Legislature(2015 - 2016)CAPITOL 106

03/24/2015 03:00 PM House HEALTH & SOCIAL SERVICES

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03:03:16 PM Start
03:03:41 PM Confirmation Hearing(s):
04:32:46 PM HB148
05:20:27 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
- Commissioner Valerie Davidson, Dept. of Health
& Social Services
- State Medical Board
-- Public Testimony --
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
           HB 148-MEDICAL ASSISTANCE COVERAGE; REFORM                                                                       
4:32:46 PM                                                                                                                    
CHAIR SEATON announced that the  final order of business would be                                                               
HOUSE  BILL  NO. 148,  "An  Act  relating to  medical  assistance                                                               
reform measures;  relating to eligibility for  medical assistance                                                               
coverage;  relating   to  medical  assistance   cost  containment                                                               
measures by  the Department  of Health  and Social  Services; and                                                               
providing for an effective date."                                                                                               
4:33:36 PM                                                                                                                    
VALERIE   DAVIDSON,   Commissioner   Designee,  Office   of   the                                                               
Commissioner, Department  of Health  & Social Services,  said the                                                               
bill provided  for health  care reform  in the  Medicaid Program,                                                               
and  improved the  health of  Alaskans by  extending health  care                                                               
coverage  through Medicaid  expansion for  up to  42,000 Alaskans                                                               
who  were eligible.   She  noted  that the  bill also  identifies                                                               
savings   through  the   fiscal  notes   identified  earlier   by                                                               
recognizing  savings opportunities  that can  be transitioned  to                                                               
Medicaid  simply because  the federal  government will  be paying                                                               
that portion.   She further  noted that it  infuses approximately                                                               
$1.1 billion  in federal  resources into  the Alaska  economy for                                                               
the  initial  five -  six  years.    She  explained that  HB  148                                                               
improves   health   coverage   through  expansion,   and   covers                                                               
individuals  with  incomes  up  to 138  percent  of  the  federal                                                               
poverty level.   She remarked that technically it  is 133 percent                                                               
plus  a  5   percent  disregard.    She   related  that  eligible                                                               
individuals  are  single adults  with  annual  incomes of  up  to                                                               
$20,314 per  year, with an  approximate hourly earnings  of $9.76                                                               
per hour  based upon  a 40-hour  work week.   She offered  that a                                                               
married  couple  earning  a   combined  income  of  approximately                                                               
$27,490 per year, or a combined  hourly income of $13.21 per hour                                                               
based upon  a 40-hour work week  [is eligible].  It  would extend                                                               
coverage  to Alaskans  between the  ages of  19 -  64 who  do not                                                               
qualify for  any other  reason, such  as, a  disabling condition.                                                               
She  said that  although approximately  42,000 Alaskans  would be                                                               
eligible  for the  expansion, only  about  20,000 would  actually                                                               
sign up  in the first  year - increasing to  approximately 26,000                                                               
by the year 2021.                                                                                                               
4:36:36 PM                                                                                                                    
COMMISSIONER  DAVIDSON continued  her  overview  and pointed  out                                                               
that  the  study performed  by  Evergreen  Economics showed  that                                                               
approximately  44   percent  of  the  people   in  the  expansion                                                               
population  have   jobs,  another   29  percent   are  collecting                                                               
unemployment  which means  they are  actively seeking  work.   In                                                               
terms  of the  federal match,  she explained,  under the  Patient                                                               
Protection and Affordable  Care Act the match is  100 percent for                                                               
the initial three hard calendar years,  2014 - 2016.  The federal                                                               
contribution  match in  2016 equals  100  percent federal  match,                                                               
2017 equals  95 percent, 2018  equals 94 percent, 2019  equals 93                                                               
percent, and  2020 equals  90 percent,  with the  match remaining                                                               
constant  at  90  percent  after  2020.   She  stated  that  this                                                               
compares  to the  regular Medicaid  Program which  is matched  at                                                               
approximately  50  percent,  although  there is  a  higher  match                                                               
available for  children.  In  terms of projection of  the average                                                               
per  enrollee cost  of Medicaid,  Evergreen Economics,  which has                                                               
performed  Medicaid  analysis for  Alaska  for  almost a  decade,                                                               
estimates  that  the average  cost  per  enrollee will  start  at                                                               
approximately $7,250, and increase over  time.  She remarked that                                                               
new federal revenue in year one  was expected to be $141 million,                                                               
increasing to  $204.9 million  in the  year 2021,  a total  of $1                                                               
billion  in new  federal revenue  in Alaska.   She  conveyed that                                                               
some  savings have  been identified  which  include savings  that                                                               
DHSS currently pays for services.   For example, she related, the                                                               
Department of  Corrections services provided for  inmates who are                                                               
out  of the  facility  for  an overnight  stay  are eligible  for                                                               
coverage.    Additionally,  in 2016  there  is  approximately  $1                                                               
million  in  savings for  Chronic  and  Acute Medical  Assistance                                                               
programs  or CAMA  programs, and  approximately  $1.5 million  in                                                               
behavioral health  grants.  Additionally,  she related,  the bill                                                               
is  clear that  there is  a provision  making Alaska's  continued                                                               
participation  in Medicaid  expansion contingent  on the  federal                                                               
match  remaining at  or above  90 percent.   She  further related                                                               
that  the bill  also directs  the Department  of Health  & Social                                                               
Services  (DHSS)  to submit  to  the  legislature no  later  than                                                               
January  25, 2016,  a proposal  to  authorize a  provider tax  to                                                               
offset some  of the costs of  the Medicaid Program.   She pointed                                                               
out  that  another  equally  important portion  of  the  bill  is                                                               
Medicaid reform,  a process  that evolves  over time  by building                                                               
upon the reform efforts already  undertaken by DHSS.  She advised                                                               
this includes  maximizing the existing 100  percent federal match                                                               
opportunities  by working  with tribal  partners to  increase the                                                               
IHS  trust fund  beneficiaries who  receive services  from tribal                                                               
providers who  are also  Medicaid beneficiaries.   She  said that                                                               
when  three  things  come  together,  IHS  beneficiary,  Medicaid                                                               
beneficiary, and  receiving care  in an IHS  facility, it  is 100                                                               
percent  federally matched.   She  expressed that  this was  true                                                               
before Medicaid  expansion, during expansion, and  after Medicaid                                                               
expansion.      Essentially,   she   pointed   out,   there   are                                                               
opportunities to leverage those federal funds.                                                                                  
4:41:26 PM                                                                                                                    
COMMISSIONER  DAVIDSON  stated  that additional  reforms  include                                                               
1915(i)  and  1915(k) options  to  take  advantage of  additional                                                               
Federal  Medical  Assistance   Percentage  (FMAP)  opportunities.                                                               
DHSS would  use the 1915(i) option  to serve Alaskans who  do not                                                               
meet the  nursing level of  care, but  meet other criteria.   For                                                               
example,  she  expressed,  they   may  have  Alzheimer's  related                                                               
diseases, traumatic brain injury, or  severe mental illness.  She                                                               
described this  as a savings  increasing to the 50  percent match                                                               
by  the  regular  Medicaid  Program.   She  indicated  that  DHSS                                                               
anticipates the  reforms to  be in regular  Medicaid, as  well as                                                               
the  expansion population.   Currently,  DHSS serves  people with                                                               
Alzheimer's  disease, traumatic  brain injury,  or severe  mental                                                               
illness,  with 100  percent state  general funds,  but by  moving                                                               
them to a  1915(i) option, DHSS would increase  the federal match                                                               
from zero percent to fifty percent.   She conveyed that the other                                                               
option  is  a  1915(k)  option   to  replace  existing  home  and                                                               
community based services, a waiver  services, which increases the                                                               
match  from  50  to  56  percent.    In  terms  of  other  reform                                                               
opportunities,   she  pointed   out  that   DHSS  also   included                                                               
demonstration  project   authority  to  review   payment  reform,                                                               
whether  those  are  bundling   payments  or  innovative  service                                                               
delivery models,  to allow DHSS  to have explicit,  express broad                                                               
authority  that  allows  pursuing  other  opportunities  as  they                                                               
arise, and recognizing that reform  is a process.  She reiterated                                                               
that  reform is  a process  that  needs broad  authority to  take                                                               
advantage of  things as they  arise.   She opined that  there are                                                               
incredible  opportunities for  tele-health, especially  in Alaska                                                               
with  its large  geography and  small population.   She  remarked                                                               
that,   as   DHSS  and   the   federal   government  have   audit                                                               
requirements, providers  are seeing a  doubling up of  audits and                                                               
spending a lot  of time on administration rather  than being able                                                               
to provide programs and services.   She advised that those audits                                                               
should  be  streamlined  to  better  coordinate  both  state  and                                                               
federal requirements.                                                                                                           
4:45:16 PM                                                                                                                    
COMMISSIONER  DAVIDSON continued  her overview  and noted  that a                                                               
critical  piece   of  the   legislation  would   allow  emergency                                                               
regulation authority to  implement savings opportunities quickly.                                                               
Currently,  a   Request  for  Proposal  (RFP)   recently  closed,                                                               
requesting that  a contractor review opportunities  for reform in                                                               
Alaska, and  ways to change the  way Medicaid and health  care is                                                               
provided.  She  said those opportunities will allow  the state to                                                               
move forward, evaluating what other  states have done, evaluating                                                               
how they  might work  in Alaska,  and developing  a plan  to work                                                               
with  stakeholders  so that  the  process  is transparent.    She                                                               
pointed out that there is  a link between the broad demonstration                                                               
project authority and  the RFP, acknowledging that  DHSS does not                                                               
have all of the  best ideas and that some of  those may come from                                                               
this process.                                                                                                                   
4:47:09 PM                                                                                                                    
JON SHERWOOD,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Department  of Health  &  Social Services  (DHSS),  said that  in                                                               
addition to  the provisions regarding  expansion and  reform, the                                                               
Department  of Health  & Social  Services (DHSS)  is also  making                                                               
technical amendments  to the  statute in order  to bring  it into                                                               
conformity  with federal  law.   He said  it is  the department's                                                               
intention  to  make   clear  the  standard  under   which  it  is                                                               
4:48:07 PM                                                                                                                    
CHAIR SEATON asked that Mr. Sherwood point out sections where                                                                   
there are changes to conform to the law and not a proposed                                                                      
expansion reform.                                                                                                               
4:48:38 PM                                                                                                                    
MR. SHERWOOD responded yes, and offered a sectional analysis as                                                                 
follows [original punctuation provided]:                                                                                        
     Sectional Analysis:                                                                                                        
     Section  1  Adopts   intent  language  and  legislative                                                                    
     findings related to Medicaid  expansion and the need to                                                                    
     reform   the  existing   Medicaid  program,   including                                                                    
     instructing  the   Department  of  Health   and  Social                                                                    
     Services (DHSS)  to propose legislation to  implement a                                                                    
     provider tax in  January 2016, to help  offset the cost                                                                    
     of the Medicaid program.                                                                                                   
     Section 2 Amends AS 44.23.075  to exclude the expansion                                                                    
     population  from   the  current  Permanent   Fund  Hold                                                                    
     Harmless program.                                                                                                          
     Section  3  Amends  AS   47.05.200(a)  to  clarify  the                                                                    
     minimum number of audits that  DHSS should conduct each                                                                    
     year, along with instructions that  DHSS, should to the                                                                    
     extent   possible,  minimize   duplicative  state   and                                                                    
     federal audits for Medicaid providers.                                                                                     
     Section  4  Amends AS  47.05.200(b)  to  allow DHSS  to                                                                    
     impose  interest penalties  on identified  overpayments                                                                    
     using the post judgment statutory rate.                                                                                    
     Section 5  Adopts AS 47.05.250 that  authorizes DHSS to                                                                    
     develop   provider   fines    though   regulation   for                                                                    
     violations  of  AS  47.05,   AS  47.07  or  regulations                                                                    
     adopted under those chapters.                                                                                              
     Section  6 Amends  AS 47.07.020(b)  including technical                                                                    
     corrections   related  to   eligibility  for   Medicaid                                                                    
     authorized under the Affordable  Care Act. This section                                                                    
     also  provides   the  authority  for  DHSS   to  expand                                                                    
     Medicaid to  adults aged 19-64  who are not  caring for                                                                    
     dependent children,  are not disabled or  pregnant, and                                                                    
     who  earn  at  or  below 138  percent  of  the  federal                                                                    
     poverty guidelines  for Alaska including the  5 percent                                                                    
     income disregard.                                                                                                          
     Section  7 and  8  Amends AS  47.07.020(g)  and (m)  to                                                                    
     clarify  when   DHSS  may  impose  transfer   of  asset                                                                    
     penalties when determining eligibility for Medicaid.                                                                       
     Section 9  and 10  Amends AS  47.07.036(b) and  adds AS                                                                    
     47.07.036(d)  to outline  cost  containment and  reform                                                                    
     measures  that DHSS  must undertake,  including seeking                                                                    
     demonstration  waivers,  applying   for  other  options                                                                    
     under the  Medicaid Act and improving  telemedicine for                                                                    
     Medicaid recipients.                                                                                                       
     Section 11  and 12 Amends  AS 47.07.900(4) and  (17) to                                                                    
     remove   the   requirement   that   behavioral   health                                                                    
     providers be a grantee of  the state of Alaska in order                                                                    
     to bill Medicaid.                                                                                                          
     Section 13  Instructs DHSS to  amend any state  plan it                                                                    
     has with  the federal government to  be consistent with                                                                    
     this Act.                                                                                                                  
     Section 14 Authorizes DHSS to  engage in emergency rule                                                                    
     making   under  the   Alaska  Administrative   Code  to                                                                    
     implement Medicaid  reform measures and  the provisions                                                                    
     of this Act.                                                                                                               
     Section  15 Instruct  the Revisor  of Statutes  to make                                                                    
     technical amendments  to the  title of AS  47.07.036 to                                                                    
     conform to amendments in this Act.                                                                                         
     Section  16  Provides  that  Section   13  and  14  are                                                                    
     effective immediately                                                                                                      
     Section 17  Provides that Section  1- 12 and 15  of the                                                                    
     Act are effective on July 1, 2015.                                                                                         
4:48:40 PM                                                                                                                    
MR. SHERWOOD said  Section 1 is the findings  and intent language                                                               
around  the   bill  expansion  and  reform   which  includes  the                                                               
provision instructing DHSS to propose  legislation for a provider                                                               
tax by  next session.   He noted that Section  2 is the  first of                                                               
the  technical amendments  to reflect  or accommodate  changes in                                                               
federal law.   The provision amends the  hold harmless provisions                                                               
in  statute  for  treatment  of receipt  of  the  Permanent  Fund                                                               
Dividend.   He remarked  that within  the Patient  Protection and                                                               
Affordable  Care  Act  states were  required  in  their  Medicaid                                                               
Programs to change  the way they determined  income for children,                                                               
pregnant  women,  and parent  caretaker  relatives  to tax  based                                                               
rules for  income.  As a  result, DHSS now counts  income using a                                                               
modified adjusted gross income (MAGI).   He pointed out that this                                                               
differs from  previously as it  tends to look more  toward annual                                                               
income  and does  not allow  income disregards.   He  pointed out                                                               
that  in adding  the expansion  group there  was no  easy way  to                                                               
reconcile  these  MAGI-based  Methodology  rules  with  the  hold                                                               
harmless  statute.    Previously,  he said,  the  Permanent  Fund                                                               
Dividend  (PFD) was  always  counted as  income  under a  monthly                                                               
receipt, whereas, under MAGI it  is annualized.  The statute does                                                               
not provide  for that kind of  situation.  He remarked  that once                                                               
the PFD is  annualized it becomes a very small  amount of monthly                                                               
income as the check  is divided by 12.  He  said that there would                                                               
be individuals slightly over income  for the expansion group, but                                                               
these  individuals would  have the  federal  market available  to                                                               
obtain substantially subsidized health  insurance.  He reiterated                                                               
that,  in these  cases,  the individual  would  go from  Medicaid                                                               
coverage  to a  substantially subsidized  federal coverage.   The                                                               
decision was  made to  exempt this group  from the  hold harmless                                                               
provision and allow them to move into the exchange.                                                                             
4:51:48 PM                                                                                                                    
REPRESENTATIVE  WOOL asked  whether  an individual  on the  fence                                                               
could opt not to receive a PFD.                                                                                                 
MR.  SHERWOOD  said   he  would  check  under   the  new  federal                                                               
regulations as  a development of  income requirement  stated that                                                               
an individual  entitled to  an income must  apply for  and pursue                                                               
4:52:30 PM                                                                                                                    
REPRESENTATIVE   VAZQUEZ  questioned   how   the  hold   harmless                                                               
provision applies at the present time and how this would change.                                                                
MR.   SHERWOOD   responded   that  presently   when   determining                                                               
eligibility  for  Medicaid,  the   statute  instructs  the  state                                                               
whether it  is possible under  federal requirements  to disregard                                                               
the PFD  and not count it  as income.   In this case there  is no                                                               
asset test for  the expansion group, but individuals  can have up                                                               
to four  months of hold  harmless coverage which means  the state                                                               
replaces the federal  benefit that is provided.   Essentially, he                                                               
explained, DHSS would continue to  leave them on Medicaid but for                                                               
those 1  - 4 months that  they were ineligible due  to receipt of                                                               
the  PFD,   DHSS  would  not   claim  federal  funds   for  those                                                               
individuals.  In that case,  the lost federal revenue is actually                                                               
paid out of the PFD account and not the general fund account.                                                                   
4:54:11 PM                                                                                                                    
COMMISSIONER  DAVIDSON explained  that with  this provision,  the                                                               
PFD  hold harmless  provision  does not  apply  to the  expansion                                                               
4:54:22 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ asked for an example.                                                                                    
COMMISSIONER DAVIDSON offered a scenario  of an individual who is                                                               
potentially eligible  for Medicaid  expansion, but has  an income                                                               
almost at  138 percent of the  federal poverty level.   When that                                                               
individual receives a PFD that puts  them over 138 percent of the                                                               
federal poverty level, they would  not be eligible for expansion.                                                               
Rather, the  individual would then  be directed to  the federally                                                               
facilitated market  place in  Alaska where  they could  choose to                                                               
purchase a substantially subsidized market place plan.                                                                          
4:55:11 PM                                                                                                                    
CHAIR SEATON  offered that this  also relates to  other programs,                                                               
such as, food stamps.  In  the event an individual earns too much                                                               
money, they don't qualify.   The PFD actually pays the difference                                                               
of what the individual was  losing in their benefits in receiving                                                               
the PFD.   He pointed  out that the  hold harmless was  not being                                                               
changed, it just does not apply to the expansion population.                                                                    
MR. SHERWOOD answered "That is correct."                                                                                        
4:56:08 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  questioned  whether the  department  had                                                               
considered that  the hold  harmless also  applies to  food stamps                                                               
and  asked whether  there had  been any  thought about  excluding                                                               
food stamp recipients in the hold harmless program.                                                                             
COMMISSIONER DAVIDSON replied that the  food stamp program is not                                                               
a subject of this bill.                                                                                                         
4:56:45 PM                                                                                                                    
MR. SHERWOOD said  that Section 3 is the  provision which reduces                                                               
the mandatory  number of audits  required under the statute.   He                                                               
offered that since  the law passed there has been  an increase in                                                               
the  amount of  oversight of  providers through  other state  and                                                               
federal initiatives.   The Division  of Quality Assurance  in the                                                               
department  [indisc.]  14  different   kinds  of  oversights  the                                                               
providers can be subject to  depending upon the type of provider,                                                               
federal or  state.  He opined  that one of the  prime purposes of                                                               
audits is the  sentinel effect and DHSS believes  there is enough                                                               
activity  that it  is  achieving  that.   He  explained that  the                                                               
section also gives DHSS clear  authority to coordinate the audits                                                               
to  avoid   duplication  with  other   state  or   federal  audit                                                               
4:57:57 PM                                                                                                                    
CHAIR  SEATON  conveyed there  had  been  a discussion  regarding                                                               
certain   audits  being   identified  as   being  an   acceptable                                                               
substitute when  there is coordination  in receiving  the results                                                               
of these audits.  He asked  if DHSS was still thinking that would                                                               
work in some instances.                                                                                                         
MR.  SHERWOOD  responded  that DHSS  does  coordinate  among  the                                                               
audits  which also  avoids  any duplicative  penalties.   To  the                                                               
extent possible, the  department would take the  federal audit as                                                               
part of the DHSS oversight strategy.                                                                                            
4:59:04 PM                                                                                                                    
MR.  SHERWOOD stated  that  Section 4  allows  the department  to                                                               
impose   penalties   on   overpayments   when   the   overpayment                                                               
determinations become  final.  This section  creates an incentive                                                               
for prompt resolution  when there are audit findings  as there is                                                               
a disincentive  for the provider to  drag out the dispute  of the                                                               
4:59:39 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ referred  to [Sec.  4, AS  47.05.200(b)],                                                               
page 3, lines 17-20, which read:                                                                                                
     (b) ...  The department  may assess  interest penalties                                                                
     on  any  identified  overpayment. Interest  under  this                                                                
     section shall  be calculated using the  statutory rates                                                                
     for post-judgement  interest accruing from the  date of                                                                
     the issuance of the final audit.                                                                                       
REPRESENTATIVE  VAZQUEZ  asked  what  statutory  rate  for  post-                                                               
judgement interest is being applied.                                                                                            
MR.  SHERWOOD answered  that the  language came  from "our  legal                                                               
folks," and he assumed  it was clear as to which  one.  He agreed                                                               
to research the answer and get back to the committee.                                                                           
REPRESENTATIVE VAZQUEZ said  it should clearly be  set forth what                                                               
statutory rate it is making reference to for avoiding confusion.                                                                
5:01:03 PM                                                                                                                    
MR. SHERWOOD conveyed that Section  5 allows DHSS to impose fines                                                               
on providers for violation of  statute or regulations.  Currently                                                               
the only financial recovery with  providers is through the audit.                                                               
He said it has been discovered  that it makes more sense for both                                                               
parties to  assess a fine.   He offered  as an example,  if there                                                               
was evidence  of poor documentation  that was not  systemic, DHSS                                                               
may choose  to impose a  fine rather than actually  performing an                                                               
audit where both  sides have to drill down to  determine what the                                                               
evidence shows.  He conveyed that  there may be occasions when an                                                               
audit  is  over-kill  or  impractical   and  simply  assessing  a                                                               
financial  penalty   for  failing   to  follow  the   statute  or                                                               
regulations is a more appropriate and efficient tool.                                                                           
CHAIR SEATON  asked whether  the fine was  in dispute  or someone                                                               
prefers an audit,  would that fine language be  permissive and be                                                               
part of the regulations that can be challenged.                                                                                 
MR.  SHERWOOD responded  in the  affirmative and  stated that  by                                                               
adding  it as  a  sanction there  is an  appeal  process for  any                                                               
substantial sanction.                                                                                                           
5:02:36 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ referred  to [Sec.  5, AS  47.05.250(a)],                                                               
page 3, lines 22-23, which read:                                                                                                
     (a) ...The department may adopt regulations to impose                                                                      
     a civil fine against a provider who violates AS 47.05                                                                      
REPRESENTATIVE  VAZQUEZ noted  that AS  47.05 deals  with medical                                                               
assistance  fraud.   She  said  if  this legislation  passes,  it                                                               
appears the  department may adopt  regulations to impose  a civil                                                               
fine against a provider who violates.   Usually, she opined, in a                                                               
criminal case there is restitution to  be made, so why would DHSS                                                               
need a separate section.                                                                                                        
MR.  SHERWOOD offered  that this  does not  extend simply  to the                                                               
fraud provisions  of AS  47.05, but  to the  other administrative                                                               
provisions of  AS 47.05  and AS  47.07, essentially  the Medicaid                                                               
statute.  All violations of  regulations governing Medicaid would                                                               
be subject to fines.                                                                                                            
REPRESENTATIVE   VAZQUEZ  reiterated   her  question   whether  a                                                               
criminal  case  under AS  47.05  deals  with Medicaid  fraud  and                                                               
spells out  the criminal sanctions.   She pointed out that  it is                                                               
clearly  a  criminal  process,  and  asked  why  this  particular                                                               
provision is  included in  that it  interferes with  the criminal                                                               
statute.   She noted that  restitution is in criminal  cases, and                                                               
the criminal code sets forth the parameters of that restitution.                                                                
MR. SHERWOOD  advised that this  provision was intended  to allow                                                               
DHSS to impose fines for  violations of regulation which were not                                                               
necessarily  criminal.    He  offered that  if  the  question  is                                                               
whether this language is appropriately  placed in this section or                                                               
in AS  47.07, he would consult  with the Department of  Law (DOL)                                                               
to provide an answer.                                                                                                           
5:05:36 PM                                                                                                                    
REPRESENTATIVE TARR  referred to [Sec. 5,  AS 47.05.250(b)], page                                                               
3, lines 25-26, which read:                                                                                                     
     (b) A fine imposed under this section may not be less                                                                      
     than $100 or more than $25,000 for each occurrence.                                                                        
REPRESENTATIVE TARR said the provision  reads like a problem that                                                               
does  not  meet the  standard  of  a  criminal proceeding.    The                                                               
department wants a  mechanism to encourage good  behavior and the                                                               
threat of a fine will likely do that.                                                                                           
MR. SHERWOOD answered  that her statement was  a good assessment.                                                               
Certainly, he said, the deterrent  effect is in knowing there are                                                               
some situations  in which  DHSS is  not likely  to pursue  a full                                                               
blown audit  simply to obtain  a modest recovery.   Generally, he                                                               
offered, all of DHSS sanctions  tend to be progressive so initial                                                               
and  minor occurrences  tend to  be modest  fines, and  repeat or                                                               
serious offenses tend to be higher fines.                                                                                       
5:06:53 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ commented  that there  may be  a need  to                                                               
include  a provision  for  fines but  as this  covers  all of  AS                                                               
47.05,  which also  covers Medicaid  fraud,  she suggested  there                                                               
should be an  explicit exception to the  criminal statutes, which                                                               
includes criminal  charges, and follows a  whole criminal process                                                               
and not a civil process.                                                                                                        
CHAIR  SEATON  asked  [Mr.  Sherwood] to  check  with  the  legal                                                               
department  to determine  if  there should  be  an exception  for                                                               
fraud.  He  stated that if there is actually  fraud DHSS does not                                                               
want to be submitting a fine for criminal penalties.                                                                            
5:08:22 PM                                                                                                                    
MR.  SHERWOOD continued  with the  sectional analysis  and stated                                                               
that Section 6 amends the  Medicaid eligibility statutes to bring                                                               
the  statute in  line  with  the new  MAGI  rules,  and adds  the                                                               
expansion  group.     He  referred  to   MAGI  [indisc.]  several                                                               
categories of  coverage including  many categories  for children.                                                               
The  legislation  amends AS  47.07.020(b)(8)  in  that it  better                                                               
describes  a group  of children  that  are already  covered.   He                                                               
explained that the language dated  back to the early 1990s, which                                                               
artfully describes a category of  children who weren't ineligible                                                               
because they did  not meet the old deprivation  standards for Aid                                                               
to  Families with  Dependent Children  (AFDC).   He offered  that                                                               
DHSS was making technical amendments  to clarify this language to                                                               
what has always  been the coverage for these children  who do not                                                               
meet  the deprivation  requirements.   He indicated  that as  the                                                               
program has evolved this language  has become antiquated and DHSS                                                               
does not  have people who  would track  that kind of  policy back                                                               
that far.   The  other changes  related to MAGI  have to  do with                                                               
eligibility categories for pregnant  women and children and their                                                               
income levels are  set in statute as a percentage  of the federal                                                               
poverty level,  he explained.   He reiterated that MAGI  gets rid                                                               
of  all income  disregards  that are  applied before  determining                                                               
eligibility.   The  federal government  made  DHSS calculate  the                                                               
value of those disregards and  adjust the income standards upward                                                               
to  reflect the  loss of  disregards for  existing categories  of                                                               
Medicaid, he  stated.  This  legislation is changing  the numbers                                                               
in the  statute to  match those  new MAGI  adjusted amounts.   He                                                               
offered that  it appears  income standards are  going up,  but in                                                               
truth  it  is the  equivalent  standard.    He pointed  out  that                                                               
instead of  applying the  standard after DHSS  has taken  out the                                                               
income  disregards  it is  now  applying  the standard  of  gross                                                               
income.   Another way of looking  at it, he advised,  is that the                                                               
disregards have been built into the standard.                                                                                   
5:11:19 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  asked for an  example of at least  two to                                                               
three income disregards that are taken into consideration.                                                                      
MR.  SHERWOOD  replied that  the  disregards  that come  to  mind                                                               
include earned income disregards,  child care disregards, a child                                                               
support disregard, and the PFD disregard.                                                                                       
REPRESENTATIVE  VAZQUEZ  asked  that  Mr.  Sherwood  explain  the                                                               
definition of  disregard, and  how it  is reviewed  by department                                                               
personnel determining eligibility.                                                                                              
MR.  SHERWOOD  answered  that when  determining  an  individual's                                                               
eligibility  the department  typically  starts  with their  gross                                                               
income for  the month, then  determines whether  adjustments need                                                               
to be  made.   In that  instance, a disregard  may be  a complete                                                               
disregard of a certain type of  income, or a partial disregard of                                                               
earned income,  and the  amount of  disregard is  subtracted from                                                               
the individual's income.   Subsequently, he related,  once all of                                                               
the disregards  have been subtracted, the  department reviews the                                                               
remaining income  and in the old  method would compare it  to the                                                               
income standard.                                                                                                                
5:14:29 PM                                                                                                                    
MR.  SHERWOOD advised  that another  part of  Section 6  adds the                                                               
expansion group and it contains  the provision that the expansion                                                               
group is  covered only if the  federal match rate is  at least 90                                                               
percent.   He  referred  to  Sections 7-8  and  advised they  are                                                               
technical  amendments which  clarify that  individuals determined                                                               
eligible  using MAGI  standards are  not subject  to transfer  of                                                               
asset penalties.   He explained that transfer  of asset penalties                                                               
are applied  to individuals who  receive long term  care, nursing                                                               
home  care, and  home  and  community based  waivers.   In  these                                                               
circumstances, an  individual has been  found to have  given away                                                               
assets  in order  to qualify  for  Medicaid, or  for any  purpose                                                               
other than to receive some  sort of direct benefit to themselves.                                                               
He pointed  out that they  may be  ineligible for Medicaid  for a                                                               
period of  time -  approximately equivalent to  the value  of the                                                               
transfer.  He  remarked that the legislation  clarified that MAGI                                                               
standards are not  subject to the transfer of asset  penalty.  He                                                               
explained  that  all  the  categories   of  Medicaid  that  cover                                                               
individuals who  are aged,  blind, and disabled  do not  use MAGI                                                               
standards.  He  said that the over whelming  majority, almost the                                                               
entirety  of the  individuals receiving  long term  care, qualify                                                               
under those standards for aged, blind, and disabled.                                                                            
5:16:03 PM                                                                                                                    
MR. SHERWOOD  referred to Sections  9 -  10 and advised  that the                                                               
amendments  to  the cost  containment  statutes  in the  Medicaid                                                               
statute  include   the  reform  initiatives,  the   Section  1115                                                               
waivers,  the 1915(i)  and 1915(k)  options, other  demonstration                                                               
authorities, and  enhancement and  incentivizing telehealth.   He                                                               
advised that  Sections 11 -  12 amend  the statute to  remove the                                                               
Medicaid requirement  that behavioral  health providers  be grant                                                               
recipients.     He  conveyed  that   Section  13   instructs  the                                                               
department  to  amend  the  state plan  in  accordance  with  the                                                               
legislation.   He further  conveyed that  Section 14  gives clear                                                               
authority  to issue  emergency regulations  for  reform and  cost                                                               
containment.     Section   15   includes   Reviser  of   Statutes                                                               
instructions.   Sections  16 -  17  are effective  dates, and  he                                                               
noted that Sections 13 -  14 are effective immediately, while the                                                               
rest of the Act is effective on July 1, 2015.                                                                                   
5:18:09 PM                                                                                                                    
REPRESENTATIVE TARR  asked for  clarification that  the committee                                                               
will not  consider amendments  on Thursday but  get them  out for                                                               
CHAIR  SEATON  said  the committee  may  consider  amendments  on                                                               
Thursday, before  the public testimony  comes in, so  people will                                                               
know what is on the table.                                                                                                      
5:18:26 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  advised she will have  many questions and                                                               
stated it is only fair for  the committee to have time to clarify                                                               
certain provisions  in order  to understand  what this  bill does                                                               
and does not do.                                                                                                                
CHAIR SEATON expressed his agreement.                                                                                           
5:19:11 PM                                                                                                                    
COMMISSIONER DAVISDON offered members  to forward their questions                                                               
to her in the meantime.                                                                                                         
CHAIR  SEATON   asked  the  members   to  forward   questions  to                                                               
Commissioner  Davidson and  there may  be written  responses back                                                               
with information.                                                                                                               
REPRESENTATIVE VAZQUEZ requested that the questions and answers                                                                 
be distributed to every committee member.                                                                                       
CHAIR SEATON offered that questions could be submitted to him,                                                                  
and he would forward the questions and receive the answers.                                                                     
[HB 148 was held over]                                                                                                          

Document Name Date/Time Subjects
Confirmation- Commissioner DHS - Davidson.pdf HHSS 3/24/2015 3:00:00 PM
Confirmations- HHSS
Confirmation-Medical Board - Humphreys.pdf HHSS 3/24/2015 3:00:00 PM
Confirmations- HHS
HB148 Version A.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 Sectional.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DOA-OAH-03-15-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal note narrative 03-17-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -PHC-03-14-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-APDMS-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note - DHSS-BHA-03-15015.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-BHMS-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-CCIA-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-GRTAL-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-CDDG-03-14-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-HCMS-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-MAA-03-17-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-PAFS-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-SCBG-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-RR-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-SDMS-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-SDSA-03-15-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal Note -DHSS-TRG-03-16-15.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Support - Catherine Girard - Medicaid Expansion.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Support -17 assorted resolutions.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Support -assorted emails in Support of Expansion.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Support letter - Sean Jones.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 Medical Assistance Coverage; Reform Transmittal Letter.pdf HHSS 3/24/2015 3:00:00 PM
HB 148
HB148 - Fiscal note narrative update.pdf HHSS 3/24/2015 3:00:00 PM
HHSS 3/26/2015 3:00:00 PM
HB 148
HB148 - Support - ANHB Public Testimony.pdf HHSS 3/24/2015 3:00:00 PM
HB 148