Legislature(2003 - 2004)

03/26/2003 01:32 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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 That  federal law  has been  repealed and  replaced with                                                               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                                                               
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                                                               
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.                                                                                       

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