Legislature(2017 - 2018)SENATE FINANCE 532

04/16/2018 01:30 PM Senate FINANCE

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Heard & Held
CS FOR HOUSE BILL NO. 176(FIN)                                                                                                
     "An Act relating to medical assistance reimbursement                                                                       
     for emergency medical transportation services; and                                                                         
     providing for an effective date."                                                                                          
2:20:47 PM                                                                                                                    
REPRESENTATIVE ADAM WOOL, SPONSOR, introduced himself.                                                                          
ROB  EARL,  STAFF,   REPRESENTATIVE  ADAM  WOOL,  introduced                                                                    
2:21:00 PM                                                                                                                    
Representative Wool explained  that the bill would  set up a                                                                    
mechanism that the Department of  Health and Social Services                                                                    
(DHSS) could use to gain  access to federal funds that could                                                                    
then  be dispersed  to municipalities  to further  reimburse                                                                    
them for medical transport, both  ground and air. He relayed                                                                    
that, currently, emergency medical  services (EMS) were only                                                                    
compensated  for a  fraction of  the  costs associated  with                                                                    
transporting a Medicaid beneficiary.  The bill requests that                                                                    
the  federal  government  amend Alaska's  Medicaid  plan  to                                                                    
include supplemental  reimbursements for  medical transport.                                                                    
He said that the Title 19  Social Security Act allowed for a                                                                    
certain  reimbursement for  states. Tribal  transports would                                                                    
be reimbursed  at 100  percent. He  noted other  states that                                                                    
had  enacted  similar  programs.  He stated  that  in  2017,                                                                    
Alaska  had 21,000  claims for  ground transport,  averaging                                                                    
$800, unreimbursed  by Medicaid,  for each  transport. Based                                                                    
on  those  numbers, the  state  could  receive roughly  $8.5                                                                    
million to recoup some of  the transport costs. He furthered                                                                    
that there  had been  281 claims in  air transport  in 2017,                                                                    
averaging $17,000 for each incident.  Based on those numbers                                                                    
the state  could receive $2  million in  unreimbursed costs.                                                                    
He stated  that the number  of transports was  increasing in                                                                    
the state  due to the  opioid crisis. He cited  the document                                                                    
"HB 176 Flow Chart"(copy on file).                                                                                              
2:25:23 PM                                                                                                                    
Mr. Earl looked  at the document titled,  "Flow Chart" (copy                                                                    
on  file).  The chart  illustrated  the  flow of  funds  for                                                                    
medical transport:                                                                                                              
     Explanation    Based  on  Hypothetical $1000  Transport                                                                  
     Cost  The Provider  is  reimbursed  $400 under  regular                                                                  
     state  Medicaid for  a $1000  transport. This  leaves a                                                                    
     $600 UCC.  Under HB 176,  the Provider then  sends $300                                                                    
     to DHSS  (Supplemental) and CMS  matches with  the $300                                                                    
     federal  share.  DHSS  then  sends  $600  back  to  the                                                                    
     Provider.  The  Provider  recoups  $700  of  the  $1000                                                                    
     Transport  Cost ($400  Regular  State  Medicaid +  $300                                                                    
     Federal  Share). Administrative  fees  (expected to  be                                                                    
     nominal)  will be  deducted from  the reimbursement  to                                                                    
     the Provider.                                                                                                              
2:27:00 PM                                                                                                                    
Vice-Chair   Bishop  asked   what   would   happen  in   the                                                                    
hypothetical scenario if the bill were not to pass.                                                                             
Mr. Earl replied  that the provider would get  the $400, but                                                                    
that the bill would offer significant help.                                                                                     
2:27:18 PM                                                                                                                    
Vice-Chair  Bishop said  that the  non-reimbursable rate  of                                                                    
transport was reaching crucial levels in his district.                                                                          
2:27:53 PM                                                                                                                    
Co-Chair MacKinnon queried how  the department would process                                                                    
the $800 piece of paperwork.                                                                                                    
2:28:11 PM                                                                                                                    
Representative  Wool  looked  at   the  fiscal  note,  which                                                                    
reflected that one person would  need to be hired to process                                                                    
the paperwork.  The cost would  be passed on to  the federal                                                                    
government in the overall cost  of the uncompensated portion                                                                    
of  the  transportation  bill.   The  50/50  split  for  the                                                                    
administrative cost  was between the federal  government and                                                                    
2:28:59 PM                                                                                                                    
Vice-Chair Bishop  understood that  the position  started at                                                                    
Range 18, or $97,000 annually.                                                                                                  
2:29:26 PM                                                                                                                    
Co-Chair  MacKinnon asked  whether the  state would  need to                                                                    
apply for a waiver.                                                                                                             
Representative Wool  replied that a negotiated  new contract                                                                    
would  need  to  be  approved by  the  Center  for  Medicaid                                                                    
Services (CMS); approval was expected.                                                                                          
2:30:02 PM                                                                                                                    
Co-Chair  MacKinnon asked  whether  the  program involved  a                                                                    
waiver or a contract.                                                                                                           
Representative   Wool  deferred   to   the  department   for                                                                    
2:30:44 PM                                                                                                                    
MARGARET BRODIE, DIRECTOR,  DIVISION OF HEALTHCARE SERVICES,                                                                    
ANCHORAGE (via  teleconference), shared that the  bill would                                                                    
not  require  a  waiver  but  would  require  a  state  plan                                                                    
2:31:05 PM                                                                                                                    
Co-Chair MacKinnon  asked how ling the  state plan amendment                                                                    
process would take.                                                                                                             
Ms.  Brodie replied  that the  state plan  was amended  on a                                                                    
regular basis;  the entire process  could take 30 days  to 9                                                                    
Co-Chair  MacKinnon   asked  whether  the  state   had  been                                                                    
certified for its Medicaid system.                                                                                              
Ms.  Brodie  responded  that  the   system  had  yet  to  be                                                                    
2:31:48 PM                                                                                                                    
Co-Chair  MacKinnon  asked  where   the  state  was  in  the                                                                    
certification process.                                                                                                          
Ms. Brodie  said that the  department had received  an email                                                                    
from  CMS   and  was  in   the  process  of  setting   up  a                                                                    
teleconference  to discussed  issues that  had been  raised.                                                                    
She  said  that  some  of  the issues  raised  by  CMS  were                                                                    
optional and not mandatory for certification.                                                                                   
Co-Chair MacKinnon  asked whether the state  had covered all                                                                    
of the critical outstanding issues.                                                                                             
Ms. Brodie relayed  that the one issue  outstanding was that                                                                    
of the National Correct  Coding Initiative Editing Sequence.                                                                    
The issue should be cleared up by the end of April 2018.                                                                        
2:33:10 PM                                                                                                                    
Co-Chair MacKinnon  understood that there were  other issues                                                                    
still unresolved.                                                                                                               
Ms. Brodie asserted  that there were no  critical defects in                                                                    
the system.  She added that  the defects that  were relevant                                                                    
did no impact claims payments.                                                                                                  
2:34:04 PM                                                                                                                    
Co-Chair MacKinnon expressed appreciation  for the work done                                                                    
by Ms. Brodie and her team.                                                                                                     
2:34:49 PM                                                                                                                    
JEFF  TUCKER,  PRESIDENT,  ALASKA FIRE  CHIEFS  ASSOCIATION,                                                                    
KENAI (via  teleconference), spoke  in support of  the bill.                                                                    
He noted that there was zero  cost to the state to implement                                                                    
the program. [Mr. Tucker has a letter of support on file.]                                                                      
2:37:38 PM                                                                                                                    
Co-Chair  MacKinnon asked  whether he  was comfortable  with                                                                    
the  50/50  split  between municipalities  and  the  federal                                                                    
Mr. Tucker replied in the affirmative.                                                                                          
2:38:31 PM                                                                                                                    
Co-Chair MacKinnon understood that  claims would be paid one                                                                    
per year.                                                                                                                       
Mr. Tucker said  that the payment timing would be  set up in                                                                    
the  plan; the  processing of  the  claims could  be set  up                                                                    
monthly, quarterly, or annually.                                                                                                
2:39:15 PM                                                                                                                    
Senator Micciche  warned that  EMS organizations  might over                                                                    
invest,  and the  federal government  could discontinue  the                                                                    
Mr.  Tucker believed  that any  federal program  carried the                                                                    
same risk.  He noted that  the program had existed  for over                                                                    
30 years.                                                                                                                       
2:40:56 PM                                                                                                                    
Co-Chair  MacKinnon  noted  that  the State  of  Alaska  was                                                                    
picking  up  approximately  60  percent  of  all  healthcare                                                                    
costs,  at  a  30  percent higher  fixed  cost  for  medical                                                                    
services than the rest of  the nation. She asked whether the                                                                    
bill would  provide another federal dollar  that would drive                                                                    
costs up further.                                                                                                               
Mr.  Tucker  replied  that  he  did  not  know  whether  the                                                                    
legislation would drive up the cost.                                                                                            
2:42:25 PM                                                                                                                    
Senator  Micciche  lamented  that medical  procedures  under                                                                    
Medicaid  were  high.  he  was  concerned  that  they  would                                                                    
increase for transport related services under the bill.                                                                         
Mr.  Tucker  did  not  believe   so.  He  stated  that  most                                                                    
transport was provided by  local municipalities or volunteer                                                                    
organizations  and were  non-profit or  publicly funded.  He                                                                    
believed that  the bill would  result in the  fully realized                                                                    
cost of services already being provided.                                                                                        
2:44:48 PM                                                                                                                    
RICH ETHERIDGE, FIRE CHIEF, JUNEAU,  spoke in strong support                                                                    
of  the legislation.  He relayed  that the  call volume  for                                                                    
emergency transportation was  increasing rapidly and without                                                                    
staffing  increases. He  understood that  the program  would                                                                    
offset the costs that were already being incurred.                                                                              
2:47:47 PM                                                                                                                    
Vice-Chair  Bishop   understood  that  the  intent   of  the                                                                    
legislation was  to help municipalities collect  on expenses                                                                    
already incurred and not to buy new equipment.                                                                                  
Mr. Etheridge  replied in  the affirmative.  He said  that a                                                                    
few more personnel  would be needed to  drive the ambulances                                                                    
that were already part of the fleet.                                                                                            
2:48:21 PM                                                                                                                    
Co-Chair  MacKinnon   spoke  again  of  the   high  cost  of                                                                    
healthcare in Alaska. She  felt that Medicaid reimbursements                                                                    
led to the increase in costs in the private sector.                                                                             
Mr.  Etheridge could  not speak  to the  private sector.  He                                                                    
replied that  local municipalities were required  to justify                                                                    
any cost increases.                                                                                                             
2:49:54 PM                                                                                                                    
Co-Chair MacKinnon  said that it  was easier to raise  a fee                                                                    
that was being reimbursed by  the federal government and the                                                                    
state. She asserted  that the more services  provided by the                                                                    
state  and  federal  governments,  the  higher  the  private                                                                    
sector cost to receive the services.                                                                                            
2:50:27 PM                                                                                                                    
Senator Micciche  warned that  the smaller  districts needed                                                                    
to remember  that the  program was  not guaranteed  into the                                                                    
2:51:33 PM                                                                                                                    
Co-Chair  MacKinnon  asked  whether the  opioid  crisis  had                                                                    
contributed  to  an  increase  in  emergency  transportation                                                                    
Mr.  Etheridge replied  that  there had  been  a 16  percent                                                                    
increase from 2016  to 2017. In 2018 there  had already been                                                                    
a 12  percent increase  in the  call volume.  Medicaid cases                                                                    
constituted 25 percent of the calls received.                                                                                   
2:52:20 PM                                                                                                                    
Co-Chair  MacKinnon  asked  whether  EMS  directed  indigent                                                                    
patients to DHSS to sign up for Medicaid.                                                                                       
Mr.  Etheridge  replied  in  the   negative.  He  said  that                                                                    
hospital  employees helped  people  to  obtain services.  He                                                                    
said that  the fire department generally  ended up absorbing                                                                    
the costs.                                                                                                                      
2:53:05 PM                                                                                                                    
BRITTANY   SMART,  FAIRBANKS   NORTH  STAR   BOROUGH/MAYOR'S                                                                    
OFFICE, FAIRBANKS  (via teleconference), testified  that the                                                                    
borough  supported  the  legislation. She  shared  that  the                                                                    
borough charged $1000 per  ambulance transport, plus mileage                                                                    
charges;  however, the  average  Medicaid reimbursement  was                                                                    
only  $455  per  patient.   During  2016,  approximately  30                                                                    
percent  of   the  patients   transported  by   borough  EMS                                                                    
providers  were Medicaid  beneficiaries, accruing  more than                                                                    
$430,000 in uncompensated costs.                                                                                                
2:54:26 PM                                                                                                                    
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
2:54:32 PM                                                                                                                    
AT EASE                                                                                                                         
2:54:54 PM                                                                                                                    
2:54:57 PM                                                                                                                    
AT EASE                                                                                                                         
2:55:21 PM                                                                                                                    
2:55:24 PM                                                                                                                    
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
explained the  fiscal notes. He used  the $1000 hypothetical                                                                    
example  illustrated on  the flow  chart. He  said that  the                                                                    
administrative   costs  were   projected  at   approximately                                                                    
$110,000,  per  year.  He noted  that  local  municipalities                                                                    
would be  reimbursed - the  state would receive  nothing and                                                                    
would be charged nothing.                                                                                                       
2:58:16 PM                                                                                                                    
Co-Chair  MacKinnon   said  that   the  fiscal   note  under                                                                    
discussion  was note  #3(copy on  file). She  furthered that                                                                    
the second note under discussion was #4(copy on file).                                                                          
Mr. Teal said  that the funding sources on  the fiscal notes                                                                    
gave the  illusion that  the bill would  cost the  state $22                                                                    
million,  but  that  it  was  a net  zero  fiscal  note.  He                                                                    
stressed that the fiscal notes  reflected a zero cost to the                                                                    
3:00:44 PM                                                                                                                    
Vice-Chair  Bishop  interjected  that the  bill  was  budget                                                                    
3:01:07 PM                                                                                                                    
Senator  Micciche  asked whether  the  vision  was that  the                                                                    
department   would   change    municipalities   or   medical                                                                    
transportation   service  providers   a   few  dollars   per                                                                    
transport to recoup costs.                                                                                                      
3:01:36 PM                                                                                                                    
Mr.  Teal said  that the  state position  would be  paid for                                                                    
with interagency  receipts that came  from what EMS  paid to                                                                    
the   state.  The   state  commission   would  be   paid  by                                                                    
3:02:13 PM                                                                                                                    
Senator  Micciche  thought  that  the  full  cost  would  be                                                                    
reimbursed, and the state would be compensated for costs.                                                                       
Mr. Teal replied in the  affirmative. He reiterated that the                                                                    
state would  not be fronting  money; the  municipality would                                                                    
pay and then the federal  government would be matching those                                                                    
3:04:09 PM                                                                                                                    
Vice-Chair Bishop said  that the plan was  all contingent on                                                                    
the federal government.                                                                                                         
3:04:17 PM                                                                                                                    
Co-Chair MacKinnon asked  for the location in  the bill that                                                                    
said  that the  state would  not be  fronting the  money and                                                                    
would not reimburse prior to receiving the federal funds.                                                                       
Ms. Brodie replied  that she did not know where  in the bill                                                                    
the language was located.                                                                                                       
3:05:13 PM                                                                                                                    
Co-Chair MacKinnon believed that  such a safeguard should be                                                                    
written into the bill.                                                                                                          
Representative Wool agreed.                                                                                                     
3:05:40 PM                                                                                                                    
Co-Chair  MacKinnon expressed  concern  that  the state  was                                                                    
covering much  of the cost of  Medicaid in the state  at the                                                                    
expense of driving up private sector costs.                                                                                     
Ms.  Brodie  replied  that  the   bill  was  for  government                                                                    
entities exclusively  and would  not include  private sector                                                                    
3:07:32 PM                                                                                                                    
Co-Chair  MacKinnon felt  that  there  had been  conflicting                                                                    
information given during the meeting.  She believed that the                                                                    
inclusion  of Tribal  entities meant  that private  entities                                                                    
had to be included in the bill.                                                                                                 
Ms.  Brodie replied  that  tribal  entities were  considered                                                                    
government entities.                                                                                                            
3:08:13 PM                                                                                                                    
Senator Micciche  cited Page  2, line  10. He  asked whether                                                                    
there  was no  one  enrolled  at the  department  who was  a                                                                    
medical assistance  provider that  was a private  entity. He                                                                    
said  that   he  was  unaware  of   any  air  transportation                                                                    
providers that were not private entities.                                                                                       
Ms.  Brodie replied  that there  were private  entities that                                                                    
provided  transport  and  that  one of  those  entities  was                                                                    
partially owned by a Tribal entity.                                                                                             
3:09:04 PM                                                                                                                    
Senator Olson  informed the committee  that the  North Slope                                                                    
Borough  had a  leer jet  and a  king air  aircraft for  air                                                                    
3:09:33 PM                                                                                                                    
Co-Chair MacKinnon  relayed that the bill  would be reviewed                                                                    
again for consistency.                                                                                                          
Ms. Brodie  stated that there would  not be a change  in the                                                                    
rate paid to private providers.                                                                                                 
3:10:28 PM                                                                                                                    
Representative Wool  referred to an earlier  asked question.                                                                    
He believed  that answer could be  found on Page 1,  lines 8                                                                    
through 13:                                                                                                                     
     Except as provided  in (b) of this  section, the amount                                                                    
     of the  supplemental reimbursement  paid to  a provider                                                                    
     must  be  equal  to  the amount  of  federal  financial                                                                    
     participation  that  the  department receives  for  the                                                                    
     nonfederal matching funds paid  by the provider through                                                                    
     intergovernmental   transfers   or   certified   public                                                                    
     expenditures, less any  administrative fee described in                                                                    
     (d) or (e) of this section.                                                                                                
3:10:45 PM                                                                                                                    
Co-Chair  MacKinnon added  that answers  to questions  about                                                                    
the  private section  could  be  found on  Page  2, lines  8                                                                    
through 14:                                                                                                                     
     (c)   An  emergency   medical  transportation   service                                                                    
     provider is  eligible to participate in  the program if                                                                    
     the provider                                                                                                               
          (1) is enrolled with the department as a medical                                                                      
          assistance provider;                                                                                                  
          (2) voluntarily enters into an agreement with the                                                                     
         department to participate in the program;                                                                              
          (3)  is   owned  or  operated  by   the  state,  a                                                                    
          political   subdivision  of   the   state,  or   a                                                                    
          federally     recognized    tribe     or    tribal                                                                    
3:10:48 PM                                                                                                                    
Representative  Wool offered  to  walk  through a  Sectional                                                                    
3:11:15 PM                                                                                                                    
Co-Chair MacKinnon determined that it would be unnecessary.                                                                     
3:12:10 PM                                                                                                                    
Co-Chair  MacKinnon announced  that concerns  and amendments                                                                    
were due to her office by 5pm the following day.                                                                                
CSHB 176(FIN)  was HEARD and  HELD in committee  for further                                                                    

Document Name Date/Time Subjects
HB 176 AML Letter.pdf SFIN 4/16/2018 1:30:00 PM
HB 176
HB176 Sponsor Statement.pdf SFIN 4/16/2018 1:30:00 PM
HB 176
HB176 Flow Chart.pdf SFIN 4/16/2018 1:30:00 PM
HB 176
HB176 Letters of Support.pdf SFIN 4/16/2018 1:30:00 PM
HB 176
HB176 - Explanation of Changes.pdf SFIN 4/16/2018 1:30:00 PM
HB 176
HB 213 Letter to House Finance - Dept. of Revenue.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Letter to House Finance - Dept. of Law.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213--Supportive Letter.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Support letter.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Summary of Changes ver. R 2-8-18.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Summary of Changes Ver U to N.A 4-12-2018.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Sectional Analysis.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Sectional Analysis Ver N.A 4-12-2018.pdf SFIN 4/16/2018 1:30:00 PM
HB 213
HB 213 Actual vs. POMV bar chart.pdf SFIN 4/16/2018 1:30:00 PM
HB 213