Bill aimed at curbing Medicaid costs moves in Alaska Senate

JUNEAU — Legislation aimed at curbing and containing costs within Alaska’s Medicaid program advanced from a key Senate committee Monday after lawmakers were told of the savings it’s expected to generate over the next six years.

On Friday, the Senate Finance Committee co-chairs reacted coolly to agency estimates of the bill’s fiscal impact, raising questions with the number of new employees that would be added and questioning the level of reported savings. Co-chair Anna MacKinnon asked agency officials to review their numbers.

Deputy health commissioner Jon Sherwood told the committee Monday that officials over the weekend looked at their assumptions and timelines and in some cases made significant changes, including moving up timelines, finding areas of additional savings and finding reductions in positions and capital costs. The initial presentation may have been more conservative in areas, he said.

The department is still trying to be reasonable in terms of its projections, Sherwood said. One challenge is to not double-count savings through different efforts, he said.

In a handout provided Monday, the department estimates the bill could save the agency $31.4 million in unrestricted state general funds in the upcoming fiscal year, with that amount rising to nearly $114 million by fiscal year 2022. Those estimates apply only to the health department.

The Department of Administration, for example, estimates it will cost about $835,000 in the next fiscal year to carry out a provision in the bill calling for a study to determine whether the creation of an authority to coordinate state health care plans is feasible.

The next step will be for the bill to be scheduled for a floor vote. The House has been working on Medicaid legislation of its own. Medicaid is one of the areas targeted by legislators for reform as they try to reduce the size of the state budget.

The Medicaid bill, SB 74 from Senate Finance co-chair Pete Kelly, R-Fairbanks, incorporates elements from Gov. Bill Walker’s administration. MacKinnon led a special subcommittee that helped shape the bill.

The measure includes provisions related to cracking down on false claims, verifying eligibility, decreasing the unnecessary use of special care and emergency rooms services, expanded use of telehealth services and coordinated care demonstration projects.

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