Legislature(2015 - 2016)SENATE FINANCE 532

02/25/2016 09:00 AM Senate FINANCE

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09:06:51 AM Start
09:07:31 AM SB74
01:10:40 PM Public Testimony
02:36:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Testimony <Invitation Only> --
-- Public Testimony Beginning at 1 p.m. --
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 74                                                                                                            
     "An Act relating to  permanent fund dividends; relating                                                                    
     to a medical assistance  reform program; establishing a                                                                    
     personal  health savings  account  program for  medical                                                                    
     assistance recipients;  relating to  the duties  of the                                                                    
     Department of Health  and Social Services; establishing                                                                    
     medical   assistance    demonstration   projects;   and                                                                    
     relating to  a study  by the  Department of  Health and                                                                    
     Social Services."                                                                                                          
9:07:31 AM                                                                                                                    
Co-Chair Kelly MOVED to  ADOPT proposed committee substitute                                                                    
for SB 74, Work Draft 29-LS0692\V (Glover, 2/23/16).                                                                            
Co-Chair MacKinnon OBJECTED for purposes of discussion.                                                                         
Co-Chair  MacKinnon   explained  that  the   Senate  Finance                                                                    
Subcommittee  on  Medicaid  believed  that  there  would  be                                                                    
several  issues in  the  bill that  it  expected the  Senate                                                                    
Finance  Committee  to  address,  and the  issues  were  not                                                                    
included in  the work draft  being considered.  She expected                                                                    
that the  committee process  would work  slowly so  that the                                                                    
members could work to gain understanding on each section.                                                                       
Co-Chair Kelly  asked if the  sectional analysis  before was                                                                    
the one he had previously examined.                                                                                             
Co-Chair   MacKinnon  explained   that  the   committee  was                                                                    
reviewing a draft document from the previous evening.                                                                           
Senator Hoffman  asked which members served  on the Medicaid                                                                    
Co-Chair  MacKinnon  specified  that  the  subcommittee  was                                                                    
comprised  of  Senator   Olson,  Senator  Micciche,  Senator                                                                    
Kelly, Senator Kelly, and herself.                                                                                              
9:10:02 AM                                                                                                                    
ERIN SHINE,  STAFF, SENATOR  ANNA MACKINNON,  explained that                                                                    
the Medicaid Reform subcommittee had  met 13 times to review                                                                    
and discuss  a wide variety of  topics and issues in  aid of                                                                    
considering  SB  74,  as  well  as  SB  78  (the  governor's                                                                    
proposal  for Medicaid  reform). She  referred to  the draft                                                                    
sectional  analysis   for  CSSB  74(FIN)  (copy   on  file);                                                                    
specifying  that  portions of  the  bill  had been  amended.                                                                    
Additionally,  sections of  the original  bill had  remained                                                                    
untouched, and  sections of  SB 78 had  been moved  into the                                                                    
work draft  for SB  74. She continued  that she  would point                                                                    
our new sections of the bill as she reviewed the CS.                                                                            
Ms. Shine directed  attention to page 2, Section  1, line 6;                                                                    
and explained that the section  was part of a robust package                                                                    
of fraud language that the governor had proposed.                                                                               
Co-Chair  MacKinnon  recognized  legislative  staff  in  the                                                                    
STACIE  KRALY,  ASSISTANT  ATTORNEY GENERAL,  DEPARTMENT  OF                                                                    
LAW,  stated she  would review  initial sections  in the  CS                                                                    
related to  fraud that had  originally been contained  in SB
78. She  referred to Section 1  and 2 on page  2, which were                                                                    
statute of limitations provisions  which amended Title IX of                                                                    
Alaska Statutes  to identify when  claims pertaining  to the                                                                    
false  claims act  could be  brought. Section  3 on  pages 2                                                                    
through 10 created a new chapter  in Title IX, which was the                                                                    
Alaska Medical Assistance False Claim and Reporting Act.                                                                        
Ms.  Kraly explained  that the  act created  a new  cause of                                                                    
action  whereby the  State of  Alaska,  in conjunction  with                                                                    
individuals  that identified  false claims  or fraud  in the                                                                    
Medicaid program, may pursue recovery  of the claims through                                                                    
civil action. She  detailed that there had been  a number of                                                                    
new statutes established under the act:                                                                                         
     AS  09.58.010.  False  claims for  medical  assistance;                                                                    
     civil penalty.  She  explained that generally there was                                                                    
     a  list of  activity  that would  be  considered to  be                                                                    
     false claims.  A full list  of the activities  could be                                                                    
     found on page  2, line 26 through the end;  and page 3,                                                                    
     through line  11. The penalties for  false claims would                                                                    
     be civil  penalties not  less than  $5500 and  not more                                                                    
     than  $11,000,   three  times  the  amount   of  actual                                                                    
     damages,  reasonable  attorneys'   fees  and  costs  as                                                                    
     provided   in  court   rules,  possible   reduction  in                                                                    
     penalties,  and  establishes  corporate  liability  for                                                                    
     false claims.                                                                                                              
     AS  09.58.015.   Attorney  General   invitation;  civil                                                                    
     action. Authorizes the  attorney general to investigate                                                                    
     claims  brought   under  this   statute  and   to  work                                                                    
     collaboratively with DHSS on such matters.                                                                                 
Ms. Kraly  elaborated that after an  individual identified a                                                                    
false claim and  filed a lawsuit with the  Superior Court of                                                                    
Alaska,   the  action   would  be   filed  under   seal  and                                                                    
immediately served  upon the attorney general's  office. The                                                                    
attorney general's  office, upon  receipt of  the complaint,                                                                    
must take  60 days  to evaluate the  claim; then  must: take                                                                    
over  the action,  defer the  action to  the individual  who                                                                    
brought the claim,  or determine that the  claim was without                                                                    
merit and dismiss the action outright.                                                                                          
9:14:45 AM                                                                                                                    
Co-Chair   MacKinnon  asked   Ms.  Kraly   to  explain   the                                                                    
department's  perspective  on   corporate  liability  versus                                                                    
individual  liability  in  the  case  that  a  member  of  a                                                                    
corporation commits fraud.                                                                                                      
Ms.  Kraly  stated  that  the  general  premise  (which  had                                                                    
already  been  in  existence  prior   to  the  proposed  new                                                                    
statute)  was that  a corporation  was  responsible for  the                                                                    
corporate integrity of  its organization through established                                                                    
internal controls  to ensure  individuals working  under and                                                                    
with  corporate  authority  were acting  appropriately.  She                                                                    
clarified  that  AS  09.58.010 would  establish  that  if  a                                                                    
corporation failed to have such  internal controls, it would                                                                    
be  held  liable for  the  activity  of its  employees.  She                                                                    
reiterated the  corporate liability was  established outside                                                                    
of the false claims act.                                                                                                        
Co-Chair MacKinnon stated that  (inside the legislation) the                                                                    
administration had  made the  recommendation for  audits for                                                                    
the companies performing medical  services. She wondered if,                                                                    
in  addition to  having corporate  liability, responsibility                                                                    
for federal dollars would be embedded in the new statutes.                                                                      
Ms. Kraly answered in the  affirmative, and added that there                                                                    
was another provision  later in the bill  that addressed the                                                                    
subject of audits.                                                                                                              
9:18:23 AM                                                                                                                    
Ms. Kraly  continued discussing  provisions under  the false                                                                    
claims act.   She discussed  AS 09.58.020, which  dealt with                                                                    
how the attorney  general acted as a check and  balance to a                                                                    
claim  brought under  the act.  She discussed  AS 09.58.025,                                                                    
which granted  the attorney general  the authority  to issue                                                                    
subpoenas  in order  to  assist in  the  investigation of  a                                                                    
claim.  She  addressed  AS 09.58.030,  which  discussed  the                                                                    
rights within the  false claims provision, if  an action was                                                                    
     AS  09.58.030.  Rights  in fraudulent  claims  actions.                                                                    
     This outlines the  relative role of the  parties in the                                                                    
     event that  the attorney  general intervenes in  a case                                                                    
     (exclusive authority  over the  case/action), including                                                                    
     moving  to dismiss  the case  at any  time or  settling                                                                    
     with  the   provider  despite  the  objection   of  the                                                                    
     relator.  If   the  attorney  general  defers   to  the                                                                    
     relator, the attorney  general can ask to  be served on                                                                    
     all pleadings  and intervene at any  time. Further, the                                                                    
     attorney general can ask that  discovery in the case be                                                                    
     stayed   during   the    pendency   of   the   criminal                                                                    
Ms.  Kraly described  AS 09.58.030  as a  "safety valve"  to                                                                    
ensure that claims were properly prosecuted.                                                                                    
Co-Chair MacKinnon  asked if  the section  included standard                                                                    
language  from  other  states that  specified  the  attorney                                                                    
general would have ultimate veto  authority on a case versus                                                                    
the judicial branch.                                                                                                            
Ms. Kraly stated that it  was general language that had been                                                                    
adopted   after    review   of   guidelines    for   program                                                                    
certification from  the U.S. Department of  Health and Human                                                                    
Services  Office of  Inspector General.  She continued  that                                                                    
the language  was a general  provision in most  false claims                                                                    
acts and can be found in the federal false claims act.                                                                          
Ms. Kraly addressed 09.58.040:                                                                                                  
     AS  09.58.040.  Award  to  false  or  fraudulent  claim                                                                    
     Outlines  how  the relator  will  be  compensated in  a                                                                    
     filed claim act.                                                                                                           
     (1)  If the  attorney general  intervenes, the  relator                                                                    
     will be awarded 15% to 25% of the total award;                                                                             
     (2) If the attorney general  defers and allows the case                                                                    
     to go forward,  the relator receives 25% to  30% of the                                                                    
     total award; and,                                                                                                          
     (3) Authorizes the  court to limit or  reduce the award                                                                    
     if  the evidence  takes into  account the  role of  the                                                                    
     relator in bringing the case and the overall scheme.                                                                       
9:21:53 AM                                                                                                                    
Senator  Dunleavy  asked Ms.  Kraly  to  illustrate a  brief                                                                    
scenario on how a fraudulent claim process might work.                                                                          
Ms.  Kraly described  a scenario  whereby an  individual (an                                                                    
employee  of  an  organization   or  a  Medicaid  recipient)                                                                    
believed   something   inappropriate  was   occurring.   The                                                                    
individual would hire a private  attorney to investigate and                                                                    
help determine if  there was sufficient evidence  to bring a                                                                    
false claim. If sufficient  evidence was found, the attorney                                                                    
would  file a  lawsuit in  the superior  court. The  lawsuit                                                                    
would be filed under seal and  be sent to the superior court                                                                    
while  contemporaneously  sent  to  the  attorney  general's                                                                    
office.   The   attorney   general's   office   would   then                                                                    
investigate  to   determine  the  merit  of   the  case  and                                                                    
determine  a course  of action  as to  whether to  bring the                                                                    
case  forward  and as  to  whom  would prosecute  the  case.                                                                    
Finally,  if the  attorney  general found  no  merit to  the                                                                    
claim,  the  case  would  be dismissed.  If  the  case  went                                                                    
forward'  a   full  civil  trial  would   ensue  to  include                                                                    
discovery,  depositions, and  potentially a  bench trial  in                                                                    
front of a judge. If  a judge determined fraud had occurred,                                                                    
an award would be identified and damages would be awarded.                                                                      
9:24:12 AM                                                                                                                    
Senator Dunleavy wondered if the  hire of a private attorney                                                                    
indicated that any  claim would need to be  of a significant                                                                    
magnitude to  justify the expense.  He thought that  most of                                                                    
the   incidents   would    probably   take   place   against                                                                    
institutions and entities.                                                                                                      
Ms. Kraly stated that a  claim could be against any Medicaid                                                                    
provider regardless  of the provider's size.  She added that                                                                    
there was a  limit in the statute that  stipulated one could                                                                    
not bring a  false claim for anything less  than $5,500. She                                                                    
stated that he was correct  in that there was a cost-benefit                                                                    
analysis to  determine whether or  not to file a  claim. She                                                                    
thought most claims would be in excess of $5,500.                                                                               
9:25:02 AM                                                                                                                    
Senator Dunleavy  asked if there  could potentially  be many                                                                    
issues  below the  amount  of $5,500  that  over time  could                                                                    
accumulate to a substantial sum.                                                                                                
Ms. Kraly answered in the affirmative.                                                                                          
9:25:30 AM                                                                                                                    
Senator Olson  asked about  potential lawsuits  and wondered                                                                    
if  the attorney  general decided  to dismiss  the case,  if                                                                    
there was an appeal process for the plaintiff.                                                                                  
Ms. Kraly understood that if  DOL dismissed a case, the case                                                                    
would end. She  assumed the decision would  be appealable by                                                                    
the plaintiff  to the Supreme  Court, however was  not aware                                                                    
of a circumstance in which it had happened before.                                                                              
9:26:32 AM                                                                                                                    
Senator Bishop remarked that  the attorney general possessed                                                                    
a  lot of  power in  the situation,  and wondered  about the                                                                    
eventuality  of  new  evidence being  presented  after  case                                                                    
Ms. Kraly  thought the reopening  of a case to  consider new                                                                    
evidence depended  upon whether the case  was dismissed with                                                                    
or without prejudice.  She thought some cases  might be left                                                                    
for additional  evidence to come  forward, and  others would                                                                    
be dismissed after finding insufficient evidence.                                                                               
9:27:45 AM                                                                                                                    
Senator Hoffman wondered if the  CS contained provisions for                                                                    
whistle-blower protection.  He asked if there  were monetary                                                                    
incentives for individuals to bring false claims forward.                                                                       
Ms.   Kraly   stated    that   there   were   whistle-blower                                                                    
protections,  and  she  would  discuss  them  later  in  her                                                                    
presentation.  She   clarified  that  there   was  incentive                                                                    
through  the  potential  of  enhanced  recovery  -  that  an                                                                    
individual  could obtain  a  portion of  the  recovery if  a                                                                    
false claim was established.                                                                                                    
9:29:00 AM                                                                                                                    
Ms. Kraly continued to discuss the provisions of the CS:                                                                        
     AS 09.58.050. Certain actions barred.                                                                                      
     Provides a list of situations  that do not constitute a                                                                    
     false claim, such as a  claim that is currently subject                                                                    
     to a criminal  or civil action by the  State. (For full                                                                    
     list page 12, line 18 - page 13, line 1).                                                                                  
     AS 09.58.060. State not liable  for attorneys' fees and                                                                    
     other  expenses.   Provides  that  the  State   is  not                                                                    
     responsible  for the  costs and  fees of  a relator  in                                                                    
     bringing an action.                                                                                                        
9:30:18 AM                                                                                                                    
Co-Chair MacKinnon  asked if there  was a definition  of the                                                                    
term  "relator" within  the false  claims  act section.  She                                                                    
thought   the  general   public  might   have  a   different                                                                    
understanding of the word than  how it was being employed in                                                                    
the bill.                                                                                                                       
Ms. Kraly clarified  that a relator was  the private citizen                                                                    
who  had brought  the false  claim to  the attention  of the                                                                    
attorney general's  office. She confirmed that  the term was                                                                    
used in the formal statutes that governed false claims.                                                                         
9:30:58 AM                                                                                                                    
Co-Chair  Kelly thought  the word  "relator" was  pronounced                                                                    
differently than the more commonly known word "realtor."                                                                        
Ms. Kraly concurred.                                                                                                            
9:31:15 AM                                                                                                                    
Ms. Kraly  pointed out  AS 09.58.070  which was  the section                                                                    
pertaining  to whistleblower  protection.  She discussed  AS                                                                    
09.58.080, which allowed for  the development of regulations                                                                    
to implement the act. She  described AS 09.58.090, which set                                                                    
the  minimum  threshold  to  bring a  false  claims  act  at                                                                    
9:31:52 AM                                                                                                                    
Senator  Hoffman  asked  how  the  $5500  minimum  threshold                                                                    
amount  was  established.  Ms.   Kraly  explained  that  the                                                                    
language was  drafted after a  review of  federal guidelines                                                                    
from the Office of Inspector  General. By using the specific                                                                    
provisions,  including   the  threshold  damage   amount  of                                                                    
$5,500;  the  federal  government would  certify  the  false                                                                    
claim  act and  thereby increase  the state  recovery match.                                                                    
She explained that  under Medicaid there was  both a federal                                                                    
and  state match;  funds from  recoveries were  split at  50                                                                    
percent.  Under the  false claims  act  (if certified),  the                                                                    
state would receive  a 5 percent enhancement  and receive 55                                                                    
percent of the recoveries.                                                                                                      
9:32:54 AM                                                                                                                    
Ms. Kraly  explained that the  final sections  pertaining to                                                                    
the false claim act concerned definitions and short title.                                                                      
9:33:05 AM                                                                                                                    
Ms. Shine addressed Section 4  through Section 9, which were                                                                    
comprised of new  language neither from SB 74 or  SB 78. She                                                                    
discussed  a subcommittee  meeting  on the  topic of  opioid                                                                    
abuse,  in  which  it   reviewed  recommendations  from  the                                                                    
Controlled    Substance   Advisory    Committee   for    the                                                                    
Prescription Drug  Monitoring Program (PDMP).  She explained                                                                    
that  the sections  being  discussed  incorporated the  nine                                                                    
recommendations  that   had  been  sent  to   the  Board  of                                                                    
Pharmacy. She  detailed that in  Section 4, it  required the                                                                    
collection of  dispensing data and  to update the PDMP  on a                                                                    
weekly basis.                                                                                                                   
Ms. Shine discussed Section 5:                                                                                                  
     Section 5(page 11-13) New Section                                                                                          
     AS 17.30.200(d)                                                                                                            
     (3)  Amends to  authorize  a  licensed practitioner  to                                                                    
     delegate  database access  to  supervised employees  or                                                                    
     clinical staff;                                                                                                            
     (4)  Amends to  authorize a  registered pharmacists  to                                                                    
     delegate  database access  to  supervised employees  or                                                                    
     clinical staff;                                                                                                            
     (7)  Adds  a new  section  to  authorize PDMP  database                                                                    
     access  to  the  State   of  Alaska  Medicaid  Pharmacy                                                                    
     (8)  Adds  a new  section  to  authorize PDMP  database                                                                    
     access   to  the   State   of   Alaska  Medicaid   Drug                                                                    
     Utilization Review Committee;                                                                                              
     (9)  Adds  a new  section  to  authorize PDMP  database                                                                    
     access to the State of Alaska Medical Examiner;                                                                            
     (10)  Adds a  new  section  to authorize  de-identified                                                                    
     PDMP data access  to the State of  Alaska Department of                                                                    
     Health and  Social Services Division of  Public Health.                                                                    
     The Division of Public Health  would not need access to                                                                    
     identifiable data  to fulfill public  health objectives                                                                    
     regarding controlled  substances including prescription                                                                    
Ms. Shine  explained that currently a  licensed practitioner                                                                    
or  registered  pharmacist  only  had  access  to  the  PDMP                                                                    
themselves,  and found  the practice  of  checking the  PDMP                                                                    
database   before   the   prescribing  and   dispensing   or                                                                    
prescribing an  opioid to be time-prohibitive.  She directed                                                                    
attention to the four new subsections in Section 5.                                                                             
9:35:19 AM                                                                                                                    
Ms. Shine discussed Section 6:                                                                                                  
     Section 6(page 13) New Section                                                                                             
     AS 17.30.200(e)                                                                                                            
     Amends to  require all prescribers and  all pharmacists                                                                    
     to register  with the Alaska PDMP.  Failure to register                                                                    
     is grounds  for the  board to take  disciplinary action                                                                    
     against the license or registration  of the pharmacy or                                                                    
Ms.  Shine commented  that the  subcommittee had  heard that                                                                    
there  might   be  an  issue  regarding   response  time  of                                                                    
emergency  room physicians  required to  participate in  the                                                                    
9:36:10 AM                                                                                                                    
Ms. Shine discussed Sections 7 through 9:                                                                                       
     Section 7(page 13) New Section                                                                                             
     AS 17.30.200(h)                                                                                                            
     Amends  to  require   prescribers  and  pharmacists  to                                                                    
     review   the   PDMP   database  when   prescribing   or                                                                    
     dispensing  a   controlled  substance  to   a  patient.                                                                    
     Immunity  for  using the  PDMP  remains  even with  the                                                                    
     change from optional to mandatory.                                                                                         
     Section 8(page 13-14) New Section                                                                                          
     AS 17.30.200(k)                                                                                                            
     Amends to adopt regulations to:                                                                                            
     (3) Set a procedure and time frame for registration;                                                                       
     (4) Require  prescribers and pharmacists to  review the                                                                    
     PDMP   database  when   prescribing  or   dispensing  a                                                                    
     controlled substance to a patient.                                                                                         
     Section 9(page 14) New Section                                                                                             
     AS 17.30.200                                                                                                               
     Adding new subsections to:                                                                                                 
     (o) Require  prescribers and pharmacists to  review the                                                                    
     PDMP   database  when   prescribing  or   dispensing  a                                                                    
     controlled substance to a patient.                                                                                         
     (p) Require notification to  boards when a practitioner                                                                    
     registers with the database.                                                                                               
     (q)  Authorize   the  Board  of  Pharmacy   to  forward                                                                    
     unsolicited    notifications    to   prescribers    and                                                                    
     dispensers of  database information about  patients who                                                                    
     may  be  obtaining controlled  substances  inconsistent                                                                    
     with generally recognized standards of care.                                                                               
     (r)  Collect  dispensing  data and  updating  the  PDMP                                                                    
     database weekly.                                                                                                           
9:37:22 AM                                                                                                                    
Co-Chair  MacKinnon  stated  that the  previously  discussed                                                                    
sections were a departure  from previous state statute, were                                                                    
based  on a  recommendation from  a task  force, and  may be                                                                    
controversial. The  language pertained to opioids  only, and                                                                    
was moving from  language of "may report"  to "shall report"                                                                    
on the prescription  and use of opioids.  She understand the                                                                    
language was  in aid of  understanding where the  drugs were                                                                    
going.  She  referred  to testimony  from  a  physician  the                                                                    
previous day  regarding drug abuse versus  drug selling. She                                                                    
thought the optional  program had made it  difficult to curb                                                                    
drug  abuse  activities,  and pondered  that  the  mandatory                                                                    
participation in  the PDMP would help  mitigate the problem.                                                                    
She  wanted  to  recognize  that   there  was  a  huge  drug                                                                    
addiction  issue in  the state,  and  expressed concern  for                                                                    
individuals who might  perceive the changes as  a barrier to                                                                    
their  personal  pain  management. She  related  a  personal                                                                    
experience in  Fairbanks wherein she spoke  with individuals                                                                    
in  a  public setting  about  their  experience with  opioid                                                                    
abuse in the  community and the ease with  which the general                                                                    
population could  access opioids. She recognized  that there                                                                    
would  be different  perspectives on  the PDMP  component of                                                                    
the  bill,  and clarified  that  the  subcommittee made  the                                                                    
recommendation based  on what  was in  the best  interest of                                                                    
the state.                                                                                                                      
9:41:13 AM                                                                                                                    
Senator Dunleavy  concurred that drug abuse  was an epidemic                                                                    
in  the  state,  and  related personal  knowledge  of  young                                                                    
adults  that  had  experienced drug  addiction  after  being                                                                    
legitimately prescribed pain medication.                                                                                        
9:42:08 AM                                                                                                                    
Co-Chair  MacKinnon  discussed   over-prescription  of  pain                                                                    
medication.  She  mentioned  her experience  as  the  former                                                                    
executive  director of  Hospice of  Anchorage and  discussed                                                                    
pain management as  part of end-of-life issues.  She did not                                                                    
want to  restrict pain medication  to people  suffering from                                                                    
terminal disease or unmanageable pain.                                                                                          
9:43:31 AM                                                                                                                    
Senator  Bishop referred  to Section  9, subsection  (r) and                                                                    
wondered who had access to the PDMP information.                                                                                
Ms.  Shine stated  that  currently access  to  the PDMP  was                                                                    
limited  to  pharmacists  and the  prescribing  doctor.  She                                                                    
continued that there was a  recommendation in Section 5 that                                                                    
would allow  access to  other entities such  as an  agent of                                                                    
the  state or  an employee  of a  doctor or  pharmacist. She                                                                    
reiterated  the   concern  with   the  time   necessary  for                                                                    
providers to access the PDMP  database, and thought it might                                                                    
have  inhibited  doctors  from  voluntarily  coming  to  the                                                                    
9:45:00 AM                                                                                                                    
Co-Chair MacKinnon clarified that there  it was a better use                                                                    
of  a doctor's  time  and  more cost  effective  to be  with                                                                    
patients and was  a better use of an employee's  time to use                                                                    
the PDMP database.                                                                                                              
9:45:26 AM                                                                                                                    
Senator  Bishop was  concerned that  drug  companies may  be                                                                    
able to access data from the PDMP for marketing purposes.                                                                       
Ms.  Shine confirmed  that  it  was not  the  intent of  the                                                                    
legislation to allow  for such access, and  she would ensure                                                                    
that  it was  not in  the  bill. She  discussed the  limited                                                                    
nature of access to the PDMP database.                                                                                          
9:46:02 AM                                                                                                                    
Co-Chair MacKinnon  stated that there had  been conversation                                                                    
about protecting privacy, and  indicated that currently even                                                                    
the  state  pharmacist  did  not  have  access  to  detailed                                                                    
information in the PDMP database.                                                                                               
Ms.  Shine added  that  31 other  states  had added  allowed                                                                    
access for state Medicaid pharmacists.                                                                                          
9:46:58 AM                                                                                                                    
Ms. Kraly addressed Section 10:                                                                                                 
     Section 10(page 14) Previously CS SB 78(FIN) Section 5                                                                     
     AS 37.05.146(c)                                                                                                            
     Amends to include a new  paragraph (88) adding monetary                                                                    
     recoveries from  the Alaska  Medicaid False  Claims Act                                                                    
     to the  program and  non-general fund  program receipts                                                                    
9:47:27 AM                                                                                                                    
Senator  Hoffman   asked  for  the  justification   for  not                                                                    
forwarding the recoveries to the GF.                                                                                            
Ms.  Kraly understood  that  under  statute, other  Medicaid                                                                    
receipts  were included  under the  non-GF designation.  She                                                                    
stated she  would look into  the matter and  provide Senator                                                                    
Hoffman with the information.                                                                                                   
9:48:12 AM                                                                                                                    
Senator Hoffman  asked what the  receipts would  be eligible                                                                    
to be utilized for. Ms. Kraly  was not sure of how the funds                                                                    
could be used.                                                                                                                  
Co-Chair MacKinnon made note of  the two questions for later                                                                    
discussion. She thought that the  direction of the funds had                                                                    
to do with the state and  federal funding split and the need                                                                    
for  proper accounting.  She  indicated  that the  committee                                                                    
would request further information from DOL.                                                                                     
9:48:52 AM                                                                                                                    
Ms. Kraly reviewed Section 11:                                                                                                  
     Section 11(page 14) Previously CS SB 78(FIN) Section 6                                                                     
     AS 40.25.120(a)                                                                                                            
     Amends to include a new paragraph (15) a conforming                                                                        
     amendment to include new AS.09.58.010 to existing                                                                          
     public records statutes.                                                                                                   
Ms.  Kraly  elaborated  that  the section  had  to  do  with                                                                    
protection  of the  filing the  case under  seal, and  other                                                                    
information. Once  the case went  forward and was  open, the                                                                    
matters  would  be public  as  any  other civil  litigation.                                                                    
There   was   a   process   whereby   the   department   was                                                                    
investigating and  determining the  merits of the  case, and                                                                    
the  information needed  to be  maintained as  confidential.                                                                    
She confirmed  that the  section would  add the  false claim                                                                    
act provisions to the Alaska Public Records Act.                                                                                
9:49:44 AM                                                                                                                    
HEATHER  SHADDUCK,  STAFF,  SENATOR  PETE  KELLY,  discussed                                                                    
Section 12:                                                                                                                     
     Section 12 (page 14-15) Previously CS SB 74(STA)                                                                           
     Section 1                                                                                                                  
     AS 47.05.015                                                                                                               
     Amends  by  adding  a  new   subsection  to  allow  the                                                                    
     Department  of Health  and  Social  Services (DHSS)  to                                                                    
     enter into  a contract through the  competitive bidding                                                                    
     process under  the State  Procurement Code  for durable                                                                    
     medical   equipment   or  specific   medical   services                                                                    
     provided in the Medicaid program.                                                                                          
9:50:30 AM                                                                                                                    
Senator  Hoffman asked  if there  was  a monetary  threshold                                                                    
that  was required  in the  statute. He  thought it  did not                                                                    
make sense to go to competitive bid for a small amount.                                                                         
Ms. Shadduck stated that there  was not a monetary threshold                                                                    
specified -  the language was acquired  through an amendment                                                                    
made  the  previous  session in  the  Senate  State  Affairs                                                                    
Committee. She clarified  that the section was  also left as                                                                    
permissive  language  that the  department  could  use as  a                                                                    
tool. She  mentioned that there  had been  other suggestions                                                                    
from other groups such as  the Key Campaign regarding how to                                                                    
purchase medical supplies, and  noted that the allowance was                                                                    
an option rather than a requirement.                                                                                            
9:51:10 AM                                                                                                                    
Ms. Shadduck addressed Section 13:                                                                                              
     Section  13(page   15-16)  Previously  CS   SB  74(STA)                                                                    
     Section 2 (Amended)                                                                                                        
     AS   47.05.105    Enhanced   computerized   eligibility                                                                    
     verification system.                                                                                                       
     Amends  by  adding  a   new  subsection  requiring  the                                                                    
     department   to  establish   a  computerized   enhanced                                                                    
     eligibility verification  system to  verify eligibility                                                                    
     and to  deter waste  and fraud.  It also  requires DHSS                                                                    
     enter into  a competitively bid contract  with a third-                                                                    
     party vendor  for the eligibility  verification system.                                                                    
     The   annual   savings   must  exceed   the   cost   of                                                                    
     implementing the system.                                                                                                   
Ms.  Shadduck pointed  out that  the  section would  require                                                                    
DHSS  to  use  a   system  that  would  complement  Alaska's                                                                    
Resource   for  Integrated   Eligibility  Services   (ARIES)                                                                    
system.  She continued  that added  new subsections  (c) and                                                                    
(d) clarified that  the system was separate  from ARIES (how                                                                    
the  division   of  public  assistance   determined  program                                                                    
eligibility); and would utilize  a nation-wide system to try                                                                    
and  capture waste  and abuse.  Subsection  (d) prevented  a                                                                    
conflict of interest by stipulating  that the department may                                                                    
not  award the  contract to  the  same entity  that ran  the                                                                    
eligibility system.                                                                                                             
9:52:59 AM                                                                                                                    
Senator  Bishop expressed  appreciation  for Ms.  Shadduck's                                                                    
earlier mention  of efficacy of  past computer  programs. He                                                                    
pondered  that  she  was considering  programs  that  had  a                                                                    
positive track record.                                                                                                          
Ms.  Shadduck  affirmed  that  it  was  the  intent  of  the                                                                    
sponsors  of the  legislation to  acquire a  program with  a                                                                    
positive track record.                                                                                                          
9:53:41 AM                                                                                                                    
Ms. Kraly addressed Section 14:                                                                                                 
     Section 14(page 16) Previously CS SB 78(FIN) Section 8                                                                     
     AS 47.05.200                                                                                                               
     a) Amends  Medicaid Audits statute, changes  the number                                                                    
     of program  audits to no  less than fifty per  year and                                                                    
     adding  that  the  state   shall  attempt  to  minimize                                                                    
     concurrent state or federal audits.                                                                                        
Ms. Kraly detailed  that Section 14 would  reduce the number                                                                    
of audits  that DHSS must  contract for  from 75 to  50. She                                                                    
discussed  the state  being cognizant  of  the multitude  of                                                                    
other audits occurring at the  federal level, and trying not                                                                    
to duplicate services.                                                                                                          
9:54:38 AM                                                                                                                    
Co-Chair  MacKinnon   relayed  that  the   subcommittee  had                                                                    
communicated with  the department regarding the  question of                                                                    
a  shared  services  agreement  pertaining  to  audits.  She                                                                    
understood  that  DHSS  and   the  federal  government  were                                                                    
sharing   audit  information.   She   indicated  that   DHSS                                                                    
Commissioner Valerie  Davidson indicated  affirmatively from                                                                    
the gallery.                                                                                                                    
9:55:56 AM                                                                                                                    
AT EASE                                                                                                                         
9:58:47 AM                                                                                                                    
Ms. Kraly addressed Section 15:                                                                                                 
     Section  15(page   16-17)  Previously  CS   SB  78(FIN)                                                                    
     Section 9 (Amended)                                                                                                        
     AS 47.05.200(b)                                                                                                            
     Amends so  that the Department may  assess interest and                                                                    
     penalties   on  overpayments,   identified  in   audits                                                                    
     conducted under  this section, by  calculating interest                                                                    
     using  existing statutory  rates from  the date  of the                                                                    
     final agency decision.                                                                                                     
Ms.  Kraly  qualified that  the  section  would mirror  what                                                                    
happened  in civil  litigation  and  would encourage  prompt                                                                    
Ms. Kraly addressed Section 16:                                                                                                 
     Section 16  (page 17) Previously CS  SB 78(FIN) Section                                                                    
     10 (Amended)                                                                                                               
     AS  47.05.235.   Duty  to  identify  and   repay  self-                                                                    
     identified overpayments.                                                                                                   
     Amends  by  adding a  new  section  which requires  all                                                                    
     enrolled  Medicaid  providers  to  conduct  one  annual                                                                    
     review or audit of all  claims, and if overpayments are                                                                    
     identified, to report those  findings to the department                                                                    
     within ten business days, and  to establish a repayment                                                                    
     agreement with the state.                                                                                                  
10:00:20 AM                                                                                                                   
Co-Chair  MacKinnon asked  how  the  department was  working                                                                    
with  providers  to establish  safety  nets  for the  annual                                                                    
review of claims.                                                                                                               
Ms. Kraly was aware that  DOL and DHSS worked with providers                                                                    
on a regular on-going  basis to provide technical assistance                                                                    
pertaining to regulatory  interpretation and record-keeping.                                                                    
She referred  to webinars, trainings, and  seminars provided                                                                    
by  DHSS to  assist providers  with information  to mitigate                                                                    
occurrences of overpayment.                                                                                                     
Co-Chair  MacKinnon appreciated  Ms.  Kraly's response.  She                                                                    
referred to  previous testimony by  the department,  as well                                                                    
as   discussions  about   transition  to   a  new   Medicaid                                                                    
enrollment  system.   She  had   heard  that  there   was  a                                                                    
substantial amount of money that had not been returned to                                                                       
the state, and wondered if interest was being charged.                                                                          
Ms. Kraly was not aware of whether interest was being                                                                           
charged, and directed Co-Chair MacKinnon's inquiry to the                                                                       
10:02:37 AM                                                                                                                   
Ms. Kraly discussed Section 17:                                                                                                 
     Section 17(page 17-22)                                                                                                     
     AS  47.05.250.   Civil  penalties.  Previously   CS  SB
     78(FIN) Section 11 (Amended)                                                                                               
     Authorizes  the department  to  develop regulations  to                                                                    
     impose civil  fines and  sets limits  on the  amount of                                                                    
     the fines.                                                                                                                 
     AS  47.05.260.  Seizure  and   forfeiture  of  real  or                                                                    
     personal property in medical assistance fraud cases.                                                                       
     Authorizes  the department,  after  application to  the                                                                    
     court  and  a  finding  of  probable  cause,  to  seize                                                                    
     certain  real   or  personal  property  of   a  medical                                                                    
     assistance provider who has  committed or is committing                                                                    
     medical  assistance fraud,  to offset  the cost  of the                                                                    
     alleged fraud. The court may  authorize seizure of real                                                                    
     or personal property  to cover the cost  of the alleged                                                                    
     This  section  provides  a list  of  possible  real  or                                                                    
     personal    properties,   including    bank   accounts,                                                                    
     automobiles,  boats, airplanes,  stocks and  bonds, and                                                                    
     This  section,  upon issuance  of  the  court order  of                                                                    
     seizure,   prohibits  the   owners  of   property  from                                                                    
     disposing  of the  property, with  a provision  of good                                                                    
     faith  in the  event property  is sold  without written                                                                    
     permission   of  the   court.   This  section   further                                                                    
     authorizes  the forfeiture  of any  seized property  if                                                                    
     the  Medicaid  provider   is  eventually  convicted  of                                                                    
     medical   assistance  fraud.   This  section   provides                                                                    
     instructions   to  the   state   to   sell  or   return                                                                    
     properties,  and  depositing  funds  from  disposal  of                                                                    
     seized properties.                                                                                                         
     This section  also allows for the  action of forfeiture                                                                    
     to be joined with another  civil or criminal action for                                                                    
     damages  resulting  from   alleged  medical  assistance                                                                    
10:04:18 AM                                                                                                                   
Ms. Shadduck further discussed Section 17, and highlighted                                                                      
the changes to an additional section:                                                                                           
     AS  47.05.270.   Medical  assistance   reform  program.                                                                    
     Previously CS SB 74(STA) Section 4                                                                                         
     Under (a), the reform program must include 11 items:                                                                       
     1) Referrals to community  and social support services,                                                                    
     including  career   and  education   training  services                                                                    
     available through  the Department of Labor  & Workforce                                                                    
     Development,  the   University  of  Alaska,   or  other                                                                    
     2)  Electronic  distribution   of  benefits  (EOBs)  to                                                                    
     3) Expanding the use of  telemedicine for primary care,                                                                    
     behavioral health and urgent care                                                                                          
     4)   Enhancing   fraud   prevention,   detection,   and                                                                    
     5) Reducing the cost  of behavioral health, senior, and                                                                    
     disabilities  services provided  of Medicaid  under the                                                                    
     state's home and community-based services waivers                                                                          
     6) Pharmacy initiatives                                                                                                    
     7) Enhanced care management                                                                                                
     8) Redesigning the payment  process by implementing fee                                                                    
     agreements that include:   premium payments for centers                                                                    
     of   excellence,    penalties   for   hospital-acquired                                                                    
     infections, readmission, and  outcome failures, bundled                                                                    
     payments, or global payments.                                                                                              
     9)  Stakeholder involvement  in setting  annual targets                                                                    
     for quality and cost-effectiveness                                                                                         
     10) Reducing travel by requiring  a recipient to obtain                                                                    
     care in their home  community to the extent appropriate                                                                    
     services are available.                                                                                                    
     11) Establish  guidelines for health care  providers to                                                                    
     develop  health  care  delivery models  that  encourage                                                                    
     wellness and disease prevention.                                                                                           
     New   Subsection  (b):   Requires  the   department  to                                                                    
     efficiently  manage  a   comprehensive  and  integrated                                                                    
     behavioral  health  system  that  uses  evidence  based                                                                    
     practices  that   are  data  driven   with  measureable                                                                    
     outcomes.  The department  and the Alaska Mental Health                                                                    
     Trust Authority must provide a  plan for a continuum of                                                                    
     community   based   services   that   includes   house,                                                                    
     employment and criminal justice issues.                                                                                    
     Subsection (c):  Has the department identify  the areas                                                                    
     of   the  state   where  improvements   in  access   to                                                                    
     telemedicine would  be most  effective in  reducing the                                                                    
     costs of Medicaid. Allows the  department to enter into                                                                    
     agreements with  IHS providers if necessary  to improve                                                                    
     access to telemedicine facilities and equipment.                                                                           
     Subsection (d): Requires the  department to prepare and                                                                    
     submit  a  report  around reforms,  savings  and  costs                                                                    
     related to  the Medicaid  program on or  before October                                                                    
     15 of each year.                                                                                                           
     Subsection    (e):    Provides   a    definition    for                                                                    
Ms. Shadduck detailed that item  11 was new and comprised of                                                                    
language from  SB 78.  Item 11, Subsection  (b) was  new and                                                                    
had been formulated in coordination  with Jeff Jessee, Chief                                                                    
Executive  Officer   of  the  Alaska  Mental   Health  Trust                                                                    
Ms. Shadduck  read from the  bill starting on Page  20, line                                                                    
     The goal  of  the  program   is  to  assist  recipients                                                                    
     of services  under the  program to recover by achieving                                                                    
     the   highest  level   of  autonomy   with  the   least                                                                    
     dependence  on   state-funded  services   possible  for                                                                    
     each  person.                                                                                                              
Ms.  Shadduck   expanded  that  the  bill   was  focused  on                                                                    
continuum  of care,  linking individuals  to community-based                                                                    
services,  addressing  housing,   employment,  and  criminal                                                                    
10:07:50 AM                                                                                                                   
Senator  Bishop   asked  to  revisit  Subsection   (d),  and                                                                    
wondered if  the specified date  of October 15  was amenable                                                                    
to all parties.                                                                                                                 
Ms.  Shadduck conveyed  that the  date was  chosen with  the                                                                    
intent   that  the   report  would   be  delivered   to  the                                                                    
legislature  with time  for bills  to be  drafted or  budget                                                                    
items to  be prepared.  She referred  to comments  from DHSS                                                                    
Commissioner Davidson regarding her  work with the governor,                                                                    
in  the  light  of the  departmental  reporting  requirement                                                                    
listed on Page 21, line 19 of the bill:                                                                                         
     (4) recommendations for legislative  or budgetary                                                                          
     changes  related  to  medical assistance reforms                                                                           
     during the next fiscal year;                                                                                               
Senator Bishop  supported the section,  but wondered  if the                                                                    
date allowed  for ample time  for the department  to provide                                                                    
full information.                                                                                                               
Co-Chair  MacKinnon   relayed  that  the   subcommittee  had                                                                    
allowed for brief testimony from  DHSS. She relayed that the                                                                    
commissioner had thought  that some of the  dates could pose                                                                    
a challenge  for the  department to  achieve. She  avowed to                                                                    
continue  working with  the department  to  align dates  and                                                                    
make  it  easier  to  accomplish  the  reporting  task.  She                                                                    
reiterated  Ms.  Shadduck's   point  about  the  legislature                                                                    
receiving  information  in a  timely  fashion  prior to  the                                                                    
legislative session in order to  start work on an issue. SHe                                                                    
thought  that  if  the  governor  chose  not  to  advance  a                                                                    
particular topic, he would have reasons behind his choice.                                                                      
Ms. Shadduck concurred.                                                                                                         
10:10:35 AM                                                                                                                   
Senator  Bishop  was   supportive  of  Co-Chair  MacKinnon's                                                                    
comments.  He  considered the  newness  of  the program  and                                                                    
thought it might  be prudent to give more time  in the first                                                                    
year for adjustment to the reporting schedule.                                                                                  
Co-Chair  MacKinnon  thought  Senator Bishop  made  a  valid                                                                    
10:10:55 AM                                                                                                                   
Senator Olson referred to Page 19, line 25 of the bill:                                                                         
     (2) electronic distribution  of  an  explanation  of                                                                       
     medical  assistance  benefits to recipients for health                                                                     
     care services received under the program;                                                                                  
Senator Olson expressed  support for electronic connectivity                                                                    
of  businesses, but  wondered if  there were  care providers                                                                    
that  did  not have  access  to  the  internet or  means  of                                                                    
complying with the section.                                                                                                     
Ms.   Shadduck   understood   that   the   distribution   of                                                                    
explanation of  benefits (EOBs)  would have  to be  added to                                                                    
the  current Xerox  Medicaid  Management Information  System                                                                    
(MMIS).  She thought  it would  be up  to the  department to                                                                    
comply with the requirement  and ensure that individuals had                                                                    
access to the EOBs.                                                                                                             
10:12:16 AM                                                                                                                   
Co-Chair  Kelly thought  there was  nothing in  the language                                                                    
that prohibited other types of distribution.                                                                                    
Senator  Olson asked  for confirmation  that other  forms of                                                                    
distribution were available.                                                                                                    
Co-Chair Kelly answered in the affirmative.                                                                                     
10:12:28 AM                                                                                                                   
Co-Chair MacKinnon relayed  that the cost of  paper may have                                                                    
precluded  the  idea  of  printed  EOBs  in  a  cost-benefit                                                                    
analysis. She mentioned that one  way for individuals to see                                                                    
if  providers  were  over-charging  was  to  understand  the                                                                    
services that  Medicaid was being billed  for. She described                                                                    
the new system as a test,  and thought that there would be a                                                                    
benefit  if  individual  Alaskans could  help  monitor  what                                                                    
providers were charging.                                                                                                        
10:13:35 AM                                                                                                                   
Ms. Shine discussed Section 18:                                                                                                 
     Section 18 (page 22-23) Previously CS SB 78(FIN)                                                                           
     Section 17 (Amended)                                                                                                       
     AS 47.07.030(d)                                                                                                            
     Amends to  require DHSS to  implement the  primary care                                                                    
     case management system. The purpose  of this new system                                                                    
     is to  increase Medicaid enrollees' use  of primary and                                                                    
     preventive care, while decreasing  the use of specialty                                                                    
     care and hospital emergency department services.                                                                           
10:14:21 AM                                                                                                                   
Ms. Shine addressed Section 19:                                                                                                 
     Section  19  (page  23-24)  Previously  CS  SB  78(FIN)                                                                    
     Section 12(Amended)                                                                                                        
     AS 47.07.036                                                                                                               
     Amends  by adding  new subsections  (d)-(f) to  outline                                                                    
     cost   containment  and   reform   measures  DHSS   may                                                                    
     undertake,  including   seeking  demonstration  waivers                                                                    
     related   to   innovative  service   delivery   models,                                                                    
     applying for  other options  under the  Social Security                                                                    
     Act to obtain or  increase federal match, and improving                                                                    
     telemedicine  for  Medicaid  recipients.  This  section                                                                    
     also requires  DHSS to apply  for an 1115 waiver  for a                                                                    
     demonstration  project  for  one   or  more  groups  of                                                                    
     Medicaid  recipients in  one or  more geographic  area.                                                                    
     The  demonstration  project  may include  managed  care                                                                    
     organizations,  community care  organizations, patient-                                                                    
     centered  medical homes,  or  other innovative  payment                                                                    
10:15:16 AM                                                                                                                   
Ms. Shadduck reviewed Section 20:                                                                                               
     Section 20(page 24-27)                                                                                                     
     AS 47.07.038. Collaborative,  hospital-based project to                                                                    
     reduce   use   of    emergency   department   services.                                                                    
     Previously CS SB 74(STA) Section 6(Amended)                                                                                
     Requires   the  department   to  partner   a  statewide                                                                    
     professional  hospital   organization  to   design  and                                                                    
     implement a demonstration  project to reduce non-urgent                                                                    
     use of emergency departments by Medicaid recipients.                                                                       
     AS 47.07.039(a)  New Section                                                                                               
     Requires DHSS to solicit and  contract with one or more                                                                    
     third-party     entities    for     coordinated    care                                                                    
     demonstration projects for  individuals who qualify for                                                                    
     Medicaid  benefits  on  or before  December  31,  2016.                                                                    
     DHSS  may  use  an innovative  procurement  process  as                                                                    
     described under AS 36.30.308.  A proposal for considers                                                                    
     must include one or more of the following:                                                                                 
     (1)Comprehensive     primary-care-based     management,                                                                    
     including behavioral health services                                                                                       
     (2)Care  coordination, including  the  assignment of  a                                                                    
     primary care  provider located in the  local geographic                                                                    
     area of the recipient                                                                                                      
     (3)Health promotion                                                                                                        
     (4)Comprehensive transitional  care and  follow-up care                                                                    
     after inpatient treatment                                                                                                  
     (5)Referral to  community and social  support services,                                                                    
     including career and education training services                                                                           
     (6)Sustainability  and  the  ability  to  replicate  in                                                                    
     other regions of the state                                                                                                 
     (7)Integration   and  coordination   of  benefits   and                                                                    
     (8)Local   accountability  for   health  and   resource                                                                    
10:16:12 AM                                                                                                                   
Co-Chair  Kelly  thought  it   was  important  to  note  the                                                                    
requirements  that  had  been  interjected  in  the  system:                                                                    
identifying frequent  users, electronic exchange  of patient                                                                    
information,  dissemination of  a  list  of frequent  users,                                                                    
education   of   patients,    guidelines   for   prescribing                                                                    
narcotics,  and a  drug monitoring  program. He  thought the                                                                    
section was a significant piece of the legislation.                                                                             
10:16:57 AM                                                                                                                   
Ms.  Shadduck  continued  to discuss  the  coordinated  care                                                                    
project,  which was  pursuant to  a subcommittee  discussion                                                                    
regarding  the proposal  for a  managed care  program, along                                                                    
with  the  department's  proposal for  an  accountable  care                                                                    
organization. There had been much  debate pertaining to what                                                                    
type  of payment  model or  project to  put forward.  The CS                                                                    
proposed  that the  department should  contract with  one or                                                                    
more third-party to implement  coordinated care projects, in                                                                    
order for  the best projects  to come forward to  the review                                                                    
committee. She referred to the list of items 1 through 8.                                                                       
10:18:34 AM                                                                                                                   
Ms. Shadduck gave an overview subsection (b):                                                                                   
     AS 47.07.039(b)                                                                                                            
     Establishes  a project  review committee  for proposals                                                                    
     submitted under (a) of this section.                                                                                       
     The committee is comprised of:                                                                                             
     1) The DHSS commissioner or their designee                                                                                 
     2) The director of the  Division of Insurance, DCCED or                                                                    
     their designee                                                                                                             
     3) The CEO of the  Alaska Mental Health Trust Authority                                                                    
     or their designee                                                                                                          
     4)   Three   representatives  of   stakeholder   groups                                                                    
     appointed by the Governor                                                                                                  
     5) A Non-voting member of the Senate appointed by the                                                                      
     Senate President                                                                                                           
     6) A Non-voting member of the House of Representatives                                                                     
     appointed   by   the   Speaker    of   the   House   of                                                                    
Ms.  Shadduck  noted  that the  subsection  listed  an  even                                                                    
number  of  voting  members  for  the  review  committee  in                                                                    
subsection (b) and surmised that  the issue would need to be                                                                    
addressed in another work draft.                                                                                                
10:19:21 AM                                                                                                                   
Senator  Hoffman   asked  if  there   was  a  list   of  the                                                                    
stakeholders related  to the review committee.  Ms. Shadduck                                                                    
replied that the stakeholders were not listed.                                                                                  
Senator Hoffman  clarified that he  wanted to see a  list so                                                                    
as  to know  who might  be appointed.  Ms. Shadduck  offered                                                                    
that   the   department    had   worked   extensively   with                                                                    
stakeholders during  the interim,  and offered to  work with                                                                    
the  commissioner  to provide  a  list.  She continued  that                                                                    
stakeholders   generally   included    the   State   Medical                                                                    
Association, the Primary Care  Association, the Alaska State                                                                    
Hospital and Nursing Home Association, and others.                                                                              
Senator Hoffman  wondered how many stakeholders  there might                                                                    
Co-Chair  MacKinnon confirmed  that there  were hundreds  of                                                                    
10:20:26 AM                                                                                                                   
Co-Chair  Kelly reiterated  that  his  office would  provide                                                                    
Senator  Hoffman  with  a  list  as  soon  as  it  could  be                                                                    
10:20:49 AM                                                                                                                   
Senator Hoffman  asked if  there would  be terms  of service                                                                    
for the  committee members, and  wondered how  members would                                                                    
be replaced.                                                                                                                    
Ms.  Shadduck  thought  that  the  specified  members  would                                                                    
change as did  any other committee or board,  and thought it                                                                    
might be  good to  specify length  of terms  for stakeholder                                                                    
groups.  It was  the  sponsor's intention  that the  project                                                                    
would continue  on. She clarified  that the  committee could                                                                    
be used  in perpetuity  should the  occasion arise  that the                                                                    
Centers for Medicaid and Medicare  came forward with another                                                                    
innovative model in the future.                                                                                                 
10:21:39 AM                                                                                                                   
Ms. Shadduck discussed subsections (c), (d), and (e):                                                                           
     AS 47.07.039(c)                                                                                                            
     Grants  DHSS authority  to contract  with third-parties                                                                    
     to  implement the  demonstration projects  listed under                                                                    
     (a)  of   this  section   that  include   managed  care                                                                    
     organizations, primary care  case managers, accountable                                                                    
     care organizations, prepaid  ambulatory health plan, or                                                                    
     a provider-led entity.   Requires a per  capita fee and                                                                    
     allows for value payment models.                                                                                           
     AS 47.07.039(d)                                                                                                            
     Requires any  project under (a) to  include cost-saving                                                                    
     measures  including the  expanded  use of  telemedicine                                                                    
     for primary  care, urgent  care, and  behavioral health                                                                    
     AS 47.07.039(e)                                                                                                            
     Requires DHSS  to contract  with a  third-party actuary                                                                    
     to  review demonstration  projects  after  one year  of                                                                    
     implementation   and  make   recommendations  for   the                                                                    
     implementation  of a  similar  project  on a  statewide                                                                    
     basis.  On  or before December 31, 2018,  and each year                                                                    
     thereafter, the  actually shall  submit a  final report                                                                    
     to the DHSS for any  project that has been in operation                                                                    
     for at least one year.                                                                                                     
Ms.  Shadduck confirmed  that subsection  (c) included  that                                                                    
fee   structures  may   include  global   payments,  bundled                                                                    
payments, shared  savings, or other payment  structures. She                                                                    
clarified  that the  intent of  subsection (e)  was to  have                                                                    
good information regarding what  projects should be launched                                                                    
in a wider regional or statewide basis.                                                                                         
10:22:45 AM                                                                                                                   
Ms. Shadduck reviewed subsections (f) and (g):                                                                                  
     AS 47.07.039(f)                                                                                                            
     Directs DHSS  to prepare a  plan regarding  regional or                                                                    
     statewide implementation of  a coordinated care project                                                                    
     based  on the  results  of  the demonstration  projects                                                                    
     under this  section.  Requires  DHSS on or  before June                                                                    
     30, 2019 to  submit a report to the  legislature on any                                                                    
     changes  or  recommendations   for  wider  regional  or                                                                    
     statewide implementation.                                                                                                  
     AS 47.07.039(g)                                                                                                            
     Refers  to   the  definition  of  telemedicine   in  AS                                                                    
10:23:24 AM                                                                                                                   
Ms. Shadduck continued on Section 21:                                                                                           
     Section  21  (page  27-28)  Previously  CS  SB  74(STA)                                                                    
     Section 7                                                                                                                  
     AS 47.07.076 Report to legislature.                                                                                        
     Requires  the department  and the  attorney general  to                                                                    
     annually prepare  a report regarding  fraud prevention,                                                                    
     abuse,   prosecution,   and  vulnerabilities   in   the                                                                    
     Medicaid program.                                                                                                          
Ms.  Shadduck expanded  that the  section would  provide the                                                                    
legislature with a report detailing  payment error rates and                                                                    
other  details  of  fraud prevention.  She  noted  that  the                                                                    
report would be due on October 15th of each year.                                                                               
10:24:07 AM                                                                                                                   
Ms. Shine discussed Sections 22 and 23:                                                                                         
     Section 22  (page 28) Previously CS  SB 78(FIN) Section                                                                    
     Amends   Medicaid    Administration   definitions,   by                                                                    
     removing the grantee  status requirement for outpatient                                                                    
     mental health clinics serving Medicaid patients.                                                                           
     Section  23  (page  28-29)  Previously  CS  SB  78(FIN)                                                                    
     Section 14 (Amended)                                                                                                       
     AS 47.07.900(17)                                                                                                           
     Amends  by   removing  the   grantee/contractor  status                                                                    
     requirement  from drug  and  alcohol treatment  centers                                                                    
     and outpatient mental health  clinics. This change, and                                                                    
     the one  in the previous section,  allows mental health                                                                    
     and  drug  treatment  service   providers  who  do  not                                                                    
     receive grants  from the department to  become enrolled                                                                    
     Medicaid  providers and  deliver  services to  Medicaid                                                                    
10:24:46 AM                                                                                                                   
Co-Chair MacKinnon  stated that there was  discussion in the                                                                    
subcommittee  that  removal  of   the  word  "community"  in                                                                    
Section 23  could have  an adverse  effect. She  stated that                                                                    
the subcommittee  would look into the  issue further through                                                                    
dialogue with  the department. She clarified  that currently                                                                    
in order  to receive  a Medicaid  benefit for  mental health                                                                    
services, a service provider must  be a grantee of the state                                                                    
of Alaska.  The legislation  would allow an  opportunity for                                                                    
other providers  an opportunity  to help  meet the  needs of                                                                    
the community. Ms. Shine agreed.                                                                                                
10:25:29 AM                                                                                                                   
Ms. Kraly commented on Section 24:                                                                                              
     Section 24  (page 29) Previously CS  SB 78(FIN) Section                                                                    
     Uncodified: Indirect Court Rule Amendments.                                                                                
     Adds a new section to  outline court rule amendments as                                                                    
     a result of the enactment of section 3 and 17.                                                                             
Ms.  Kraly  explained that  the  section  would outline  the                                                                    
court  rule  amendments required  with  the  passage of  the                                                                    
false claims act.                                                                                                               
Ms. Shine addressed Section 25:                                                                                                 
     Section 25(page  30) Previously  CS SB  78(FIN) Section                                                                    
     Uncodified:   Implement   Federal  Policy   on   Tribal                                                                    
     Medicaid Reimbursement.                                                                                                    
     Requires DHSS to collaborate  with Alaska Tribal health                                                                    
     organizations  and  the  U.S.  DHHS  to  implement  new                                                                    
     federal  policy  regarding  100%  federal  funding  for                                                                    
     services provided to  Medicaid-eligible American Indian                                                                    
     and Alaska Native individuals within  six months of the                                                                    
     rule change  being finalized.  Requires DHSS  to report                                                                    
     to the  co-chairs of Finance the  estimated savings and                                                                    
     calculations  of  savings  to the  state  general  fund                                                                    
     within thirty days of the rule being finalized.                                                                            
Ms. Shine relayed that the  intent of the report required in                                                                    
Section  25 was  to  gain understanding  of  what GF  relief                                                                    
there  might be  after  implementing  impending new  federal                                                                    
10:27:03 AM                                                                                                                   
Co-Chair MacKinnon  relayed that  the subcommittee  had been                                                                    
told  that some  of  the travel  that  happened with  Indian                                                                    
Health Service recipients would  be 100 percent reimbursable                                                                    
rather than  the state contributing. She  continued that the                                                                    
report  would help  to ensure  that  the department  started                                                                    
implementation of the rules as quickly as possible.                                                                             
Ms. Shine  added that  in addition  to travel,  services not                                                                    
available in  the community or tribal  health facility could                                                                    
potentially be covered at 100 percent.                                                                                          
10:27:53 AM                                                                                                                   
Co-Chair  MacKinnon thought  the new  rules might  result in                                                                    
significant cost  savings and stated  that travel for  FY 15                                                                    
was just under $80 million for the Medicaid program.                                                                            
10:28:07 AM                                                                                                                   
Ms. Shine discussed Section 26:                                                                                                 
     Section  26(page   30-31)  Previously  CS   SB  78(FIN)                                                                    
     Section 18                                                                                                                 
    Uncodified: Health Information Infrastructure Plan.                                                                         
     Requires  DHSS  to develop  a  plan  to strengthen  the                                                                    
     health  information  infrastructure,  including  health                                                                    
     data  analytics capability,  to support  transformation                                                                    
     of the health system in Alaska.                                                                                            
10:28:31 AM                                                                                                                   
Ms. Shadduck addressed Section 27:                                                                                              
     Section 27(page 31) Previously CS  SB 74(STA) Section 9                                                                    
     Uncodified:  Department of  Health and  Social Services                                                                    
     Feasibility Study.                                                                                                         
     (a)Requires   the  department   to   conduct  a   study                                                                    
     analyzing  the feasibility  of  privatizing the  Alaska                                                                    
     Pioneers' Homes  and select facilities of  the division                                                                    
     of juvenile justice.                                                                                                       
     (b)Requires  the Alaska  Mental Health  Trust Authority                                                                    
     to  conduct  a  study   analyzing  the  feasibility  of                                                                    
     privatizing the Alaska Psychiatric Institute.                                                                              
     (c)Requires the Legislative  Audit and Budget Committee                                                                    
     to  conduct  a  study   analyzing  the  feasibility  of                                                                    
     creating a Health Care Authority  that manages a single                                                                    
     community-related  risk pool  for all  State of  Alaska                                                                    
     Employees, State of  Alaska retirees, Teacher retirees,                                                                    
     Medicaid  Assistance  recipients,   and  active  school                                                                    
     district employees.                                                                                                        
Ms. Shadduck clarified that before  the state was allowed to                                                                    
privatize facilities  that employed union employees,  it was                                                                    
required  to complete  a feasibility  study. She  added that                                                                    
she thought that  the language in subsection  (b) would need                                                                    
to be adjusted slightly  after collaboration with the Alaska                                                                    
Mental Health Trust Authority.                                                                                                  
Ms. Shadduck discussed subsection (c)//                                                                                         
10:30:36 AM                                                                                                                   
Co-Chair MacKinnon referred to a  report from // She thought                                                                    
that  the  state  paid for  approximately  //  Ms.  Shadduck                                                                    
concurred //                                                                                                                    
Ms. Shadduck //                                                                                                                 
10:31:17 AM                                                                                                                   
Ms. Shadduck addressed Section 28, //                                                                                           
Ms. SHadduck discussed Section 29, //                                                                                           
Ms.  SHadduck  discussed  SEction  30, //  The  section  was                                                                    
created with Leg elgal //                                                                                                       
Ms. SHaddauck summariazed that Section s                                                                                        
10:32:32 AM                                                                                                                   
Co-Chair  MacKinnon  conveyed   that  the  subcommittee  was                                                                    
explicit that  the issue  of Medicaid  expansion was  not on                                                                    
the table, and  the CS being considered  pertained solely to                                                                    
reform //                                                                                                                       
10:33:07 AM                                                                                                                   
Co-Chair Kelly //                                                                                                               
10:33:23 AM                                                                                                                   
Co-Chair  MacKinnon  WITHDREW  her   objection.  it  was  so                                                                    
ordered. CS SB 74(FIN) was adopted.                                                                                             
10:34:35 AM                                                                                                                   
VALERIE  DAVIDSON, COMMISSIONER,  DEPARTMENT  OF HEALTH  AND                                                                    
SOCIAL SERVICES, complimented the  work of the subcommittee.                                                                    
//  She stated  that there  were versions  of the  bill that                                                                    
could benefit from enhancement. //                                                                                              
She referred  to Section 4,  page 11, line 8;  that required                                                                    
reporting on a weekly basis.  She relayed that providers had                                                                    
commented //  She suggested adding  the words "at  least" to                                                                    
accomdate for real-time information that could be //                                                                            
10:36:50 AM                                                                                                                   
Commissioner  Davidson appreciated  the clarification  of //                                                                    
She asked for more clarification on the com                                                                                     
Commissioner Davidson section 13, page  15, lines 30 and 31,                                                                    
regarding enhanced  computerized eligibility // All  but two                                                                    
of the requirements //                                                                                                          
10:38:55 AM                                                                                                                   
Co-Chair Kelly relayed that it was the intention to have //                                                                     
10:39:31 AM                                                                                                                   
Co-Chair MacKinnon // SHe did  not want the department to //                                                                    
She thought //                                                                                                                  
10:40:07 AM                                                                                                                   
Vice-Chair  Micciche  reiterated  //  Commissioner  Davidson                                                                    
clarified that //                                                                                                               
10:40:47 AM                                                                                                                   
Co-Chair Kelly made jokes.                                                                                                      
10:41:36 AM                                                                                                                   
Senator  Olson wondered  about the  cost  of implementing  a                                                                    
second  system. Commissioner  Davidson anticipated  that the                                                                    
pertinent fiscal  notes would  be transmitted  the following                                                                    
10:42:16 AM                                                                                                                   
Co-Chair MacKinnon                                                                                                              
Vice-Chair Micciche  drew attention to line  // Commissioner                                                                    
Davidson appreciated the clarification.                                                                                         
10:42:58 AM                                                                                                                   
Co-Chair MacKinnon //                                                                                                           
Commissioner Davidson referred to section 17, //                                                                                
on  lines  8   and  9,  subsection  12,   requiring  //  The                                                                    
department recommended //                                                                                                       
Commissioner Davidson  referred to section //  She expressed                                                                    
a  desire for  latitude to  consider individuals  in end  of                                                                    
life scenarios who were //                                                                                                      
10:45:24 AM                                                                                                                   
Senator Olson asked  for the n7mber of people  that would be                                                                    
affected. Commissioner Davidson did not have the in                                                                             
10:45:52 AM                                                                                                                   
Commissioner  Davidson  addressed  //  The  department  felt                                                                    
strongly that // and wanted the  process to be ongoing // It                                                                    
recommended adding  the language "and every  year thereafter                                                                    
" //                                                                                                                            
Commissioner Davidson addressed // She                                                                                          
10:47:29 AM                                                                                                                   
Commissioner Davidson pointed out  section 25, page 30, line                                                                    
1 - // She // SHe pointed out                                                                                                   
Commissioner Davidson discussed a  point that was raised the                                                                    
previous day, referring to several references //                                                                                
Commissioner Davidson expressed her thanks //                                                                                   
10:49:10 AM                                                                                                                   
AT EASE                                                                                                                         
10:49:20 AM                                                                                                                   
BECKY  HULTBURG, PRESIDENT  AND CEO,  ALASKA STATE  HOSPITAL                                                                    
AND NURSING HOME ASSOCIATION,   // expressed appreciation //                                                                    
She thought the bill // She remarked on the flexibility //                                                                      
10:52:33 AM                                                                                                                   
Ms.  Hultburg continued,  stating  that //  SHe relayed  the                                                                    
model was based on a model in Washington state //                                                                               
10:53:17 AM                                                                                                                   
Ms. Hultburg  highlighted areas of  concern in the  bill. //                                                                    
She commented  on administrative burden brought  about by //                                                                    
She  expressed  that  the  magnitude  of  the  changes  were                                                                    
difficult for the provider community to understand //                                                                           
Ms. Hultburg referred to Section  3, which would incentivize                                                                    
frivolous lawsuits //                                                                                                           
Ms.  Hultburg  suggested  that the  bill  created  a  double                                                                    
standard, while //                                                                                                              
10:56:00 AM                                                                                                                   
Ms.  Hultburg continued,  and //  She expressed  support for                                                                    
the sections pertaining to //                                                                                                   
10:56:44 AM                                                                                                                   
Senator   Hoffman  thought   the  primary   thrust  of   the                                                                    
legislation was to address fraud,  and wondered if ASHNA had                                                                    
specific suggestions // Ms. Hultburg //                                                                                         
10:57:42 AM                                                                                                                   
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY,  praised the  transparent, inclusive, // He                                                                    
expressed  support for  the  bill, which  he  thought //  He                                                                    
thought  behavioral  health had  been  recognized  as a  key                                                                    
element //  He conveyed that  the trustees thought  the bill                                                                    
was the most important //  He discussed internal scrutiny of                                                                    
funding // He expressed commitment //                                                                                           
11:00:41 AM                                                                                                                   
NANCY MERRIMAN, PRESIDENT,  ALASKA PRIMARY CARE ASSOCIATION,                                                                    
ANCHORAGE (via teleconference),   expressed // She expressed                                                                    
appreciation for the time that //                                                                                               
11:02:00 AM                                                                                                                   
Ms. Merriman expressed APCA's concern with //                                                                                   
She expressed concern with Section //                                                                                           
In  Section  17,  referring  to  medical  assistance  reform                                                                    
program  //   she  suggested  //   She  conveyed   that  the                                                                    
association would not support the //                                                                                            
In Section 18,                                                                                                                  
Ms. Merriman conveyed that the association //                                                                                   
11:04:31 AM                                                                                                                   
Ms. Merriman //                                                                                                                 
Ms. Merriman related that the association //                                                                                    
talking too fast…                                                                                                               
11:05:59 AM                                                                                                                   
Senator   Olson   referred   to   //   asked   about   other                                                                    
demonstration  projects //  Ms. Merriman  referred to  other                                                                    
states, and emphasized that Alaska presented unique //                                                                          
11:07:02 AM                                                                                                                   
Senator  Olson  asked  aobu the  audits  and  administrative                                                                    
obstacles // He  wondered if ASHNA considered  the amount of                                                                    
required  audits  // Ms.  Merriman  understood  that the  50                                                                    
audits would be conducted by the state, and her concern //                                                                      
11:08:19 AM                                                                                                                   
Co-Chair MacKinnon discussed the  schedule for the remainder                                                                    
of the day //                                                                                                                   
11:09:00 AM                                                                                                                   
1:09:09 PM                                                                                                                    
^PUBLIC TESTIMONY                                                                                                             
1:10:40 PM                                                                                                                    
MARY   MINOR,   SELF,    ANCHORAGE   (via   teleconference),                                                                    
testified  in support  of Medicaid  expansion. She  shared a                                                                    
personal medical  situation. She  felt that there  were some                                                                    
items that  should not  be left to  the private  sector. She                                                                    
felt  that  the  country  should be  healthy,  and  had  the                                                                    
opportunity to enhance the nation's health.                                                                                     
1:13:15 PM                                                                                                                    
MICHAEL  BAILEY, CFO,  HOPE  COMMUNITY RESOURCES,  ANCHORAGE                                                                    
(via  teleconference), testified  in  support of  protection                                                                    
against  continued litigation.  He  urged  the expansion  of                                                                    
protections against  false claims.  He explained  that there                                                                    
were  various organizations  that conducted  internal audits                                                                    
and reviews  of compliance.  He felt  that an  annual review                                                                    
and audit of  all claims would be  an administrated unfunded                                                                    
burden to  providers. He  looked at Section  1, page  2, and                                                                    
expressed  concern  regarding  the reporting  timeframe.  He                                                                    
felt  that  the  expanded   litigation  processes  would  be                                                                    
expensive, and could not withstand the exposure.                                                                                
Co-Chair MacKinnon  wondered if  Mr. Bailey had  any closing                                                                    
comments. Mr. Bailey replied that  he was concerned with the                                                                    
definition of "agent", as outlined in the bill.                                                                                 
1:17:47 PM                                                                                                                    
CONNIE  SIPE,  EXECUTIVE  DIRECTOR,  CENTER  FOR  COMMUNITY,                                                                    
SITKA (via  teleconference),  echoed Mr.  Bailey's comments.                                                                    
She expressed concern about the  vagueness of the definition                                                                    
of  "agent." She  suggested additional  language. She  added                                                                    
that  she was  concerned  about the  word, "knowingly."  She                                                                    
testified  in  support  of the  language  related  to  over-                                                                    
payment.  She   urged  separating   the  False   Claims  and                                                                    
Reporting  Act out  of  the bill,  to  ensure that  Medicaid                                                                    
providers  were not  driven out  of  business. She  remarked                                                                    
that the annual  audit section be clarified,  because of the                                                                    
undue administrative burden.                                                                                                    
1:21:12 PM                                                                                                                    
ANNE  ZINK,   AMERICAN  COLLEGE  OF   EMERGENCY  PHYSICIANS,                                                                    
PALMER  (via teleconference),   expressed  concern regarding                                                                    
the    database   portion    related   to    mandating   the                                                                    
administration of medication. She further //                                                                                    
1:22:19 PM                                                                                                                    
Senator  Olson wondered  if  Dr.  Zink was  in  // Dr.  Zink                                                                    
1:22:36 PM                                                                                                                    
Senator  Olson //  Dr. Zink  replied that  page 14,  lines 6                                                                    
through 9 //                                                                                                                    
1:23:46 PM                                                                                                                    
Co-Chair MacKinnon // Dr. Zink replied in the affirmative.                                                                      
1:24:07 PM                                                                                                                    
ELIZABETH   RIPLEY,   EXECUTIVE  DIRECTOR,   MAT-SU   HEALTH                                                                    
FOUNDATION,  WASILLA  (via  teleconference),   testified  in                                                                    
support  of the  provisions to  reduce the  super utilizers.                                                                    
She  stated that  there was  no vision  for an  adequate and                                                                    
comprehensive  behavioral  health  system,  therefore  there                                                                    
were  many  gaps  within  the  system.  She  felt  that  the                                                                    
legislation  would   take  an   important  step   to  better                                                                    
behavioral health care access.                                                                                                  
1:27:41 PM                                                                                                                    
JEREMY   GITOMER,  AIM,   ANCHORAGE  (via   teleconference),                                                                    
shared that his group  had examined the opportunities within                                                                    
Medicaid, as  related to patients  admitted with  a specific                                                                    
diagnosis. He remarked that //                                                                                                  
1:32:31 PM                                                                                                                    
KATHLEEN YARR, SELF, KETCHIKAN (via teleconference),  //                                                                        
1:32:47 PM                                                                                                                    
Co-Chair MacKinnon  clarified that  the bill was  related to                                                                    
Medicaid reform, not Medicaid expansion.                                                                                        
1:33:10 PM                                                                                                                    
Ms.  Yarr  expressed  concern  about  individuals  who  were                                                                    
alcoholics, and  attempted to receive  care at  an emergency                                                                    
room.  She felt  that individuals  were treated  poorly, and                                                                    
should not be  turned away in the emergency  rooms. She felt                                                                    
that the best place for  intervention for an addict would be                                                                    
in the hospital. She stressed  that many people would return                                                                    
to  the hospital  later,  because they  were  not given  the                                                                    
proper treatment at the initial visit.                                                                                          
1:35:32 PM                                                                                                                    
Co-Chair  MacKinnon shared  that  Ms.  Yarr's comments  were                                                                    
relevent to the legislation.                                                                                                    
1:36:01 PM                                                                                                                    
PATRICK SIDMORE, PLANNER,     ALASKA MENTAL HEALTH BOARD/                                                                       
ADVISORY BOARD ON ALCOHOLISM AND  DRUG ABUSE, JUNEAU, shared                                                                    
that there were  many aspects of the bill that  were in line                                                                    
with his  boards' constituents.  He remarked  that evidence-                                                                    
based practices  were important aspects of  the legislation.                                                                    
He understood that there was  an administrative burden on //                                                                    
He suggested  language that would  allow a person  to choose                                                                    
to  be   enrolled  in  a  behavioral   health  provider.  He                                                                    
supported  the expansion  of a  broader  base of  behavioral                                                                    
health  providers. He  noted that  there may  be a  required                                                                    
regulatory  change.   He  suggested  intent   language  that                                                                    
allowed new providers to be equal to existing providers.                                                                        
1:39:09 PM                                                                                                                    
CARLTON HEINE, BOARD MEMBER, ALASKA       STATE      MEDICAL                                                                    
ASSOCIATION, JUNEAU,   testified in support of  // He shared                                                                    
that there were  approximately 10 percent of  people that //                                                                    
He stated  that there were  a fairly small number  of people                                                                    
that  used  emergency  services to  receive  medication  for                                                                    
chronic pain. He felt that using //                                                                                             
1:42:30 PM                                                                                                                    
Vice-Chair   Micciche   remarked   that  there   were   some                                                                    
practitioners that were irresponsible.  He wondered if there                                                                    
was value  on the  side of the  provider. Dr.  Heine replied                                                                    
that there were some providers that were not //                                                                                 
1:44:16 PM                                                                                                                    
SHAILEE NELSON,     COMPLIANCE     ADMINISTRATOR,     YUKON-                                                                    
KUSKOKWIM  HEALTH CORPORATION,  BETHEL,   looked at  Section                                                                    
16, and echoed  the comments of some  previous testifiers as                                                                    
related  to an  annual  review. She  stressed that  auditing                                                                    
every claim would cause an undue administrative burden.                                                                         
1:45:48 PM                                                                                                                    
PAMELA WATTS, EXECUTIVE DIRECTOR,  JUNEAU    ALLIANCE    FOR                                                                    
MENTAL  HEALTH,  INC.,  JUNEAU,    urged  the  committee  to                                                                    
consider three points.                                                                                                          
1:49:26 PM                                                                                                                    
Co-Chair  Kelly requested  the suggestions  in writing.  Ms.                                                                    
Watts agreed to provide that information.                                                                                       
1:49:53 PM                                                                                                                    
TOM CHARD, EXECUTIVE DIRECTOR,  AK BEHAVIORAL HEALTH ASSOC.,                                                                    
JUNEAU,      supported   many  provisions   in   the   bill,                                                                    
specifically  related to  behavioral health  care. He  hoped                                                                    
that  the   process  continued   to  be   all-inclusive.  He                                                                    
expressed  support of  the  fraud  protection, but  remarked                                                                    
that  there  should  not be  undue  audit  requirements.  He                                                                    
stated that  there were already many  audit requirements. He                                                                    
remarked  that   the  committee  should  remove   the  grant                                                                    
requirement outlined  in the  bill. He  stated that  the law                                                                    
should bear more thorough examination.                                                                                          
1:53:30 PM                                                                                                                    
Co-Chair MacKinnon  wondered if the grantee  language was in                                                                    
the governors bill  in the year prior. Mr.  Chard replied in                                                                    
the affirmative.                                                                                                                
1:53:46 PM                                                                                                                    
Co-Chair  MacKinnon  //  Mr.   Chard  replied  that  he  had                                                                    
provided his comments to all                                                                                                    
1:54:24 PM                                                                                                                    
ROBERT  LANE,   AK  PSYCHOLOGICAL  ASSOC.,   ANCHORAGE  (via                                                                    
teleconference),   felt  that  the  Medicaid program  should                                                                    
cover   psychological  care.   He  remarked   that  Medicaid                                                                    
patients should  be allowed the same  psychological care. He                                                                    
urged the committee to change  the definition of "physician"                                                                    
to  include  "psychologists."  He  shared  that  many  other                                                                    
states    had   crafted    language   to    accomplish   the                                                                    
recommendations.   He   stated   that   currently   licensed                                                                    
psychologists could not provide  the full range of services,                                                                    
unless  supervised   by  a   physician.  He   stressed  that                                                                    
psychologists could not currently  bill for services, unless                                                                    
supervised by a physicians. He  urged the committee to allow                                                                    
doctoral   psychological  interns   to  bill   Medicaid  for                                                                    
testing, which  would allow  for better  qualified providers                                                                    
to serve the communities.                                                                                                       
1:58:42 PM                                                                                                                    
Co-Chair  MacKinnon wondered  if he  should be  addressed as                                                                    
"Dr. Lane." Dr. Lane provided in the affirmative.                                                                               
1:59:07 PM                                                                                                                    
Co-Chair  MacKinnon  wondered  if Ms.  Pemberton  wanted  to                                                                    
1:59:28 PM                                                                                                                    
ANDREW  PETERSON, DIRECTOR,  MEDICAID  FRAUD, DEPARTMENT  OF                                                                    
LAW, ANCHORAGE  (via teleconference),   replied that  he was                                                                    
available for questions.                                                                                                        
2:00:09 PM                                                                                                                    
CAROLYN HEYMAN-LAYNE,    HEALTH   LAW  ATTORNEY,   ANCHORAGE                                                                    
(via teleconference),                                                                                                           
2:04:23 PM                                                                                                                    
Co-Chair  MacKinnon requested  Ms.  Heyman-Layne submit  her                                                                    
testimony in writing.                                                                                                           
2:04:51 PM                                                                                                                    
JULIA    JACKSON,   VICE-PRESIDENT,    TREATMENT   SERVICES,                                                                    
VOLUNTEERS OF AMERICA, ANCHORAGE (via teleconference),                                                                          
2:07:04 PM                                                                                                                    
Co-Chair MacKinnon  announced the number for  individuals to                                                                    
call in                                                                                                                         
2:07:47 PM                                                                                                                    
JOHN LAUX,  SELF, ANCHORAGE (via  teleconference), expressed                                                                    
appreciation for Medicaid reform. He  shared that he did not                                                                    
have any  prepared comments. He encouraged  the committee to                                                                    
provide  further  opportunities  for  public  testimony.  He                                                                    
stressed   that  there   was  nuance   and  detail   to  the                                                                    
legislation.  He  supported  the   language  as  related  to                                                                    
behavioral and mental health.                                                                                                   
2:10:18 PM                                                                                                                    
Co-Chair MacKinnon shared that  the public had been notified                                                                    
of all meetings related to the legislation.                                                                                     
2:10:54 PM                                                                                                                    
AT EASE                                                                                                                         
2:17:09 PM                                                                                                                    
2:17:54 PM                                                                                                                    
AT EASE                                                                                                                         
2:20:29 PM                                                                                                                    
2:20:49 PM                                                                                                                    
DEBORAH  BROLLINI,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
expressed concern  as related to  Tribal Health  System, and                                                                    
remarked  that she  was not  eligible for  Medicaid and  the                                                                    
system  would   not  bill  her  insurance.   She  urged  the                                                                    
committee  to  examine  the   billing  system  in  Medicaid,                                                                    
because it should not be through Chase billing.                                                                                 
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
2:24:06 PM                                                                                                                    
Co-Chair  MacKinnon shared  that she  heard from  testifiers                                                                    
that  the grantee  requirement should  be  removed from  the                                                                    
legislation. She felt that there  would be a provider issue,                                                                    
and the  quality of care.  She furthered that  the mandatory                                                                    
language on  pharmacy and the emergency  room requirement to                                                                    
access the PDMP database  before a narcotic prescription was                                                                    
administered. She  announced that  there was also  a concern                                                                    
for the annual  audit, and the suggestion  to streamline the                                                                    
2:26:26 PM                                                                                                                    
Senator Olson agreed with Co-Chair MacKinnon's concerns.                                                                        
2:26:35 PM                                                                                                                    
Co-Chair MacKinnon  asked for  specific concerns  as related                                                                    
to the audits.                                                                                                                  
2:27:08 PM                                                                                                                    
Co-Chair  Kelly  did  not have  any  objection  to  Co-Chair                                                                    
MacKinnon's  suggestions. He  stated that  the intention  of                                                                    
the  legislation  was  an increased  quality  of  care,  and                                                                    
addressing  efficiencies.  He   felt  that  the  highlighted                                                                    
concerns should be  addressed. He shared that  the House had                                                                    
a Medicaid  reform bill, and  furthered that the  bill would                                                                    
be vetted throughout the legislative process.                                                                                   
2:29:20 PM                                                                                                                    
Co-Chair  MacKinnon shared  that the  goal was  to pass  the                                                                    
bill  at  the  beginning  of   March.  She  hoped  that  the                                                                    
committee substitute would be drafted //                                                                                        
2:30:14 PM                                                                                                                    
Co-Chair  MacKinnon   stated  that  the  committee   was  on                                                                    
2:30:22 PM                                                                                                                    
Senator Bishop  felt that the  public comment  spoke volumes                                                                    
to the quality of work of the committee.                                                                                        
2:30:40 PM                                                                                                                    
Vice-Chair  Micciche appreciated  the subcommittee  process.                                                                    
He remarked  that the  state budget was  largely made  up of                                                                    
the Medicaid.  He appreciated the legislation.  He felt that                                                                    
the  bill provided  the only  substantive  change to  health                                                                    
care costs in the state.                                                                                                        
2:31:36 PM                                                                                                                    
Co-Chair Kelly shared that Medicaid  reform was essential in                                                                    
conducting the work required to draft the legislation.                                                                          
2:32:33 PM                                                                                                                    
Co-Chair MacKinnon announced that  Medicaid was $775 million                                                                    
of the  general fund. She  stated that it also  attracted $1                                                                    
billion  from the  federal government.  She //  She restated                                                                    
that Medicaid was  a large cost driver to the  state. // She                                                                    
remarked  that  the items  should  remain  in the  committee                                                                    
substitute,  and stressed  that the  overutilization of  the                                                                    
hospital stays  were large cost  drivers. She  declared that                                                                    
the opioid  overuse in the  state should  be a focus  of the                                                                    
legislation. She  thanked the efforts of  Co-Chair Kelly and                                                                    
his staff  in the work  on the legislation. She  stated that                                                                    
she would  not halt the  bill, so individual  advocacy group                                                                    
could block  legislation. She  stressed that  lobbyists were                                                                    
attempting  to block  the legislation,  and  hoped that  the                                                                    
legislators  would   not  succumb  to  that   pressure.  She                                                                    
exclaimed that the state was the last in the country /                                                                          
SB  74  was   HEARD  and  HELD  in   committee  for  further                                                                    

Document Name Date/Time Subjects
SB 74 JAMHI Testimony.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 AK-PA Letter regarding Medicaid Expansion and Reform.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 ABHA Testimony re-Grant Req.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 AKPA Testimony Revising Sec 22 AS 47 07 900.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 ACEP Testimony - AK PDMP.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 Public Testimony - Stukey.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 Public Testimony - Federico.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 JAMHI Testimony Version V.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 ASHNHA Testimony - Version V.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 022516 DHSS Feedback for Consideration_02262016.pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 AADD Comments on CSSB74 Version V 022616 (1).pdf SFIN 2/25/2016 9:00:00 AM
SB 74
SB 74 Proposed Medicaid Reform Legislation- Sec 17 AS 47 05 Defining Sec 47 05 270 (e).pdf SFIN 2/25/2016 9:00:00 AM
SB 74