Legislature(2015 - 2016)CAPITOL 106

04/07/2015 03:00 PM House HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HCR 9 Out of Committee
-- Public Testimony --
Moved CSHB 161(HSS) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 161-MEDICAID: USED DURABLE MEDICAL EQUIPMENT                                                                     
3:20:58 PM                                                                                                                    
CHAIR SEATON announced that the  final order of business would be                                                               
HOUSE BILL NO.  161, "An Act relating to the  purchase of durable                                                               
medical equipment under Medicaid;  and providing for an effective                                                               
3:21:08 PM                                                                                                                    
REPRESENTATIVE LYNN  GATTIS, Alaska State Legislature,  read from                                                               
the sponsor statement:                                                                                                          
     House Bill  161 is a  cost saving bill for  the state's                                                                    
     medical assistance programs.   Currently the Department                                                                    
     of  Health  and  Social  Services  only  purchases  new                                                                    
     Durable  Medical Equipment,  even  though used  Durable                                                                    
     Medical  equipment   is  available   and  is   able  to                                                                    
     withstand repeated use.                                                                                                    
     House   Bill  161   would  require   that,  "When   the                                                                    
     department authorizes  the purchase of  durable medical                                                                    
     equipment, the department shall  require a recipient of                                                                    
     medical  assistance   services  to  purchase   used  or                                                                    
     refurbished  durable  medical   equipment  if  used  or                                                                    
     refurbished durable medical  equipment is available, is                                                                    
     less expensive  than new  durable medical  equipment of                                                                    
     the  same type,  is able  to withstand  at least  three                                                                    
     years of use and meets the needs of the recipient."                                                                        
REPRESENTATIVE  GATTIS  declared  that   the  proposed  bill  was                                                               
"simply  a  cost savings  bill,"  as  when  the state  could  use                                                               
cheaper,  used  equipment,  it  would.   She  stated  that  "it's                                                               
unfortunate, in my  opinion, that we even have to  have a bill to                                                               
do what I think is common sense."                                                                                               
REPRESENTATIVE  STUTES asked  whether there  was a  facility that                                                               
did the refurbishing and cleaning  of these used items to prepare                                                               
them for re-use.                                                                                                                
3:23:12 PM                                                                                                                    
ANDREW  FORD, Staff,  Representative  Lynn  Gattis, Alaska  State                                                               
Legislature, replied  that he  did not have  a list  of providers                                                               
for  refurbished or  used durable  medical  equipment, but  there                                                               
were a number of testifiers available.                                                                                          
REPRESENTATIVE  STUTES  asked  whether there  was  a  specialized                                                               
company to refurbish and certify this equipment.                                                                                
REPRESENTATIVE TARR noted that there  were support materials from                                                               
the Key  Coalition of Alaska [included  within members' packets].                                                               
She reflected  on the  suggestions for  used equipment  during an                                                               
earlier presentation by the Key  Coalition, and she asked whether                                                               
the proposed bill was different from those suggestions.                                                                         
REPRESENTATIVE  GATTIS   replied  that  the  proposed   bill  was                                                               
introduced because  of the Key Coalition,  as it had been  one of                                                               
their top priorities.                                                                                                           
3:24:54 PM                                                                                                                    
CHAIR SEATON opened public testimony.                                                                                           
3:25:04 PM                                                                                                                    
JOHN CANNON,  President, Key Coalition  of Alaska,  declared that                                                               
the proposed  bill addressed  one of the  top priorities  for the                                                               
Key Coalition.  He said  that apparently the state prohibited the                                                               
use of  Medicaid funds for  the purchase of used  and refurbished                                                               
durable  medical   equipment  (DME),  even  though   the  federal                                                               
government  did allow  these purchases.   He  reported that  many                                                               
other  states  allowed  it, including  Kansas,  Delaware,  Idaho,                                                               
Oklahoma, and  Vermont, which had  resulted in cost savings.   He                                                               
pointed out that  the Kansas program reported a  $3.15 return for                                                               
every  $1 spent  on this  reused program.   In  2012, the  Kansas                                                               
equipment  exchange program  had 1,200  requests and  re-assigned                                                               
806  items, with  a value  of  nearly $1  million.   In the  four                                                               
months of  2013, the Kansas  program had 397  equipment requests,                                                               
228 donations valued  at $283,000, and reassigned 220  items.  He                                                               
declared that the durable medical  equipment reuse program made a                                                               
lot of sense for  cost and users.  He offered  his belief that it                                                               
was wise  to keep the  language of  the proposed bill  simple and                                                               
straightforward in  order to allow DHSS  to set up the  DME reuse                                                               
program.   He reported that,  currently in Alaska,  the ownership                                                               
of the equipment  went to the client, and  consequently, when the                                                               
client no  longer needed the equipment,  it was disposed of  in a                                                               
variety of ways.   He suggested that this policy  of ownership be                                                               
re-considered by DHSS.   He pointed out that Kansas  had the most                                                               
established re-use  program, noting that Kansas  had suggested to                                                               
be cautious of  the impact on DME providers, as  it was necessary                                                               
to maintain a healthy partnership  with these vendors.  He shared                                                               
that  other  states  had  recognized that  there  was  plenty  of                                                               
business,  and that  through collaboration,  everyone would  win.                                                               
He stated  that this  program would  not need to  put any  of the                                                               
current DME providers at risk.   He urged passing of the proposed                                                               
bill, adding that Access Alaska was currently refurbishing DME.                                                                 
REPRESENTATIVE TARR  questioned whether, although  there appeared                                                               
to  be about  50 different  businesses involved  with DME,  there                                                               
were enough businesses in smaller communities for participation.                                                                
MR.  CANNON  said that,  judging  from  the experience  of  other                                                               
states, no DME  providers had been put out of  business through a                                                               
similar program.                                                                                                                
3:32:44 PM                                                                                                                    
PATRICK  REINHART,  Executive  Director,  Governor's  Council  on                                                               
Disabilities  and  Special  Education,  Division  of  Senior  and                                                               
Disabilities Services, Department of  Health and Social Services,                                                               
testified in support  of proposed HB 161 regarding  the reuse and                                                               
recycling of  durable medical equipment, and  allowing this under                                                               
Medicaid.   He declared that  the Governor's Council  had brought                                                               
this concept  to the  legislature earlier this  year, as  had the                                                               
Key Coalition of Alaska.  He  spoke about his experience with the                                                               
Wisconsin mobility store, a program  run by an independent living                                                               
center similar to  Access Alaska.  He said that  this store had a                                                               
vast amount  of used equipment  and that, as almost  everyone who                                                               
worked there had  a disability, it had  created opportunities for                                                               
employment.  He  reported that the wheelchairs in  the store were                                                               
about one-third  the original price,  even though  nothing looked                                                               
used.   He  said  that damaged  equipment was  not  offered.   He                                                               
reported that  Wisconsin used the  correctional industries  for a                                                               
lot of the cleaning and repair  of the equipment, and that Kansas                                                               
and  Oklahoma had  similar  programs.   These  programs would  be                                                               
somewhat adaptable  to Alaska, although Alaska  would have bigger                                                               
challenges with shipping and collecting.   He stated that it made                                                               
a lot of  sense for Alaska in urban areas.   He acknowledged that                                                               
the  details would  need  to  be worked  out,  as  there was  the                                                               
potential  for   unintended  consequences   if  it   was  denying                                                               
appropriate DME.   He declared that  the concept was for  when it                                                               
was appropriate  and when  equipment was  useable by  someone who                                                               
needed the  equipment.   He stated that  there was  potential for                                                               
schools,  Medicaid,  and other  state  programs,  and that  local                                                               
entities would also  utilize the program.   He directed attention                                                               
to page 1,  line 6, and expressed his concern,  suggesting that a                                                               
change from "shall" to "may" was  necessary.  He pointed out that                                                               
a companion  bill in  the Senate  used "may"  as there  were some                                                               
instances  where a  used piece  of  equipment was  not the  right                                                               
thing at the right time, and an option was important.                                                                           
REPRESENTATIVE  GATTIS,  in  response to  Representative  Foster,                                                               
said  that the  original  intent  of the  proposed  bill was  for                                                               
purchases anytime used equipment was  available at a lower price;                                                               
however, she  expressed an understanding for  the substitution of                                                               
"may," as it was often  necessary to include the additional costs                                                               
for shipping long  distances.  She declared her  support for this                                                               
CHAIR  SEATON   relayed  that  this  would   be  considered  when                                                               
amendments were discussed.                                                                                                      
3:39:39 PM                                                                                                                    
LISA  NOLAND,   Chief  Marketing   Officer,  Arc   of  Anchorage,                                                               
expressed support for  HB 161.  She said that  there were typical                                                               
issues of  need for DME,  and in the  remote areas of  Alaska, it                                                               
took a  lot of  time just to  acquire the  appropriate equipment.                                                               
She said  that many rural  communities relied on  loaner closets,                                                               
although often  this equipment had not  been maintained properly.                                                               
She pointed  out that often there  was not the ability  by a user                                                               
to pay  cash.  She expressed  support for proposed HB  161, as it                                                               
made common sense.                                                                                                              
3:41:31 PM                                                                                                                    
JIM  BECK, Executive  Director, Access  Alaska, said  that Access                                                               
Alaska had the most mature  experience with this type of program.                                                               
He  reported  that  Access  Alaska  accepted  donated  equipment,                                                               
sanitized it, and then loaned it  out.  In Fiscal Year 2014, they                                                               
loaned out  2,399 pieces  of DME, valued  at more  than $500,000,                                                               
which  resulted in  savings to  private insurance,  Medicare, and                                                               
Medicaid.  He reported that  grant funding from the Rasmussen and                                                               
the Murdoch  charitable foundations had allowed  Access Alaska to                                                               
buy  a  Hub  Scrub,  similar  to a  commercial  dish  washer  for                                                               
cleaning wheelchairs and durable  medical equipment.  He declared                                                               
that  proposed  HB  161  was  "generally  a  pretty  good  idea,"                                                               
although he  expressed some concern with  the regulatory process.                                                               
He  asked to  be involved  with the  regulatory process,  as "the                                                               
devil is  in the details" and  they did not "want  to wander into                                                               
the   land  of   unintended  consequences   with  this   sort  of                                                               
legislation."    He pointed  out  that  it  would depend  on  the                                                               
regulatory framework for whether  Access Alaska became a Medicaid                                                               
provider.  He reiterated that  currently Access Alaska was a loan                                                               
program which  offered a lot  of good for the  local communities,                                                               
and he expressed his desire to continue this program.                                                                           
3:44:31 PM                                                                                                                    
CHAIR SEATON asked  if the proposed bill would  give authority to                                                               
Department of Health and Social Services to write regulations.                                                                  
CHAD   HOPE,  Pharmacy   Program   Manager,  Medical   Assistance                                                               
Administration, Division  of Health Care Services,  Department of                                                               
Health  and Social  Services,  explained  that regulations  would                                                               
have  to be  written  by  DHSS establishing  a  coverage and  fee                                                               
structure  for used  equipment.   He  shared that  DHSS had  been                                                               
approached in the  last year by Mr. Reinhart, and  they had begun                                                               
work on  the process.   He stated  that regulations for  the used                                                               
equipment  rate  would be  required,  regardless  of whether  the                                                               
proposed bill was passed.                                                                                                       
CHAIR  SEATON asked  whether the  statute needed  to include  the                                                               
authority to write regulations, or  whether it would preclude any                                                               
changes from  regulations to  modify the program.   He  asked for                                                               
confirmation that DHSS had the  authority to write regulations to                                                               
implement the statute as it was passed.                                                                                         
MR. HOPE expressed his agreement;  however, he clarified that the                                                               
approach  by DHSS  for  regulations  had been  to  allow for  the                                                               
purchase of  used equipment but  not to  mandate it.   He offered                                                               
his belief that  a mandate could be a challenge,  but if that was                                                               
amended,  then   there  should   not  be   any  issue   with  the                                                               
CHAIR SEATON  stated that his  intent was for  clarification that                                                               
the statute allowed for the goal.                                                                                               
REPRESENTATIVE TARR  referenced the  Access Alaska  apparatus for                                                               
sanitizing  the DME,  the  industry standard,  and  she asked  if                                                               
there  were  any  concerns  for  enforcement  of  cleanliness  by                                                               
additional providers.                                                                                                           
MR. HOPE  expressed his  agreement that  those were  details that                                                               
would need to be worked out.   He reported that the primary focus                                                               
until now had been to allow  that used equipment be billed to the                                                               
department.   He said that  it was  still an unknown  for whether                                                               
Medicaid  would  write  these  details  into  the  regulation  or                                                               
whether  it  would  be  included  with  the  provider's  business                                                               
practices and policies.                                                                                                         
CHAIR  SEATON referenced  the ownership  of DME,  as there  was a                                                               
system whereby the  client would own the equipment.   He asked if                                                               
there would be a right of  return included in the regulations, as                                                               
there was  nothing in the  proposed bill regarding who  would own                                                               
the equipment.                                                                                                                  
MR. HOPE  explained that currently  the department  purchased new                                                               
equipment and  the ownership  transferred to  the recipient.   He                                                               
said that the  department had allowed for rental  of various DME,                                                               
in which  case ownership would  remain with the  provider, unless                                                               
it was  rented to own.   He noted that there  had been discussion                                                               
of   used  equipment   when  the   department  investigated   the                                                               
transition from  a purchase  model to a  capped rental  model for                                                               
reimbursement.   He declared that  this was a  complicated topic,                                                               
as it  would allow  for the  rental of  equipment rather  than an                                                               
outright  purchase,  but would  then  create  a market  for  used                                                               
equipment.    He  said  that  the department  would  build  in  a                                                               
reimbursement  model   to  allow  providers  to   bill  for  used                                                               
equipment.   He allowed  that all  of this was  part of  a larger                                                               
discussion for ways to reform the overall program.                                                                              
CHAIR  SEATON  offered his  belief  that  the statute  would  not                                                               
preclude these models.                                                                                                          
REPRESENTATIVE GATTIS  commented that the proposed  bill had been                                                               
kept relatively simple to allow these opportunities.                                                                            
3:52:04 PM                                                                                                                    
CHAIR SEATON  closed public testimony after  ascertaining that no                                                               
one further wished to testify.                                                                                                  
REPRESENTATIVE STUTES  offered her  belief that this  appeared to                                                               
be a win-win bill.                                                                                                              
3:52:26 PM                                                                                                                    
REPRESENTATIVE FOSTER  moved to adopt a  conceptual amendment, on                                                               
page 1, line 6, to change the word "shall" to "may."                                                                            
CHAIR  SEATON  stated  that  this  would  be  labeled  Conceptual                                                               
Amendment 1, and he objected for discussion.                                                                                    
REPRESENTATIVE  GATTIS, in  response to  Chair Seaton,  said that                                                               
Conceptual Amendment  1 was  acceptable, as  it aligned  with the                                                               
senate version of the bill.                                                                                                     
3:53:11 PM                                                                                                                    
CHAIR  SEATON removed  his  objection.   There  being no  further                                                               
objection, Conceptual Amendment 1 was adopted.                                                                                  
3:53:35 PM                                                                                                                    
CHAIR SEATON  moved to adopt Amendment  2, labeled 29-LS0636\W.1,                                                               
Glover, 4/6/15, which read:                                                                                                     
     Page 1, line 10, following "expensive":                                                                                    
          Insert ", including shipping,"                                                                                        
     Page 1, line 13, following "(4)":                                                                                          
          Insert "equally"                                                                                                      
3:54:09 PM                                                                                                                    
REPRESENTATIVE TARR objected for discussion.                                                                                    
CHAIR SEATON  explained that the proposed  amendment would ensure                                                               
that shipping  was included in  the expense,  as a piece  of used                                                               
equipment  could  have a  less  expensive  list price,  but  with                                                               
shipping  it  could  be  more  expensive  than  a  new  piece  of                                                               
equipment.  He pointed out that  there was a question for whether                                                               
a piece of durable equipment  specifically, or equally, meets the                                                               
needs of an  individual, offering examples of  different types of                                                               
REPRESENTATIVE TARR asked  whether all four of  the standards had                                                               
to  be met,  and questioned  whether there  was any  circumstance                                                               
when you would  not want any limitation.  She  offered her belief                                                               
that  being equally  able  to  meet the  needs  of the  recipient                                                               
prevented purchase  of any less  expensive piece that was  not as                                                               
useful to the individual.                                                                                                       
MR. HOPE explained  that shipping costs would be  factored in, as                                                               
it  was  an issue  that  was  being  reviewed holistically.    He                                                               
reported that the current shipping  regulations were very narrow,                                                               
and DHSS  was exploring ways  to refine  these.  He  allowed that                                                               
any  used equipment,  inclusive  of shipping,  would  need to  be                                                               
cheaper than  a new item, each  of which would meet  the needs of                                                               
the recipient.                                                                                                                  
3:57:45 PM                                                                                                                    
CHAIR  SEATON directed  attention  to the  proposed Amendment  2,                                                               
page 1, line 13, which inserted  "equally" in front of meets, and                                                               
asked whether he was comfortable with that.                                                                                     
MR. HOPE said that he did not foresee any challenges to this.                                                                   
REPRESENTATIVE GATTIS,  in response to Chair  Seaton, stated that                                                               
proposed Amendment 2 made this a better bill.                                                                                   
3:58:36 PM                                                                                                                    
REPRESENTATIVE  TARR  removed  her   objection.  There  being  no                                                               
further  objection, Amendment  2, labeled  29-LS0636\W.1, Glover,                                                               
4/6/15, was adopted.                                                                                                            
3:58:58 PM                                                                                                                    
REPRESENTATIVE  FOSTER  moved  to  report  HB  161,  Version  29-                                                               
LS0636\W,   as  amended,   out  of   committee  with   individual                                                               
recommendations and  the accompanying  zero fiscal notes.   There                                                               
being  no  objection, CSHB  161(HSS)  was  moved from  the  House                                                               
Health and Social Services Standing Committee.                                                                                  

Document Name Date/Time Subjects
HCR9 Version A.PDF HHSS 4/7/2015 3:00:00 PM
HCR9 Supporting Documents-CDH Statistics.pdf HHSS 4/7/2015 3:00:00 PM
HCR9 Sponsor Statement.pdf HHSS 4/7/2015 3:00:00 PM
HCR9 Supporting Document - MOA Resolution.pdf HHSS 4/7/2015 3:00:00 PM
HB161 DHSS Summary and Recommendations.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 Fiscal Note - DHSS - 04-05-2015.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 Sectional Analysis Version W.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 Sponsor Statement.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 ver W.PDF HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 Support Key Coalition.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 Support Governor's Council on Disabilities.pdf HHSS 4/7/2015 3:00:00 PM
HB 161
HB161 letter from AK PT Association.pdf HHSS 4/7/2015 3:00:00 PM
HB 161