Legislature(2009 - 2010)BELTZ 211

04/08/2009 08:00 AM EDUCATION

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08:05:36 AM Start
08:05:52 AM SB174
09:03:35 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 174(EDC) Out of Committee
         SB 174-PROF STUDENT EXCHANGE LOAN FORGIVENESS                                                                      
8:05:52 AM                                                                                                                    
CHAIR DAVIS announced SB 174 to be up for consideration.                                                                        
8:05:58 AM                                                                                                                    
SENATOR MENARD, sponsor  of SB 174, said this  measure will boost                                                               
the number  of Alaska's health  care providers by making  it more                                                               
financially  feasible and  attractive  for a  recent graduate  to                                                               
come back to the state.  The Washington, Wyoming, Alaska, Montana                                                               
and  Idaho Program  (WWAMI)  currently  provides for  educational                                                               
opportunities  for  medical  students,   but  not  for  dentists,                                                               
pharmacists, and  optometrists. This is  where SB 174  comes into                                                               
She said  there is no  doubt about Alaska's shortage  of dentists                                                               
especially  in  rural  Alaska.   She  said  a  well-crafted  loan                                                               
forgiveness   program   will   entice  Alaskans   graduating   in                                                               
dentistry, pharmacy and optometry to  come home to their careers.                                                               
SB  174  accomplishes  this  by  setting  requirements  for  loan                                                               
forgiveness. Working with the  Western Interstate Commissions for                                                               
Higher  Education  (WICHE),  residents  will be  able  to  attend                                                               
professional  health  care  programs   not  offered  in  Alaska's                                                               
university system.  WICHE is a  regional organization  adopted in                                                               
the  1950s;  its purpose  is  to  create resource  sharing  among                                                               
higher  education  systems  in   the  American  West.  This  bill                                                               
establishes a  minimum number of supported  Alaskans participants                                                               
in  dentistry, pharmacy  and  optometry. It  also  sets the  loan                                                               
interest rate for  the postsecondary education loan  at 5 percent                                                               
and  provides a  0 percent  interest while  participating in  the                                                               
school  period.  SB  174 will  establish  a  forgiveness  program                                                               
entitlement  up to  25 percent  for participants  who meet  these                                                               
criteria: they must  accept Medicaid for not less  than 5 percent                                                               
of their total  average gross billings of the year;  they can get                                                               
an additional 25 percent forgiveness  if they maintain a practice                                                               
that serves an underserved population in Alaska.                                                                                
SENATOR  MENARD  summarized  that  it  is  not  secret  how  very                                                               
expensive  dental  schools are  and  Nevada  is even  considering                                                               
closing its  dental school.  She said  that dental  equipment for                                                               
schools is much  more expensive than for medical  schools; so she                                                               
didn't see  that Alaska would  ever be  able to provide  a dental                                                               
8:11:10 AM                                                                                                                    
SENATOR HUGGINS moved to adopt  the proposed committee substitute                                                               
(CS) to SB 174, labeled 26-LS0764\ S, as the working document.                                                                  
CHAIR DAVIS objected for discussion purposes.                                                                                   
8:12:04 AM                                                                                                                    
SENATOR HUGGINS asked if the  5 percent interest rate is standard                                                               
or if it varies.                                                                                                                
DIANE   BARRANS,  Executive   Director,   Alaska  Commission   on                                                               
Postsecondary Education (ACPE) answered  that this language would                                                               
set a  fixed interest  rate in  statute that  would apply  to the                                                               
entire repayment period of the loan program.                                                                                    
SENATOR HUGGINS asked if this  applies to other loan programs she                                                               
MS. BARRANS replied the interest  rate for loans financed through                                                               
the  Alaska  Student  Loan Corporation  is  reset  annually;  the                                                               
current rate  on the  Alaska Supplemental  Education Loan  is 7.3                                                               
percent. This  is fixed for the  life of the loan;  the new loans                                                               
would be reset  in the next year.   This would have  no impact on                                                               
the corporation's ability  to set the interest rate  on any other                                                               
program except the Professional Education Exchange Program.                                                                     
One concern  may be  that this  program is  being overlaid  on an                                                               
existing professional student exchange  loan program that applied                                                               
to fields other than dentistry,  pharmacy and optometry. It would                                                               
impose that interest rate as well  as the zero interest period on                                                               
the other  fields that  are being supported  by the  Student Loan                                                               
Corporation.  When they  finance loans  through the  Student Loan                                                               
Corporation,  they  need interest  to  accrue  during the  entire                                                               
period of  the borrowing.  The corporation  needs the  ability to                                                               
set that rate in such a  fashion that those loans can be financed                                                               
through the capital markets.                                                                                                    
SENATOR HUGGINS said  it makes more sense to not  set the rate in                                                               
statute, but to have an adjustment factor.                                                                                      
8:15:49 AM                                                                                                                    
MS.  BARRANS remarked  that fixing  interest  rates below  market                                                               
rates is a policy call for  the legislature; this would be funded                                                               
by the general fund.                                                                                                            
8:16:25 AM                                                                                                                    
SENATOR  STEVENS said  he feels  this is  a slippery  slope. What                                                               
they are really doing is  saying these particular occupations are                                                               
especially  needed,  but  he  has   heard  that  about  teachers,                                                               
doctors, dentists,  and engineers.  How do they  logically decide                                                               
who needs it the most?                                                                                                          
MS. BARRANS  replied that  the proposal  before them  is somewhat                                                               
different in that  it doesn't forgive other  education loans. The                                                               
only  debt  this benefit  applies  to  is  the extra  debt  these                                                               
students  are incurring  by paying  support  fees. She  explained                                                               
that the Professional  Student Exchange Program works  is that it                                                               
is  managed by  the WICHE  organization,  but it's  one of  three                                                               
student exchange  programs. It is  the only  one that has  a per-                                                               
student support  fee paid by  the sending state to  the receiving                                                               
institution. That is above what  the student is already incurring                                                               
as a  tuition cost.  In the  case of dentists,  that is  a little                                                               
over $18,000/yr. What  they get in exchange for  that support fee                                                               
is preferential  consideration for  admission into  that graduate                                                               
program. This  might actually be considered  leveling the playing                                                               
field  between  the  professions  that are  offered  through  the                                                               
University of  Alaska or  other institutions  in Alaska  and ones                                                               
that are not available in Alaska.                                                                                               
SENATOR STEVENS asked if there  are other occupations they should                                                               
consider for this type of help.                                                                                                 
MS. BARRANS answered  yes; this bill originally  addressed all of                                                               
the fields  that currently  provide support  fees through  a loan                                                               
mechanism.  So  they  would  just   shift  from  a  student  loan                                                               
corporation funding model  to a general fund  (GF) funding model.                                                               
That has  now been narrowed  to three occupations. One  reason is                                                               
that the  UA is  working on developing  a partnership  to deliver                                                               
physician   assistant  training.   She  wasn't   sure  what   the                                                               
rationales   were  for   eliminating  occupational   therapy  and                                                               
podiatry; physical therapy wasn't included.                                                                                     
MS. BARRANS  explained that  the fiscal  note hadn't  changed for                                                               
the CS.                                                                                                                         
8:19:42 AM                                                                                                                    
SENATOR OLSON  said obviously  they are  all concerned  about the                                                               
unsustainability  of  the  budget,  but  they  need  to  be  more                                                               
concerned  about  the  health care  industries  that  affect  the                                                               
health  and welfare  of  the state's  aging  population which  is                                                               
increasing  than other  professions that  don't involve  life and                                                               
death  situations. He  asked what  happens to  the interest  rate                                                               
when the students are in residency.                                                                                             
MS. BARRANS  replied that the interest  accrues during residency,                                                               
but these three occupations don't require residency.                                                                            
SENATOR OLSON asked  if a student is eligible who  wants to go on                                                               
to oral surgery, for instance, that has residency.                                                                              
8:23:23 AM                                                                                                                    
MS. BARRANS replied yes; as the bill is written.                                                                                
SENATOR OLSON said the fiscal note  goes from zero during 2010 to                                                               
double that  in 2011,  and asked if  she really  anticipated that                                                               
great a participation.                                                                                                          
8:24:00 AM                                                                                                                    
MS.  BARRANS  replied  it  is  quite  possible  because  so  many                                                               
advantageous terms  are made available.  She prepared  the fiscal                                                               
note  with  the full  complement  of  students  for each  of  the                                                               
occupations. The bill  provides for a minimum number  of seats to                                                               
be supported  each year; and  to the extent that  the legislature                                                               
were to appropriate more money, more students could be funded.                                                                  
SENATOR  OLSON asked  what the  return rate  is now  for students                                                               
participating in  the program and  what the expected  return rate                                                               
is once this program is implemented.                                                                                            
8:25:03 AM                                                                                                                    
MS.  BARRANS   replied  that  she   did  not  have   return  rate                                                               
statistics, but she would get  the figures from the WICHE office.                                                               
Right now  participants who are  borrowing the support  fee don't                                                               
have an obligation to return to Alaska.                                                                                         
8:25:25 AM                                                                                                                    
VICE CHAIR DAVIS said the fiscal  note was based on a 7.5 percent                                                               
interest rate and  it is now 5 percent. Wouldn't  that change the                                                               
fiscal note?                                                                                                                    
MS. BARRANS  replied that the  interest rate is not  reflected at                                                               
all in the fiscal note. It is  just the amount of the support fee                                                               
for the  five seats  per field  of study  listed in  the original                                                               
bill.  What  would  impact the  fiscal  note  (considerably,  she                                                               
thought) would be  the elimination of the other  fields that were                                                               
required to be supported.                                                                                                       
8:26:06 AM                                                                                                                    
SENATOR STEVENS  asked if  keeping track  of the  forgiveness for                                                               
treating  Medicaid  patients  and   underserved  Alaskans  was  a                                                               
function of her office.                                                                                                         
MS.  BARRANS  replied  that  her  division  has  no  capacity  or                                                               
expertise to do  that work. They would rely on  the Department of                                                               
Health and Social Services (DHSS)  for the information in section                                                               
AS 14.44.042  (2)(a). With  respect to  attestation to  comply in                                                               
(2)(b)   they  would   likely  require   independent  third-party                                                               
documentation that the provider had done that at their expense.                                                                 
MS.  BARRANS also  stated that  the Department  of Law  indicates                                                               
that   the  bill's   current   provision   about  the   providers                                                               
maintaining  their license  to  practice in  the  state could  be                                                               
problematic for  providers who are  working for a  federal agency                                                               
in the state. The license  requirement poses a potential conflict                                                               
with the supremacy  clause of the U.S.  Constitution; the federal                                                               
government sets  standards for its  own employees, which  may not                                                               
include  state licenses.  In that  case, those  individuals would                                                               
not be eligible for the forgiveness provisions.                                                                                 
8:28:23 AM                                                                                                                    
SENATOR OLSON explained that this  issue has to do with licensure                                                               
of  federal facilities.  Many of  those  people are  commissioned                                                               
corps and  are already under  a program  that looks out  for them                                                               
8:28:53 AM                                                                                                                    
PAT   CARR,   Section   Chief,  Health   Planning   and   Systems                                                               
Development,  Department of  Health and  Social Services  (DHSS),                                                               
said  the department,  her section  in  particular, is  currently                                                               
preparing  applications for  underserved areas;  they do  that in                                                               
the course  of their work.  They are  usually determined to  be a                                                               
"medically  underserved  area,"   a  federal  designation.  Those                                                               
designations  are  used  for establishment  of  community  health                                                               
centers  in the  state  that  can apply  for  federal funds.  The                                                               
designation    of   "underserved    area"    calculates   in    a                                                               
provider/population ratio as well as several other factors.                                                                     
They also use  medical assistance information by  provider. So in                                                               
their bill  analysis, the  department, through  the commissioner,                                                               
can  identify  these  underserved  areas  or  the  percentage  of                                                               
participation  of a  provider in  medical assistance  as criteria                                                               
for  working with  providers and  can work  with the  Division of                                                               
Postsecondary Education  in determining it. They  also identified                                                               
that  there is  no  fiscal note,  because this  kind  of work  is                                                               
already ongoing with  a number of providers,  especially now with                                                               
the reduced number of providers in this group.                                                                                  
8:30:49 AM                                                                                                                    
VICE CHAIR  DAVIS asked  if the Department  of Health  and Social                                                               
Services  provided information  indicating  a  shortage in  these                                                               
occupational fields.                                                                                                            
MS. CARR replied that they  have identified shortages of dentists                                                               
and  pharmacists.   She  would   have  to  find   information  on                                                               
optometry.  Part of  the question  is  whether the  state has  an                                                               
adequate  number  of  providers;  and   the  other  part  is  the                                                               
distribution of  providers. But they  have identified  almost all                                                               
of their areas as having shortages right now.                                                                                   
8:31:27 AM                                                                                                                    
SENATOR OLSON  asked where  physicians stack  up in  the priority                                                               
list of professional shortages in Alaska.                                                                                       
MS. CARR said  she didn't have that answer, but  she could get it                                                               
from the vacancy study they did several years ago.                                                                              
SENATOR  OLSON said  it was  his  understanding that  physicians,                                                               
pharmacists and dentists were the top 3 or 4.                                                                                   
MS. CARR agreed that those are very high need categories.                                                                       
SENATOR  OLSON  asked if  the  DHSS  maintains oversight  of  the                                                               
(2)(b)  provisions  in  AS  14.44.042  so they  can  see  if  the                                                               
provider is measuring up to the underserved standard.                                                                           
MS. CARR  replied that currently  they don't  look at it  in that                                                               
regard, but  they have  the capability of  doing that  to support                                                               
this particular bill.                                                                                                           
SENATOR STEVENS  said he appreciates  the attempt to  address the                                                               
Medicaid  problem the  state is  facing,  but 5  percent seems  a                                                               
little small. Does it actually do us any good?                                                                                  
MS.  CARR  replied  that  most  providers  already  see  Medicaid                                                               
SENATOR STEVENS asked  if she had the percentage  of Alaskans who                                                               
are on Medicaid.                                                                                                                
MS. CARR replied yes, but she would have to get that for him.                                                                   
8:34:30 AM                                                                                                                    
SENATOR STEVENS said he'd appreciate that.                                                                                      
SENATOR HUGGINS  amended that it  would be  nice to see  what the                                                               
gross billing actually equates to  in terms of number of patients                                                               
so the state will know what it is getting for its money.                                                                        
MS. CARR said  she would have to do some  research to answer that                                                               
8:36:36 AM                                                                                                                    
VICE  CHAIR  DAVIS thanked  the  members  for bringing  up  these                                                               
questions.  She  agreed  that  the  state  needs  more  of  these                                                               
providers, but the  big problem is that many  of them, especially                                                               
dentists, won't  take Medicaid  or Medicare  participants because                                                               
that system  doesn't pay  enough, and  this bill  doesn't address                                                               
that problem.                                                                                                                   
8:38:25 AM                                                                                                                    
DR. DAVE LOGAN, DDS, Alaska  Dental Society, supported SB 174. He                                                               
said that  he attended dental  school through the  WICHE program,                                                               
and can speak to the success  of the program in bringing students                                                               
back to the state. Most dentists  under 50 years of age were born                                                               
here, went out to  go to school, and have come  back. This is his                                                               
20   year of  practicing here.  He explained  that Medicaid  pays                                                               
about  50 percent  of what  others  pay; and  5 percent  Medicaid                                                               
really  represents 10  percent  of practice  volume,  which is  a                                                               
palatable number.                                                                                                               
8:40:29 AM                                                                                                                    
SENATOR  OLSON said  he's unfamiliar  with residency  requirement                                                               
for oral surgeons.                                                                                                              
8:40:53 AM                                                                                                                    
DR. LOGAN  replied that it  would depend on the  specialty. There                                                               
is  a general  practice  residency for  dentists  that lasts  one                                                               
year,  but it's  not  mandatory for  licensure. General  practice                                                               
residency  (GPR) lasts  one year  and  provides some  specialized                                                               
training; oral  surgery is the  most at four years  of additional                                                               
training and the rest are anywhere from two to three years.                                                                     
SENATOR OLSON  asked if there is  a shortage of oral  surgeons in                                                               
Alaska and should something be done to bring them back.                                                                         
8:42:07 AM                                                                                                                    
DR.  LOGAN  answered   that  Alaska  has  a   shortage  of  every                                                               
specialty.  We probably  don't  have  a major  need  for an  oral                                                               
pathologist, but otherwise we are short of everything else.                                                                     
8:42:41 AM                                                                                                                    
SENATOR  HUGGINS  asked what  happens  to  the Medicaid  patients                                                               
after the five years.                                                                                                           
DR.  LOGAN replied  that his  hope is  that if  new practitioners                                                               
start out treating Medicaid patients,  those patients will become                                                               
part of  their practice.  The financial  incentive that  the bill                                                               
contains will  help defray some  of the  costs that will  make it                                                               
more feasible for a new practitioner with a heavy debt load.                                                                    
8:44:14 AM                                                                                                                    
SENATOR HUGGINS  asked how many  Medicaid patients that  would be                                                               
per practitioner.                                                                                                               
DR. LOGAN  replied that  would be about  3 Medicaid  patients per                                                               
day for  an average dental practice  of 30/day - 12  patients per                                                               
8:45:10 AM                                                                                                                    
SENATOR HUGGINS asked  what Medicaid would pay for  a root canal,                                                               
for instance, and what would the actual charge be.                                                                              
DR. LOGAN replied that Medicaid pays  about $400 for a molar root                                                               
canal and he normally charges $1150.                                                                                            
8:45:48 AM                                                                                                                    
SENATOR STEVENS  asked if Medicaid  has been  reimbursing doctors                                                               
that amount  consistently for a  long time. Would that  amount be                                                               
addressed at the federal level at some point?                                                                                   
8:46:29 AM                                                                                                                    
DR. LOGAN replied that last year  is the first year in eight that                                                               
there was an increase in Medicaid  fees for dentists. There is no                                                               
statutory  requirement that  those  be reviewed  regularly so  he                                                               
doesn't know.                                                                                                                   
SENATOR  STEVENS  wondered  if  the 5  percent  clause  would  be                                                               
problematic if the fee changes.                                                                                                 
DR. LOGAN  replied if the fee  doesn't increase for a  long time,                                                               
the  5 percent  would  become  more and  more  difficult in  real                                                               
numbers. If the  adult supplemental system in HB  26 passes, that                                                               
takes away a  large pool of money that is  available for dentists                                                               
for treating Medicaid patients.                                                                                                 
8:48:07 AM                                                                                                                    
SENATOR HUGGINS asked him to explain the effects of HB 26.                                                                      
DR. LOGAN  replied that HB  26 removes  the sunset date  from the                                                               
end  of  this fiscal  year  on  the adult  supplemental  Medicaid                                                               
8:48:46 AM                                                                                                                    
DR. MARK PRAETER, President, Alaska  Dental Society, supported SB
174. He was born and raised in  Alaska and had to leave to attend                                                               
dental  school. He  has practiced  here for  32 years.  This bill                                                               
offers students  a good incentive to  come back to Alaska  and to                                                               
serve the state's underserved populations.  He remarked that some                                                               
of  the  other  practitioners  they have  mentioned  are  covered                                                               
through other  programs, which  is one of  the reasons  they were                                                               
removed  from  this  bill. Podiatry,  for  instance,  is  covered                                                               
through WWAMI.                                                                                                                  
8:51:10 AM                                                                                                                    
SENATOR  OLSON asked  if he  knew  the number  of applicants  who                                                               
applied to dental  school that didn't get into  any programs, and                                                               
had to find a different way to make a living.                                                                                   
DR.  PRAETER replied  he  didn't have  that  information, and  he                                                               
wasn't  sure  how  to  get   it.  But  anecdotally,  one  of  his                                                               
associates has a  son who has applied and is  on the waiting list                                                               
for three  dental schools  right now. He's  willing and  able and                                                               
excited  to do  this and  would be  happy to  enter this  kind of                                                               
SENATOR OLSON  asked how many  dentists actually work 24  hours a                                                               
day when they are on call.                                                                                                      
DR. PRAETER replied  that those are the dentists  who practice in                                                               
a hospital  setting. His office  is on call  24 hours a  day, but                                                               
the  hospital in  the  Mat-Su  Valley where  he  practices has  a                                                               
couple of oral surgeons who take  calls. He is not required to do                                                               
8:53:33 AM                                                                                                                    
SENATOR HUGGINS asked if he  knew of any other incentive programs                                                               
in other states that they might want to look at.                                                                                
DR. PRAETER said  some other states have  incentive programs, but                                                               
he doesn't have a lot of detail about them.                                                                                     
8:55:31 AM                                                                                                                    
JIM POWELL, Executive Director,  American Dental Society, said he                                                               
has nothing to add, but that  he will research the questions that                                                               
have been raised.                                                                                                               
He didn't know  how many changed from having a  dental career due                                                               
to  financial issues,  and he  wasn't sure  that information  was                                                               
available. He does not have  specifics about other state programs                                                               
in front of him, but 44  other states have some kind of incentive                                                               
program  designed to  entice these  practitioners to  their state                                                               
because all states have shortages.                                                                                              
8:58:01 AM                                                                                                                    
VICE  CHAIR DAVIS  closed public  testimony. She  said there  are                                                               
some loose  ends in  the bill  and asked  Senator Menard  to come                                                               
back up to address them.                                                                                                        
8:59:24 AM                                                                                                                    
SENATOR MENARD  said she would take  the bill back to  her office                                                               
and try  to get  some of these  questions answered.  She reminded                                                               
the committee that there is  no residency for these three fields;                                                               
practitioners  can  go right  to  work  after school.  She  feels                                                               
strongly  and is  aware of  how  hard it  is to  get into  dental                                                               
school; there are six dentists in  her family. She feels that the                                                               
medical profession is already covered nicely under WWAMI.                                                                       
9:01:06 AM                                                                                                                    
SENATOR OLSON asked if these three fields require an admissions                                                                 
test, like the LSAT.                                                                                                            
SENATOR MENARD answered yes for all three fields. Pharmacy is a                                                                 
little different, but there is a test.                                                                                          
9:03:02 AM                                                                                                                    
SENATOR HUGGINS moved to report CSSB 174(EDC) from committee                                                                    
with individual recommendations and attached fiscal note(s).                                                                    
There being no objection, the motion carried.                                                                                   

Document Name Date/Time Subjects
SB 174 ACPE sectional analysis.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB 174 AK Dental Soc. lttr 2.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB 174 Sponsor Statement.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB 174 CS draft E.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB174-EED-ACPE-04-03-09.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB 174 AK Dental Soc. lttr.pdf SEDC 4/8/2009 8:00:00 AM
SB 174
SB 174 CS draft S.pdf SEDC 4/8/2009 8:00:00 AM
SB 174