I call this meeting of the House Finance Committee to order.
Let the record reflect that it's 1.35 p.m. on Monday, February 9th, 2026.
Present today are Representative Staff.
Representative Moore.
Representative Bynum.
Representative Hannon.
Representative Tom Schifsky.
Representative Galvin.
Representative Jimmy.
Also present today are House Finance Committee staff, Committee Assistant Helen Phillips,
Paige Tallulah-Lestufka, Secretary Brie Wiley, and Secretary Leah Frazier.
We also have our moderator Emily Mesh from the Legislative Information Office.
Before we start, please mute your cell phones.
In today's meeting, we will hear a presentation on the Medicaid Rate Review Study by the Department
of Health and Guide House.
So this issue is familiar more with folks who sit on the health committee.
And they'll explain, I think, how this report was commissioned or
review study was commissioned, just to help you recall that our Medicaid expenditure exceeds,
I thinks, $600 million, and it's growing.
And they are required, I think, by rule to review the rates from time to time.
They'll probably use a word called rebalancing rather than rebasing, and you can ask them about that.
So as I said with this from the department today is Emily Ritchie, Deputy Commissioner.
And with us today from Guide House is Coy Jones, Project Director and
Claire Payne, Behavioral Health Lead.
Put your names on the record and begin your presentation
Or however you wish to do it
Good afternoon for the Record my name is Emily Ritchie Deputy Commissioner with the Department of Health
Then I will provide a brief introduction and then pass a presentation over to guide house to complete this
So, for the committee's awareness, as the Committee knows, Alaska's Medicaid program is a joint state federal program that provides health insurance to low-income Alaskans.
As of December 2025, provided health insurances to over 210,000 Alascans, or one in four Alasking.
Medicaid provides critical services and essential revenue to health care providers.
It is also a very large budget component as this Committee is aware.
The budget must be carefully managed to ensure the value of the dollars being spent aligned
with the outcomes that we want to see.
And fundamentally, that's what we are trying to review through the rate methodology study.
When I started in this role in 2022, we were emerging from the pandemic, and we're moving
back into business as usual mode.
But the effects of pandemics were very present in the healthcare sector as in other sectors.
Workforce was and remains a critical issue that we hear frequently from both providers and others as a challenge.
Behavioral health needs were skyrocketing across the US, including Alaska, particularly among our youth.
And chronic and acute conditions were beginning to emerge and accelerate in ways that
we had not seen before.
Legislature was responsive and you provided increased rates for home and community based waiver services.
And you supported the department as we implemented behavioral health rate increases.
But we continued to hear from providers that these increases were not enough, and
that there were gaps in their ability to meet the needs and provide the services that their population was experiencing.
So we needed to consider, is the issue that, there's not
enough funding or is it that how our funds are established and how they are paid out,
may not reflect the realities of the system that we want to see and the outcomes that
we wanna see.
Is the methodology underlying our rate structures, have we got it right?
Is this structure right.
And how can we be sure that further investment in the Medicaid program aligns with the gaps in our system that we want to close?
Again, this is a question that underlies the foundation of our Medicaid rate methodology study.
And like everything in Medicaid, our rate structure is very complicated.
We have over a dozen different rate methodologies in out Medicaid system.
And so to tackle this, we broke the study into two phases.
We prioritized some of the services where we were hearing the most concern from both our stakeholders and our providers.
These include behavioral health services, long-term care services and support, so think about our home and community-based waiver services.
Federally qualified health centers and transportation services
Other types of rates will be addressed in Phase 2, which we are building out over the next few months.
So work on the first phase started last fall and final reports for behavioral health and long-term care services were completed in this last
Fall or early winter so about a year later
The federally qualified health center reports were just fully finalized at the end of last week and we are finalizing the transportation report
However, we've shared many of those findings already with stakeholders publicly and will be speaking to those today
These studies and recommendations are intended to provide policy makers and
appropriators with options and structures to consider when you're
evaluating future needs and requests for the Medicaid program. We have asked the
contractor guide house to provides fiscal estimates that reflect fiscal
year 25 if these were to take effect in fiscal year twenty five and the intent is
to offer a sense of magnitude of what some of these options would be.
There is no expectation from the Department that these recommendations be implemented all at once or potentially at all again
This is depends on discussions that will occur this year and next and the next several years by policymakers and appropriators
But many of the I think questions at the rate methodology
Examens are ones that we have heard from stakeholders and so we're
I'm happy to put some context and some numbers
around those discussions so that they can inform
some of the future decisions that we have to make.
We know that this is especially important
given our fiscal situation.
As we work to balance the needs of the healthcare system and Alaskans along with our fiscal constraints
We hope that you find this
useful information to consider as we move forward into the future and with that I will
Pass the discussion over to guide house for the rest of presentation. Thank you deputy commissioner looks like
Is it mr. Koi? Yes, that's right. All right, you look like your ear all right? I'm going to give it to you. I'd slide two
Okay, for the record my name is koi Jones. I'm a director at Guidehouse and led the rate of valuation
I am with my colleague Claire Payne who will introduce herself if we need to
if We need To
Change our taught our speaking rules
the
First thing I want to do in the presentation understanding that the acronyms and healthcare are
somewhat out of control as just let you know we do have definitions and common terms I will
try my best not to fall into the alphabet suit myself but if I do just note that these are here
and available Deputy Commissioner Ritchie did I think a very comprehensive job of talking about
what the rationale for for putting it together and what we were attempting to do with it.
I really just want to stress kind of from our perspective at Guidehouse where we do these kinds
of evaluations what was different distinctive about what The State of Alaska was looking for with this
and it does really kind impact our scope and the nature of the recommendations that we gave.
Want to call out on this slide really I think four very important keywords.
standardized and transparent, and so calling out comprehensive and standardized, one of
the things that really distinguished this evaluation from other sort of similar gestures
that folks go through in other states is that there really was an ambitious program to look
across Medicaid as much as possible at all the many methodologies that the state uses.
Like Alaska, many states use multiple methodogies, so it can be pretty cumbersome to kind of
look at them together. And so a lot of states.
look at different programs in different years and that has its virtues but one of the things
that is missed is an attempt to bring them all together to really standardize the rate
methodologies across the programs to make them transparent and so this was a real opportunity
for the state to look in a phase 1 and a Phase 2 look these things together so that where there
is a need for uniformity and say behavioral health services or for other home and community-based
services, there is an opportunity to really kind of implement any changes in a rational
way.
Another piece, Chairman Josephson really noted this in his comments.
This is in evaluation rather than something we would call a rebase, right?
We were given a broad scope in terms of making recommendations on the methodology.
We weren't just looking at the services that exist today and saying, well, this is the
rate that you need.
Or following this basic methodology,
this was where your new rate should be.
Look at the methodologies.
Are the methodology actually supporting the services,
not just that are provided today, but that
are needed today.
And then also, where could we make recommendations
that would.
that would establish new needed services or improve the service delivery in current services.
So that can be fairly unique. That's a very broad scope. So I just want to kind of point
out those things. And so our recommendations do really reflect that broader point of view.
Just very quickly noting, you know, who was involved.
Well, lots of folks were involved, obviously,
but the Alaska Department of Health played a key role,
as well as Alaska providers, both tribal
and non-tribal providers.
And then we also made some very strong efforts
to include Alaskans with lived experience,
self-advocates, their families, and then kind of broader input
from a wide range of stakeholder groups.
As was mentioned, we have a phase one and phase two.
We're at the point of sort of completing phase
one, which focused on four major types of services
and programs, and you'll see of them on the slide here.
We looked closely at behavioral health.
what's sometimes called long-term services and supports,
federally qualified health centers,
and medical transportation broadly,
and what is provided through Medicaid.
I'll speak a little bit more about each of these
so that they're a bit of more than handles.
You see service types and categories,
different types of programs that kind of fall
within kind the broader bureaucratic
and regulatory constraints of how Medicaid works,
but I just want to describe these very simply.
health, we're looking at community services, not institutional services with like going
to the state hospital or anything, but really everything that's sort of beyond that.
And when we call it behavioral health that includes mental health as well as substance
use disorder services.
You might hear me slip and say SUD, that just means services for substance use disorders.
That runs a broad gamut of services.
So there's the services that most people familiar with.
You go get therapy or counseling,
sitting down with a professional for 30 minutes or an hour.
That's really just the start.
The behavioral health services include
a wide range of high intensity services
where you'll have a lot of professionals
who wrap around and assist with various parts of people with
with a range of needs.
The same is true on the SUD side,
so we're looking at anything from therapy services
to major, almost residential services along the way.
You have a similar kind of gamut of services
and what we call LTSS.
This is really home and community-based services.
for our elderly and physically disabled population,
as well as the developmental disabilities population
in Alaska.
So two key populations that have different needs,
even though there's some significant overlap
in the types of services they receive.
And calling them home and community-based services,
you're looking at things from home- based services
like a personal care attendant coming into a person's home
all the way to assisted living
and major residential services.
So just wanna note there that you have really everything
other than purely institutional services that fall into this.
FQHCs are really a form of health clinic that does a lot of medical care, as well as behavioral
health care. Really kind of serving needy populations in locations where there's often no other provider.
We looked at the perspective payment system as well as what the alternative payments system
There's a co-alternative payment models various ways to to reimburse those those facilities
medical transportation
This is really really everything the Medicaid pays for in the in The world of medical
Transportation we're looking at emergency transportation. That's that's air ambulance. It's ground ambulance
water ambulance sometimes in the case of Alaska.
And we're also looking at non-emergency medical
transportation, so that's everything from taxis
to ride shares to public transit to get people
to their medical appointments.
And then given that that can be a massive undertaking
in Alaska to people where they need to go,
especially in this state, that also includes accommodations,
lodging and meals.
That's not always very clear in medical transportation, but that's a piece of the total package involving travel for a recipient.
I'll just go very quickly in terms of stakeholder engagement,
but what we really sought to get input from.
as many types of stakeholders as we could. Providers are obviously a key part of that,
but we also met with broader provider and industry associations with advocacy organizations,
labor groups who actually are the practitioners and deliver the services, tribal health organizations
and their management offices, and of course self-advocates and families of those with lived
experiences. And we use the number of venues to try to get and receive as much information
Mr. Court questions if you're willing, first from Representative Tom Myshevsky, and then from
Representative Galvin. Thank you, Co-Chair, Josephson, through the chair, thank you to our good folks
from the Health Department. So there's been a massive amount of news in Minnesota, fraud.
I mean, you just went through a whole lot of community health, transportation,
all this stuff coming to light that there's a massive amount of fraud happening within
this category. How are we in the state of Alaska making sure that this does not happen
or has it happened and who's checking on all these folks that are taking massive amounts
of Medicaid funding and different health care funding?
Mr. Jones, another to have your name right.
That's right, please.
through the chair to Representative Thomas Chesky.
I think the main way that our study intersects
with those sorts of issues that are emerging,
that I'd think is important for Alaska,
is to really understand how services
are being delivered and the costs of those services.
So one of the things that we really did in this
was looking at the cost that
are incurred by providers.
And so that really gives a sense of
what costs are today that is not itself a program integrity effort because that really wasn't was
not a part of our scope, but it did. But it does give a sense of the cost of delivering the service,
so obviously that will line up importantly with some sort of budget. And I don't know if perhaps
Through the chair, Representative Thomas Chesky, for the record, this is Emily Ricci, Deputy Commissioner of the Department of Health.
We do have a program integrity unit that also works with a Medicaid fraud unit in the department of law.
The two work together, you may have seen in The News, there's been increasing activity as far as us
really trying to be forward and pursue kind of publicizing some of
the program-integrity efforts that are underway right now.
items that I took away from the study is that there are different ways how we
pay reflects how people provide services and there there
are some areas where we need to make adjustments into how our rights are
structured because we may be create like we maybe we
And that incentivizes people to build 15 minutes, 15
minutes 15, minutes 50 minutes right.
That drives up the cost and you're not necessarily
getting better services.
We could look at establishing a daily rate.
And, that provides almost a limit and an incentive for
those services to occur in a different fashion.
So, I don't know that that directly addresses your question,
but I think those are some of the things we've asked
Guide House to look, again, to make sure that what we're
paying for reflects the services that we want to see
back from providers.
follow up somewhat answers my question I guess it's those that I see that are
not even providing services right they're just they just outright fraudulent
turning in receipts or I don't know how they do it exactly but just out right
fraudulent organizations on transportation not
even provide services how do we make sure that that's not happening
Deputy commissioner through the chair
Representative Tamajeski
Emily Ricci Department of Health for the record
We I would be happy to update the committee without line from our program integrity unit for how we look at both
Unusual behavior or billings in the Medicaid system combined with our routine program. Integrity kind of random
analysis and
audits
Thank you
I'm recalling that a former colleague of mine, one of the toughest state prosecutors around
J. Fayette, who led the homicide unit, essentially, for years, was selected to run the Medicaid
fraud unit for the criminal division.
So we do prosecute folks, do we not?
All right.
Okay.
Let's finish with slide seven.
Are we work? Oh, yeah, well, sorry. We are finished with slide seven. All right. It's slide eight represent Galvin
Thank you. I presume this represents then what you just described, which is where you are doing your
focus areas and I guess my question is on the choosing of these
the selection I see that the North slopes completely not really
represented here and then down in the
I guess in southeast, well, really more curious about Port
Iden, where there wasn't a choice for the HUB community
of Analaska or Dutch Harbor.
I'm just curious to know if there was a thinking around that.
And in your answer, I hope you will also include something that I
heard about, which is the transportation piece of
of Medicaid that you brought up, I've heard, and I might be completely wrong, but under
medical transportation, that if you are charging for the service, it's only when the patient
is in the helicopter, the ambulance, or what have you, if that's true, then that must really
rates, and so if you could comment on that, particularly like I said, in light of the
very far away communities like Utiakvik that might need, you know, if they're going to
have to pay for the all of gas going up and then only get payment from or reimburse for
Comment on that. Sure. Mr. Jones through the chair to representative Galpin
I'll first comment just kind of
What was the nature of the strategy with stakeholder engagement and what why we were why?
We were where we weren't why were we we're not where were not?
and our
Our strategy generally, I'll say what motivated.
First, we wanted to talk to as many people as possible.
And I think that explains why we're in Anchorage,
why were in Fairbanks, why weren't Juneau.
That's where a lot of the population is.
That is where we can speak to a lotta the organizations.
But another very important point for us was to visit
all of the major regions in the state,
so depending on how you categorize those,
those are five or six, right?
So you'll see that we're in five,
that were in 5 or 6,
and that wasn't just to check off the boxes,
it's very important.
You know.
Cotsaboo is isolated, so is southeastern Alaska.
They're isolated in very different ways.
Very different kind of cultural logistical demographic
constraints and characteristics, and we
wanted to be on the ground to to
be able to see those differences and note those
differences.
And I think another another important motivator for us
was to have an important, I
think, demographic cross-section.
So we're interested in urban communities,
because that's where a lot of the population
are understanding basically how the hub and spoke model works in Alaska.
We really want to visit the rural hub communities as well, and that shows why we're in Cotsaboo
and Bethel, Dillingham.
But there's another layer of that, which is the villages, right?
And that's Port Haydn is our single village representative there.
My sense is that a lot of folks don't go to the village level because it's as we learned
It's very hard to get to The Villages and it was extremely instructive for us
Just getting transportation to a village and poor Haydn was actually the second option
But the first option we were not able to travel there because the weather was too bad very important lesson learned
and I do want to know with
We're visiting the villages in particular because I don't want to over stress wow
These are places are really small and I thought that I felt Bethel was remote poor hide-ins really remote
That's all true, and i think that's that was a
valuable lesson for many of us coming from the lower 48, but I do I
Do want a stress with the Villages
What we learn there is the villagers have a unique perspective that is not the same perspective as
even the rural hub communities, right?
They are served by providers that are based
in the Rural Hub communities
but their perception of their needs is often different
than both the vantage point in Anchorage
or in rural hubs communities.
And so,
I mean, if we had more time and more resources,
I would have loved to have visited more villages
in particular, because even sort of our single sample,
it gave us a whole other dimension.
I'd also really like to visited the North Slope a little bit
more.
We simply just had to make a choice with the constraints
that we have, but we know that Cotsaboo is not necessarily
the only or best representative of what's, you know, a very massive area just in the northern part of Alaska.
So that's my response to kind of the first part
of your question. In terms of
the second part, the question, which is
all these things that go into transportation that's not covered in Medicaid policy,
it is unfortunate that as somebody who works on Medicaid rates, I understand why that policy
is there, but it's really not just a state policy. This is how the Medicaid program works
and the federal state partnership. Honestly, this is a program that arose
to cover medical costs, and transportation in most states
is fairly peripheral to the medical needs.
And so the rules are built for providing medical services,
so you don't pay for anything that's not sort
of directly related or doesn't require actual medical
services to be delivered.
And, so that is a constraint on the transportation side, right?
So if people don t get to their location,
or somebody's waiting and it's not time actual transportation,
you don't get to just pile that in or bill for it separately.
And so noting that that's a complexity in Medicaid,
part of our role is to figure out,
well, a provider's still incurring costs for that, right?
And, so you need a rate that will adequately account for the fact
that there's, you know,
Uncli- sorry, uncliented minutes, right?
They go in a, they go on a ground transportation
or air transportation, you know, a plane may go,
but have to turn, turn back and it never completes.
That's still a cost, but you can't bill for it.
And so, and so part of the methodology
that we use for these types of services
is, is to account for unbillable time
and the cost that's incurred for that.
Representative, Hannah?
Thank you. My first question is pretty specific, which is on this page you use the term in the very
last bullet across all four work streams. Is workstreams the same as service categories?
Those yes, those are the those they're equivalent to what you saw in a previous slide. These are sorry
That's our that's are more internal jargon. We had four works streams
So we had slightly different teams working on all for these programs
And then a follow-up-
Representative Hannon for Mr. Jones.
Kind of globally, because I don't know anything
about Guide House, so could you just briefly tell us
who you are, whether you've worked
for our Department of Health before?
Is this the one off?
You do this every day of the week for all 50 states,
or did we swipe right on Tinder to find you?
Sure.
All right.
Through the Chair, Representative Panin, that's a great question, and I'm probably a bad
consultant by not talking about all we do at Guide House right off the bat.
But we are a national firm.
We work in healthcare as well as really other areas of state and federal government as
well the private sector.
We do have a particular focus in health care and the practice that I am in is state
and state health in particular.
So we do this in many states.
I've.
Personally, in my career, I have worked in Alaska before,
but this is, and Guidehouse has had some experience
with Alaska, but it's been not within the first,
not with in the last five years.
So this was kind of our first return to Alaska in a while.
But I've had several projects with Alaskas,
so we weren't completely unfamiliar
with what we were getting into.
And these rate evaluations are something we do,
really, across the United States.
In the case of Alaska, we don't lean too heavily
on what we've done in the lower 48
because there are some very unique issues and challenges
that we won't bring out of the box solutions for.
But in some contexts, the national experience is helpful
because we can talk about what the benchmarks are
and the expectations in other states.
I think that will show up when we talk
about indirect costs, for example,
or just talking about transportation,
what it's like for other States.
Those were useful illustrations for us.
Right, one more, representing that.
Thank you, and I apologize because I just don't spend much time in the health care realm.
At the beginning, when you were looking at rate evaluation and talk about rate structures
versus rate methodologies, we're spending a lot of time talking about methodologies.
Is the methodology produces a rate structure at the end, or are they, again, these are
terms that are interchangeable?
Just so I understand when you're talking about methodology at the end, does that produce a rate structure that we should follow?
Right, mr. Jones that through the chair. That's an example
So
One example is your your methodology will generally define where where your rate lands
So it does structure it structures the rate
However, there's also a rates structure of what that is
not decided by the methodology,
which is what services does the state want to deliver, right?
And so a rate structure will be fitted to those services
in order to figure out how to pay for those
services. Do you want pay
for them separately? Do
you wanna pay
for
them apart? So that's usually how we're using slightly different terms for
rate
structure versus rate methodology.
Let's go to slide nine.
I'll speak very briefly to this slide because this really just talks about our methodology.
For most of the services here, we use what we call an independent model, independent rate
buildup.
For the service that you see in phase one like behavioral health, like the LTSS, these
There is typically no data unless a state requires providers to give their costs.
So you actually have to kind of make your data through cost surveys, which is what we did with the providers.
We went and asked them what their cost are.
Which is actually great in Alaska because you don't want to piggyback off of other.
other costs seen in the rest of the country. But we essentially take those costs
that the providers get us and we build up a rate based on those cost. So we understand
what it takes to deliver these services. You're going to need, you're
going need practitioner time, there's administrative overhead,
travel components, there's different kinds of indirect costs.
We capture those things, wages, staffing ratios, employee
benefits, and then we put them together into rate models
that will tell you, on a cost-based rate,
what it would cost for a provider to deliver a quality
service with all the requirements that a service involves.
And just really the one last thing I want to stress before we actually get to the
results of our recommendations is noting the actual cost.
are extremely important in Alaska to understand because the cost profile for delivering services
is really unlike any other state in the country. So we captured those costs through our survey,
through different cost reports for FQHCs, and we really benchmarked them to other public data
that was available. And that really drove the benchmarks around what we thought services should
All right, so I will now just kind of transition
into going into our particular findings
and recommendations for each of these programmatic areas.
And I'll start with behavioral health.
It's really three key findings in behavioral
health, the first is that one of the things that we saw
is that overall service reimbursement we we are recommending some overall sort of rate increases
but the biggest issue that we saw is the service reimbursements is misaligned.
Many services have adequate reimbursement right now. Many service services are actually
probably paid more than our benchmarks tell us is needed,
but some are significantly lower,
like the actual cost is significantly
lower than the service.
So a key recommendation for us
is that the state and behavioral health
needs rate equity or rate rebalancing.
There's different things you can call it,
but it's not necessarily that you need
an infusion of lots more money.
Before the dollars that go into the surface,
appropriately calibrate the service so that you're paying appropriately, otherwise you
providing incentives to over-deliver a certain service and under-Deliver others based on
how those rates look.
What we saw in terms of overhead and what we call program support,
everything that you can't directly bill for, but is necessary to provide the service,
that was disproportionately high.
And this is true for LTSS as well as behavioral health.
For every dollar you're spending on behavioral
health, about 40 cents if it goes to indirect costs.
And that's really higher than anything we see in the rest of the country.
And really kind of the third the 3rd piece
With what sort of lack of historical standards the and kind historical misalignment
There's there's not really built into the system any way to sorta drive efficiency
Essentially the state is paying for the paying-for-the-cost-of-services and those costs go up every year
Represented staff and then more for mr. Jones
Thank you, Chair Justin, to the Chair.
Thanks for being here, folks.
Can you elaborate maybe a little bit on point number two
regarding basically the delivery of the service
is being so high.
So first question would be,
how does that 40 cents on the dollar
compared to other jurisdictions that you've looked at?
And the second question is, is this just all an administrative costs that the
service the providers themselves are using to say do these billables through the chair?
Mr. Jones, through
the Chair to Representative Staff, Representative Stapp.
These indirect costs reflect really two sort of cost buckets.
One of them is administrative overhead.
The other is what we're calling program support costs.
So that might be another worker who's assisting in delivering the services but
can't bill for it themselves, but they need to be included in the cost.
We're seeing that in Alaska, it's higher than what
we see in other jurisdictions.
I'd say, I would say 30.
30% of the cost would be high and would
be very high in most other jurisdictions.
Alaska's at 40%.
We will usually see probably between 20% and 30%.
I don't have a lot of very strong theories
on what's driving that.
There are higher personnel costs, generally, in Alaska.
But the higher costs are.
direct care costs as well as these indirect care cost.
So we calculate these sort of,
we calculated these in direct costs
as a percentage of the direct hair costs.
And if you have really high direct
care, you could also have
really higher indirect
care.
Cost without it.
without it being disproportionately high relative to the direct cost.
I don't know if that was extremely clear, but what we're seeing is indirect costs
are making up 40% of the whole rate, and that that's disproportionately
high. It's usually between 20 and 30%, including both overhead and program support.
I don't have a fault, Mr. Kushner.
Follow-up, sir.
Yeah, thank you.
You're just in through the chair.
Yeah.
No, it makes sense to me, but I think in layman terms,
basically, there's been in $0.40 on the dollar
for basically administrative costs, right?
Which I thing is very odd, you know,
in down the health side that federal government
requires insurance companies to spend 15%, right.
But.
In all of your research
Was this you mentioned personnel additional personnel to for the service and Christ like admin billing medical that type of stuff
Right were you able to determine whether or not?
The additional personal non-billable personnel you utilize that in the direct care process was more of a driver
Or was it straight up the paperwork through the chair?
Mr.. Jones to the Chair to
One of the ways that we do our cost survey
in order to make it manageable for all the providers,
because it is a huge undertaking to report all these costs,
we capture broadly the cost categories and indirect costs.
But say if we're looking at administrative personnel,
we don't ask questions about who exactly is and what roles
and their salaries are.
So we captured it at a pretty high level.
So, we could tell you what's driving the indirect care costs
to the extent that we could tell you whether it's broadly
administrative personnel or this program support
personnel category or transportation or IT,
but beyond sort of appropriately bucketing them,
we can't tell if there's sort
of a particular driver of, say for instance,
broadband being more expensive in certain parts of Alaska.
Thanks.
Sure.
Thank you chair Josephson. Um, thanks for being here through the chair. I just was going to go back to slide 10
I was curious about the provider costs survey. What percentage of the providers responded to you guys on that?
It was it was sort of it. Was different for each program
Generally, we were we're aiming at a at about 30%
Response rate. Uh, I might have to pass it to my to. My colleagues for the exact number here
So pass it to Claire Claire pay and behavioral athlete guide house through the chair representative more
It definitely very depending on this on the service one of those work streams that we commented on right?
So behavioral health how we looked at it specifically is you look at the sheer number of providers
If you count providers right as well as the actual total medicaid dollars that they deliver because you know you could have
a hundred providers that maybe only do a little bit of Medicaid and so they don't
have the same labor force. On the behavioral health side it was about 60%
of the Medicaid dollars were responded to in the survey.
We usually based on a company called Qualtrics and they're actually the one who does a lot of the surveys in the country
They think a representative sample is about 35%
So you're almost double that and I believe our our other providers were similar
FQHC either federally qualified health centers was quite a bit different because it's a much smaller pool of providers
follow-up yes follow more and
The of this the providers that did report cost did were those validated?
Through the through the chair to representative more
Quijons
We we didn't validate those and we we do make a distinction between a cost report
Which is usually audited and certified in a costs survey which for the
for the sake of time and expediency to get real-time data that's not years old.
We don't look at audited financials and back up the dollars.
So there is a bit of an understanding that you're kind of trading accuracy for expedient
I do want to go back a little bit to the survey piece because we had a lot of surveys for
a lotta different services.
But one example where we have low response rates, but we're not concerned is air ambulance.
There are a ton of air-ambulance providers.
Some are much bigger than others.
We had a very poor response rate from the perspective of number of providers,
you know, it was probably four of all the different providers.
But among those providers we captured about 90 percent of the volume.
And so I think each of those programs sort of captures, tells the story,
but generally we were comfortable with the feedback that we got through the survey.
Okay.
So to be clear on that question, no, they were not validated.
All right, we have represent Galvin
Thank You co-chair jostleson for the chair
This is a question around you were talking about
30%
Would be considered
That is 30 percent of the cost
Over the indirect cost would be consider to high
of the overhead and that we were looking at 40% direct costs and I bring this up because I wonder
if there was consideration around what I heard from behavioral health providers that 40 percent
of their time was spent doing paperwork to allow them to get reimbursed and i want to ask you this
The state of Alaska, as opposed to, I think it was Wyoming,
there are a few other states that are doing using a federal form
instead of whatever Alaska is using, and I don't know all the details.
So forgive me for not giving you detailed question here,
but I want to know what you have based on your experience
This should be considered, that is, what we are putting out that must be
filled out by our providers, and whether or not that plays a big role in this cost differential.
through the chair to Representative Galvin.
I do want to clarify, when I say 40%,
that's total indirect cost.
So it's not all overhead, especially in the case
of behavioral health.
A lot of that is program support costs.
So that that the cost of transportation, for example.
It's it not admin, like you have to spend that money
to provide the service, but you can't bill for it.
And so just really want
In the case of these services, in these particular services you have a fee for service structure
in Alaska. That's going to require a certain level of reporting and documentation to be able
to, for all the fraud considerations that I think everyone is aware of, you need that basic
documentation, to make the claim and tie it back to a service delivered. In some cases,
behavioral health, LTSS, the transportation pieces,
there's not a standardized federal system that we think
would streamline this process.
There are potentially some rules,
some administrative rules in the state that could be changed.
We didn't really know, we didn t note some many of those.
That wasn't a focal point of our study.
Yes, there are some reforms going on in behavioral health right now that would lead
to say CCBHCs, Clinically Certified Behavioral Health Centers, part of that payment methodology
would address some of this administrative overhead because you sort of, you pay for it through what's
kind of an episode that cuts down on a lot of those documentation. It has its own challenges,
but that's a potential improvement, and we did look at those sorts of things.
Following up on Representative Galvin's question, there's an existing bill now, Senate Bill 45,
Relating to parity in mental health and substance use to sort of coverage in the state medical assistance program
We all have scores and scores of meetings. It's hard to remember each one, but these were behavioral health providers
top level in this state who came and talked about the burden of paperwork that they have that other types of
physical health care providers don't I guess
relating to parody
And I think that's sort of what Representative Galvin is getting to.
I don't know if you've heard this sort
of complaint around the country.
The key word is parody.
Two Representative Josephson.
I'm familiar with the parody issue.
We didn't see anything strictly related to the...
to the parity issue. Many of these services that we're studying, there really is no sort
of equivalent to commercial health care, where parity is an issue, as to complain about really
high burdens of documentation, we hear that everywhere, not to diminish the reality and
truth of it, but we here it from medical providers as well as behavioral health providers.
behavioral health providers are a little newer to the world of medical of just medical claiming
like that there's there're sort of late comers into the Medicaid program
unlike hospitals and other folks who have been doing this for decades and decades.
There is there is a learning curve to making the making claiming more efficient and it probably
is difficult for more difficult behavioral healthcare providers than than established medical providers.
And let me pass over some additional comments to my colleague.
through the chair of Representative Galvin.
So just another way that we account for that
in the methodology that were kind of getting at, right?
Why we spent so much time trying to tell you
all the different ways that way actually look at a rate.
We don't just want to take it and move it forward
based on inflation, because then you're just taking
a system that's already gotten out of sync
and you are just perpetuating that.
So we look all these very nuanced pieces
in that methodology.
One of those is what we call
right? And we see that traditionally a lot higher in the behavior health space
for this document and this record keeping, right. If you're in a therapy
session as an example, that therapist is supposed to have a care plan. They're
supposed a document. they're supposed
to take notes on what's supposed
to happen next in your follow-up right that does take a
lot of time. And so when you actually go and look at the rate models that we've
developed and the appendix of the report, you are going to see
that little adjuster and you'll see
Counterintuitive but increases the reimbursement to account for that quote-unquote down time
Right, so we did try to address that very specifically and as my colleague Koi Jones mentioned here
It is traditionally higher in behavioral health and so you'll notice that that difference for the record. That was clear of pain
I think we're gonna go on with that objection to representative Hannon and then vitamin
My understanding when a meeting, learning about parity for behavioral health services,
it was more described that as opposed to, I went to see my doctor and the doctor decides
I'm depressed and can prescribe to me at that moment a medication and I can start a treatment
course and in six weeks evaluate whether it's being effective or not, that our therapist
can, has to say, you need to go to a medical provider, and then you get a script,
and you go back to your doctor who then has you come back and see me, so they're getting this,
it's two or three sessions before they have something to build for,
and that that's where the bulk of this extra time for the behavioral health treatment,
Get you a script and then say follow-ups in six weeks
Is that accounted for in some of this indirect cost?
Miss Payne yeah through the chair representative Hannon
Not specifically, right?
Because we're actually more so trying to come up with,
okay, I'm a patient,
I go see my therapist, they see me for 30 minutes,
I get a bill for that 30 minute,
right, the downtime of maybe they have to follow up
with your insurance or, again, extended record keeping,
no keeping.
Maybe they had to chase you down for your followup.
That would be accounted for on this kind of
down lost, non-billable time.
The rule though is where I get a little nuanced, and I think we'd have to follow up and look at it specifically so I don't misquote it.
And then, can I return to indirect costs?
Yes, roughly, then and on indirect cost.
Thank you, Chair Joseph.
Although you're saying in bullet two that we're spending more,
we are at $0.40 on the dollar as opposed to $25 or $30.
and so much of it being non-billable,
but I can think of a million circumstance
where the vernacular in Alaska,
were you able to transport them on a seat fair,
or did you have to charter the plane?
Two big, different costs,
neither of them would seem to be reimbursable
because they're not ambulance costs or paratransit.
So when you're looking at that
and saying we're 40 cents on every dollar,
You're not concluding that they're in valid charges. It's just that. They are higher
So it's not just our cost of utilities.
It is just in some of these broad categories. We have such
bizarre compared to anywhere else that the option of Wyoming is you know a 50-mile drive or a 200- mile drive
But for us it literally is is it a chartered flight? Is it? A seat fare?
Is there a ferry alternate?
Is a private transport on a snow machine?
Mr. Jones through the chair, representative Hannah that that's that. That's right
We we note that they're high. However, we didn't in our benchmarking. We didn' t say they should not be so high
We took them we understand the costs are higher in Alaska
And so for for the most part our rates do reflect those high and direct costs
So there isn't any kind of prescription on what what the rate what those indirect costs should be
Okay, representative Bynum
Thank You, co-chair josison and through the chair. Thank you for being here today
Obviously the amount of time we have here. Today is is not going to cover the scope and depth of what you guys actually do
Running a three point eight billion dollar program in the state of Alaska one billion dollars worth of ugf
So when we talk about that kind of money, I you, guys are talking about trying to find level cost savings
Measures and being a little more efficient and how we do business
That can equate to hundreds of millions of dollars.
So I was just wanting to have a better understanding
of when we start talking about these programs,
we understand in Alaska that we have Medicaid expansion,
and as part of expansion we get a 90%,
it's a 10 to 90% cost share on that.
And then under standard Medicaid,
that's I think about a 50-50, it a little less than 50, 50.
When we're talking about the data, do we track the cost associated with those different user
groups? And for example, we specifically have behavioral health here. Do we know based on those
user groups who's using these services? Through the chair to Representative Biden,
are using each of the different services.
And in the case of Alaska Native populations,
whether the rate is paid for through very high levels
of FMAT, federal share, or state share.
So we can tell you program by program how the state dollars
are being spent versus additional federal dollars.
Yep, I'll representative Biden. So with that being said, do we are you tailoring? Are you
tailuring your data and research to target the best return for those higher cost share
the ones where we have a 50 50 for example, expenses, because those are the one that's really
driving up our actual spend. And that isn't to say we shouldn't be very frugal and very
Wise with every dollar we get including federal dollars, but from a
From a targeted perspective, I would assume that you know, we want to be able to target
Where are we getting the best value in return so that we can either save the state of Alaska money or?
We can provide better services to Alaskans
Through the chair to representative Bynum. Yes, We do that in the report. We Do note where
We do know where different services like
significant state investment here would get a
A larger ROI that's very like that. It's a very important in the in case of transportation
Where some of the most significant expenses are?
incurred in rural and frontier areas where the federal dollar goes
goes extremely far relative to the state's spend.
So you'll see in our fiscal impact,
even with a relatively small investment in state dollars,
you could get as much as $4 for every dollar that you spend,
now that's not true of every program,
and you will see when we look at the fiscal
impact of federal versus state,
that dollars go further with some programs than others.
One more question and one more questions and we're going to actually get to the results. Yes, okay. Thank you. Go chair
co-chair Josephson
the
When we talk about behavioral health
Obviously your departments in front of us, but we have another
Element within the state
Mental Health Trust what kind of coordination are we seeing between your department and the mental health trust to make sure that we?
all of our resources to get to healthy Alaskans, basically.
So they're not a department as much as a vendor,
but DC, Richie?
Hey, through the chair, Representative Bynum, for the record, this is Emily Ricci, Deputy Commissioner of the Department of Health.
We do coordinate with the Alaska Mental Health Trust.
We work together in development of different budget scenarios.
We present to the board regularly, and one of areas you'll see us focus on both this year and
an upcoming year is making sure that we're really leveraging.
dollars between both entities to go as far as possible.
Because some of the dollars that the state can use to support behavioral health services have limitations.
And some other dollars the trust has access to may have more flexibilities.
So we're really trying to be strategic in thinking about how we can weave those together to meet the needs that we have.
Thank you.
Slide 13.
Coy Jones again for the record.
So we're now in the results side of things,
a slide 13.
So looking at behavioral health, given the findings
that we just walked through, one of our key recommendations
is this methodology transition and recalibration.
So, we are recommending that the DOH adopt the methodologies
that go into our independent rate buildup
to really identify kind of
identify rates that are more appropriate and align more closely with the actual
costs of delivering particular services. Now the implication of adopting that
methodology transition is that there will have to be some recalibration of
rates. Some rates for services will go up significantly, some might decrease
significantly but that's a part of this rebalancing that we're talking about.
That's why we have the second recommendation under rates which is hold
balancing, it increases a lot of volatility for providers.
It's not a complete wash, where for a single provider some of their rates may go up, some
of the rates might go down.
it all balances out, but that's not always the case.
For some providers, they're focusing on the rate
that is going down, rather than the rates that are going up,
and so you can put somebody out of business easily
if you don't do it wisely.
So we're recommending having a risk corridor
where you're essentially leaving rates
that would lower as they are until there's
a natural point at which rate increases would happen.
Finally, under rates, there's a broader level of rate rebalancing.
I'm going to bring it up, very happy to answer questions on it, but there is a unique feature
of Alaska's system called the UPL, and it's ceiling for certain services that you can't
pay higher than what Medicare pays.
How to address that issue around around the clinic upl demonstration
looking at other sort of other pieces of the reimbursement structure.
Behavioral health does not adjust, those rates are not adjusted geographically.
And we are proposing a framework to have slightly different rates depending on where services are delivered.
We believe this is pretty feasible because it already exists in the LTSS side,
in home and community-based services.
We're recommending something similar for implementation with a.
with behavioral health, kind of going back to the indirect costs, one of the things
that's unclear about how the services are designed and described right now is whether
the rates are really designed to cover transportation and staff transportation.
So one our recommendations is to include a specific add-on in certain rates, so that
is addressed more clearly.
Some of the more complex services around SUD for adolescents versus adults
There are we did make some specific recommendations to the state to to review those service definitions to
Confirm whether or not
The state is is paying for the type of service that it wants and to work with a work
With providers to revue those surface definitions and then we're also recommending updates to crisis services
now sort of redesigning its crisis services, crisis service array, and we've included some
recommendations on what rates would be appropriate for those new services.
Finally, just looking at sort of state operations, how these rates get implemented and monitored over time.
We are recommending that the state put together a cost reporting system, which would require annual reporting from providers.
There are two big reasons for that.
One is to understand these indirect costs.
Even though we've sort taken them at face value, there is an argument to be made as to whether.
as to whether they should be lower.
But the data is really not there
to kind of track what's going on,
what goes on with the cost.
And by putting in a cost reporting system,
the state will have better information
to understand the nature of the indirect costs
and potentially establish additional reimbursement
features that incentivize efficiencies.
That could ultimately be to the benefit of both
the payer and regulator, as well as the provider.
Another piece is this clinic UPL issue.
If you have a cost reporting,
you don't have to set the ceiling at
the Medicare rate, you can set it at actual costs and so if Alaska ever wants to pay more
beyond the ceiling or rebalance those rates to fall under the clinic UPL,
cost reporting really facilitates that. And then finally we made an administrative
recommendation that the state using the methodology that we're recommending
can more easily update rates administratively every year,
factors on things like wages and other indirect costs.
So the CMS prohibition on exceeding the UPL can be dispensed with if you do cost reporting?
You basically, you have a new measuring stick, so the requirement doesn't go away.
The nature of how the upper payment limit is decided changes.
So instead of basing the ceiling on the equivalent Medicare rate,
you base it on actual costs incurred by providers.
And so if those costs are higher than Medicare would pay,
you can still pay up to those cost.
But it requires actually having data on what providers pay.
And what it costs providers?
So, getting to the dollars here, so what we've described is we have sort of line item estimates of what it would take to implement these pieces.
So the first recommendation, which is simply to adopt the new methodology and the rates that correspond to it,
that would cost an additional 4.1 million,
It's not on the state side an additional total investment of $13 million.
That's all that high given behavioral health, I don't want to diminish the point.
But given behavior health spending now, relatively, that's an high amount.
And that is because in this basic recommendation.
higher rates are being offset to some extent by rates
that would decrease.
Now, of course, keeping in mind the hold harmless,
if you're not going to lower rates for those services
that we would otherwise see rates go down,
it would basically be an additional 1.6 million
to keep rates that otherwise lower where they are now.
And so that's recommendation two.
The geographic differentials would likely result in
I'm just mostly reading kind of the general fund here
That would be an additional 1.3 million to to kind
Of cover cover the cost for the for more expensive regions of The state
The health care the behavior of health cost reporting. We've noted that
Depending on kind how the state implements that that would Be an Additional
150 to 225 thousand dollars in state spend
We've not put a price tag on the rate rebalancing because it very much depends on how the state wants to address that.
For crisis services, we have an additional 280 plus thousand and
then we anticipate a small need for additional resources to do the administrative rate review.
So collectively, if you implemented, I understand that the Department of Health is looking at a phased implementation of this.
The overall cost that we're kind of looking is about $7.2 to $ 7.5 million in general fund for
an overall investment, including federal dollars of roughly $21 million for behavioral health.
Mr. Jones, how long is the hold harmless period?
I think that you would recommend.
to the chair two years is usually a good hold harmless period if it's if
it is much shorter it doesn't help if that's much longer it also doesn' t
help it design to be it designed to temporary to prepare to
prepare providers for changes so I would say two to three years would be
really optimal and how do you incorporate inflation into these
This is one I'll pass over to my colleague miss pain. Yeah, Claire Payne director with guide house through the chair
So in inflation, what we did, because data already gets old, right?
It's your favorite thing about data as no matter what,
and the next day it's already old.
Right? So our base recommendations already included a small amount of inflation
because the data set we use was already a year behinds.
We want to get it to 7, 1, 20, 25 was the implementation date.
We did not build an additional inflation knowing that you have in your regulations
that that should come into effect July 1st of every year.
to apply additional inflation based on your regulations.
Okay. All right.
Any other questions from the Queenie?
These are the four components.
These were the furthest along in terms of completion.
Is that right?
Or publication, maybe it's a better word.
Your work on behavioral health recommendation is done.
Yes.
Yes?
Okay.
D.C. Ritchie, could I ask you a question, please?
Ms. Richie, what is the state's goal for, first of all, I think you've said that maybe
you haven't.
But there may be other factors for you when is it that you would anticipate implementing these changes?
Through the chair represent to the Chair Representative Josephson for the record. This is Emily Ritchie Deputy Commissioner with the Department of Health
We are working to implement these recommendations in probably two different phases
and we are promulgating regulations right now to begin implementing the
the rate rebalancing and the hold harmless combined.
Again, we have the $10 million temporary increment
in the Medicaid component, and I believe the supplemental
that was just released, the updated supplemental will extend
that into FY27, giving us time to promulgate the regulations
to begin implementing that.
We will also look at the same time of building out the geographic
differences and crisis services.
thinking about the best way to approach establishing a system for cost reporting.
Ultimately, that is going to be important as Medicare continues to put pressure,
not just on the behavioral health system, but the rest of the Alaska system.
That's something that I think this committee will hear more about in future years.
But the requirement to have annual cost reporting is significant to both the provider and to the state.
And so if this is something we move forward with, we hear very loudly the concerns about behavioral health providers related to administrative requirements.
And burden, and we don't want to add to that, but we also can't get around the Medicare limit to a limit that reflects costs until we find a way to collect that data.
So we're not sure quite what that looks like it.
All right, I think we're done with slide 14.
We'll go to long-term services, slide 16.
Sure, so the grooves have been established,
I'd think with behavioral health, for LTSS,
there's somewhat similar.
somewhat similar findings here we didn't see the same need for rebalancing for
LTSS services that we did for behavioral health for the most part the state has
kept up pretty well with
has kept up pretty well with costs.
With one important exception,
which is personal care services,
we did see a need for about 32% increase in rates.
That is a significant part of the service array.
And so you will see in the fiscal impact,
just given the expenditures on LTSS generally,
that those lead to some significant dollars,
even though they're not a high proportion of current spending.
But when you take out the personal
and see that generally rates for LTSS have kept pace.
We do, we did note with other findings
with the geographic rate differentials.
Those are in place for these services,
but they depend on a framework that's over 20 years old.
So we do recommend a new way to do geographic differentiales.
And then the, really the same issue in direct costs.
We found almost coincidentally about 40.
40 cents to every dollar for LTSS services
was going to indirect costs.
So on the personal care services,
these are their various acronyms
and they sort of overlap it like a PCA and.
That's right.
Yeah.
Personal care aid who comes into your home
and helps with tasks and based home-based services.
You're finding that in Alaska are.
Our cohort is paid 32% less than you would recommend.
Is that what you said?
The rates would need to be 32%, higher for those services
roughly to cover the costs.
Right.
So the rates, which is the total package,
might reflect some other numbers as a wage increase
but there's some connection, I'm sure,
and the wage is that fair statement correct yeah the wages are the the driver of cost
okay steer the train take us where you want to go okay so we're we are recommending the same
methodology and rate recalibration that we did for behavioral health and then as well as hold
otherwise go down with adopting our recommendations.
We're recommending updates to the geographic adjustment,
some tiered service recommendations
for better capturing, acuity differences,
differences in needs between individuals,
and then around some administrative fees
for certain services known as the
Organized Healthcare Delivery System.
As with behavior health, we're also recommending a new cost reporting system.
That's the track, track and direct costs, but also in the case of these types of services,
there's new rules coming down from CMS called the Access Rule, which actually mandates.
a ceiling on indirect costs that you pay that
you should pay for things like personal care.
And a state has to demonstrate that its providers
are not paying more for indirect cost.
And if you don't collect that cost data,
you can't be compliant with the federal regulations.
And then additional administrative rate updates
as with behavioral health.
And just going back to looking at the.
opportunities for for drawing higher federal share LTSS is one of those areas
where the federal piece is about 50 it's 50 50 and so we do recommend looking to
tribal providers and see gauging willingness to invest in more in
providing these services. So where we see a hundred percent opportunities to
That is not true and we're very good at that now in Alaska. That's not
true for LTSS. Right it's largely non-tribal providers delivering those
services and it strong a really the 50-50 match. Got it. Okay so here we go
slide 18. All right so this is the fiscal this
is really a fiscal impact you see the
Just given the size of this program and really kind of funding personal care and a few
To the benchmark rate along with a couple other rates
There is a fairly hefty price tag even though it's a you know not not a
Not a massive proportion of the overall kind spending currently, but that's the biggest piece
I do want to know there is the correction on the
On the bottom, if you would switch the columns, we have the general fund in the total and the wrong columns there.
But we break out the hold harmless, the geographic differentials, our rate-tearing recommendations.
And so the.
the total price tag on the state side would be 24 to around $30 million to cover all of those
recommendations. And again, this is an area where DOH is looking at a phased approach.
As Deputy Commissioner Ricci sort of noted early on,
this was a narrower scope for FQHCs.
It really came down to the small number of F QHC's
who have not moved to The APM rate.
There are about four now that are still in the PPS rate,
so the goal of this P...
the goal of these recommendations were really to establish a pathway for those who are still
in the PPS to do what we're calling a one-time catch-up change in scope to look at current
costs of those rates and establish the pathway in recommendations for future increases, not
So the catch-up change in scope we did an analysis to look at what it would call
So both providers and the state would understand kind of what what?
What the potential fiscal implications are even though we expect that really only probably two one or two
Providers would would want to do that PPS rather than move to an APM
and then in order to support that we recommended some technical assistance to provide those
to provide to those providers who are interested.
And then, again, having that policy and process moving forward
that allows the providers to update their PPS rates.
That was short and sweet, but having to take any questions.
All right, let's go to 22.
Yep.
So on general fund expenditures, we see maximally if all the providers wanted to go in that
direction with the PPS, it would be up to 1.5 million if a smaller number 800,000.
This is one where the general matching rate is about 75% FMAP, so you see that for 1,5
million the total would about 5.3 million investment.
And finally transportation.
I think the report has not been fully released yet.
I can basically offer you preliminary pieces.
Here, the big issue is that the ambulance,
ambulance enlarging rates have not
been increased in many, many years.
So we are recommending that those rates be,
an aggregate brought up to what is equivalent
to about 125% of Medicare.
And so that we've-
we've calculated how that would work in air transportation as well as ground transportation
because costs are lower because the rates are low right now we are seeing ambulance staffing
becoming a more significant issue getting those staff in place and then there are administrative
from getting the lodging that they need and so we've made recommendations around there
and then especially around out-of-state lodging and transportation and mills we made
for those traveling to Seattle for example we have made some recommendations that would
improve those policies. Question from Rep. Staph for Mr. Jones.
Yeah thank you. Joe sent to the chair to Mr Jones, Mr
Jones I assume the Medicaid rate reimbursement is still subject to
I'm sorry, could you restate that I assume the air ambulance rate reembasement is still subject to upl correct?
That is correct the the uPL
The uPL is different for transportation than clinic and so it's up to average commercial rates
so
And this in Alaska. This is not had a ceiling because the ceiling is so much higher. Yeah follow Mr.
Go to follow up represent after mr. Quig. Yes, you jumped.
Yeah, I think you could adjust in future mister Jones. Do you know how far the
the rate is off of the upper payment limit through the chair.
Mr. Jones. We don't know because that would involve commercial
commercial rate and proprietary data between commercial insurers and the providers.
So we don t have that data available. Another follow-up? Yes, follow up.
Rep step. Yeah, thank you. Air ambulance obviously pretty big deal in Alaska,
drive down this point.
What is this a product?
So the primary company here, Guardian Flight,
has been bought and sold many times the last few years.
So I'm curious if some of the challenges
that they have as opposed to other carriers like LifeMed
have been reflected so far in which you've
been finding through the chair.
I I think what we've found is really applies to most of the providers. I don't think our our findings are unique to Guardian
Generally Medicare and Medicaid both pays significantly lower than than commercial rates
So when we our recommendations really reflect reflect just these public insurance programs paying more their share
Okay, thank you. Sure
What I'm hearing from the
service providers, pilots, guardian, et cetera,
is that they are not reimbursed for costs of,
there's a modifier, basically,
as Representative Galvin said, when they're en route
and they have no patient with them.
And this, that's our cost,
and that that cost isn't built
into their current reimbursement rate.
Combined with that,
They note that there've been I think they use the number hundred and sixty
Flights that were canceled not weather related in I
Think in this band of a year where they just couldn't provide the service anymore
And that sounds spooky to me. I I don't know if you had any
Conversations like that with providers
To the chair, we heard similar feedback from the providers.
Again, that's a constraint in the nature of the Medicaid program
that you can't pay directly for those things, but you
can build in your rates an understanding that there is
non-billable time and resources that have to be covered.
Okay. All right, let's go to slide 20.
If you're done with 25, will go 26.
Sure, yeah, just really noticing, noting that the big issues are increasing rates here
for the ambulance providers, and there are a few policy recommendations we make.
And then on the partnerships, really just noting a recommendation for a statewide brokerage,
which could have really substantial positive effects for non-emergency medical transportation.
If you look at the fiscal impact for these pieces on slide 26 really again just noting
Ambulance rate increases, for example, we're looking at additional state expenditures of 2.3 to 2,4 million,
which would draw an additional 16 million total, and so essentially what that boils down to is for every dollar
that you put into these rate increase, as you get four additional dollars from the federal government,
Areas of particular need in the state because it's really disproportionately
Positively impacts rural and frontier travel
heavily on the air ambulance side as well as the as wells ground ground ambulance
rate increases you'll see
You'll say for for lodging. It's a very similar picture
The need for lodging of course is is higher for
Folks coming in Anchorage from rural and frontier areas
We've made we've make some estimates around even potential savings for a public transportation partnership or
Or the use of a brokerage
Those it depends on implementation as to whether it's going to be an increase or our yield potential. Savings
I think the the term that the industry uses is unloaded
versus loaded planes I think is what that's correct yeah um just a few actually let
me go to committee member questions we'll go start with reference staff then
hannon then bind them yeah thank god you're dressing through the chair as
Mr. Jones um couple just housekeeping items I guess regarding some
the terminology you have a slide here prayer authorization fee increase can
you elaborate I know what prayer authors but um what do you mean by fee
Through the chair to representative staff staff these
The their tribe tribal TMOs that actually serve as a kind of broker arranging
Arranging transportation there in order to go through the prior authorization process. They charge a fee
Essentially the fee was just was set many years ago and doesn't reflect all the because transportation needs change pretty regularly
Sometimes it could be administratively complex. So we recommended increasing the fees for
For working the prior authorization system fault mr
Representative stamp mister Jones. I think you're
Mr. Jones
also
the thought I
This notion of brokerage
and government partnerships.
What do you mean by that through the chair?
Mr. Jones.
Through the Chair to Representative Stapp.
So we call them government to government
partnerships because some of the elements of The Brokerage
happen through these TMOs.
So it's not technically a brokerage.
It's a government-to-government agreement.
But that's going to cover all the travel needs.
So, we are looking at a statewide broker
The tribes are not involved.
It doesn't involve necessarily tribal travel.
So among the current TMOs and the brokerage,
that would be sort of a larger statewide structure.
I'll follow up, Mr. Coachear.
Thank you.
Thank your just care, just said OK.
Statewide broker is in the state of Alaska.
Like I don't know of any third party.
Vendors that would do that so is it suggesting that we would be that instead of how the tribal entities already do
That themselves through the chair
through the chair to representative stat.
So for non-tribal Medicaid members,
you would be bringing in a transportation broker
that is arranging the travel needs
for the non tribal population.
So there are TMOs for tribal populations
who do this arrangement for Tribal populations,
but there is no broker at this point in time.
And so that could be a
very helpful thing for Alaska, but no, it would not be the state doing the arranging.
Yeah, gotcha.
Thanks.
Representative Hannon.
Thank you, Chair Josephson.
Let me go one step more ignorant on the brokerage.
You mean like a travel office, a Travel Agency?
Mr. Jones, through the chair to Representative Hannah, that's exactly what I mean.
Okay.
Travel, follow-up.
Seasonal lodging rates. So currently
We have no variation in the rate
So if we're and I'm just gonna pull this out of the air if it's a hundred dollars for accommodation
It's whether it speak travel season in June, oh where our hotel rates double overnight on
May 1st or whether. It' s the debt of winter
Okay, that is correct. We're recommending seasonal differences and increases
generally
So even if you don't do a seasonal increase,
there needs to be a general increase in the current rate.
Thank you.
Representative Bynum.
Thank You, Coach, your justice and through the chair.
I got to tell you, I was really excited to see this last slide
because we went through all of this.
And there were actually two line items
where we said we actually save money.
So, I was pretty excited to see that.
But overall, when I look through here,
I see we have an estimated $43 million of additional recommendations, and I understand
that when we're increasing these rates, we are actually helping the folks that are providing
these services.
But with an additional $110 million, a federal match that would be associated with it.
Overall, good that the providers are getting the care that, I'm sorry,
the reimbursement rates that are necessary to provide the services that we're asking for.
But frequently I say to my office and I have folks that come in and they ask us to look at this.
And one of the.
Things that they're actually asking us quite a bit is to hey
We need to really look at this because there are many areas where we can move the continuum care to the left
So we could provide care sooner better care and we save money in the long-term
I'm just trying to get a better understanding of the presentation
I just saw here today that is actually going to accomplish that and so nothing in here from your evaluation
About the rates really gives a recommendation or reflection of saying now that we've done this we can actually save
Money by moving continuum care to the left all I just see is an additional $43 million just spend to be able to provide
Care, so I was just trying to help them. Maybe you can address that a little bit if it's possible
Maybe that's not something you guys evaluated at all
The department might be up to talk a bit about it, but I appreciate
any kind of feedback on that.
Thank you.
D.C. Ritchie.
Yeah, through the chair, Representative Biden,
for the record, this is Emily Ritchee
with the Department of Health.
This study was really focused on really looking
at the rates, the underlying rate methodology,
and the build-ups, right?
And does that produce the outcomes that we want?
And again, it was focused
on these specific work streams.
As I said at the very beginning there's no expectation from the department that these are implemented
All at once or potentially even ever depending again on the policy considerations in the fiscal situation that we face as a state
But it but many of these questions we have been asked by providers or stakeholders a constituents
Since we started in 2022 and I think they were they we're asked prior to that and so this starts to give a little bit of shape
to what the answers to some of those questions may mean and the magnitude of that.
I agree that that has to also, any consideration in this, has also a line with what we want
to see in the outcome of the system, which is more of a, I think, an emphasis on prevention.
more of an emphasis on better aligning our services to meet the risks and the acuity of the population that we serve.
I don't think our healthcare system does a great job of doing that right now, and I
don' t know that our health insurance system, any of them, whether it's Medicaid or any other type of insurer, does that either.
That is something that will be a focus area for the department in the next several years.
And we have some ideas on where we can start and what we look at.
Those are not included in these studies.
Thank you.
Want to follow-up?
Yes.
Representative Biden.
Thank You, co-chair Josephson, through the chair.
I've heard quite a bit here recently.
One of our senators talked quite about FMAP and the fight that they've underwent to
basically trying to get 20, or 30, 70 type split
instead of the 50, 50 split that we have.
With, through all your evaluations,
was there any consideration put in place to say
what that, what the overall impact would be for us
if there was success from our congressional delegation
to that FMAP changed?
DC-Ritchie through the chair represented by them again
That was not part of the the request to guide house as part. The right methodology study
We have been closely watching that
Particularly as debate has played out over the last I don't know 13 months now about
Medicaid funding at the national level and the implications of that for Alaska
I can tell you in conversations. I think we'll probably have beginning on Wednesday
Are what we call our base or a regular F map?
is over 50%, it used to hover at about 50%.
It moved up slightly and we are actually seeing a decrease
of about just over 1% beginning in October
of next federal fiscal year.
And what that translates to for the state is an additional
$10.8 million in general fund that we will have
to provide looking at federal
fiscal years 27.
So that's not a direct answer to your question
change and FMAP means in relation to the general fund match at any given year for the Medicaid
program. So we track it very closely and we do try to leverage opportunities to draw down federal
match as much as possible. One of the areas you'll see again in Wednesday when we talk a little bit
claim additional federal dollars for IT enhancements or positions associated with that.
These are things that other states have been doing.
We are also making sure that we are doing that as well on our end.
Thank you.
Representative Hannon, and then I have some questions as will.
Thank You.
And Chair Josephson, my question is spurred by Representative Bynum's question about
Ms. Ritchie, correct me if I'm incorrect, but the Guide House study on page 16, Mr.
Jones, noted that the personal care services remains low and that if we need to increase
our rates by maybe up to 32% to reflect the actual cost.
And my understanding is the whole nature of that is keeping someone with care in their
at the far left of the continuum and care and saves us money.
So even if it is a substantial rate increase of 32%,
it saves this money by not putting someone
into a hospital or a nursing home
with more intensive care in costs.
Am I incorrect in that conclusion?
D.C. Richard.
Through the chair, Representative Hannon for the record, this is Emily Ricci.
I don't believe you're incorrect.
I think the challenge is, and will remain with these types of programs, is how to make sure that.
Those costs result in lower overall cost of care for the individual compared to what they might have received versus additional costs that would not have been otherwise incurred.
And I think that's sometimes where we struggle to see some of those investment returns.
I would say in one area that apartment will be closely watching is,
if there is.
A desire to move forward with some of the recommendations regarding personal care services.
We know that that's an area that requires very careful monitoring and crafting to ensure that those services are being used as directed and appropriate.
We've had problems in the past with that in Alaska and I know other states are experiencing that as well.
So we need to be very thoughtful before we move with forward that and take into consideration items that are not necessarily considered in this study.
But that we would want to make sure are in place from a Medicaid side.
I would say the same thing for autism services as well.
We hear, I have heard consistently concerns from parents or
individuals with children that need autism
services that are not available in the state.
And when I saw there is also the study that aligned with what I am hearing,
that there aren't insufficient autism
services and you notice a large rate recommendation increase for
autism service.
At the time we know that that is an area that can be prone.
to misuse and so how do we make sure that we're addressing the need while building in the correct
barriers to care for that from the beginning and those are all things we need to be thinking
about from a department perspective. A couple questions for the fine folks from
the guide house. Are there any connections between your recommendations such that
as you see reform of the methodology and payment structure.
To Representative Josephson, I think the main dependency is really around the rate increases
in the four different areas.
But many of the other policy recommendations, they can be implemented, many
of them, the latter recommendations can
be implement, independently, but the ones that have the really strong financial
impacts, there's a basic adoption of
the methodology and the recalibration and then you can,
the hold harmless and other pieces really depend on basically moving forward there.
Mr. Jones, do you see CMS having any concerns with your recommendations that would result
in denial, for example, of a state plan and adjustment if I've got that right?
I don't see a high probability of that or I won't say that that will be a significant
issue.
These are accepted methodologies from CMS and in many cases preferred methodologies.
And a couple questions for you, Deputy Commissioner.
You said something about whether changes would be made ever, and I'm having a hard time
deciding who's the ultimate decider, certainly your department is central.
But you noted that it could depend on our state's fiscal position.
If the services are rather if not the service is if the reimbursement rate is inadequate is the state allowed for that?
Next year, so I'm not picking on any particular governor to just let that erode or
Is it a requirement that we at some point play ball with some some recommendations?
Chair representative Josephson
the Department of Health
works within the budget that it's allocated with, right,
including the Medicaid program.
And so any sort of changes to the rate or rate methodology,
so let's go through the appropriations process.
It gets a little bit complicated because we have annual
inflationary increases that are outlined in regulation
and we had rebasing that occurs perpetually as well,
usually in a longer process over four to five years.
So, you don't want to end up in a position where the funding that's available for the Medicaid component conflicts with the regulatory adjustments that are required, but ultimately, again, the
Medicaid program functions within the budget that is allocated from the legislature.
And so, it would be presumptuous of anyone in the department, whether now or in future years, to put forward substantial rate increases that
are not supported through appropriations.
And then and then the final question I have is and I know you've answered this
I'd invite you to do it again as to the behavioral health portion
But can you give providers who might be listening to any part of this
So transportation long-term care a sense of how you so we're at the beginning of 26
calendar year 26 how how you see the department engaging with these
recommendations over say the next couple years.
Hi Chair Josephson for the record this is Emily Ritchie I think we have a
clear a clear vision for behavioral health services that again this has been
an area where there's been very strong interest and focus by both
Our team, the legislature, and entities at the federal level since I started.
So we know that this is a critical piece that we need to get right.
So I think we have a clear plan for that that
we've talked about in terms of promulgating regulations and leveraging the $10 million
increment that is proposed in the supplemental to extend into FY27.
I think for the other rate methodology recommendations and considerations I
think we need to have more discussions again taking into account the fiscal
situation of the state the realities of
the needs that we have that frequently exceed our means to be able to provide
for those and how we prioritize what we are able
to invest in and I don't know what that is today.
But I guess more clearly what are the regulations
require as a timeline on these other three
Is it do they say you're in title 7 is that right your your regs?
The administrative code anyway, do if I look took the time to read through those would it say?
January 1, 2028
Department shall do X
Chair Josephson I
Don't know that anything in the study changes what's in existing regulations today
I apologize if i'm not understanding the question correctly
I'm just, for example, if I am guardian flight company for lack of a better term and I want
to know when the department will take action, what can I tell them?
Uh, Chair Josephson, I would say we're considering all of the recommendations.
Again, we need to evaluate how we implement those in the context of
the fiscal situation. And so right now,
we've identified a path forward with behavioral health rates.
I don't know that we have the same clarity on the other rates,
Thank you, Coach, your justice and through the chair.
So as far as your premise for your evaluations,
I see that we have these estimated expenditures.
And so I'm just trying to also understand that
we're making a recommendation for a change in rates
that reflects into additional costs.
Those rates are to reimburse providers
for the services they're providing.
Do we take any consideration, how does increasing these rates translate into better care?
That's the first part of the question.
And by increasing the rates, if we do, will this also lead to additional costs that aren't
reflected here?
Meaning would services, would certain services potentially be used more frequently because
say, for example, more providers because we're providing more money to provide that service.
Ms. Payne.
Yeah, Claire Payne with Director with Guidehouse through the Chair, Representative Bynum.
So, yeah, I mean, transportation in particular, right?
If you actually get people proper access to services, you could see service utilization go up.
Right, this gets into a little bit of the cost avoidance
question you're getting at, so I can get someone
to their standard therapies, their
standard office visits, maybe they won't end up
in the hospital, right?
So it's kind of a chain reaction that it is hard
to quantify overall impact five, 10 years in
the future.
But at surface value, yeah, and you do usually want
to get people to the services, access to
their services for better care, for the outcomes
that you are actually looking for,
right.
Correct, so is the follow-up?
Yes, follow up.
Thank you to the chair.
So to these current estimates,
do they reflect only current services
that are provided under the new rate model,
and wouldn't take into consideration
potential higher uses of services?
Yeah, through the Chair, Representative Biden, correct.
Thank You.
This is based on historical utilization
where we applied updated rates through that,
through cost.
Thank-you.
That was Ms. Payne, and this is a comment
it looks like from Deputy Commissioner Ritchie.
Through the chair, Representative Biden.
You know, one area that we're really focusing on
and relating, especially with behavioral health,
is because we hear about challenges and access
to care, particularly individuals who may show up
at the emergency room and need immediate care.
They're not able to get follow-up care
in the community as fast as they need.
where you end up with individuals that end
up seeking much higher levels of care than they otherwise would
because they don't have that community access to care.
And so that's one of the reasons that we really focused
on the behavioral health rates to start with.
So that is an example where we might see an increase
in utilization of community providers, but ideally over time
and this is where that challenge comes in, right?
You see a decrease in those that are needing acute care,
whether that through inpatient care or other means.
Representative Galvin and then we're going to close out. Okay. Thank you
Appreciate it co-chair Joseph Senate through the chair, and I think this might be a question for
Deputy Commissioner
Richie
So I just want to make sure I've understood you clearly you step one behavioral health
That's what the the department is feeling like it's the right direction to start within the beginning
my question is I saw
pretty great presentation here helping us to understand that, for example, transportation
equals, to me, access to care, and that's another chunk of money.
The piece of long-term care for particularly the 32% for the care providers, that seems
I guess what I'm asking is if the legislature finds a way to funding, are we appreciating
that all of this is important and should be considered, would the governor consider it
or is the Governor already, is there a message I am getting that there is only one piece
DC Richie to the chair representative Galvin. Yes, we've been focused on the behavioral health rates
I think about these recommendations again
I want to use the term menu of options because that's not that doesn't translate appropriately
But it really is a series of different considerations you could make if if you're seeing a specific area that needs
Where there are gaps and people are not able to get services so personal care assistance that might be a conversation to have in the future
You could say well, this is an area. We know if we
make changes here, we could see this result, but there's a series of different options that you could combine or take depending on the funding that is available and the need that arises.
I asked Guide House specifically if they had seen any state that had implemented recommendations at once, or even in their entirety.
And they don't because this was complex, and because again every state has different budgetary needs at a different time.
I've been hearing about concerns in some of these areas for a long time
We haven't had any numbers or sense of magnitude to go with those and then that's what this can help
Provide to policymakers and appropriators follow-up. Please. Thank you. I appreciate that fully and
I would ask this committee to also remember what we were hearing from last year and the year before
the inordinate amount of care providers who are personal care provider and
So now, to me, this proves it up, they were right.
I mean, we heard over and over how they wanted to stay in their job.
They loved their jobs.
They're trying their best.
I don't know if you remember, it was hours into the evening of testimony
about how the personal care attendants cannot continue doing what they want to do
because they can't make a living doing it.
And this is from all over the state, so I just wanted
to raise that up because you had mentioned you're hearing from behavioral health.
and I remember very distinctly hearing and not just on public testimony but in my office as well,
definitely during the interim. So this is an area that I also appreciate is affecting the health
and wellness of all of Alaska and that i am hearing from people. I want to make sure that
I've raised their voices since I did hear them. Thank you.
But apparently not enough with some of these care providers, several years ago,
would that give the Department the confidence that the legislature is serious about making this
part of its broader policy within the budget and therefore move to adjust the rates?
I mean, I'd have to think about whether those increases
if they were appropriated, would be part of a base budget.
If they are, are your rates important to us at that point?
These may be questions I could better ask, that's finance.
Chair Josephson, you know, I think we have spent,
the department has spent significant time thinking
through the implementation of the behavioral health
recommendations.
We have not spent as much time
thinking through implications of some of
Given, again, the history of the state, especially related to personal care assistance services,
the magnitude of dollar impact, kind of in the import of this issue, we would want to
spend considerable time, thinking through what would be appropriate and the shape of that,
and we are not at that point right now.
All right.
I want think this was a good hearing in my mind.
I'm teasing I'd like to thank deputy commissioner Richie. Mr. Jones miss pain for their presentations today
That concludes our business for today our next house finance committee meeting is scheduled for tomorrow for every 10th at 1 30 at that meeting
We will hear the Alaska Mental Health Trust present its FY 27 governor's budget overview
Then beginning at 2 30
We'll hear public testimony at HB 289 the governor s supplemental bill
Please note for that meeting, written testimony may be submitted to the committee at house.financeet, A-K-L-E-G.gov.
We ask the public to keep their testimony to two minutes to ensure everyone has an opportunity to testify.
Again, the testimony that you may offer, Alaskans, is on the Governor's supplemental bill, House Bill 289.
With that, we'll adjourn this meeting at 327.