Legislature(2003 - 2004)
03/26/2003 01:32 PM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 108-HEALTH FACILITY MEDICAID RATES/ADV. COM'N CHAIR FRED DYSON announced SB 108 to be up for consideration. COMMISSIONER JOEL GILBERTSON, Department of Health and Social Services (DHSS), said SB 108 deals with rates for health facilities under the Medicaid program. It would eliminate the Medicaid Rate Advisory Commission (MRAC), the state's companion to the Bourne amendment, which deals with rate settings for facilities. Instead, it would codify rate setting in one office of rate review in the department. The MRAC was created in 1984 and was largely responsible for establishing rate settings for the state's facilities. In 1989, by executive order, its function was changed to simply serve in an advisory role and the department retained the rate setting authority. In response to the Bourne amendment, Alaska put a fair-rate-for-reasonable-cost provision under Medicaid in statute. That federal law has been repealed and replaced with public process requirements dealing with how to go about rate setting. SB 108 will bring Alaska statutes into alignment with current federal law and remove unnecessary provisions, namely that there are two separate public processes for rate setting. The department does a variety of rate setting and will do a larger variety after restructuring - with things like foster care payments, child care providers, physicians, dentists and facilities. COMMISSIONER GILBERTSON said under the restructuring all the rate settings will be in one office under the commissioner. There will still be a public process and the methodologies will go through the regulatory process. The programmatic work that needs to occur to develop the rate setting will still be happening in the divisions that administer the programs. He said right now they don't have the flexibility to vary the methodologies for rate setting for facilities between a 10-bed facility and a 200-bed facility. This leads to over-payment for some facilities and under-payment for others. The actual consolidation will result in a small savings if the other cost containment measures are adopted and these bills are passed. SENATOR GRETCHEN GUESS asked if the two public processes are being reduced to one. COMMISSIONER GILBERTSON replied yes, but there would still be the public process for rate setting in the regulation process. MS. LARAINE DERR, President, Alaska State Hospital and Nursing Home Association (ASHNHA), said the Bourne amendment has been sacred because it creates a fair and reasonable rate. ASHNHA members are willing to go along with the governor's recommendation and would be involved in a partnership with the administration to develop regulations. A letter from one of her members said: For my part, please convey to the legislators that we are very concerned about being able to maintain the level of access to critical services and recommend they carefully consider - this isn't in the priority list, but we need to be able to make decisions about what our citizens should have and have some sort of tool to make objective decisions. Therefore, we are concerned about the removal of the Bourne amendment. She added that she hadn't had a meeting with ASHNHA members to talk about all three pieces of legislation, but they would be in town on [April] 9th and 10th. SENATOR BETTYE DAVIS asked when the Medicaid Rate Advisory Commission's status was changed to advisory. MR. JACK NIELSON, Executive Director, Medicaid Rate Advisory Commission, replied in 1989. SENATOR DAVIS asked what the commission had been doing, since it had been on the books for all those years. MR. NIELSON replied that current statute requires the commission to advise the department on payment rates for facilities. They have been participating in public hearings on facilities and providing advice to the department on staff proposals. The commission is also a central point where facilities can go to learn what is happening with payment rates and Medicaid policy. SENATOR DAVIS asked if that role could be filled. MR. NIELSON replied that they would continue to do the public hearings on the rates, but the commission wouldn't be involved. TAPE 03-13, SIDE B SENATOR GARY WILKEN moved to pass SB 108 from committee with individual recommendations and the attached fiscal note. There were no objections and it was so ordered.