Medicaid fight expands as session nears end

JUNEAU — Medicaid has quickly become one of the explosive issues of the 2015 legislative session. For several weeks House and Senate committees have been grinding through details of ways the program can be reformed to reduce costs.

Those costs are running at $1.8 billion per year, half of it paid with state funds.

Gov. Bill Walker has meanwhile been pressing hard for expansion of Medicaid to cover more low-income Alaskans. That’s allowed under the federal Affordable Care Act, and the federal government will pick up the bulk of the costs of expansion, the governor says.

Republicans in the state House and Senate are balking at expansion, however, saying reform, which Walker also endorses, must come first.

In an April 14 briefing by Senate leaders, Sen. Pete Kelly, R-Fairbanks, said, “The current system is broken and we should make sure it’s fixed before we expand it.”

Kelly, who co-chairs the Senate Finance Committee, is a sponsor of one reform bill in the mix, Senate Bill 74.

Sen. John Coghill, R-Fairbanks, the Senate Majority Leader, agreed with Kelly.

“Our computerized system for making payments is just not working. The new (federal) money is attractive but our ability to deliver (to an expanded population) is suspect,” because of the system problems, he said. “If we can’t get sustainability with our system we’re making false promises by expanding it.”

Sen. Charlie Huggins, the Senate Rules chairman, said the current Medicaid system must be fixed and reforms must be adopted, and the results of those measures, before any expansion should be discussed.

The issue is now coming to a head. In the April 13 briefing Senate leaders said they may sideline the various Medicaid bills for more work over the summer.

“I’m perfectly willing to look at reform as an interim project,” between sessions, Kelly said. 

Democrats in the state House disagree with this, however, and they have a significant card to play. They say they are conditioning their agreement on a crucial vote needed to fund the state budget on passage of Medicaid expansion.

Democrats in the House hold the needed 10 votes for a withdrawal of funds from the Constitutional Budget Reserve to balance the budget, which is running a huge deficit this year, said House Minority Leader Rep. Chris Tuck, D-Anchorage.

The governor has also said he may call a special session on Medicaid if the Legislature adjourns without passing the bill to expand the program.

This is a mixture that could turn explosive when combined with other hot-button issues pending. The Legislature is set to adjourn Sunday night, April 19, but lawmakers could extend the session into Monday if needed, or even longer.

Meanwhile, work has continued on the reform bills even as Walker’s expansion bills appear headed for the shelf, at least now.

On reform, Kelly’s SB 74 is getting the most attention. The Senate Health and Social Services Committee moved that bill out of committee April 9 to the State Affairs Committee, which took it up April 13. The committee also moved the governor’s bill, SB 78, to the Finance Committee, which is co-chaired by Kelly.

Kelly’s bill reforms the current Medicaid program but does not expand it. The House Finance Committee introduced Kelly’s bill, or the language from it, in a new HB 190, on which the committee began work April 13. The governor’s expansion bill, HB 148, is also in House Finance.

The committee may decide to take reform elements from the governor’s bill and insert them into HB 190. The House Health and Social Services Committee had worked over the governor’s HB 148 earlier, strengthening several of its reform measures.

One provision in the governor’s bill that does not appear in Kelly’s SB 74 and the House Finance bill, HB 190, is the tax on health providers proposed by the governor to help defray any expenses the state might bear in expanding the program.

Meanwhile, an element of Kelly’s original version of SB 74 that was taken out is a section authorizing Health Savings Accounts for Medicaid patients funded partly with Medicaid recipients’ Permanent Fund dividends.

Two important differences from the governor’s reform proposals in Kelly’s current SB 74, and HB 190 are the privatization of state-owned treatment and seniors’ facilities like the Alaska Psychiatric Institute in Anchorage and the state Pioneer’s Homes in several cities, as well as several state-operated juvenile facilities.

Before state operating facilities can be sold, a feasibility study must be done to spell out costs and benefits, and SB 74 provides for those, with a deadline for completing and submitting them to the Legislature within the first 10 days of the 2016 legislative session.

Another provision in Kelly’s bill is that specific reform steps are mandated, including development of a reform program by the state Department of Health and Social Service that includes measures to enhance case management, redesigning payment to medical providers based on positive outcomes of treatment as well as “bundled” rates (a single negotiated fee for a procedure), and measures to expand telemedicine and coordination to reduce travel.

A key part of the bill is in case management to reduce non-urgent use of hospital emergency rooms. Many Medicaid patients use emergency rooms for routine primary care because they do not have primary care provider.

This section of HB 190 and SB 74 would expand on a pilot program the health and social services department already has underway in Anchorage for about 2,000 identified heavy users of emergency rooms. The difference is that where the current program is voluntary, it would become mandatory under the pending legislation.

The managed care program, designed as a demonstration project, would be contracted to a third party such as an insurance company, and must be designed and initiated by Jan. 31, 2016, under the legislation. The department’s current managed care program began in January with its administration contracted to MedExpert, based in Redwood City Calif.

For Medicaid patients who do use emergency rooms for non-urgent care frequently, the bill directs the department to help make appointments with a primary care provider within 96 hours.

Updated: 
11/20/2016 - 8:15am

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