Legislature(2015 - 2016)CAPITOL 106

03/28/2015 03:00 PM House HEALTH & SOCIAL SERVICES

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03:02:38 PM Start
03:03:12 PM HB148
06:08:52 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
           HB 148-MEDICAL ASSISTANCE COVERAGE; REFORM                                                                       
3:03:12 PM                                                                                                                    
CHAIR SEATON announced  that the only 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."                                                                                               
3:05:29 PM                                                                                                                    
LINCOLN BEAN SR., Elected Tribal Leader; Chair, Alaska Native                                                                   
Health Board, paraphrased from the following prepared statement                                                                 
[original punctuation provided]:                                                                                                
     Honorable  Representative  Seaton  and Members  of  the                                                                    
     Committee:  Thank you  for the  opportunity to  provide                                                                    
     input  for this  hearing  on House  Bill  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."                                                                    
     I am  the Chairman  of the  Alaska Native  Health Board                                                                    
     (ANHB).  ANHB, established  in 1968,  is recognized  as                                                                    
     the statewide  advocacy voice  on Alaska  Native Health                                                                    
     issues; and serves as the  support organization for the                                                                    
     Alaska  Tribal  Health System  (ATHS).  The  ATHS is  a                                                                    
     voluntary affiliation  of over 30  tribal organizations                                                                    
     that  serve over  145,000 Alaska  Natives and  American                                                                    
     Indians   (ANAIs)   and  thousands   more   non-Natives                                                                    
     throughout  the  state.  The ATHS  network  includes  a                                                                    
     statewide  hospital   in  Anchorage,   25  sub-regional                                                                    
     clinics,  6  regional  hospitals,  nearly  200  village                                                                    
     clinics,  and 5  residential  treatment  centers. I  am                                                                    
     here to  speak before  you today in  support of  HB 148                                                                    
     and to  voice our  concern on  the critical  and urgent                                                                    
     need  to  expand  Medicaid   in  our  state.  Expanding                                                                    
     Medicaid  and implementing  smart reforms  will provide                                                                    
     immediate relief  to an over-taxed  system. It  will do                                                                    
     this  by addressing  the  chronic  underfunding of  our                                                                    
     health  care   facilities;  reducing  the   unique  and                                                                    
     complex  geographic  challenges   associated  with  our                                                                    
     rural  villages;  and, promoting  innovative  solutions                                                                    
     that leverage the strengths of  the ATHS model. Chronic                                                                    
     Underfunding Chronic  underfunding afflicts  our Native                                                                    
     health facilities. Currently,  federal dollars from the                                                                    
     Indian Health Service (IHS)  cover approximately 55% of                                                                    
     the funding  needed to provide health  care services to                                                                    
     the Native  population. The  finite federal  funds mean                                                                    
     that for every person  referred there are fewer dollars                                                                    
     available  for the  next. If  Tribal programs  operated                                                                    
     solely on  federal funds,  services would  be curtailed                                                                    
     or halted  long before the fiscal  year ended. However,                                                                    
     Tribal  health  programs  have developed  capacity  and                                                                    
     access,  and depend  on third  party  billing in  their                                                                    
     business   models.  Medicaid   is   critical  and   has                                                                    
     contributed  to the  improved health  status of  tribal                                                                    
     people.  However,  the   disparities  still  exist  and                                                                    
     Tribal programs are stretch to  cover the costs of care                                                                    
     for the  uninsured. Medicaid  expansion closes  the gap                                                                    
     caused  by  uncompensated  care. Alaska  Native  Health                                                                    
     Board  2 Geographic  Challenges  Almost  80% of  Alaska                                                                    
     Native  villages are  not connected  by a  road system.                                                                    
     This  presents a  major  challenge  for Alaska's  rural                                                                    
     villages. The  Community Health Aide Program  (CHAP) is                                                                    
     the backbone  of the  rural health  care system  and in                                                                    
     many  cases provides  the only  local source  of health                                                                    
     care  for many  Alaska Native  people. But  when health                                                                    
     care  services are  needed  beyond  what the  community                                                                    
     health  aides   can  provide,  tens  of   thousands  of                                                                    
     Alaskans do not have  access. The IHS funding typically                                                                    
     covers only "urgent" travel, meaning  when a patient is                                                                    
     at  risk of  loss  of  life or  limb.  In other  words,                                                                    
     transportation  is  only  funded  when a  trip  to  the                                                                    
     emergency  room  is  needed. However,  Medicaid  offers                                                                    
     travel benefits  that will  allow earlier  detection of                                                                    
     illness    and   preventative    measures.   Innovative                                                                    
     Solutions  Medicaid  expansion  and  reform  offer  the                                                                    
     greatest opportunity  to plant the seeds  and implement                                                                    
     innovative  solutions.  In  collaboration  between  the                                                                    
     State  of   Alaska  and  the   ATHS,  there   are  true                                                                    
     opportunities  to develop  savings. 100%  FMAP: From  a                                                                    
     tribal perspective,  Medicaid Expansion would  create a                                                                    
     tremendous   opportunity   to  allow   newly   eligible                                                                    
     beneficiaries  to  receive  services  where  100%  FMAP                                                                    
     continues to  apply. In doing  this, the  Tribal system                                                                    
     would  have  increased  resources  to  provide  greater                                                                    
     access  and a  higher  level of  health care  delivery.                                                                    
     This expanded capacity will  create healthier lives and                                                                    
     safer communities across  the state. Uncompensated care                                                                    
     waiver: Other states with  large ANAIs populations that                                                                    
     cut  back   their  Medicaid   program  due   to  budget                                                                    
     shortfalls  helped to  overcome that  shortfall working                                                                    
     with  tribes  and CMS  to  develop  1115 waivers  under                                                                    
     which Indian  health provider  types were  approved and                                                                    
     could be compensated for a  different array of services                                                                    
     (and  sometimes  eligibility   categories)  than  other                                                                    
     providers.  And 100%  FMAP will  remain for  ANAIs even                                                                    
     after  the  FMAP  rate  for   others  decline  to  90%.                                                                    
     Transportation  and  accommodation  waiver:  Alaska  is                                                                    
     highly  unique given  its vast  size, disconnected  (by                                                                    
     road) village  communities, and cohesive  Alaska Tribal                                                                    
     Health System. Medicaid expansion  and reform offers an                                                                    
     opportunity to  leverage these attributes  by designing                                                                    
     reimbursement  model  that  fits our  system  of  care.                                                                    
     Expanding  Medicaid  now  will  save  lives.  Expanding                                                                    
     Medicaid now will save lives  and dollars. It will also                                                                    
     create job opportunities in rural  Alaska during a time                                                                    
     when  many industries  are cutting  back on  hiring. It                                                                    
     will provide  the safety net  so those who  become sick                                                                    
     don't risk  losing everything.  It will  improve access                                                                    
     and  provide  for   proactive  approaches  and  support                                                                    
     innovation. Our  decisions today  will not  only impact                                                                    
     our  lives,   but  those  of   our  children   and  our                                                                    
     grandchildren. Please pass HB 148.                                                                                         
3:13:05 PM                                                                                                                    
LOUISE  DEKREON-WATSJOLD, St.  Anthony Catholic  Parish, informed                                                               
the committee  that St. Anthony  Parish is a member  of Anchorage                                                               
Faith  &  Action  Congregations  Together  (AFACT),  which  is  a                                                               
federation of 15 churches representing  about 8 denominations and                                                               
10,000  residents throughout  the Anchorage  area.   Ms. Dekreon-                                                               
Watsjold said  AFACT represents a  typical Alaska  demographic of                                                               
ethnicities,  nationalities,   education  levels,  socio-economic                                                               
levels,  political  affiliations,   and  non-affiliations.    The                                                               
organization  has a  common belief  in the  inherent dignity  and                                                               
worth of  human beings.   Members of  AFACT have  extended family                                                               
throughout the state, and have  been working with legislators and                                                               
others to explain the effects  of the Medicaid gap, which affects                                                               
those who have no access to  Medicaid and no access to the health                                                               
exchange  marketplaces.   She said  this situation  denies health                                                               
care  coverage, which  is a  basic right  for most  citizens, and                                                               
puts those affected, through no fault  of their own, on the wrong                                                               
side  of  the   law.    Ms.  Dekreon-Watsjold   stated  that  one                                                               
alternative  idea to  Medicaid expansion  is  to provide  medical                                                               
care through  neighborhood clinics and health  centers.  However,                                                               
these services  are limited to  primary care and cannot  meet the                                                               
needs of many.  Another  alternative suggestion is for physicians                                                               
to  donate  their time,  which  is  an unreasonable  expectation.                                                               
Finally, it was  suggested that churches should step  in, and she                                                               
assured  the committee  that churches  are  already involved  and                                                               
have been  for two  years; for example,  in 2013,  AFACT produced                                                               
4,000  copies of  a Medicaid  informational  booklet on  Medicaid                                                               
expansion, gave 800 presentations  on the subject in communities,                                                               
and repeatedly  contacted elected  officials.   She characterized                                                               
the  foregoing   alternative  ideas  as  limited   in  scope  and                                                               
unrealistic, and urged for Medicaid  expansion this session.  Ms.                                                               
Dekreon-Watsjold provided AFACT's mission statement.                                                                            
3:17:37 PM                                                                                                                    
MARY  VALLEJO  BLOES,  Anchorage  Faith  &  Action  Congregations                                                               
Together (AFACT),  stated she was  speaking out of  concern about                                                               
the Patient Protection and Affordable  Care Act (PPACA) including                                                               
coverage  for everyone.   Ms.  Bloes said  she is  an 83-year-old                                                               
widow and has been  an Alaska resident for 55 years.   Her son is                                                               
45, has  worked all of his  life, and was suddenly  stricken with                                                               
severe depression.   In July  2014, he was denied  coverage under                                                               
PPACA and was referred to coverage  under Medicaid.  It was eight                                                               
months  before   she  was  notified  that   his  application  was                                                               
received.  During the delay, Ms.  Bloes paid for counselling by a                                                               
psychologist   and  sought   treatment   through  the   Anchorage                                                               
Community Health  Center; however,  she said,  "it's not  what he                                                               
needs,  really."   Ms.  Bloes stated  that  countless people  are                                                               
suffering,  although  she   acknowledged  that  legislators  must                                                               
follow the  [Alaska State Constitution]  and are working  hard to                                                               
ensure  programs are  not abused.    She urged  the committee  to                                                               
remember the law of compassion.                                                                                                 
3:21:21 PM                                                                                                                    
KATE   BURKHART,  Executive   Director,   Alaska  Mental   Health                                                               
Board/Advisory Board  on Alcoholism  and Drug Abuse,  Division of                                                               
Behavioral  Health,  Department  of Health  and  Social  Services                                                               
(DHSS),  informed the  committee  that the  Alaska Mental  Health                                                               
Board and  the Advisory Board  on Alcoholism and Drug  Abuse, the                                                               
state's planning councils for behavioral  health, support HB 148.                                                               
Adults without  dependent children are not  eligible for Medicaid                                                               
unless   qualified   as   disabled   by   the   Social   Security                                                               
Administration,  which is  very difficult,  especially for  those                                                               
experiencing  mental illness.    In  addition, DHSS  constituents                                                               
experiencing a  primary disability  related to a  substance abuse                                                               
disorder are not eligible for  disability benefits.  Ms. Burkhart                                                               
advised that  many adults  in Alaska  who are  disabled due  to a                                                               
serious and chronic behavioral  health disorder, cannot currently                                                               
access  Medicaid.   Medicaid  expansion  in HB  148  is based  on                                                               
indigence  and  not on  a  categorical  eligibility, which  would                                                               
allow  the  aforementioned  sector  access to  healthcare.    She                                                               
stressed that  access to  health care has  been shown  to prevent                                                               
recidivism  in  those  returning  to  a  community  from  prison,                                                               
therefore,  expanding Medicaid  is not  only an  issue of  health                                                               
care  but  is also  a  factor  to  reduce costs  across  systems,                                                               
including [the Department of Corrections].                                                                                      
REPRESENTATIVE  TARR  asked for  a  description  of some  of  the                                                               
conditions of substance use disorder.                                                                                           
MS. BURKHART  offered to  provide the committee  a memo  with the                                                               
requested information.                                                                                                          
3:25:06 PM                                                                                                                    
TANEEKA  HANSEN,  Staff  to Representative  Paul  Seaton,  Alaska                                                               
State  Legislature, read  the testimony  submitted by  email from                                                               
Sharon Whytal as follows [original punctuation provided]:                                                                       
     Dear  Committee  members:   Please  read  my  following                                                                    
     comments into the record. As  a recently retired Public                                                                    
     Health Nurse  and an  ongoing participant  in community                                                                    
     health improvement planning, I  am writing to encourage                                                                    
     your full support for HB  148; I am delighted that this                                                                    
     bill  has  been  so  well  crafted  and  that  you  are                                                                    
     considering it. Gov.  Walker, Commissioner Davidson and                                                                    
     many  others have  worked hard  to make  this a  viable                                                                    
     option  for Alaska,  both financially  and to  increase                                                                    
     access  to health  care for  vulnerable populations  in                                                                    
     our state. Even more in  this time of budget shortfall,                                                                    
     AK  is overdue  to take  advantage of  this opportunity                                                                    
     for  sharing   of  large  health  care   expenses  with                                                                    
     rightful  federal  assistance.   There  will  be  other                                                                    
     improvements  in funding  and  affordability of  health                                                                    
     care in  the future;  this bill creates  solutions now.                                                                    
     It  is  absolutely  imperative   that  we  address  the                                                                    
     inequities in  present access  to healthcare,  and this                                                                    
     bill extends  coverage to many  of our working  poor or                                                                    
     otherwise  disadvantaged Alaskans  who, with  access to                                                                    
     health can  live productive,  fulfilling lives.  I urge                                                                    
     you to pass this bill immediately.                                                                                         
3:26:28 PM                                                                                                                    
RANDI SWEET,  Spokesperson, United Way of  Anchorage, stated that                                                               
Alaska  is  at  a  crossroads between  having  the  world's  most                                                               
expensive health  care system,  even as  some are  without health                                                               
insurance,  and  taking the  opportunity  to  improve the  Alaska                                                               
health  care  system  and  provide  coverage  for  more  Alaskans                                                               
through  Medicaid reform  and  expansion.   A  place for  regular                                                               
medical, behavioral,  and oral health  care enables  all Alaskans                                                               
to  maintain good  health, along  with  childhood screenings  and                                                               
immunizations  to  catch and  treat  disease  early.   Ms.  Sweet                                                               
advised  that  the cost  of  routine  treatment in  an  emergency                                                               
department  is paying  "high dollars"  for  less effective  care.                                                               
Reducing care in hospitals will  reduce the cost of uncompensated                                                               
care in hospitals  and community health centers, will  add to the                                                               
revenue  stream needed  to sustain  the health  care system,  and                                                               
will reduce the cost of insurance  premiums for all.  She advised                                                               
that the lost  revenue from delaying Medicaid  expansion would be                                                               
put  to  better use  to  cover  more Alaskans,  improve  Alaska's                                                               
health  care system,  and offset  current budget  expenses.   Ms.                                                               
Sweet said  HB 148 has broad  support in Alaska and  provides the                                                               
framework   for   Medicaid   reform,   Medicaid   expansion   and                                                               
accountability,   and  urged   for   its   passage  during   this                                                               
legislative session.                                                                                                            
3:30:41 PM                                                                                                                    
JOHN LAUX disclosed  he is a member of the  board of directors of                                                               
the  Anchorage  Health  and  Human  Services  Commission,  Alaska                                                               
Volunteers of America, and the  Alaska Public Health Association,                                                               
and  a member  of the  American Public  Health Association.   Mr.                                                               
Laux is also a health care  consultant, and was testifying on his                                                               
own  behalf.   His personal  experience as  a former  employee of                                                               
DHSS is  that the Alaska  Medicaid program is  barely functional.                                                               
Although  generally  supportive  of the  principles  of  Medicaid                                                               
expansion, Mr.  Laux said the  ethical and moral action  would be                                                               
successful Medicaid expansion, and  he questioned how Alaska will                                                               
reinforce  DHSS  in its  failed  state  in  order to  expand  the                                                               
Medicaid system.   Mr. Laux said he was  reserving judgement, and                                                               
urged for more discussion on  how Medicaid expansion will be done                                                               
CHAIR  SEATON  advised  that the  proposed  legislation  includes                                                               
Medicaid reform to accompany Medicaid expansion.                                                                                
3:33:36 PM                                                                                                                    
DAVE MORGAN  informed the  committee he  has had  experience with                                                               
Medicaid  and  Medicare reimbursement  for  31  years during  his                                                               
positions  as  the former  chair  of  the municipal  health  care                                                               
commission, a  member of the  Alaska Health Care  Commission, and                                                               
as a  fellow of the Healthcare  Financial Management Association.                                                               
He has been acknowledged for  his 25 years of providing resources                                                               
by  the Alaska  Primary  Care  Association.   He  worked for  the                                                               
Southcentral   Foundation  and   Providence  Hospital,   and  his                                                               
educational   background  is   in  health   care  economics   and                                                               
accounting.   Mr. Morgan said HB  148 would bring a  new criteria                                                               
of  single individuals,  aged 21-63  years and  without children,                                                               
into a new  category with 100 percent  Federal Medical Assistance                                                               
Percentage (FMAP).   Otherwise, the bill  contains little change,                                                               
reform,  or  action  to  contain health  care  costs  or  improve                                                               
processing, but is  an addition to the  current Medicaid program.                                                               
Individuals still  have to enroll  through a provider,  which can                                                               
only bill for covered services.   Processing is still through the                                                               
Xerox Health  Enterprise Medicaid Management  Information System,                                                               
which is currently  in arbitration with the state.   He expressed                                                               
concern  about the  amount  of time  presently  needed to  enroll                                                               
individuals who are  qualified for regular Medicaid.   Mr. Morgan                                                               
turned to  the "gap population"  and noted that about  40 percent                                                               
get  coverage from  Indian Health  Services (IHS);  in fact,  the                                                               
Internal  Revenue Service  has ruled  that IHS  beneficiaries are                                                               
not penalized and  their benefits are treated  as insurance, thus                                                               
the  gap  population  is  smaller.    He  acknowledged  the  bill                                                               
provides  reforms  and  activities  to improve  the  delivery  of                                                               
services and  contain costs;  however, the  only date  certain is                                                               
for a  report related to  a health care  tax.  He  suggested that                                                               
the committee  review related information provided  by the Alaska                                                               
State  Hospital  and Nursing  Home  Association  (ASHNA) and  the                                                               
Office of Management & Budget.                                                                                                  
3:40:21 PM                                                                                                                    
WIL THEUER  said he was in  support of the expansion  of Medicaid                                                               
and  reform in  Alaska based  on the  recovery of  costs and  the                                                               
consistency of  delivery.  He  yielded the remainder of  his time                                                               
to testify to Fr. Fred Bugarin.                                                                                                 
3:41:31 PM                                                                                                                    
FRED BUGARIN,  Pastor, St.  Anthony Parish,  and board  member of                                                               
Anchorage Faith  & Action Congregations Together  (AFACT), stated                                                               
that  seven  members of  AFACT  from  five congregations  are  on                                                               
record   in  support   of  Medicaid   expansion.     Fr.  Bugarin                                                               
acknowledged that the  committee is very busy  and introduced the                                                               
other AFACT members in attendance.                                                                                              
3:43:39 PM                                                                                                                    
BOB  RUPKEY   (ph),  Anchorage   Faith  &   Action  Congregations                                                               
Together,  said  he  has  been  an  insurance  adjuster  handling                                                               
liability claims  for 45 years.   Mr. Rupkey said  many claimants                                                               
do  not have  insurance because  they cannot  afford coverage  or                                                               
coverage  is  not  provided  by   their  employer,  and  Medicaid                                                               
expansion would help those without insurance.                                                                                   
3:45:03 PM                                                                                                                    
PAUL SHERRY said he was a  40-year resident and was testifying on                                                               
his own  behalf.  Mr.  Sherry said he  has worked in  health care                                                               
management in Alaska  for many years.  He said  he supported [HB]                                                               
148  because  it provides  better  access  to  care for  about  5                                                               
percent of the population, is  beneficial to a sustainable health                                                               
care  workforce,   reduces  the  uncompensated  care   burden  on                                                               
hospitals, is beneficial to the  tribal health system, and allows                                                               
for investments in preventative care  that will reduce the higher                                                               
cost of  care later  in life.   In  addition, the  bill increases                                                               
access  to behavioral  health and  assisted living.   Mr.  Sherry                                                               
pointed  out the  bill's "trickledown  effect"  on air  services,                                                               
restaurants, taxis,  and hotels due to  the transportation aspect                                                               
of  Medicaid coverage.   The  bill  is supported  by the  public,                                                               
unions, chambers  of commerce, the hospital  industry, the Native                                                               
community,  and the  faith community.    Mr. Sherry  acknowledged                                                               
that the Medicaid system needs  improvement and he encouraged the                                                               
committee  to  pursue  with   DHSS  strategies  for  improvement;                                                               
however, his  experience is  that the system  meets the  needs of                                                               
many Alaskans.   Finally, he said  this is a good  use of federal                                                               
tax dollars and an intelligent investment by the state.                                                                         
3:47:40 PM                                                                                                                    
LUKE HOPKINS,  Mayor, Fairbanks North  Star Borough,  referred to                                                               
previous  testimony  by  Medicaid   service  providers  who  have                                                               
experienced  exclusions to  medical care  coverage and  financial                                                               
program  costs,  and  said  these  are  real  situations  in  the                                                               
Fairbanks community.   Mayor Hopkins noted  that "17 resolutions"                                                               
address  the issues  of reducing  uncompensated costs  to medical                                                               
providers,  creating new  jobs across  Alaska, and  allowing many                                                               
Alaskans to  seek medical care  and avoid hospital  charity care.                                                               
One  resolution  is  supported by  19  social  service  executive                                                               
directors  and seeks  to "fix  and clear  some of  the backlogs,"                                                               
accept  the federal  money for  Medicaid  expansion, and  approve                                                               
supplemental funding  for Medicaid expansion administration.   If                                                               
the  projected  savings of  $6  million  for  the first  year  is                                                               
correct,  he  said,  "We  should  be  after  that."    There  are                                                               
resolutions  of support  from  across the  state.   Alaska  seeks                                                               
federal dollars  for highways, for  landfill operations,  and for                                                               
sewer and water systems, and  Alaskans need this coverage.  Mayor                                                               
Hopkins stated his hope that  amendments addressing the number of                                                               
audits and reform  issues would be added to  the legislation, and                                                               
he urged that the bill move this year.                                                                                          
3:50:57 PM                                                                                                                    
JEANNETTE  GRASTCO,   President,  National  Alliance   on  Mental                                                               
Illness (NAMI),  stated that NAMI of  Fairbanks supports Medicaid                                                               
expansion  and  reform  because it  is  ethically,  morally,  and                                                               
financially  the  right  thing  to  do.   The  bill  would  allow                                                               
Alaskans access to  physical and mental healthcare,  many of whom                                                               
do  not have  access  now.   Ms.  Grastco  pointed  out the  most                                                               
economical and  effective health  care is  provided at  the local                                                               
level.   When local care is  unavailable, it must be  provided by                                                               
institutional  settings   which  are  more  expensive,   such  as                                                               
emergency  rooms,  hospitals,  and  corrections.    Institutional                                                               
settings are  very expensive and  care comes at a  delayed state.                                                               
Ms. Grastco advised that treatment  for mental illness leads to a                                                               
better quality  life and enables  one to work and  be productive.                                                               
Suffering a  mental illness doesn't  necessarily mean one  is not                                                               
productive  unless   medical  care   is  not   available  through                                                               
insurance.  She  stated that her intent is for  the federal taxes                                                               
she pays  to be invested  in Alaskans.  Ms.  Grastco acknowledged                                                               
that billing Medicaid  is not an easy system;  however, the Xerox                                                               
system is improving, and she  encouraged the committee to support                                                               
HB 148.                                                                                                                         
3:54:15 PM                                                                                                                    
SHEILA SMITH,  Licensed Clinical  Social Worker  (LCSW), informed                                                               
the committee she  has been a mental health provider  for over 20                                                               
years,  providing  services  to adults,  families,  and  couples,                                                               
including  the chronically  mentally  ill.   Ms. Smith  addressed                                                               
[proposed Section 6] to authorize  a provider tax to offset costs                                                               
of  the  Medicaid  program.     She  said  this  provision  would                                                               
discourage   proficient  and   highly  qualified   mental  health                                                               
professionals  from  participation  because  providers  are  paid                                                               
below  insurance reimbursement  rates,  and a  tax would  further                                                               
reduce  payment  rates.    She  directed  attention  to  proposed                                                               
Section 3(a), and noted that  a mental health investigator should                                                               
be  looking at  patient  records  - or  audits  should include  -                                                               
treatment  goal,  type   of  psychotherapy  treatment,  estimated                                                               
length  of  treatment,  and evidenced-based  treatment  outcomes.                                                               
The  question for  auditors  should be  whether  the provider  is                                                               
effective,  which would  lead  to fewer  treatments.   Ms.  Smith                                                               
pointed  out that  therapy  is  psychotherapy, not  pharmacology.                                                               
Pharmacology  may  reduce  symptoms,   but  does  not  treat  the                                                               
underlying  illness.    Turning  to proposed  Section  4(b),  she                                                               
advised  that  overpayments  should  be  prevented  by  reviewing                                                               
claims  as  they  are received;  in  fact,  competent  clinicians                                                               
should have  no objection to  accountability for treatment.   She                                                               
questioned whether  successful practitioners would be  willing to                                                               
work far below market rates,  as suggested in proposed Section 9,                                                               
and this  provision would attract unskilled  providers.  Proposed                                                               
Section 10 seeks an increase  in federal match, and she cautioned                                                               
that  if  federal  funds  dry  up the  state  would  be  fiscally                                                               
responsible.  Ms.  Smith opined cost savings  by telemedicine was                                                               
only considered because there is a fiscal crisis.  She remarked:                                                                
     If  a project  or  program is  suddenly unnecessary  in                                                                    
     tight  financial times,  then  it  is unnecessary  when                                                                    
     implemented  in good  times.   Here is  the reality  of                                                                    
     mental  health  in Fairbanks:    There  are not  enough                                                                    
     mental  health agencies  or  independent mental  health                                                                    
     providers in  Fairbanks.   (2) Of  those, many  are not                                                                    
     qualified to treat families,  couples, or children, let                                                                    
     alone the chronically mentally ill.   (3) Only a couple                                                                    
     of clinics  or agencies accept Medicaid  ... those that                                                                    
     do  are backlogged  or  have established  accessibility                                                                    
     criteria that  would exclude  many who  are in  need of                                                                    
     mental health services.                                                                                                    
MS. SMITH concluded  that there is the appearance  of helping the                                                               
disadvantaged,  in  contrast  with  the  reality  of  effectively                                                               
providing services  needed.   If Fairbanks  does not  have mental                                                               
health providers, there is no value in Medicaid expansion.                                                                      
3:59:35 PM                                                                                                                    
RICHARD ROBB  disclosed he is the  mayor for the City  of Bethel,                                                               
but is testifying  on his own behalf.  In  addition, he works for                                                               
the  Yukon-Kuskokwim  Health  Corporation   as  the  director  of                                                               
residential services.  Mr. Robb  expressed his support for HB 148                                                               
and Medicaid  expansion, and encouraged  legislators to  pass the                                                               
bill.   Medicaid expansion would  save the state money,  bring in                                                               
federal  revenues,  create  jobs,   reduce  dependence  on  state                                                               
grants, and  provide insurance for  about 40,000 Alaskans.   Most                                                               
of the  expansion is paid for  by the federal government,  is 100                                                               
percent reimbursed for the first  year, and will be maintained at                                                               
90 percent federally funded.   Mr. Robb relayed that expansion is                                                               
estimated to save  the state $6.5 million and bring  to the state                                                               
$148  million in  federal funding  in the  first year.   Further,                                                               
Medicaid expansion  is estimated to  create 4,000 jobs  in Alaska                                                               
and  save  the state  grant  funding  to medical  and  behavioral                                                               
health programs.   He acknowledged  that Medicaid expansion  is a                                                               
political  hot  potato  and  very  unpopular  in  some  political                                                               
circles; however,  as a registered Libertarian  elected to public                                                               
office, he has learned to  put political ideology aside in public                                                               
service.   Although  there may  be political  risk for  many, Mr.                                                               
Robb encouraged the committee to support Medicaid expansion.                                                                    
4:02:54 PM                                                                                                                    
LACEY KEIL  said she has been  a health care professional  for 10                                                               
years  and   expressed  her   support  for   Medicaid  expansion.                                                               
Recently,   the   local   hospital   reported   that   in   2014,                                                               
approximately  $1.9  million [she  later  e-mailed  a request  to                                                               
correct  this amount  to $1.6  million] was  spent on  charitable                                                               
care.   This deficit  endangers the ability  of the  community to                                                               
maintain  local  healthcare;   therefore,  combining  reform  and                                                               
Medicaid expansion improves  the community's financial viability,                                                               
and would  ensure affordable and  accessible health care  for its                                                               
REPRESENTATIVE TARR  asked which  hospital reported the  loss due                                                               
to charity care.                                                                                                                
MS. KEIL answered Seward [Community Health] Center.                                                                             
4:04:11 PM                                                                                                                    
KATHLEEN  YARR  expressed   agreement  with  previous  testifiers                                                               
Jeannette Grastco, Paul Sherry,  Kate Burkhart, and David Morgan.                                                               
Ms. Yarr said  she was originally against  Medicaid expansion but                                                               
now realizes  it is  in the  best interest of  Alaskans.   In her                                                               
experience  as a  drug and  alcohol counselor,  she advised  that                                                               
getting people  into substance abuse treatment  immediately after                                                               
they have  experienced a crisis  is critical; in fact,  any delay                                                               
in time is detrimental to patients.                                                                                             
4:05:32 PM                                                                                                                    
DAVID OTNESS  said he was  testifying as  a person caught  in the                                                               
middle of  this issue because he  is one year short  of receiving                                                               
Medicare, and  cannot afford health insurance  premiums as health                                                               
issues  have caused  him  to  take Social  Security  early.   Mr.                                                               
Otness was  a commercial fisherman  with health care  provided by                                                               
the   Fisherman's  Fund,   [Department  of   Labor  &   Workforce                                                               
Development] and the  U.S. Public Health Service.   This coverage                                                               
was  provided because  watermen and  their vessels  are available                                                               
for the  country's defense if called  upon.  However, at  the age                                                               
of 27,  he was  injured and  admitted to  the U.S.  Public Health                                                               
Service   hospital    in   Seattle   for   an    extended   time.                                                               
Unfortunately,  Seaman's   coverage  was   ended  after   he  was                                                               
diagnosed with a  chronic disease.  Mr.  Otness' diagnosis placed                                                               
him in a high-risk category  for insurance, and his medical bills                                                               
led to  the loss  of fishing boats,  his home,  and opportunities                                                               
for fishing  permits and individual fishing  quotas (IFQs) during                                                               
his  career  as   a  third  generation  fisherman.     Under  the                                                               
protection of  union-sponsored medical coverage and  Medicaid, he                                                               
received lifesaving surgeries.  Mr.  Otness opined that since the                                                               
early  '80s,  citizens  have  had a  drastic  erosion  of  social                                                               
support  systems that  were once  provided by  income taxes.   He                                                               
cautioned  against  the  rise  of  both  the  Military-Industrial                                                               
Complex and the medical insurance complex.                                                                                      
CHAIR SEATON  suggested Mr. Otness  provide the remainder  of his                                                               
testimony  in  written form,  and  asked  if  he was  correct  in                                                               
assuming that Mr. Otness supported Medicaid expansion.                                                                          
MR. OTNESS said correct.                                                                                                        
4:10:21 PM                                                                                                                    
DEROTHA FERRARO,  Director, Public  Relations &  Marketing, South                                                               
Peninsula  Hospital, stated  that South  Peninsula Hospital  is a                                                               
small critical  access hospital in  Homer.  Ms. Ferraro  said the                                                               
hospital's  board of  directors recently  passed a  resolution in                                                               
support  of  Medicaid  expansion.   She  advised  that  in  South                                                               
Peninsula  Hospital's  service  area,  Medicaid  expansion  would                                                               
result  in  over 1,300  residents  being  eligible for  coverage,                                                               
which could make  a difference in their lives,  in the population                                                               
of the  hospital's service area,  and in  the ability of  a small                                                               
community  hospital  to meet  its  mission  and stay  financially                                                               
viable.   Last  year the  hospital provided  $2.4 million  in bad                                                               
debt  and charity  care,  thus  having even  a  small portion  of                                                               
currently   uninsured  residents   getting  insurance   could  be                                                               
significant.   Furthermore, Homer's  2009 community  health needs                                                               
assessment identified  "access to  care" as the  most significant                                                               
issue facing  residents, and expanding  Medicaid would  assist in                                                               
this  effort.   Ms. Ferraro  said small  hospitals are  tasked to                                                               
succeed during times of increased  expenses, reduced income, cuts                                                               
to Medicare  reimbursement, and additional costs  required by the                                                               
PPACA.   Finally, Medicaid expansion  will provide  many benefits                                                               
to the state, communities, hospitals, and to beneficiaries.                                                                     
4:13:19 PM                                                                                                                    
CHARLES  BINGHAM said  he was  a  45-year Alaska  resident.   Mr.                                                               
Bingham  expressed  his  support of  Medicaid  expansion  because                                                               
there are many people "living  on the margins," especially in the                                                               
rural  communities,  who may  not  be  able to  afford  insurance                                                               
premiums.   Medicaid expansion was meant  to be a key  element in                                                               
PPACA, but  was lost through a  U.S. Supreme Court decision.   As                                                               
an  individual, Mr.  Bingham said  he is  currently working  on a                                                               
contract position  that ends  soon, and  he could  become someone                                                               
who  qualifies   for  Medicaid.     He  described   his  personal                                                               
experience  as a  diabetic seeking  insurance under  PPACA.   The                                                               
Sitka Community Hospital  also has a high level  of charity care,                                                               
and  would  benefit  from  100  percent  to  90  percent  federal                                                               
reimbursement.   He  restated the  benefits of  Medicaid such  as                                                               
access  to  behavioral  health, substance  abuse  treatment,  and                                                               
emergency medical evacuation services.   Mr. Bingham restated his                                                               
desire  to see  Alaskans receive  the full  benefit of  ACA.   He                                                               
disclosed  that   he  previously  worked  for   Southeast  Alaska                                                               
Regional Health Consortium but was testifying on his own behalf.                                                                
4:16:23 PM                                                                                                                    
ROBIN  MENARD, Spokesperson,  Mat-Su Health  Foundation, reminded                                                               
the committee  that the majority  of those who would  be eligible                                                               
for Medicaid  expansion are  the working poor;  in fact,  over 40                                                               
percent are working at jobs that  do not pay enough for a subsidy                                                               
to buy  insurance, but who  are required  to have insurance.   In                                                               
addition, Medicaid "puts them on  a path to self-sufficiency" and                                                               
to obtain health care before health  issues become a crisis.  Ms.                                                               
Menard  said accepting  federal dollars  in this  issue does  not                                                               
differ from federal money accepted  for other projects throughout                                                               
4:18:19 PM                                                                                                                    
ANNETTE  ALFONSI informed  the committee  that about  three years                                                               
ago she  sustained a  traumatic brain  injury and  other physical                                                               
injuries  as the  result of  an automobile  accident.   Traumatic                                                               
brain  injury  (TBI)   is  now  recognized  to   be  a  medically                                                               
manageable  chronic  physical  condition, and  victims  can  work                                                               
every  day   with  adequate  medical  management.     Before  the                                                               
accident,  Ms. Alfonsi  held a  good  job with  benefits and  had                                                               
never used  services.  Presently,  she lives with her  mother and                                                               
has personal  insurance; however, her personal  insurance company                                                               
is dissolving at the  end of this year.  Ms.  Alfonsi said she is                                                               
currently  unable  to work,  but  is  improving with  appropriate                                                               
treatment.   Medicaid expansion  is the bridge  to enable  her to                                                               
again contribute  to Alaska's economy and  reenter the workforce.                                                               
At the  end of this year,  Medicaid will be needed  to manage her                                                               
condition so that  she can get and keep employment.   Ms. Alfonsi                                                               
said she  is in her  20s, and the  treatment she receives  now is                                                               
critical for her  future success and opportunities,  or she could                                                               
"fall  through the  cracks, deteriorate,  and become  permanently                                                               
dependent  on state-funded  services."   Ms. Alfonsi  pointed out                                                               
that   one  with   uncontrolled   diabetes   could  not   sustain                                                               
employment, and her condition  also requires medical maintenance.                                                               
She suggested that  expanding Medicaid is a  great opportunity to                                                               
allow residents  crucial access to  medical care  while gathering                                                               
data  - at  no  financial  obligation for  the  state  - so  that                                                               
Medicaid reform can be addressed next session.                                                                                  
4:21:41 PM                                                                                                                    
MARY MINOR said  in December 2008 she was working  at a clinic in                                                               
Fairbanks, and  paid $400 per  month for health insurance  with a                                                               
$3,000  deductible.   She was  in her  early 50s  with no  health                                                               
issues when  she sustained  a skiing  accident and,  after paying                                                               
her deductible,  her insurance paid  less than $10.   However, in                                                               
2009 her  insurance premiums increased  to $800 per month  with a                                                               
$5,000  deductible.   Ms. Minor  said  her knee  injury ended  up                                                               
costing  her  $60,000.   In  2010,  she  could no  longer  afford                                                               
insurance until  she recently got  insurance through PPACA.   Her                                                               
premiums  are now  $22 for  health insurance  and $38  for dental                                                               
insurance, however,  she is  now unemployed.   At this  time, she                                                               
does not  fear bankruptcy due  to illness  or injury.   Ms. Minor                                                               
agreed with  legislators' concerns about waste,  fraud, and abuse                                                               
of the  health care  system, but  noted that  this is  a separate                                                               
issue.   The  charges made  by  hospitals are  unrelated to  what                                                               
items cost; in fact, 60  percent of personal bankruptcies in 2013                                                               
were due  to medical  bills, and insurance  companies do  not pay                                                               
actual costs  because of  their agreements  with providers.   Ms.                                                               
Minor acknowledged  that containing costs is  difficult; however,                                                               
Medicaid  expansion  can  address  those  who  are  in  difficult                                                               
4:25:30 PM                                                                                                                    
RUTH  WOOD stated  that she  doesn't  work in  the mental  health                                                               
industry.   She  reported that  she  pays $1,000  each month  for                                                               
health  insurance with  a $5,000  deductible.   She said  she was                                                               
fortunate for  her good health  and that she could  afford health                                                               
insurance.  She  indicated that she did not try  to switch health                                                               
care options  to obtain additional  deductions since she  will be                                                               
on Medicare soon.   She offered her belief that  good health care                                                               
was  a basic  need, and  nothing is  more important  than health,                                                               
food, shelter, and  family, so it would be  unconscionable not to                                                               
have Medicaid expansion.  She  stated that she pays federal taxes                                                               
and there  are not any  federal funds  she would rather  see than                                                               
Medicaid expansion.   She  offered that even  though it  does not                                                               
personally affect  her, it was so  important to her that  she was                                                               
willing to listen in  for an hour and a half  in order to testify                                                               
today.   She concluded  by stating  that [Medicaid  expansion] is                                                               
very critical, the state needs to  do so, and should have done so                                                               
4:27:35 PM                                                                                                                    
MIKE COONS  stated that he  is a  retired paramedic and  U.S. Air                                                               
Force  non-commissioned officer  so  he  has observed  socialized                                                               
medicine.   He  indicated that  he previously  sent an  e-mail in                                                               
opposition to HB  148.  He stated that many  charitable cases are                                                               
emergency room cases,  in fact, as a paramedic,  he observed that                                                               
approximately  99  percent of  the  minor  cases treated  at  the                                                               
emergency room  were Medicaid  patients.   He offered  his belief                                                               
that  nothing will  make these  people go  to a  medical provider                                                               
since it seemed easier for them to  go to the emergency room.  He                                                               
said he  liked Representative  Seaton's amendment  requiring [the                                                               
state]  to  establish  a primary  care  case  management  system;                                                               
however,  he  cautioned  that  the  state  needs  to  manage  the                                                               
emergency  room care  usage by  Medicaid patients.   Further,  he                                                               
agreed with Representative Vazquez's  amendment since he believes                                                               
that fraud "needs to be hammered  and hammered hard."  He related                                                               
that  as  a  veteran  it   takes  six  months  for  the  Veterans                                                               
[Benefits] Administration,  U.S. Department of  Veterans Affairs,                                                               
to  pay his  doctor, which  he  thought was  much too  long.   He                                                               
referred  to  the  projection  of  4,000  new  medical  jobs  and                                                               
predicted  that doctors  will drop  Medicare patients  since they                                                               
will derive more money from  Medicaid than they do from Medicare.                                                               
He further predicted that the  additional taxes will be passed on                                                               
to paying  patients, which  will increase  the cost  of medicine.                                                               
He concluded  by stating  that he didn't  mind helping  those who                                                               
can't help themselves fully, but  he was tired of handouts versus                                                               
"hand-ups" so he  urged members to vote no  on Medicaid expansion                                                               
and on HB 148.                                                                                                                  
CHAIR SEATON  clarified that the  jobs created were not  just for                                                               
the health care field.   He said the 4,000 new  jobs was based on                                                               
the  number of  jobs generated  for every  $10 million  the state                                                               
receives in  federal funds and  does not mean 1,000  primary care                                                               
doctors each hiring three other people.                                                                                         
4:32:20 PM                                                                                                                    
ELIZABETH  RIPLEY, Executive  Director, Mat-Su  Health Foundation                                                               
(MSHF), stated  that the foundation  "has a foot in  both worlds"                                                               
since  it co-owns  the hospital  that takes  care of  people when                                                               
injury and  illness are not prevented.   It also makes  grants to                                                               
make a  measurably healthier  Mat-Su population.   She  said that                                                               
the state is  at the apex of health care  reform.  The foundation                                                               
believes  it  is  possible,  and   the  foundation  brings  data,                                                               
analysis, and new perspectives to  help achieve the triple aim in                                                               
the  Mat-Su area,  which includes  better  care for  individuals,                                                               
better health for  populations, and lower per-capita  costs.  She                                                               
said the Mat-Su Health Foundation  strongly urges members to pass                                                               
HB 148  since it  takes steps  toward meaningful  Medicaid reform                                                               
for  a  more  sustainable  Medicaid   program,  it  would  expand                                                               
Medicaid  for the  benefit of  Alaskans and  the economy,  and it                                                               
would help achieve  the triple aim.  The  MSHF recently published                                                               
a report that  included a deep-dive on  Mat-Su regional emergency                                                               
department  utilization in  2013.   She  previously provided  the                                                               
committee with this data via e-mail.   Clearly, the care of these                                                               
high utilizers  needs to  be managed  more effectively.   Reforms                                                               
built into HB  148 in Section 10  could do this, she  said.  With                                                               
respect  to  the  proposed   amendment,  she  suggested  stronger                                                               
language be added to manage  "super utilizers," in particular, to                                                               
include  sharing   the  savings  with  hospitals   that  have  to                                                               
implement the program.                                                                                                          
MS.  RIPLEY  paraphrased  from written  testimony  [letter  dated                                                               
3/26/15], as follows:                                                                                                           
     Mat-Su  Regional's ED  sees five  times  the number  of                                                                    
     people   with  behavioral   health   issues  than   our                                                                    
     community mental  health center. The  Mat-Su population                                                                    
     nearly  doubled from  50,000  people  to 98,000  people                                                                    
     since 2000 but Mat-Su's  community mental health center                                                                    
     grants from the Department  of Behavioral Health stayed                                                                    
     flat.   State  funding mechanisms  for this  safety net                                                                    
     population literally  drove people to seek  care in the                                                                    
     ED  instead of  in  lower cost  settings.   Instead  of                                                                    
     getting care in a timely  way from our community mental                                                                    
     health center, these folks delayed  care until it was a                                                                    
     crisis and presented to the  ED.  Because they couldn't                                                                    
     pay  the bill  for those  ED services,  the ED  recoups                                                                    
     those dollars by cost-shifting to  other payers and the                                                                    
     Medicaid  expansion would  improve access  to care  for                                                                    
     these behavioral  health issues  and prevent  costly ED                                                                    
     visits.  Medicaid  expansion  would reduce  this  cost-                                                                    
     shifting and  help lower health  care costs  across the                                                                    
     system.  Medicaid reform  would ensure  that we  manage                                                                    
     our costs  and prevent  unnecessary and  preventable ED                                                                    
     visits through  care coordination.  HB 148  takes steps                                                                    
     in  the  right  direction  to  pair  meaningful  reform                                                                    
     measures with  expansion to improve access  to care and                                                                    
     reduce costs. MSHF endorses HB 148.                                                                                        
CHAIR  SEATON  welcomed  suggested  changes  to  the  amendments,                                                               
especially with respect to super utilizers.                                                                                     
4:35:53 PM                                                                                                                    
The committee took an at-ease from 4:35 p.m. to 4:45 p.m.                                                                       
4:45:13 PM                                                                                                                    
ROSS BIELING described his 30-year  background in health care, as                                                               
a  college  graduate  working to  teach  physicians  on  surgical                                                               
stapling procedures,  and currently working for  Medical Bidline,                                                               
which provides orthopedics for hip  and knee implants and in home                                                               
health care.  He said he is also an attorney.                                                                                   
MR.  BIELING  expressed  concern  on  the  structural  issues  in                                                               
Alaska.   First,  the state  has an  unreliable business  partner                                                               
since the  federal government is  $18 trillion in debt.   Second,                                                               
the state has a  big footprint.  The state can  do lots of things                                                               
to address  health care in  the Bush,  such as using  schools for                                                               
clinics  and addressing  out-of-control travel  costs.   He noted                                                               
over $100 million in travel  costs by Alaska Natives traveling to                                                               
Anchorage  in the  past  year  including airfare  and  food.   He                                                               
expressed  concern these  costs could  increase to  $200 million.                                                               
He referred  to an [Alaska]  Health Care Commission  report [from                                                               
the] Parnell [Administration] that  identified inflated costs for                                                               
items such as a $26,000 wheelchair  cost to Bethel, and lifts, as                                                               
well as  undefined actual costs.   He offered that  the challenge                                                               
for the  committee will be  to define reform and  identify detail                                                               
to  achieve a  specific,  measureable, and  reproducible plan  of                                                               
action to  exceed the  financial goals and  markers.   He offered                                                               
his  belief competitive  bidding does  work since  it levels  the                                                               
playing  field for  large and  small providers.   In  closing, he                                                               
said that his  company, Medical Bidline, has  a unique background                                                               
and  provides  expertise  in  orthotic  services,  post-operation                                                               
braces,  medical  equipment,  and surgical  procedures  including                                                               
total   hips,  total   knees,   arthroscopies,  back   surgeries,                                                               
colonoscopies,  podiatry  services,  chiropractic  services,  and                                                               
diagnostic services such as MRIs [magnetic resonance imaging].                                                                  
CHAIR SEATON  thanked Mr. Bieling,  noting the committee  has the                                                               
company's mission statement already.   He suggested a forthcoming                                                               
amendment may address competitive bidding preferences.                                                                          
4:49:39 PM                                                                                                                    
SARAH  KEHOE, PA,  stated she  is  a 24-year  Alaska resident,  a                                                               
physician  assistant,  who  has  worked in  private  practice  in                                                               
Fairbanks  and for  16 years  in the  Upper Susitna  Valley in  a                                                               
community health  center.  She spoke  in support of HB  148, both                                                               
for reform  and expansion, but  not to do  one at the  expense of                                                               
the other.   She expressed concern for the daily  loss of federal                                                               
revenue that  could be  put towards the  health and  wellbeing of                                                               
Alaskans.   She related that she  is British, but is  an American                                                               
who has  lived in Alaska  since 1991.   She has been  a physician                                                               
assistant for  18 years.  In  the past five years  she has worked                                                               
in  care  coordination,  so she  understands  the  concerns  with                                                               
community and  home-based waivers.   She presently works  in case                                                               
management, she said, so she meets  patients every day who are in                                                               
the gap -  hardworking, good Alaskans who  still remain uninsured                                                               
or underinsured.  She urged members  to pass this bill quickly so                                                               
this  plan   can  be  rolled   out  smoothly,   effectively,  and                                                               
efficiently to  help Alaskans.   She  emphasized that  this would                                                               
touch  many Alaskans  and represents  an opportunity  that should                                                               
not  be  missed.    She  would like  to  see  the  $33.5  million                                                               
appropriated for the Susitna-Watana Dam be reappropriated.                                                                      
4:52:56 PM                                                                                                                    
JEANNE SWARTZ stated  she is a nearly 40-year  resident of Alaska                                                               
and would like to offer her full  support for HB 148.  She stated                                                               
that many citizens of Alaska  have expressed eloquent support for                                                               
this bill.  She asked to  make three points:  care and compassion                                                               
is a  primary concern of  government and  a healthy society  is a                                                               
stable  and prosperous  society; the  efficiencies attached  will                                                               
provide better  service and bring  down the health care  costs in                                                               
Alaska, including  for people not covered  by Medicaid expansion;                                                               
and  Alaska obtains  federal money  for many  things, so  to take                                                               
federal  money  for  improved  health is  the  best  and  highest                                                               
4:55:26 PM                                                                                                                    
NANCY BALE stated she  is a school nurse and has  been a nurse in                                                               
a  hospital  setting  taking  care  of elders  in  Alaska.    She                                                               
received  her degree  in the  1990s at  the University  of Alaska                                                               
Anchorage.  She  previously lived in Bush Alaska  for many years.                                                               
She has been blessed with good health  and has not had to use her                                                               
insurance  policy.   She  said she  is  69 years  old  so she  is                                                               
eligible for Medicare, but she has  not had to use Medicare, Part                                                               
B, due to her current employment.   She meets parents daily whose                                                               
families fall  into the gap.   Their  children may be  covered by                                                               
Denali Kid Care, but the parents  cannot afford health care.  She                                                               
said that elders  survive in nursing homes  through Medicaid, and                                                               
their  benefits  should  be  assured  through  the  expansion  of                                                               
Medicaid.  She offered her  belief that most Alaskans support the                                                               
expansion of Medicaid and she would  like to see the climate that                                                               
is pro-reform,  but not reform  that halts expansion.   She urged                                                               
members to  set benchmarks and  move forward this year  while the                                                               
federal  government  provides  100  percent  support,  but  still                                                               
continue to consider  reforms on an ongoing basis.   In fact, she                                                               
said, that  is what other  states have  been doing.   She thought                                                               
many people  expected this to move  forward since it was  a major                                                               
point in the gubernatorial election  so many people are perplexed                                                               
that it has stalled.  She  cautioned members on the provider tax,                                                               
since  Medicaid  providers are  already  offering  services at  a                                                               
lower  rate  so  to  add  an additional  tax  would  "chill"  the                                                               
addition of  Medicaid providers in  outlying areas of  the state.                                                               
She said, "Do not let reform be the enemy of expansion."                                                                        
4:59:32 PM                                                                                                                    
JESSICA CLER,  Alaska Public Affairs Manager,  Planned Parenthood                                                               
Votes  Northwest, stated  that she  is a  lifelong Alaskan.   She                                                               
offered that  Planned Parenthood operates four  health centers in                                                               
Alaska and in  2013, served nearly 8,000  people with life-saving                                                               
and  cost-saving reproductive  health  care.   As  a health  care                                                               
provider that serves  thousands of low-income women  and men each                                                               
year,  the  organization   is  keenly  aware  of   the  needs  of                                                               
vulnerable  adults in  Alaska.   She stated  that many  childless                                                               
adults without disability making  less than $20,000 annually have                                                               
no  affordable health  care coverage.    She said,  "This has  to                                                               
change."   She offered  that expansion  would give  42,000 people                                                               
coverage for  vaccinations, cancer screenings, and  mental health                                                               
services.  The  increased health care usage could  be an economic                                                               
driver  creating thousands  of  jobs and  generating billions  of                                                               
dollars  in  new  wages.   Medicaid  expansion  also  would  give                                                               
Alaskans  an opportunity  to take  entrepreneurial risks  without                                                               
fear  of  losing  insurance coverage,  and  ensure  coverage  for                                                               
working adults or  those who wish to start a  business or seek an                                                               
education.   It would  also mean people  who have  been foregoing                                                               
medication or treatment  to pay rent will no longer  have to make                                                               
that decision.   Women who have put off their  annual exams could                                                               
finally  obtain cancer  screening  instead of  needing  to go  to                                                               
emergency rooms for treatment.  She  urged members not to wait to                                                               
expand  Medicaid, even  though reform  is important.   She  urged                                                               
members to support HB 148.                                                                                                      
5:01:59 PM                                                                                                                    
CLAYTON WALKER, Sr.,  stated that since 1970 the state  has had a                                                               
medical  problem   in  the  practice  section   of  the  national                                                               
examination  for  auditing  qualification  for  certified  public                                                               
accountants.  He expressed a concern  for the number of audits as                                                               
opposed to  the profitability  of audits.   He  has served  as an                                                               
auditor  for  the Internal  Revenue  Service,  the United  States                                                               
Treasury, and for U.S. General  Accounting Office (GAO).  He said                                                               
that auditors can  produce resources and should be  able to focus                                                               
their skills.   He said  that statistical audit designs  are more                                                               
adaptable to situations that continually  change.  He referred to                                                               
earlier testimony,  noting there is a  significant variability in                                                               
the problem  to be  addressed; however,  a group  of professional                                                               
auditors are trained to handle the complexity of this situation.                                                                
CHAIR SEATON  asked about  the issue of  audits.   One suggestion                                                               
under  consideration is  that if  there are  federal audits  that                                                               
overlap  with state  audits, the  state would  consider accepting                                                               
the  audit  in lieu  of  conducting  separate  audit.   He  asked                                                               
whether this makes sense to an auditor.                                                                                         
MR. WALKER answered  that the goal learned at IRS  was to produce                                                               
10 times  more than it  cost.  He  suggested that if  the federal                                                               
government  provided $50  million, the  audits should  produce 10                                                               
times that  or $500 million.   He  emphasized that should  be the                                                               
standard of  production for the  audit; however, if the  state is                                                               
required  to   follow  laws   written  by   non-certified  public                                                               
accountants, it represents a separate issue.                                                                                    
CHAIR SEATON welcomed suggestions submitted in writing.                                                                         
5:06:11 PM                                                                                                                    
CANDUS  MILLER  suggested  the committee  consider  privatization                                                               
regarding Medicaid  expansion.   She said  she had  concerns with                                                               
privacy rights  and parental rights, in  particular, with parents                                                               
not  having  knowledge of  their  children  seeking to  terminate                                                               
pregnancies.    She had  further  concerns  that expansion  going                                                               
through Denali  Kid Care would  provide funds for abortion.   She                                                               
expressed concern that  other problems would surface,  just as it                                                               
did  when the  Patient  Protection and  Affordable  Care Act  was                                                               
being deliberated.  She mentioned  that Oklahoma stood up against                                                               
Medicaid  expansion since  it would  cost  trillions of  dollars.                                                               
She suggested members  could go to Heartland  Institute or Alaska                                                               
Policy   Forum  for   information  on   problems  with   Medicaid                                                               
expansion.   She  expressed concern  that the  federal government                                                               
will provide  funding initially,  but then  the state  must later                                                               
cover 90 percent  of the costs.  She said  her family switched to                                                               
a  policy that  costs less  than $4,000  - $4,500  per year.  She                                                               
characterized it as  a co-dependency, but Alaska can  rely on the                                                               
private sector to  provide health care.  She  spoke in opposition                                                               
to Medicaid expansion.                                                                                                          
5:10:41 PM                                                                                                                    
PAT CHAPMAN said  she is a citizen advocate.   She suggested that                                                               
HB 148 can  help those who work hard, but  earn lower incomes and                                                               
can't afford the  high cost of insurance.   This population tends                                                               
to get sick, and is ignored  until the ailment is severe and they                                                               
then  access emergency  services.    She said  that  the cost  of                                                               
emergency  services are  much more  costly than  physician office                                                               
visits,  and  the  service  ends up  being  "charity  care"  that                                                               
increases the  cost of health insurance.   She would like  to see                                                               
HB  148  pass  so  low-income  people  can  stay  healthy.    She                                                               
emphasized  that this  health  care is  necessary  and the  state                                                               
needs  to  be  proactive  for   health  care,  not  reactive,  as                                                               
preventative  care  is less  expensive  in  the  long run.    She                                                               
offered her support for HB 148.                                                                                                 
5:13:30 PM                                                                                                                    
JEANNE PARKER  characterized herself  as a  hardworking community                                                               
member who  has lived in Homer  for 39 years and  raised a family                                                               
here.  She strongly urged members to  pass HB 148.  She said that                                                               
she falls in the "donut hole"  of the uninsured because she can't                                                               
afford health insurance.  She  stated that she teaches pre-school                                                               
and gymnastics.   She feels lucky to be a  healthy person and she                                                               
pays attention  to her  health through  preventative means.   The                                                               
health care  expansion would not  cover some of her  health care,                                                               
such as acupuncture  and exercising which she covers  on her own.                                                               
She  said  that  the  catastrophic  insurance  available  through                                                               
Medicaid expansion would  be helpful.  She related  a scenario in                                                               
which she sliced  her hand and obtained emergency room  care as a                                                               
charity case.   She offered her belief that  Alaska should accept                                                               
federal funding, noting that the  state receives a huge amount of                                                               
federal funding for the military.   She characterized the funding                                                               
as a "win-win" situation.                                                                                                       
5:16:23 PM                                                                                                                    
KELLY WALTERS  spoke in support  of HB 148 to  expand [Medicaid].                                                               
He said the  public "spoke" about this in  November [by selecting                                                               
candidates]  since Medicaid  expansion was  a cornerstone  of the                                                               
last gubernatorial  election.  He  offered his belief that  it is                                                               
very  difficult to  unseat an  incumbent governor,  and yet  that                                                               
happened, largely due  to Medicaid expansion.   He predicted that                                                               
in  five years  the state  will  save $330  million, by  spending                                                               
between $17 and $20 million.   He suggested cancelling the Bragaw                                                               
Road  extension  in  Anchorage  that  nobody  wants  through  the                                                               
university medical  district, which would  save $18 million.   He                                                               
said that everyone pays federal  taxes, but by not accepting this                                                               
due to some  partisan witch hunt, our tax  dollars are supporting                                                               
and  subsidizing wiser  states.   He reminded  members that  U.S.                                                               
Senator Ted  Stevens supported the  original bill  for affordable                                                               
care in 1994.   He reminded members that  Senator Stevens brought                                                               
in  significant federal  dollars  to Alaska.    This will  create                                                               
4,000 jobs  with over $1  billion in  wages and salaries.   Given                                                               
the oil  tax situation,  the state  needs every  possible revenue                                                               
stream, he said.  He hoped members would expand Medicaid.                                                                       
5:20:02 PM                                                                                                                    
ROBERT  NEWMAN, Student,  Juneau-Douglas  High  School, spoke  in                                                               
support of HB 148, which would expand  Medicaid.  He said he is a                                                               
senior  and is  worried about  when he  leaves college  with debt                                                               
that he  won't be able to  afford insurance.  He  said his father                                                               
left a  job he loved when  he could not afford  insurance for his                                                               
family.    He  offered  his belief  that  entrepreneurs  will  be                                                               
adversely affected  if they cannot  afford health insurance.   He                                                               
said  that   if  members  love   the  free  market   and  support                                                               
capitalism, please support HB 148, Medicaid expansion.                                                                          
5:21:51 PM                                                                                                                    
ERIC JORDAN,  Policy Analyst, Alaska Native  Health Board (ANHB),                                                               
stated that  not only does  he represent  ANHB, but he  wanted to                                                               
speak on behalf of all the  uninsured Alaskans.  He said not only                                                               
has the  committee heard  about the  fiscal, economic,  and moral                                                               
reasons to expand Medicaid, but  there was also another reason to                                                               
do  so:    empowerment.     He  said  that  health  insurance  is                                                               
empowering.  He  related his personal experience,  noting that he                                                               
had  a colonoscopy  exam  and the  surgeon  found benign  polyps,                                                               
which were  removed.  He  was advised to obtain  screenings every                                                               
three years.   His  stepmother has  colon cancer  so he  has seen                                                               
firsthand the devastation that pain  has caused her and his whole                                                               
family.  He  urged members to please  consider Medicaid expansion                                                               
and provide  insurance since  it is  empowering and  gives people                                                               
the tools and the knowledge to take care of themselves.                                                                         
5:25:45 PM                                                                                                                    
The committee took an at-ease from 5:25 p.m. to 5:32 p.m.                                                                       
5:32:39 PM                                                                                                                    
CHAIR SEATON,  after ascertaining that  no one further  wished to                                                               
testify, closed public testimony on HB 148.                                                                                     
CHAIR  SEATON  explained that  the  committee  would review  some                                                               
questions on the bill before amendments would be proposed.                                                                      
REPRESENTATIVE VAZQUEZ  referred to  page 1, line  11 of  HB 148,                                                               
which read:                                                                                                                     
     (1) the governor, through the  Department of Health and                                                                    
     Social Services,  take all necessary action  to capture                                                                    
     federal  revenues and  offset state  general funds  and                                                                    
     evaluate  the most  cost-effective method  for revising                                                                    
     expansion coverage,...                                                                                                     
REPRESENTATIVE VAZQUEZ  asked what  the department meant  by that                                                               
5:34:44 PM                                                                                                                    
JON  SHERWOOD,  Deputy  Commissioner, Medicaid  and  Health  Care                                                               
Policy,  Office of  the Commissioner,  Department  of Health  and                                                               
Social  Services   (DHSS),  explained  that   the  aforementioned                                                               
language  means that  the Medicaid  expansion  population is  not                                                               
required  to  have the  same  benefit  package that  the  current                                                               
Medicaid adult  population has.   He  stated that  the department                                                               
must  ensure that  the individuals  have a  benefit package  that                                                               
provides for  coverage for essential  health benefits  as defined                                                               
by federal  law or an  alternative benefit package  determined by                                                               
the federal government  to be equivalent.  He  offered his belief                                                               
that the most  effective way to implement  Medicaid expansion was                                                               
to  start with  the existing  Medicaid benefit  package; however,                                                               
the  department will  evaluate whether  a  more appropriate  cost                                                               
effective benefit  package is  available and  could pursue  it in                                                               
the future.                                                                                                                     
REPRESENTATIVE   VAZQUEZ  asked   for   clarification  that   the                                                               
department will  examine the existing Medicaid  services provided                                                               
to Medicaid  recipients to  see if it  is appropriate  to provide                                                               
the same services to the newly expanded group.                                                                                  
5:36:48 PM                                                                                                                    
VALERIE  DAVIDSON, Commissioner  Designee,  DHSS, explained  that                                                               
the  strategy to  get the  Medicaid  expansion up  as quickly  as                                                               
possible  was  to  mirror  the existing  Medicaid  program.    As                                                               
previously  testified,   much  of  the  bill   does  not  address                                                               
expansion,  but  consists  of  reform  for  the  entire  Medicaid                                                               
program.   As those reforms  come into play, since  the expansion                                                               
population would mirror the Medicaid  program, the reform efforts                                                               
would all be applied to the expansion population.                                                                               
REPRESENTATIVE  VAZQUEZ asked  about  the  14 mandatory  services                                                               
plus the  27 optional services  and if the department  planned to                                                               
offer all of the services.                                                                                                      
COMMISSIONER  DAVIDSON  answered   that  the  Medicaid  expansion                                                               
coverage would mirror the existing Medicaid coverage.                                                                           
REPRESENTATIVE VAZQUEZ asked to  clarify the 27 optional services                                                               
will be provided to the expansion group.                                                                                        
MR. SHERWOOD  said that  what was  currently offered  to Medicaid                                                               
recipients will be offered to the expansion group.                                                                              
COMMISSIONER DAVIDSON  explained that the state  had decided that                                                               
some  optional  services provide  a  more  cost-effective way  of                                                               
providing care  for people who  are Medicaid beneficiaries.   For                                                               
example, being able to  provide pharmaceutical coverage, covering                                                               
prescription  drugs,  is  an  optional  service  under  Medicaid.                                                               
However,  the department  also recognizes  that some  individuals                                                               
who  are  prescribed  medications,  but don't  take  them,  could                                                               
result  in  higher costs  since  their  injury or  illness  could                                                               
worsen, which will  result in more costly emergency  care.  Other                                                               
optional services that the Medicaid  program covers include home-                                                               
and community-based  service.  In  order to qualify  for services                                                               
the individual must  receive skilled nursing level  of care under                                                               
the  optional Medicaid  program; however,  the mandatory  service                                                               
under Medicaid is  skilled nursing care.  The  question raised is                                                               
whether the  department should  provide home  and community-based                                                               
services  in   Alaska  at  a   much  lower  cost   by  supporting                                                               
individuals in  their homes and  communities as an option,  or if                                                               
the  state should  take  away the  optional  service and  instead                                                               
provide  the mandatory  coverage at  a much  more costly  skilled                                                               
nursing facility.                                                                                                               
5:40:40 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  asked whether transportation to  and from                                                               
the point of Medicaid was included as optional.                                                                                 
MR. SHERWOOD  answered that access  to medical care  was required                                                               
to be provided by the Medicaid  program.  It could be provided as                                                               
an  optional  service  or  administratively.   In  Alaska  it  is                                                               
treated as an  optional service, but if it was  not treated as an                                                               
optional service,  the state would  still need to provide  it and                                                               
claim it administratively, he said.                                                                                             
5:41:26 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  asked  whether  the  federal  government                                                               
would reimburse the state for all 27 optional services.                                                                         
MR. SHERWOOD answered  that the state receives  federal match for                                                               
all the Medicaid services the state provides under the statute.                                                                 
REPRESENTATIVE VAZQUEZ  asked for  the expenditures for  the last                                                               
year for optional services.                                                                                                     
MR. SHERWOOD  replied that he did  not have the figures  for last                                                               
CHAIR  SEATON  reminded  members  that  the  department  had  not                                                               
anticipated detailed questions, which is fine.                                                                                  
REPRESENTATIVE VAZQUEZ  asked whether  the figures  were included                                                               
in the fiscal notes.                                                                                                            
MR.  SHERWOOD   said  that  the   estimated  cost   for  Medicaid                                                               
expenditures  for  the  expansion   included  estimates  for  all                                                               
optional and mandatory services.                                                                                                
CHAIR SEATON  reiterated that the fiscal  note includes estimates                                                               
for all services for Medicaid expansion.                                                                                        
REPRESENTATIVE VAZQUEZ related her  understanding that the fiscal                                                               
note were based on estimates.                                                                                                   
MR. SHERWOOD answered yes.                                                                                                      
REPRESENTATIVE VAZQUEZ asked the department  to provide a list of                                                               
the mandatory services.                                                                                                         
MR. SHERWOOD agreed to do so.                                                                                                   
5:43:19 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ referred  to  page 1,  lines 13-14  which                                                               
     most  cost-effective  method   for  revising  expansion                                                                    
     coverage, including more  efficient benefit plans, cost                                                                    
     sharing,  utilization  control,  and  other  innovative                                                                    
     health care financing strategies;                                                                                          
REPRESENTATIVE VAZQUEZ  asked about  the department's  vision for                                                               
more efficient benefit plans.                                                                                                   
COMMISSIONER  DAVIDSON replied  that the  more efficient  benefit                                                               
plans include many  of the reform efforts explained  later in the                                                               
bill,  including  allowing  the  department  the  flexibility  to                                                               
pursue  waiver opportunities,  for example,  taking advantage  of                                                               
the   existing   100   percent  federal   match   or   conducting                                                               
demonstration projects  for the department.   Thus the department                                                               
may pursue  other options  to provide health  care services  in a                                                               
more efficient manner, she said.                                                                                                
5:44:17 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ asked  how long  Mr. Sherwood  has worked                                                               
for the department.                                                                                                             
MR. SHERWOOD answered  that he has worked for  the department for                                                               
over 25 years.                                                                                                                  
REPRESENTATIVE VAZQUEZ  asked for his  ideas on a  more efficient                                                               
benefit plan.                                                                                                                   
MR.  SHERWOOD  offered  his  belief  that  the  commissioner  had                                                               
answered the  question quite well,  that the department  has been                                                               
looking at the types of things described in the reforms.                                                                        
5:44:51 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ asked  for  the  department's vision  for                                                               
utilization controls.                                                                                                           
COMMISSIONER  DAVIDSON answered  that  utilization controls  were                                                               
designed to be  relatively broad to allow the  department as much                                                               
flexibility as possible.  As  the Department of Health and Social                                                               
Services has frequently testified to  in the past, the department                                                               
views  reform as  an ongoing  process and  not a  point in  time,                                                               
similar  to  other  states  which  have  effectively  implemented                                                               
Medicaid  and health  care  programs.   Some  of the  utilization                                                               
controls include  ones identified  in the  reform section  of the                                                               
bill,  including   addressing  the  "super  utilizer"   or  "over                                                               
utilizer"  who  use emergency  rooms  [for  primary care].    The                                                               
department hopes to teach people  how to use health care services                                                               
in a more efficient and effective manner at less cost.                                                                          
5:46:24 PM                                                                                                                    
REPRESENTATIVE  TARR asked  for clarification  on how  the public                                                               
can   follow   implementation   measures.     She   related   her                                                               
understanding that [Medicaid expansion  and reform] was a process                                                               
and  the  public  and  legislature  will  have  opportunities  to                                                               
COMMISSIONER  DAVIDSON  answered  yes.   As  the  department  has                                                               
previously testified, it has issued  a request for proposal (RFP)                                                               
- which just  closed - for an independent  consultant to identify                                                               
reforms adopted  in Lower  48 states since  many states  are also                                                               
grappling   with   Medicaid   and    health   care   [costs   and                                                               
efficiencies].  The  state could benefit from  lessons learned by                                                               
other  states,  she  said,  pointing  out  that  the  department,                                                               
legislators,  providers, and  the  public all  have  ideas.   She                                                               
envisioned that the independent  consultant will review all ideas                                                               
for reform and evaluate how these  might work in Alaska - a state                                                               
with  a relatively  small population  and  the unique  challenges                                                               
posed by  its large  geographic size and  lack of  specialists in                                                               
most communities.  In addition,  the department desires to engage                                                               
the public and stakeholders in a transparent process, she said.                                                                 
CHAIR SEATON  pointed out the  committee is  currently discussing                                                               
legislative intent  language, which  it has  previously reviewed.                                                               
In fact, the committee has  already adopted amendments to address                                                               
cost containment and reform.   He suggested the committee move on                                                               
from the legislative intent section  unless members have specific                                                               
questions  related  to the  intent  of  HB  148.   Otherwise,  he                                                               
suggested the  committee could ask  the department to  start over                                                               
and  re-introduce the  bill [to  obtain further  clarification on                                                               
the details].                                                                                                                   
REPRESENTATIVE VAZQUEZ  directed attention to page  6, lines 5-15                                                               
which read:                                                                                                                     
     disabled   persons,   as   described   in   42   U.S.C.                                                                    
     1396a(a)(10)(A)(ii)(XIII),  who are  in families  whose                                                                    
     income,   as   determined  under   applicable   federal                                                                    
     regulations or guidelines, is less  than 250 percent of                                                                    
     the  official poverty  line applicable  to a  family of                                                                    
     that size according to the  United States Department of                                                                    
     Health and  Human Services, and  who, but  for earnings                                                                    
     in  excess of  the  limit established  under 42  U.S.C.                                                                    
     1396d(q)(2)(B), would  be considered to  be individuals                                                                    
     with respect to whom  a supplemental security income is                                                                    
     being  paid under  42  U.S.C. 1381  -  1383c; a  person                                                                    
     eligible  for assistance  under this  paragraph who  is                                                                    
     not eligible  under another  provision of  this section                                                                    
     shall  pay a  premium  or other  cost- sharing  charges                                                                    
     according  to a  sliding  fee scale  that  is based  on                                                                    
     income   as   established    by   the   department   in                                                                    
REPRESENTATIVE  VAZQUEZ  asked  for clarification  [of  paragraph                                                               
MR. SHERWOOD  answered that this  provision is  existing language                                                               
for eligibility  not impacted by HB  148.  It describes  what has                                                               
been commonly known as the  "working disabled buy in" that allows                                                               
individuals  with  a disability  who  are  eligible for  Medicaid                                                               
except  that their  earned income  makes them  ineligible.   This                                                               
provision  would allow  these "working  disabled" individuals  to                                                               
stay on  Medicaid by  paying a premium  to the  Medicaid program.                                                               
He reported that  several hundred people are  in this eligibility                                                               
group at any given time.                                                                                                        
CHAIR SEATON remarked that this  provision was previously covered                                                               
in the department's introduction of HB 148.                                                                                     
REPRESENTATIVE VAZQUEZ  asked whether  there were any  changes to                                                               
the aforementioned program.                                                                                                     
MR. SHERWOOD answered no.                                                                                                       
5:52:05 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  referred to  page  2,  line 10-13  which                                                               
     (3)  the  Department  of Health  and  Social  Services,                                                                    
     after  consulting  with  stakeholders,  submit  to  the                                                                    
     legislature  not   later  than  January  25,   2016,  a                                                                    
     proposal to authorize a provider  tax up to the maximum                                                                    
     extent allowed  by federal  law to  offset some  of the                                                                    
     cost of the Medicaid program.                                                                                              
REPRESENTATIVE VAZQUEZ  asked whether this provision  would allow                                                               
the department  to authorize  a provider  tax to  offset Medicaid                                                               
costs as allowable under federal statute.                                                                                       
MR. SHERWOOD answered  that federal statutes allow  states to tax                                                               
providers,  noting  that  specific  provisions  address  how  the                                                               
provider tax can  be treated to ensure that states  are not using                                                               
provider tax revenue as the  state's matching funds for Medicaid.                                                               
He offered  his belief that  Alaska is  the only state  without a                                                               
provider  tax.   He  characterized  the  provider tax  as  "broad                                                               
based" and not a specific tax of Medicaid revenue.                                                                              
5:53:15 PM                                                                                                                    
CHAIR SEATON commented that a  six-page document from [the Alaska                                                               
State  Hospital and  Nursing Home  Association]  was in  members'                                                               
REPRESENTATIVE   VAZQUEZ   responded  that   the   aforementioned                                                               
document  did  not  answer  her specific  question.    She  asked                                                               
whether  this tax  applied to  all providers,  or was  limited to                                                               
providers who accept Medicaid patients.                                                                                         
COMMISSIONER  DAVIDSON  advised  that the  department  previously                                                               
testified it  has started  an RFP process  with Fiscal  Year 2015                                                               
(FY  15)  funds  to  hire  a consultant  to  recommend  the  best                                                               
solutions for Alaska  given its unique challenges.   She reported                                                               
that other  states imposing a  provider tax have limited  the tax                                                               
to hospitals  and skilled  nursing homes  based on  revenues, but                                                               
the provider tax  is not tied to Medicaid.   She anticipated that                                                               
the evaluator will  examine whether it makes sense  to extend the                                                               
provider tax  to everyone.   She pointed out that  many providers                                                               
in Alaska  are small independent  providers.  She  cautioned that                                                               
the  state would  not  be interested  in  impacting a  provider's                                                               
ability to continue to provide  valuable Medicaid services to its                                                               
beneficiaries, but rather to identify  the best tax structure for                                                               
CHAIR SEATON  pointed out an  amendment requiring  the department                                                               
to  use a  third-party contractor  to provide  this service.   He                                                               
offered his  belief that the  only question remaining  is whether                                                               
to consider  an additional amendment  to restrict  the department                                                               
from moving forward with a provider tax.                                                                                        
REPRESENTATIVE VAZQUEZ repeated her  question.  She asked whether                                                               
the provider  tax would apply to  all providers or if  it applies                                                               
to  providers  who accept  Medicaid  since  some providers  don't                                                               
accept Medicaid.                                                                                                                
COMMISSIONER DAVIDSON  reiterated that the provider  tax does not                                                               
tax Medicaid  receipts, but  refers to a  tax based  on revenues,                                                               
and was not  tied to Medicaid.  She envisioned  that a contractor                                                               
would  engage  with  stakeholders   to  determine  and  recommend                                                               
solutions that  will work  for Alaska.   She  further anticipated                                                               
that this process  will allow large and small  providers to weigh                                                               
in  with  their  recommendations and  identify  "best  practices"                                                               
other states have implemented with respect to provider taxes.                                                                   
REPRESENTATIVE VAZQUEZ thanked the commissioner.                                                                                
REPRESENTATIVE TARR  asked for  further clarification  that there                                                               
was not currently a provider tax in Alaska.                                                                                     
CHAIR SEATON agreed  that Alaska was the only state  that did not                                                               
have  a provider  tax; however,  an amendment  requires a  third-                                                               
party evaluator  to make  suggestions on a  provider tax  to help                                                               
pay for health care in Alaska.                                                                                                  
5:57:37 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  referred to page 3,  lines 17-20, related                                                               
to audits, which read:                                                                                                          
     The  department may  assess interest  penalties on  any                                                                
     identified  overpayment.  Interest under  this  section                                                                
     shall  be  calculated  using the  statutory  rates  for                                                                
     post-judgment interest  accruing from  the date  of the                                                                
     issuance of the final audit.                                                                                           
REPRESENTATIVE VAZQUEZ  noted that  in previous hearings  she had                                                               
asked about  the interest rate,  but now  she would like  to know                                                               
what effect  it would have if  the provider was allowed  a 30-day                                                               
period  since it  seemed fair  to  allow providers  time to  have                                                               
their questions answered.                                                                                                       
MR.  SHERWOOD answered  that the  department anticipates  that it                                                               
will issue a final audit  identifying a date of expected payment,                                                               
with interest accruing  after that time.  He said  he didn't feel                                                               
comfortable addressing  all the different circumstances  since he                                                               
is  not an  audit expert,  but he  offered to  provide additional                                                               
information to the committee.                                                                                                   
CHAIR  SEATON reminded  committee members  that specific  changes                                                               
could be presented as amendments  to allow the department time to                                                               
analyze their impact.                                                                                                           
6:00:19 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  directed attention  to page 7,  lines 17-                                                               
28, which read:                                                                                                                 
     (b)  The  department,  in  implementing  this  section,                                                                    
     shall  take  all  reasonable steps  to  implement  cost                                                                    
     containment  measures  that  do not  eliminate  program                                                                    
     eligibility  or  the  scope  of  services  required  or                                                                    
     authorized  under  AS  47.07.020 and  47.07.030  before                                                                    
     implementing  cost containment  measures  under (c)  of                                                                    
     this section  that directly affect  program eligibility                                                                    
     or coverage of services.  The cost containment measures                                                                    
     taken   under   this   subsection   may   include   new                                                                    
     utilization  review  procedures,  changes  in  provider                                                                    
     payment  rates, and  precertification requirements  for                                                                    
     coverage  [OF  SERVICES,  AND AGREEMENTS  WITH  FEDERAL                                                                    
     OFFICIALS  UNDER  WHICH  THE  FEDERAL  GOVERNMENT  WILL                                                                    
     ASSUME RESPONSIBILITY FOR  COVERAGE OF SOME INDIVIDUALS                                                                    
     OR  SOME SERVICES  FOR  SOME  INDIVIDUALS THROUGH  SUCH                                                                    
     FEDERAL  PROGRAMS  AS  THE  INDIAN  HEALTH  SERVICE  OR                                                                    
REPRESENTATIVE  VAZQUEZ offered  her belief  the first  statutory                                                               
provision  referred to  the mandatory  Medicaid services  and the                                                               
second provision  related to optional services,  which appears to                                                               
tie the  state's hands  during any fiscal  crisis since  it would                                                               
not  allow eligibility  criteria to  be changed  or any  optional                                                               
services to be eliminated.                                                                                                      
CHAIR SEATON  pointed out  that subsection  (b) is  existing law.                                                               
He  stated that  the  only change  was to  add  "and" and  remove                                                               
language beginning on page 7, line 2.                                                                                           
6:02:51 PM                                                                                                                    
CHAIR SEATON  asked the committee  to focus on the  changes being                                                               
made to the Medicaid system under the bill.                                                                                     
REPRESENTATIVE  VAZQUEZ  suggested   that  this  provision  would                                                               
change a major component beginning on page 7, line 23.                                                                          
REPRESENTATIVE SEATON explained  that the aforementioned language                                                               
was moved to Section 10.                                                                                                        
MR. SHERWOOD  offered that  the language in  Section 10  does not                                                               
replace the  deleted language [page  7, lines 23-28];  however it                                                               
does outline a somewhat different  approach to obtain the federal                                                               
participation for coverage  of services.  This  language has been                                                               
in statute for many years and  the approach has been exhausted so                                                               
this section was  removed to avoid a conflict  [with the language                                                               
in proposed Section 10].                                                                                                        
REPRESENTATIVE SEATON  clarified that  the language  was replaced                                                               
in Section 10.                                                                                                                  
6:04:23 PM                                                                                                                    
STACIE KRALY,  Chief Assistant  Attorney General,  Human Services                                                               
Section,  Civil Division,  Department of  Law (DOL),  agreed that                                                               
Section 9  was existing law,  but the provision being  deleted is                                                               
language that would  have been in conflict  with proposed Section                                                               
10.  The language was  deleted, a conforming grammatical edit was                                                               
made on line 23, and the  concepts were added in proposed Section                                                               
6:05:01 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ asked  about the  deleted language  since                                                               
this  provision would  charge the  department with  entering into                                                               
agreements  under  which  the   federal  government  will  assume                                                               
responsibility  for   coverage  of  some  individuals,   or  some                                                               
services for  some individuals, through federal  programs such as                                                               
the Indian  Health Service  or Medicare.   She asked  for further                                                               
clarification on what was wrong with this provision.                                                                            
MS. KRALY answered that nothing  was wrong with the language, but                                                               
the language  in Section  9 did  not quite  track the  new reform                                                               
measures in Section 10.  She  referred to page 7, line 31 through                                                               
page 8,  line 4, stating that  language was removed to  avoid the                                                               
apparent conflict with proposed Section  10 that will achieve the                                                               
same focus, which  is to maximize the  state's participation with                                                               
the federal  government for  Indian health  beneficiaries through                                                               
the tribal health system.                                                                                                       
CHAIR SEATON related his understanding  that was provided through                                                               
the Section 115 waiver.                                                                                                         
MS. KRALY agreed.                                                                                                               
REPRESENTATIVE  VAZQUEZ,  referring  to  the  deleted  provision,                                                               
asked whether Medicaid was the second payer after Medicare.                                                                     
MS. KRALY answered that Medicaid was the payer of last resort.                                                                  
REPRESENTATIVE  VAZQUEZ  asked for  the  reference  to a  similar                                                               
provision in  the bill that ensures  that the state is  the payer                                                               
of last resort.                                                                                                                 
MS. KRALY answered that the  general premise that Medicaid is the                                                               
payer of  last resort has  been well established in  federal law,                                                               
state law, and  case law so it exists  without being specifically                                                               
referenced in this section.                                                                                                     
REPRESENTATIVE VAZQUEZ  asked for the specific  state and federal                                                               
statutory citations.                                                                                                            
MS. KRALY answered  that she did not have the  citations, but she                                                               
offered to provide them to the committee.                                                                                       
6:07:25 PM                                                                                                                    
COMMISSIONER  DAVIDSON asked  to correct  earlier testimony  that                                                               
stated the IRS  rule under the Patient  Protection and Affordable                                                               
Care  Act  (PPACA)  recognizes   that  access  to  Indian  Health                                                               
Services  is  considered  insurance  coverage.   As  one  of  the                                                               
drafters of those  specific provisions of the PPACA  in her prior                                                               
job,  she clarified  those provisions  do two  things.   First, a                                                               
provision in  the PPACA would  exempt IHS beneficiaries  from the                                                               
mandate  for health  coverage  and the  subsequent  penalty.   In                                                               
fact,  IHS  services  are not  considered  health  coverage,  but                                                               
rather  this provision  refers to  a  group membership  exemption                                                               
based on  the federal trust responsibility  to IHS beneficiaries.                                                               
Secondly,  another  section of  the  PPACA  expressly allows  IHS                                                               
beneficiaries to  be able to  participate, purchase,  and receive                                                               
subsidies for  marketplace plans.   Clearly,  the U.  S. Congress                                                               
did not  consider access to  health care services through  an IHS                                                               
facility to be health insurance, she said.                                                                                      
[HB 148 was held over]                                                                                                          

Document Name Date/Time Subjects
HB148 - Proposed Amendment - A.12 Vazquez.pdf HHSS 3/28/2015 3:00:00 PM
HB148 - Proposed Amendment -A.9 Vazquez.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 -Proposed Amendment- A.19 - Seaton.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Background - David D Amato - Community Health Center Map.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Background - David D Amato - Primary Care Providers -email.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Background - John Hughes - Juneau Urgent Care.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Background - DHSS response to Questions 03-26-15.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Support - written testimony of LBean - ANHB.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Opposition - Emails -3-28-2015.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Support - Emails - 3-28-2015.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Suppport - written testimony -3-26-2015.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Opposition - Dr Ilona Farr.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
DHSS Reply to Question on Reforms & reform numbers_RE 3-5-2015.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
Questions and Responses from DHSS on Medicaid_Follow-up on 3-5 meeting.pdf HHSS 3/28/2015 3:00:00 PM
HB 148
HB148 - Proposed Amendment - A.26 - Vazqueaz.pdf HHSS 3/28/2015 3:00:00 PM
HB 148