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Question in Juneau: Combine Medicaid expansion with reforms, or reforms alone?

Wednesday, April 29, 2015   (0 Comments)
Posted by: Sheri Ryan
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Question in Juneau: Combine Medicaid expansion with reforms, or reforms alone?

Nathaniel Herz
Alaska Gov. Bill Walker speaks to supporters at a rally outside the Alaska Capitol in Juneau in support of Medicaid expansion on Thursday, April 16, 2015.Marc Lester / Alaska Dispatch News

JUNEAU -- Telemedicine. Managed care. Provider taxes.

Trying to understand the four Medicaid bills working their way through the Alaska Legislature? Good luck, unless you have a graduate degree in public health. 

 The changes proposed by Gov. Bill Walker and Republican lawmakers to the complex, $600 million-a-year state-federal health care program have generated significant confusion and consternation both inside and outside the Legislature. Recent efforts to explain them have included hasty fax messages sent to hundreds of doctors, a sharp response from the state’s health commissioner, and even an analogy comparing the federal government to Darth Vader, the infamous masked villain in the Star Wars movies. 

“We got creative to get people’s attention,” said Rep. Liz Vazquez, R-Anchorage, who included the Star Wars reference in a PowerPoint presentation she distributed to people in the Capitol to illustrate what she describes as the perils of expanding Medicaid. 

Vazquez used to work for the Alaska Department of Health and Social Services and has positioned herself as one of the Legislature’s most enthusiastic critics of the expansion of Medicaid, saying the department’s payment system is broken.  

The program currently covers about 125,000 low-income children, pregnant women and people with disabilities, and Walker wants to add about 40,000 more Alaskans who make less than $20,300 annually, or couples with combined incomes of less than $27,500. 

The Republican-controlled Legislature has blocked Walker’s plans so far, with top lawmakers saying Medicaid costs need to be contained and other changes should be made before the program is expanded.  

There are now two competing Medicaid bills sitting in both the House and Senate.  

One pair of bills, introduced by Walker, would both expand the program and institute cost-cutting measures. The other, introduced in the Senate by Sen. Pete Kelly, R-Fairbanks, with a copy in the House, only implements cost-cutting. 

Discussion of the bills has largely been a high-level debate over the benefits and costs of expanding the program, with the details not always well understood. A Fairbanks doctor sent a fax Saturday to several hundred of his colleagues urging them to speak out against the imposition of a tax on their gross revenues that was falsely rumored to be part of Walker’s bill.  

The fax was followed three days later by Health Commissioner Valerie Davidson, who sent her own letter this week in an effort to dispel misconceptions about Walker’s legislation. 

The only mention of a tax in the governor’s Medicaid bill is a call for the state’s health department to study a provider tax and submit a proposal that would have to be approved by the Legislature. Such taxes are typically imposed on hospitals and nursing homes, Davidson said. 

“This is only one example of the misinformation being circulated in an effort to sabotage the governor’s legislation to provide coverage to working Alaskans with low incomes,” Davidson wrote. “Do not be misled by the incendiary rhetoric.” 

In a phone interview, the doctor who sent the fax, Fairbanks orthopedic surgeon Richard Cobden, said that when he checked with the offices of his local legislators, they confirmed to him the governor’s bill included a provider tax that would apply to a clinic’s receipts. 

He said he was worried a tax would drive doctors out of the state. His initial fax message Saturday told recipients that it was “imperative we speak out against” Walker’s bill, and said the tax was “totally unwarranted and will only have detrimental effects on patients and us.” 

Cobden got a letter back from the president of the Alaska State Medical Association, which he said stated “quite correctly that there’s a great deal of confusion about what is and what is not in this bill.” 

Afterward, Cobden said, he sent another fax to make it clear that he actually supports the bill and the concept of Medicaid expansion. 

“I think what I put in there was ambiguous,” he said of the first message. “This is an issue about patient care. When it is not available and patients do not have access to care, it’s a particularly harmful thing to our society and to people around us.” 

In her own response to Cobden’s letter, Davidson, the state health commissioner, said neither her department nor Walker would propose a tax that would force the departure of health care providers. 

And she urged recipients to examine the information about Medicaid expansion posted on her department’s website. 

While Walker’s and Kelly’s legislation differs sharply on the issue of expansion, and on whether to study a provider tax, there’s actually substantial overlap between the different versions of their bills in the House and Senate. 

For example, in the Senate, both Walker’s and Kelly’s legislation contain provisions that would expand the use of telemedicine -- when doctors see patients using an audio or video link rather than in-person -- in an effort to cut down on travel costs. They both include sections that would enhance fraud prevention and fines. 

And they both would boost efforts to try to reduce the public money spent on expensive and unnecessary emergency room visits by Medicaid users by better managing and coordinating their care.  

In a brief interview this week, Kelley acknowledged there are “some similarities” between his bill and the governor’s. Though he added, without elaborating, his has “more teeth.” 

In addition to the split on expansion, one other significant difference is that Kelly’s bill creates a demonstration project using a program called managed care.  

That’s a system in which contractors are paid a fixed amount of money to coordinate care of Medicaid recipients, rather than paying each time a subscriber visits a doctor or hospital. Davidson, the state’s health commissioner, has said she wants her department to pursue different cost-saving measures for the Medicaid payment system. 

The concepts associated with the Medicaid program are complicated -- and on top of that, there haven’t previously been conversations about the state’s health care system at the level of depth as those held this legislative session, said Becky Hultberg, the executive director of the state’s hospital and nursing home association, which supports Medicaid expansion. 

“You’re dealing with federal and state programs that have lists of requirements, and federal laws that have their own complexities -- it’s a heavy lift to have that conversation in 90 days,” she said in a phone interview, referring to the length of the legislative session. “It’s not surprising that people have gotten things a little bit wrong.” 

Hultberg, who worked as commissioner of administration for former Gov. Sean Parnell, an opponent of expansion, said she appreciated the discussions held in legislative committees. And she added that Walker deserved credit for sparking the “needed conversation” about the whole Medicaid program by proposing expansion. 

Similar debates about reform have occurred in other states, with some of the discussion driven by Congress’ passage of the Affordable Care Act and some of it driven by the economic downturn, said Laura Snyder, a senior policy analyst at the Kaiser Family Foundation.  

Expansion and reform, she added, are “hot topics” in discussions about Medicaid. “I think all states are looking at different combinations of those things,” Snyder said in a phone interview. 

Hultberg said her group wants to see the debate “turn into a Medicaid expansion bill” that passes both the House and Senate. 

“Because we think that expansion is key to reform,” Hultberg said. 

Jeremy Price, the Alaska director for the anti-expansion conservative group Americans for Prosperity, said he sees the debate a different way. Davidson’s letter with the reference to “misinformation” only confirms the need for more analysis of the Medicaid program, he said. 

Confusion among the public and among legislators, Price added, “is indicative of the need to take this slow and push it to next session.” 

“Expansion’s not going anywhere,” he said. “What does it hurt to wait another year or two?” 

Davidson said in a hearing this week that the Walker administration’s urgency stems from the provisions of the Affordable Care Act, or Obamacare. The law calls for the federal government to cover the full cost of Medicaid expansion through 2016, scaling back to 90 percent by 2020. 

Her department predicts Alaska would save millions of dollars a year through Medicaid expansion by replacing state spending with federal money. Expanding the program, Davidson added, would help make Alaskans more productive. 

“We all want Alaskans to be productive,” she said. “But people can’t work, they can’t hunt and they can’t fish if they’re not healthy enough to do so.” 

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