if a cost of the ambulance run was more expensive than the amount of reimbursement the state would not distribute any of the administrative reimbursement money to the providers. 2:04:04 PM Representative Wool answered that the administrative reimbursement did not go back to the provider, it went to the state. He mentioned that one of the amendments addressed the issue and allowed the provider to add the 20 percent administrative fee to the overall bill and then would be reimbursed. Representative Tilton was concerned about setting a precedent for a 20 percent administrative fee that seemed arbitrary. She had previously been involved in DHSS and recounted discussions regarding administrative fees. She supported getting as much money back as possible, but she was concerned over setting a 20 percent precedent that could apply to other grants and items. Representative Wool understood the point. He reiterated that the precedent had already been set in other states and the bill mirrored the amount. He mentioned the state's obligation to pay according to Title 19 of the Social Security Act. He agreed that he would not favor a 20 percent administrative fee charged "across the board" for every state department including DHSS. He thought the department could address the issue. He clarified that the bill proposed "up to" 20 percent. Representative Tilton requested an answer from DHSS. 2:07:23 PM MARGARET BRODIE, DIRECTOR, DIVISION OF HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via teleconference), replied that she had conversations with the Centers for Medicare and Medicaid recently and discovered that the administrative fee could only cover the cost of the administrative position. Representative Tilton wondered about the state's obligation to continue the program if the federal government ended its funding. Mr. Earl referred to page 1, lines 9 through 11 and read: " the amount of the supplemental reimbursement paid to a provider must be equal to the amount of federal financial participation?" He declared that if the federal financial participation went away the program would end. 2:08:44 PM Co-Chair Foster MOVED to ADOPT Amendment 1, 30-LS0705\O.7 (Glover, 2/20/18) (copy on file): Page 1, line 13: Delete "expenses" Insert "fee described in (d) or (e) of this section" Page 2, lines 19-22: Delete oil material and insert: "(d) If the department authorizes the use of intergovernmental transfers under the program, the deportment shall charge on administrative fee to a provider to cover the deportment's costs of administering the program. The administrative fee must be to equal up to 20 percent of the non-federal share the provider pays to the department. A provider may include the administrative fee in the provider's cost for providing an emergency medical transportation service to a medical assistance recipient. (e) If the department authorizes the use of certified public expenditures under the program, the department may establish an administrative fee for a provider. If the department establishes an administrative fee under this subsection, the department may allow a provider to include the administrative fee in the provider's cost for providing an emergency medical transportation service to a medical assistance recipient." Reletter the following subsections accordingly. Representative Wilson OBJECTED for discussion. Mr. Earl explained the amendment. The amendment did three things. First, the fee was changed to equal to 20 percent versus "up to." Second, the amendment allowed the provider to add the administrative fee to the cost of the medical transport. Thirdly, amendment 1 separated out the Intergovernmental Transfers (IGT) method and the Certified Public Expenditure (CPE) methodology and allowed the department to choose the methodology and not the providers. He pointed to the flow chart and furthered that the amendment allowed the providers to add the administrative fee to the total cost of transport. Therefore, under the scenario the provider would receive a reimbursement of $660 from the department, of which $330 was the federal supplemental reimbursement. He cited page 2, lines 3 through 7 of the bill that delineated that the amount the provider received may not exceed actual costs. 2:11:25 PM Representative Wilson asked who was charging the fee. She wondered why the bill specified what the provider had to charge. Mr. Earl answered that the department charged the provider the fee. Representative Wool elaborated that he wanted an amendment to Amendment 1 that would revert to "up to 20 percent." He confirmed that the charge was from the department to CMS. Representative Wilson stated that she did not have the amendment. 2:12:48 PM Co-Chair Seaton MOVED to ADOPT Conceptual Amendment 1 to Amendment 1: Lines 9 and 10, delete "must be equal to" and insert "may not exceed." There being NO OBJECTION, it was so ordered. Representative Wilson asked Ms. Brodie to add clarification to the administrative fee and what amount was allowable to charge. Ms. Brodie replied that the federal government would only allow to charge for actual costs. The department would estimate the total costs and divide it by the cost of the administrative position divided by 2 to calculate the percentage the department would charge at the beginning of the fiscal year. The calculation would monitor and likely amend the percentage as the fiscal year progressed. Representative Wilson asked if the provider could only charge their actual administrative fees. Ms. Brodie answered that they could only charge the actual costs that may include administrative fees. 2:15:16 PM Representative Wilson surmised that the amendment allowed providers to recoup their actual administrative and service costs. Ms. Brodie answered in the affirmative and qualified that it was permissible as long as the provider did not charge the administrative fees to another program. Representative Wilson WITHDREW her OBJECTION. There being NO OBJECTION, it was so ordered. 2:16:07 PM Co-Chair Foster MOVED to ADOPT Amendment 2, 30-LS0705\O.5 (Glover, 2/19/18) (copy on file). Page 2, following line 22: Insert a new subsection to read : "(e) This section authorizes the department to provide supplemental reimbursements for ground, water, or air emergency medical transportation service provider only if the United States Department of Health and Human Services approves payments to that type of emergency medical transportation service provider." Re-letter the following subsections accordingly. Page 2, line 30, through page 3, line I: Delete all material. Renumber the following paragraphs accordingly. Page 3, lines 8 ? 25: Delete all material and insert: "*See. 2.This Act takes effect immediately under AS 01.10.070(c)." Representative Wilson OBJECTED for discussion. Mr. Earl explained the amendment. He reminded the committee of the concern that adding air transport might jeopardize the entire program through rejection by CMS. The amendment separated ground, water, and air transport to allow the program to continue if federal Medicaid rejected the air portion. In addition, the amendment deleted the conditional effective date language on page 2 of the prior version and added an immediate effective date. Representative Wilson asked Mr. Earl to restate his explanation. Mr. Earl replied that the CS included air transport. He reiterated that concerns were expressed that federal Medicaid may deny coverage for air transport. He pointed to subsection (f) on page 3 of the CS and restated that ground, water, and air transport were separated and read the following: ?reimbursements to a ground, 1 water, or air emergency medical transportation service provider only if the United States Department of Health and Human Services approves payments to that type of emergency medical transportation service provider. Mr. Earl outlined that if CMS approved any specific type of emergency transport the program could move forward with the approved methods of transport. Representative Wilson WITHDREW her OBJECTION. There being NO OBJECTION, it was so ordered. 2:18:56 PM Co-Chair Foster reported that the bill would be held in committee for an updated fiscal note. Co-Chair Seaton requested more analysis on how the law was applied in other states. He noted the earlier discussions regarding the state's ability to charge more and were currently not accepting federal dollars that other states were collecting. Representative Wool agreed with Co-Chair Seaton. He relayed that he had been assured by his consultant that other states were charging a fee of 20 percent and 27 percent. The department was using the ITE and CPE methodologies, which might be the source of the discrepancy between Alaska and the other states. He would follow-up with answers. Representative Guttenberg asked for clarification about whether it was a new administrative charge on top of what was currently being done. He wondered whether the state was receiving reimbursement differently under the bill. He asked whether the prior method charged less than 20 percent. He asked if the program was displacing one set of money for another. 2:21:44 PM Ms. Brodie replied that there were two different payments: the initial billing went through the Medicaid Management Information System with all other weekly bills. She delineated that subsequently, the department billed the provider the difference between what they claimed in total cost and the amount the provider initially received from DHSS plus the administrative fee. The department made two payments to the providers. The first payment was the initial allowable amount. The second payment included a manual process where the state calculated the amount the provider owed the department. Once the provider paid the department it would release the supplemental reimbursement and the providers own funds. Co-Chair Seaton asked whether the department employed the IGT methodology or the current method of payment. Ms. Brodie answered that the current methodology was used for the initial payment and the second payment used the new methodology. Co-Chair Seaton requested the sponsor speak with the state's CMS to fully understand what the bill would do. Representative Wool reminded the committee that the goal of HB 176 was to obtain more medical transport reimbursement regardless of the administrative fee. HB 176 was HEARD and HELD in committee for further consideration.