Legislature(2015 - 2016)CAPITOL 106

02/23/2016 03:15 PM House HEALTH & SOCIAL SERVICES

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03:17:28 PM Start
03:17:51 PM HB227
04:27:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
Heard & Held
-- Public Testimony --
Introduction of Amendments
+ Bills Previously Heard/Scheduled TELECONFERENCED
                HB 227-MEDICAL ASSISTANCE REFORM                                                                            
3:17:51 PM                                                                                                                    
CHAIR SEATON announced  that the only order of  business would be                                                               
HOUSE  BILL  NO. 227,  "An  Act  relating to  medical  assistance                                                               
reform  measures; relating  to  administrative  appeals of  civil                                                               
penalties  for  medical  assistance providers;  relating  to  the                                                               
duties of the Department of  Health and Social Services; relating                                                               
to audits  and civil penalties for  medical assistance providers;                                                               
relating to  medical assistance cost containment  measures by the                                                               
Department  of Health  and Social  Services; relating  to medical                                                               
assistance coverage  of clinic  and rehabilitative  services; and                                                               
providing for an effective date."                                                                                               
CHAIR SEATON stated that the  proposed amendments to HB 227 would                                                               
be  introduced, and  not formally  adopted, for  consideration at                                                               
this meeting.                                                                                                                   
3:18:47 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  introduced proposed Amendment  1, labeled                                                               
29-LS1096\H.7, Glover, 2/19/16, which read:                                                                                     
     Page 5, line 5:                                                                                                            
          Delete "may not be less than 50"                                                                                  
     Page 5, lines 5 - 10:                                                                                                      
          Delete "[, AS A TOTAL FOR THE MEDICAL ASSISTANCE                                                                      
     PROGRAMS UNDER  AS 47.07  AND AS  47.08, SHALL  BE 0.75                                                                    
     PERCENT OF  ALL ENROLLED PROVIDERS UNDER  THE PROGRAMS,                                                                    
     ADJUSTED  ANNUALLY  ON JULY  1,  AS  DETERMINED BY  THE                                                                    
     DEPARTMENT,  EXCEPT THAT  THE  NUMBER  OF AUDITS  UNDER                                                                    
     THIS SECTION MAY NOT BE LESS THAN 75]"                                                                                     
          Insert ", as a total for the medical assistance                                                                       
      programs under AS 47.07 and AS 47.08, shall be 0.75                                                                       
     percent of  all enrolled providers under  the programs,                                                                    
     adjusted  annually  on July  1,  as  determined by  the                                                                    
     department,  except that  the  number  of audits  under                                                                    
     this section may not be less than 75"                                                                                      
REPRESENTATIVE  VAZQUEZ  explained  that the  proposed  amendment                                                               
reverted the number of audits  to the number previously required.                                                               
She  declared  that  requiring  75  audits  was  not  an  extreme                                                               
hardship, and  she expressed agreement that  the providers should                                                               
not  be subjected  to a  simultaneous  federal audit.   She  said                                                               
these audits  were very  important to  maintain the  integrity of                                                               
the system, and to minimize fraud, waste, and abuse.                                                                            
CHAIR   SEATON   tabled   the  proposed   amendment   for   later                                                               
3:20:31 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  introduced proposed Amendment  2, labeled                                                               
29-LS1096\H.8, Glover, 2/20/16, which read:                                                                                     
     Page 8, lines 2 - 7:                                                                                                       
          Delete all material.                                                                                                  
     Page 8, line 8:                                                                                                            
          Delete "(4)"                                                                                                          
          Insert "(2)"                                                                                                          
     Page 8, line 13:                                                                                                           
          Delete "(5)"                                                                                                          
          Insert "(3)"                                                                                                          
     Page 11, line 12:                                                                                                          
          Delete "applications for waivers and"                                                                                 
          Insert "application for a waiver"                                                                                     
     Page 11, line 13:                                                                                                          
          Delete "options under AS 47.07.036(d)(1) - (3)"                                                                       
          Insert "under AS 47.07.036(d)(1)"                                                                                     
     Page 11, line 16:                                                                                                          
          Delete "applications"                                                                                                 
          Insert "application"                                                                                                  
     Page 11, lines 17 - 18:                                                                                                    
          Delete ", a section 1915(i) option under 42                                                                           
      U.S.C. 1396n, and a section 1915(k) option under 42                                                                       
     U.S.C. 1396n were"                                                                                                         
          Insert "was"                                                                                                          
     Page 11, line 20:                                                                                                          
          Delete "programs"                                                                                                     
          Insert "program"                                                                                                      
     Page 11, line 21:                                                                                                          
          Delete "waivers"                                                                                                      
          Insert "waiver"                                                                                                       
     Page 11, lines 21 - 22:                                                                                                    
          Delete "(A)"                                                                                                          
     Page 11, line 24:                                                                                                          
          Delete ";"                                                                                                            
          Insert "."                                                                                                            
     Page 11, lines 25 - 27:                                                                                                    
          Delete all material.                                                                                                  
REPRESENTATIVE  VAZQUEZ explained  that  this proposed  amendment                                                               
would  delete the  references  and material  with  regard to  the                                                               
options 1915(i) and 1915(k), as  these proposed to further expand                                                               
the  regular  Medicaid  state  plan  beyond  the  newly  expanded                                                               
Medicaid group.  She declared that  this was "a pure expansion of                                                               
our  existing Medicaid  program  and the  department  has yet  to                                                               
provide the  legislature with  very robust  studies or  data that                                                               
support their  growth assertions  that adding these  options will                                                               
save money."  She stated  that an addition of these "populations"                                                               
without careful consideration of  all the ramifications could put                                                               
the Medicaid  program in  jeopardy, as this  included a  group of                                                               
people that were not yet  clearly defined by Department of Health                                                               
and  Social  Services.    She  acknowledged  that,  although  the                                                               
1915(k)  option was  paid with  a  56 percent  federal match,  it                                                               
expanded  the number  of services  provided to  beneficiaries and                                                               
expanded  the  scope  of  services   beyond  what  was  currently                                                               
available through waivers.  She  stated that the 1915 options did                                                               
not include  a cap on  services or  a wait list  for individuals.                                                               
She expressed agreement  that it was necessary  to include mental                                                               
health services,  substance abuse, and traumatic  brain injuries,                                                               
although  the  proposed option  could  also  provide services  to                                                               
those with Alzheimer's and related  dementia.  She suggested that                                                               
robust  studies were  necessary to  show the  number of  eligible                                                               
individuals and  the cost to  the state, as,  without a cap  or a                                                               
waitlist,  this  could place  an  undue  fiscal hardship  on  the                                                               
state.    She noted  that  it  was  unclear whether  Centers  for                                                               
Medicare   and   Medicaid   Services  (CMS)   would   allow   any                                                               
modifications or withdrawal from these  options.  She opined that                                                               
both these options  could become entitlement programs.   As there                                                               
was  not  withdrawal from  these  entitlements,  she offered  her                                                               
belief that  it was  unclear whether this  could cause  Alaska to                                                               
lose further federal funding for Medicaid.                                                                                      
CHAIR SEATON tabled the amendment for later discussions.                                                                        
3:24:41 PM                                                                                                                    
CHAIR  SEATON  introduced  proposed  Amendment  3,  labelled  29-                                                               
LS1096\H.5, Glover, 2/19/16, which read:                                                                                        
     Page 6, line 3, following "audit.":                                                                                    
          "The department may not assess interest under                                                                     
     this subsection if a provider                                                                                          
               (1)  identifies and reports an overpayment                                                                   
      to the department independent of an audit conducted                                                                   
     under this section; and                                                                                                
               (2)  repays the amount of the overpayment to                                                                 
      the department within five months after the date the                                                                  
     provider received the overpayment."                                                                                    
CHAIR  SEATON  explained  that   this  proposed  amendment  added                                                               
clarification to  Section 5  of the proposed  bill that  DHSS may                                                               
not assess  interest against a  provider who  self-identified for                                                               
overpayments  received if  the provider  independently identified                                                               
the overpayment and  repaid this in a timely  manner, within five                                                               
months.  He said that  Section 5 would encourage timely repayment                                                               
of overpayments,  and would encourage  providers to  be proactive                                                               
in self-identifying and repaying the overpayments.                                                                              
CHAIR SEATON tabled the amendment for later discussions.                                                                        
3:26:16 PM                                                                                                                    
CHAIR SEATON offered proposed  Amendment 4 labeled 29-LS1096\H.6,                                                               
Glover, 2/19/16, which read:                                                                                                    
     Page 9, line 30:                                                                                                           
          Delete "DEMONSTRATION"                                                                                                
          Insert "PILOT"                                                                                                        
     Page 9, line 31:                                                                                                           
          Delete "January"                                                                                                      
          Insert "July"                                                                                                         
     Page 9, line 31, through page 10, line 1:                                                                                  
          Delete "design and implement a demonstration                                                                          
          Insert "contract with a third party to establish                                                                      
     a  care coordination  pilot  project for  approximately                                                                    
     500  voluntary   participants  who  are   eligible  for                                                                    
     medical assistance under AS 47.07.020(b)(14)"                                                                              
     Page 10, lines 2 - 4:                                                                                                      
          Delete "The demonstration project shall provide                                                                       
     for  the  voluntary  enrollment  of  approximately  500                                                                    
     recipients  who  are  eligible for  medical  assistance                                                                    
     under AS  47.07.020(b)(14).   The Department  of Health                                                                    
     and Social Services shall"                                                                                                 
          Insert "The care coordination pilot project must                                                                      
     focus on nutritional sufficiency and"                                                                                      
     Page 10, line 6:                                                                                                           
          Delete "demonstration"                                                                                                
          Insert "care coordination pilot"                                                                                      
     Page 10, line 7:                                                                                                           
          Delete "demonstration"                                                                                                
          Insert "care coordination pilot"                                                                                      
     Page 10, line 9:                                                                                                           
          Delete "demonstration"                                                                                                
          Insert "care coordination pilot"                                                                                      
     Page 10, line 15, following "(July 2013).":                                                                                
          Insert "Two years after the date the Department                                                                       
     of Health and Social  Services first enrolls recipients                                                                    
     in the care coordination  pilot project, the Department                                                                    
     of Health  and Social  Services shall deliver  a report                                                                    
     to  the senate  secretary and  the chief  clerk of  the                                                                    
     house  of representatives  and  notify the  legislature                                                                    
     that  the  report  is  available.    The  report  shall                                                                    
     describe  the results  of the  care coordination  pilot                                                                    
     project, any difference in the  pre-term birth rate for                                                                    
     participants in  the pilot project  as compared  to the                                                                    
     pre-term birth  rate for the  state, and  the estimated                                                                    
     savings  to   the  state   resulting  from   the  pilot                                                                    
CHAIR SEATON  explained that this proposed  amendment changed the                                                               
project  under  Section  15 from  a  demonstration  and  research                                                               
project designed and  implemented by DHSS to  a care coordination                                                               
pilot project contracted with a third  party.  He stated that, as                                                               
the department did not normally  pursue research projects, it was                                                               
not well  suited to  efficiently manage a  project.   He reported                                                               
that the  focused effort for  this was already underway  in South                                                               
Carolina, so that Alaska could see  if there could be a reduction                                                               
in  pre-term  births and  related  costs  that other  states  had                                                               
CHAIR SEATON tabled the amendment for later discussions.                                                                        
3:28:01 PM                                                                                                                    
CHAIR  SEATON   offered  proposed   Amendment  5,   labelled  29-                                                               
LS1096\H.9, Glover, 2/22/16, which read:                                                                                        
     Page 7, lines 14 - 26:                                                                                                     
          Delete all material.                                                                                                  
     Renumber the following bill sections accordingly.                                                                          
     Page 7, line 31, through page 8, line 1:                                                                                   
          Delete "provided to Indian Health Service                                                                             
     beneficiaries  through the  Indian  Health Service  and                                                                    
     tribal health facilities"                                                                                                  
          Insert "for recipients of behavioral health                                                                           
     services, as defined by the department by regulation"                                                                      
     Page 11, line 13:                                                                                                          
          Delete "sec. 12"                                                                                                      
          Insert "sec. 11"                                                                                                      
     Page 11, following line 27:                                                                                                
     Insert a new bill section to read:                                                                                         
        "*  Sec. 17.  The  uncodified law  of  the State  of                                                                
     Alaska is amended by adding a new section to read:                                                                         
          IMPLEMENT FEDERAL POLICY ON TRIBAL MEDICAID                                                                           
     REIMBURSEMENT. (a) The Department  of Health and Social                                                                    
     Services  shall collaborate  with Alaska  tribal health                                                                    
     organizations  and  the  United  States  Department  of                                                                    
     Health and  Human Services  to implement  changes fully                                                                    
     in federal  policy that  authorize 100  percent federal                                                                    
     funding for  services provided  to American  Indian and                                                                    
     Alaska Native individuals eligible for Medicaid.                                                                           
          (b)  In   this  section,  "Alaska   tribal  health                                                                    
     organization" means an organization recognized by the                                                                      
     United States Indian Health Service to provide health-                                                                     
     related services."                                                                                                         
     Renumber the following bill sections accordingly.                                                                          
     Page 12, lines 6 - 7:                                                                                                      
          Delete "and the provisions  of secs. 12(e), 12(f),                                                                    
     15, and 16"                                                                                                                
          Insert  "the  provisions  of AS  47.07.036(e)  and                                                                    
     (f), added by sec. 11 of this Act, and the provisions                                                                      
     of secs. 14 and 15"                                                                                                        
     Page 12, line 22:                                                                                                          
          Delete "sec. 16"                                                                                                      
          Insert "sec. 15"                                                                                                      
     Page 12, line 23:                                                                                                          
          Delete "sec. 18"                                                                                                      
          Insert "sec. 19"                                                                                                      
     Page 12, line 25:                                                                                                          
          Delete "sec. 16"                                                                                                      
          Insert "sec. 15"                                                                                                      
     Page 12, line 27:                                                                                                          
          Delete "Section 12(e) of this Act"                                                                                    
          Insert "AS 47.07.036(e), added by  sec. 11 of this                                                                    
     Page 12, line 29:                                                                                                          
          Delete "added by sec. 12(e) of this Act"                                                                              
          Insert "of  AS 47.07.036(e),  added by sec.  11 of                                                                    
     this Act,"                                                                                                                 
     Page 12, line 31:                                                                                                          
          Delete "Section 12(f) of this Act"                                                                                    
          Insert "AS 47.07.036(f), added by  sec. 11 of this                                                                    
     Page 13, line 2:                                                                                                           
          Delete "added by sec. 12(f) of this Act"                                                                              
          Insert "of  AS 47.07.036(f),  added by sec.  11 of                                                                    
     this Act,"                                                                                                                 
     Page 13, line 4:                                                                                                           
          Delete "Section 15"                                                                                                   
          Insert "Section 14"                                                                                                   
     Page 13, line 6:                                                                                                           
          Delete "sec. 15"                                                                                                      
          Insert "sec. 14"                                                                                                      
     Page 13, line 8:                                                                                                           
          Delete "sec. 16"                                                                                                      
          Insert "sec. 15"                                                                                                      
     Page 13, line 11:                                                                                                          
          Delete "sec. 12(e) of this Act"                                                                                       
          Insert "AS 47.07.036(e), added by sec. 11 of this                                                                     
     Page 13, line 14:                                                                                                          
          Delete "sec. 12(f) of this Act"                                                                                       
          Insert "AS 47.07.036(f), added by sec. 11 of this                                                                     
     Page 13, line 17:                                                                                                          
          Delete "sec. 15"                                                                                                      
          Insert "sec. 14"                                                                                                      
     Page 13, line 20:                                                                                                          
          Delete "17(a)"                                                                                                        
          Insert "16(a)"                                                                                                        
CHAIR SEATON explained that the  proposed amendment reflected the                                                               
CMS  policy  guidance  from  October  2015  which  indicated  the                                                               
willingness by CMS to re-evaluate  the current interpretation for                                                               
Section 19.05(b) of the Social  Security Act to allow 100 percent                                                               
federal  medical  assistance  percentages  (FMAP)  for  more  and                                                               
expanded  services   for  American   Indian  and   Alaska  Native                                                               
beneficiaries.   This would include  medical travel  and services                                                               
provided  by  non-tribal  providers with  contractual  agreements                                                               
with Indian Health Service facilities.                                                                                          
CHAIR SEATON tabled the amendment for later discussions.                                                                        
CHAIR SEATON  stated his  desire for testimony  on the  effect of                                                               
these amendments in the current budget.                                                                                         
3:30:37 PM                                                                                                                    
CHAIR SEATON opened public testimony.                                                                                           
3:31:36 PM                                                                                                                    
BECKY HULTBERG, President/CEO, Alaska  State Hospital and Nursing                                                               
Home Association,  offered some brief, broad  comments, which she                                                               
described as  "tweaks to the  [proposed] bill."  She  stated that                                                               
proposed  HB 227  did several  important positive  things, as  it                                                               
articulated  a vision  in its  intent language  for the  Medicaid                                                               
program when it speaks about  prevention as a core value, payment                                                               
reform,  public   -  private   partnerships,  and   general  cost                                                               
reduction in the  Medicaid program.  It  also established payment                                                               
reform demonstration  projects, and would change  the health care                                                               
delivery  and payment  systems,  even as  this  would take  hard,                                                               
difficult work  at all  levels.   She expressed  appreciation for                                                               
the use of pilot projects to  test these new payment and delivery                                                               
models, and  for the  inherent flexibility  in the  proposed bill                                                               
for allowing for  different kinds of pilot  projects in different                                                               
regions.  She expressed appreciation  for the proposed amendment,                                                               
labelled 29-LS1096\H.5, Glover,  2/19/16, although she encouraged                                                               
"some  sidebars to  be put  around the  issue of  overpayments so                                                               
that  providers who  self-report are  not penalized  in the  same                                                               
way."  She  declared support for the efforts  to reduce redundant                                                               
audits, noting  that it was important  for the state to  have the                                                               
tools to address  fraud and abuse, but not  to add administrative                                                               
burden   to  low   risk  providers.     She   pointed  out   that                                                               
"administrative  burden  equals cost."    She  declared that  the                                                               
proposed bill was  able to strike an  appropriate balance between                                                               
tools  and enforcement  and to  ensure an  efficient health  care                                                               
system. She  reported that the  proposed bill focused  on primary                                                               
care  through  development  of a  primary  care  case  management                                                               
system, which she  labeled as a building block  for system change                                                               
as well  as the intent to  more fully utilize telemedicine.   She                                                               
declared  that reform  was a  long term  endeavor, and  that this                                                               
would probably not be the last year to address it.                                                                              
3:36:21 PM                                                                                                                    
CHAIR SEATON  asked if the  five month window  for self-reporting                                                               
mistakes was reasonable.                                                                                                        
MS.  HULTBERG replied  that she  would respond  at a  later date,                                                               
although  she  encouraged the  reporting  of  overpayments.   She                                                               
pointed  out  that,  as  the   state  did  not  pay  interest  on                                                               
underpayments, appropriate sideboards  were necessary for whether                                                               
the providers should pay interest on overpayments.                                                                              
3:37:43 PM                                                                                                                    
MS. HULTBERG,  in response  to Chair Seaton,  stated that  it was                                                               
possible that the bill language  encompassed the project, and she                                                               
expressed commitment  to the  emergency room  utilization project                                                               
and the  emergency room physicians.   She suggested  amending the                                                               
proposed bill to include the project  in statute as the intent of                                                               
the proposed  bill was to  better manage cost and  utilization of                                                               
super utilizers.                                                                                                                
CHAIR SEATON  asked about the  inclusion of dental health  in the                                                               
proposed bill.                                                                                                                  
MS. HULTBERG suggested asking the  Alaska Dental Society, and she                                                               
noted  that ASHNA  supported more  access  to dental  care as  it                                                               
would decrease  emergency room visits  that could have  been more                                                               
easily treated in other less expensive settings.                                                                                
3:41:07 PM                                                                                                                    
KATE BURKHART,  Executive Director,  Alaska Mental  Health Board,                                                               
Advisory  Board   on  Alcoholism   &  Drug  Abuse,   Division  of                                                               
Behavioral  Health, Department  of  Health  and Social  Services,                                                               
declared that her  comments were on behalf of  these boards only.                                                               
She shared that the boards  had participated in the conversations                                                               
about Medicaid reform and redesign  with the current and previous                                                               
administrations for more  than eight years.  She  shared that, as                                                               
an external  stakeholder, the board engaged  Medicaid recipients,                                                               
those who relied on the services,  in order to learn how to "best                                                               
reform the  system."  She  echoed the comments from  Ms. Hultberg                                                               
about  the  emphasis  on preventative  care  as  an  underpinning                                                               
philosophy for  reform.  She  reported that these efforts  were a                                                               
focus on  improving quality and access  to care, as well  as cost                                                               
containment, which she stated were  a priority for the boards and                                                               
the  constituents.   They supported  a sustainable  system.   She                                                               
expressed appreciation  for the flexibility of  the proposed bill                                                               
to  pursue  a  variety  of  projects  to  help  ensure  that  the                                                               
behavioral health  would become a  robust system to allow  all of                                                               
the Medicaid  reform efforts to  be successful.  She  stated that                                                               
behavioral health was  the lynchpin of reform, as it  was "such a                                                               
cost driver  of the system."   She explained that the  state plan                                                               
options  and the  1115  waiver allowed  movement  of funding  for                                                               
programs from general funds to  Medicaid funding.  She referenced                                                               
Section  9 of  the proposed  bill, expanded  access to  the super                                                               
utilizer  program,   and  reported  that  the   majority  of  the                                                               
participants  had  behavior  health disorders,  that  access  and                                                               
quality of care  was improved, and that the cost  for service had                                                               
been decreased.   This provided  support and guidance  for people                                                               
to receive  the necessary services  in a timely fashion.   Moving                                                               
on to  Section 12 regarding the  state plan options and  the 1115                                                               
waiver,  she  offered her  belief  that  this would  improve  the                                                               
delivery  for home  and community  based services,  and refinance                                                               
services that  currently relied  heavily on  general funds.   She                                                               
discouraged any amendment  to remove the state  plan options from                                                               
the proposed bill.   She opined that the 1115  waivers could have                                                               
the most  impact on the  behavioral health system, as  these were                                                               
very flexible.  She moved on to  Sections 13 & 14 of the proposed                                                               
bill,  which  were  designed to  increase  access  to  behavioral                                                               
health services by  removing the requirement that an  entity be a                                                               
Division  of   Behavioral  Health   grantee  in  order   to  bill                                                               
behavioral  health  Medicaid.   She  declared  that this  was  an                                                               
effective  way  to  increase  access.     She  cautioned  that  a                                                               
statutory change was only the start,  as there would also need to                                                               
be  regulatory changes  in order  to accomplish  this goal.   She                                                               
reiterated that administrative burden  equaled cost, pointing out                                                               
that  the administrative  burden  for  community behavior  health                                                               
providers  billing  Medicaid  was already  "pretty  significant."                                                               
She declared support for the reform efforts.                                                                                    
CHAIR  SEATON asked  for more  details  about the  1915(i) &  (k)                                                               
waivers, and the reasons for keeping them in the proposed bill.                                                                 
3:47:34 PM                                                                                                                    
MS. BURKHART  relayed that  the boards had  been most  focused on                                                               
the 1915(i)  waiver as  these were the  home and  community based                                                               
services that  benefited the most  disabled, and she  offered her                                                               
understanding  that this  state  plan option  would allow  people                                                               
highly  impaired by  disability to  receive more  coordinated and                                                               
comprehensive home  and community  based services.   She declared                                                               
that  this  was not  adding  people,  it  was just  changing  the                                                               
delivery  system as  many of  these people  were currently  being                                                               
served by  general fund  programs.  She  relayed that  the boards                                                               
had engaged  in the process  for the  1915(i) and (k)  state plan                                                               
options as  they had recognized  that people with  serious mental                                                               
illness  and chronic  substance  use disorders  that were  highly                                                               
impaired would  be in  an institution,  whether that  was prison,                                                               
homelessness,  or  the  psychiatric   hospital,  except  for  the                                                               
receipt  of  home and  community  based  services.   This  was  a                                                               
mechanism  to  better serve  this  group  of constituents,  while                                                               
financing in  a more  sound way.   She  relayed that  it appeared                                                               
that,  to achieve  the  recommendations  in the  administrations'                                                               
report, the  1115 was a  more flexible option, although  this did                                                               
not mean  that an  individual with a  serious mental  illness, so                                                               
impaired that  they would meet  the ultimate  functional criteria                                                               
set  in  1915(i),  would  not  be eligible  for  services.    She                                                               
reported that, for  behavioral health, the focus would  be on the                                                               
1115 waiver  and not  the 1915  state plan  options.   She stated                                                               
that the  commitment by the boards  to the state plan  option was                                                               
because they  had thought it  was the answer until  they realized                                                               
that the answer could be the 1115 waiver.                                                                                       
CHAIR SEATON relayed that the  committee was attempting to better                                                               
understand who would  be available and qualify  for the services.                                                               
He stated that it was a complex situation.                                                                                      
3:53:31 PM                                                                                                                    
VALERIE  DAVIDSON,  Commissioner,  Office  of  the  Commissioner,                                                               
Department  of  Health and  Social  Services  (DHSS), echoed  the                                                               
previous  comments from  Ms. Hultberg  that the  states which  do                                                               
health reform and do it well,  also do it continually, year after                                                               
year.   She expressed appreciation  for the  flexibility included                                                               
in  the proposed  bill, as  it  allowed more  available tools  to                                                               
address  concerns.    She  stated  support  for  maintaining  the                                                               
1915(i)  and (k)  options in  the  proposed bill,  as it  allowed                                                               
another way to  provide services in a more efficient  way, and to                                                               
ensure the necessary care, while  saving general fund dollars for                                                               
the  state.   She  referenced  the 1115  option  as another  tool                                                               
available for behavioral services.   She declared that behavioral                                                               
health  was the  key  to  make the  necessary  changes in  health                                                               
reform.  She  expressed appreciation for the  flexibility to DHSS                                                               
within the proposed  bill to allow the tailoring  of programs and                                                               
services for cost effectiveness and  efficiency.  She stated that                                                               
it made sense "to have a  more comprehensive tool box rather than                                                               
start  removing tools  from the  tool box  that really  limit our                                                               
ability to make meaningful change and meaningful reform."                                                                       
JON  SHERWOOD,  Deputy  Commissioner, Medicaid  and  Health  Care                                                               
Policy,  Office of  the Commissioner,  Department  of Health  and                                                               
Social  Services, acknowledged  the  correctness  of the  earlier                                                               
testimony  by   Ms.  Burkhart  regarding  the   1915(i)  and  (k)                                                               
CHAIR SEATON reiterated  his request for more  graphics to better                                                               
understand  the   services.    He  directed   attention  back  to                                                               
Amendment 5  and its  reference that  the behavioral  health 1115                                                               
waiver was available to replace tribal waivers.                                                                                 
3:59:08 PM                                                                                                                    
REPRESENTATIVE  STUTES  asked  Department of  Health  and  Social                                                               
Services for  the amount  of dollars cut  from the  budget versus                                                               
the transfer of state dollars to federal dollars.                                                                               
COMMISSIONER DAVIDSON replied that  the Medicaid program had been                                                               
cut about  $100 million in the  general fund, and she  offered to                                                               
provide the details.                                                                                                            
CHAIR SEATON talked about the  anticipated savings to the general                                                               
fund versus the total funding expended  in the state.  He pointed                                                               
out that  an objective  of [Medicaid]  expansion was  to increase                                                               
health  services provided  while cutting  the general  fund.   He                                                               
acknowledged that  it was good  to know the economic  impact from                                                               
the  increase  of  federal  dollars to  the  needed  health  care                                                               
4:01:13 PM                                                                                                                    
COMMISSIONER  DAVIDSON offered  some updated  information to  the                                                               
committee,  sharing that  DHSS posted  a graphic  on its  website                                                               
that included  the Medicaid  data for each  month.   This graphic                                                               
showed how many people had  enrolled in Medicaid Expansion, along                                                               
with the demographics.   There was also  regional information for                                                               
all  Medicaid   enrollees.    Through  January,   there  were  an                                                               
additional 10,416  Alaskans covered  by Medicaid  Expansion, with                                                               
$34.29  million  paid  in  new  claims,  which  was  100  percent                                                               
reimbursable from federal dollars.                                                                                              
REPRESENTATIVE WOOL  asked if the  10,000 enrollees was  close to                                                               
the expectations.                                                                                                               
COMMISSIONER  DAVIDSON replied  that the  number was  probably on                                                               
track to the projections for the  end of FY16.  She reported that                                                               
almost  42,000  Alaskans  would  be eligible,  and  it  had  been                                                               
projected for about 22,000 Alaskans  to enroll in the first year.                                                               
She noted that a bit of  an uptick in enrollment was usually seen                                                               
at  this  time  of  year  because  of  the  individual  insurance                                                               
COMMISSIONER DAVIDSON,  in response to Representative  Wool, said                                                               
that the expectation was for  about 22,000 enrollees in the first                                                               
year.  She  reported that, should the number be  higher, it would                                                               
mean more  federal dollars  coming in  to Alaska,  as it  was 100                                                               
percent  federal  match  in  this   first  year.    She  directed                                                               
attention to  the $34.29 million  paid in claims in  January, and                                                               
shared that this number would always  lag a bit, as providers had                                                               
a one year timely filing limit.   She said that smaller providers                                                               
often sent in  claims sooner, whereas the  larger providers often                                                               
waited to more easily process the  claims in larger batches.  She                                                               
pointed out  that 54  percent of  the Medicaid  enrollees through                                                               
January were  children, with  2 percent  of these  being children                                                               
experiencing disabling conditions.  She  stated that 8 percent of                                                               
all the Medicaid enrollees were a result of expansion.                                                                          
4:05:19 PM                                                                                                                    
CHAIR  SEATON  noted   that  a  number  of   people  had  claimed                                                               
difficulty with getting  enrolled.  He asked if there  had been a                                                               
wide  distribution of  information explaining  the mechanism  for                                                               
COMMISSIONER  DAVIDSON  replied  there   had  been  quite  a  few                                                               
outreach efforts.  She stated that  the fastest way to enroll was                                                               
on healthcare.gov,  sharing that  DHSS had worked  with navigator                                                               
programs  which  enrolled  individual  Alaskans  in  health  care                                                               
plans,  regardless of  eligibility for  Medicaid or  market place                                                               
plans.   She said that  hospitals allowed individuals  already in                                                               
the hospital  to enroll in  Medicaid, which for  some individuals                                                               
could be the fastest means.                                                                                                     
CHAIR  SEATON emphasized  that a  focus of  the House  Health and                                                               
Social Services  Standing Committee was  to get people  signed up                                                               
for appropriate health  care through primary care.   He expressed                                                               
his desire to get the sign up information out to the public.                                                                    
4:08:24 PM                                                                                                                    
COMMISSIONER  DAVIDSON suggested  that  pregnant  women call  the                                                               
DHSS fast  track hot line, as  access to good prenatal  care lead                                                               
to better  outcomes for the  mother and  the baby.   She reported                                                               
that, through the  budget process during the last  year, DHSS had                                                               
received  $1.3 million  through  the Alaska  Mental Health  Trust                                                               
Authority (AMHTA) to  fund a number of positions to  "gear up for                                                               
Medicaid Expansion."   She noted that most of  the positions were                                                               
in  the  Division  of Public  Assistance,  with  some  additional                                                               
positions  in  the  Health  Care Services  to  help  process  the                                                               
claims.   She reported  that $1.5 million  had been  reduced from                                                               
the  DHSS  budget  in  the Division  of  Public  Assistance,  for                                                               
positions which helped enroll beneficiaries.   She noted that the                                                               
justification had been that, since  the new enrollment system for                                                               
public assistance  would be  automated, those  existing positions                                                               
could  go away.   She  pointed out  that the  changes in  the new                                                               
enrollment system for  public assistance were not due  to go into                                                               
effect until 2017  and 2018.  She said that  DHSS had anticipated                                                               
the  funding from  AMHTA  would  add to  the  positions, but  the                                                               
budget reduction had resulted in an  actual loss of funding.  She                                                               
acknowledged that the department had  learned to "do with what we                                                               
have, but it certainly  was a challenge to be able  to step up to                                                               
meet those  new enrollment  projections when  we thought  we were                                                               
going to  have more positions to  be able to meet  the demand and                                                               
actually ended up with a net fewer positions to do that."                                                                       
CHAIR  SEATON asked  for  more information  to  ensure that  this                                                               
would not happen again.                                                                                                         
MR.  SHERWOOD  added  that  the  Division  of  Public  Assistance                                                               
maintained  a  separate hot  line,  listed  on its  website,  for                                                               
people with  medical urgencies to  help with  prompt facilitation                                                               
of applications.                                                                                                                
4:13:25 PM                                                                                                                    
BRUCE  RICHARDS, Director,  External  Affairs, Central  Peninsula                                                               
Hospital,  testified that  it  was  time "to  set  the stage  for                                                               
changing  the  payment  models."    He  stated  that  Alaska  was                                                               
currently  in a  fee for  service  model, and  that the  proposed                                                               
legislation contained  several demonstration programs  that would                                                               
allow  for  piloting  different  types  of  demonstrations.    He                                                               
reported  that  Central  Peninsula Hospital  was  working  toward                                                               
possibly piloting one of  the demonstrations, directing attention                                                               
to page  8, line 27  of the  proposed bill, which  authorized the                                                               
demonstration  for coordinated  care utilizing  a global  payment                                                               
fee  structure.   He shared  that the  hospital had  been working                                                               
with  Moda  Health on  a  model  currently operating  in  Eastern                                                               
Oregon,  and  that  the  language would  allow  them  to  proceed                                                               
forward.    He  reported  that data  released  earlier  from  the                                                               
Journal  of the  American Medical  Association compared  the 2011                                                               
baseline data  with the  2014 data  which showed  that in-patient                                                               
care cost had decreased by 14.8  percent, and that per member per                                                               
month spending  on out-patient care  had also decreased  by about                                                               
2.4 percent.   He emphasized that,  although out-patient spending                                                               
trends  masked a  19.2 percent  increase in  spending on  primary                                                               
care services, this  was a primary care home based  model, with a                                                               
focus on primary care "to keep  people healthy and keep them from                                                               
becoming ill and spending those  resources and mis-utilization of                                                               
them."   He stated that  the aforementioned Eastern  Oregon model                                                               
had  reduced  emergency  room  utilization by  21  percent.    He                                                               
reported that the  hospital was looking at  covering the Medicaid                                                               
population  in the  entire Kenai  Peninsula.   He explained  that                                                               
community   care   organizations   (CCOs)   differed   from   the                                                               
traditional  accountable  care  organizations (ACOs)  which  were                                                               
more  closely associated  with Medicare,  not  Medicaid, as  they                                                               
accepted  full financial  risk,  the global  payment  model.   He                                                               
pointed out  that the organizations  were both  locally governed,                                                               
were  accountable for  access, quality  and health  spending, and                                                               
both emphasized  primary care medical  homes.  He said  that both                                                               
required robust  data systems to support  the integrated networks                                                               
for clinical and business functions.   He shared that a CCO would                                                               
operate on a fixed global  budget, reduce medical cost inflation,                                                               
improve the quality of care  and outcomes, and create a healthier                                                               
population.  He  offered his belief that  the demonstration would                                                               
put Medicaid  on a predictable  and sustainable path  by reducing                                                               
the growth  trend in  the per capita  Medicaid expenditures.   He                                                               
stated that  the current  Alaska trend of  growth per  capita for                                                               
Medicaid expenditures average  more than 6 percent  annually.  He                                                               
suggested  that the  CCO  was the  next  step beyond  traditional                                                               
managed  care,  based  on  the funding  structure  and  the  risk                                                               
bearing  nature of  the program.   He  emphasized that  providers                                                               
would no longer be paid for  treating illness, but instead, for a                                                               
"highly  coordinated system  that prevents  illness and  the high                                                               
cost  associated with  it."   He  stated that  the CCO  structure                                                               
required a great  deal of front end work, which  the hospital was                                                               
currently working  on with Moda  Health.   He listed some  of the                                                               
work,   which  included   payment   structures,  shared   savings                                                               
distribution,  metrics  for  accountability, and  development  of                                                               
quality  targets.    He  reported that  there  was  currently  an                                                               
analysis of  the entire Medicaid population  to better understand                                                               
the needs, in order to build  a program which fit the population.                                                               
He suggested a  minor language change to the  proposed bill which                                                               
would provide the  most flexibility for program design.   On page                                                               
8,  line  27, delete  "design  and"  in  order to  allow  maximum                                                               
flexibility  for  work  with  Department  of  Health  and  Social                                                               
Services, and to  no longer require the department  to design the                                                               
CHAIR  SEATON   suggested  that  Mr.  Richards   review  proposed                                                               
Amendment 4, labeled 29-LS1096\H.6, Glover, 2/19/16.                                                                            
4:21:33 PM                                                                                                                    
REPRESENTATIVE   WOOL  expressed   his   understanding  for   the                                                               
incentives of fee  for service and for its increase  in fees.  He                                                               
asked  if there  was  incentive  in a  global  payment system  to                                                               
decrease fees, and whether it was projected for fees to flatten.                                                                
MR. RICHARDS  replied that  the main goal  of the  Eastern Oregon                                                               
model  was  to  flatten  and  bend the  cost  curve  of  Medicaid                                                               
expenditures,  and reduce  it by  a  percentage per  capita.   He                                                               
reported  that the  incentive to  providers was  to flatten  that                                                               
cost curve.                                                                                                                     
REPRESENTATIVE WOOL opined  that there was not a  fee for service                                                               
in  a global  system because  there was  a per  month per  capita                                                               
MR. RICHARDS  replied that,  although it would  continue to  be a                                                               
fee for service  model, the CCO would still get  a global payment                                                               
and the payment would be  distributed through the fee for service                                                               
mechanism;  however,  this  would   be  done  through  a  network                                                               
comprised  and put  together by  the CCO,  which allowed  for the                                                               
potential of  shared savings with  the providers.  He  noted that                                                               
the state  would be paying on  a global level, and  the incentive                                                               
was to reduce the utilization of  the population and the cost per                                                               
capita for each Medicaid enrollee.                                                                                              
4:24:19 PM                                                                                                                    
CHAIR SEATON  asked if a  vertical integration with  primary care                                                               
doctors  into the  hospital setting  was integral  to the  global                                                               
payment model or could it  include providers not in this vertical                                                               
MR.  RICHARDS replied  that  it  was both,  as  the hospital  had                                                               
employed primary  care providers, as well  as independent medical                                                               
staff.  He stated that the  program would be built and negotiated                                                               
to  include the  services needed  by the  enrolled beneficiaries.                                                               
He opined  that the primary  care based model would  prevent some                                                               
of  the  occurrences  and  save those  expenses  incurred  for  a                                                               
specialist or the emergency room.                                                                                               
4:26:32 PM                                                                                                                    
[Public testimony was closed.]                                                                                                  
[HB 227 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB 227 proposed amendment H.8 - Vazquez.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
HB 227 proposed amendment H.5- Seaton.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
HB 227 Proposed Amendment H.6_Seaton.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
HB 227 proposed amendment H.7- Vazquez.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
HB 227 response- CMS Tribal Policy Proposed Change 10.2015.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
Department Response- 2.16.2016- medicaid dual eligibles.pdf HHSS 2/23/2016 3:15:00 PM
Response to committee questions from 2.16.2016_ASHNHA.pdf HHSS 2/23/2016 3:15:00 PM
HB 227
HB 227 Proposed Amendment H.9- Seaton.pdf HHSS 2/23/2016 3:15:00 PM
HB 227