topAlaska Health Policy Review  comprehensive, authoritative, nonpartisan
October 2008 Vol 2, Issue 21
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Interview with Byron Perkins, DO
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Introduction: DHSS Legislative Reports
Report: BTKH 3-Year Update
Report: BTKH 2007 Review
Report: Governor's Health Care Council
Report: Behavioral Health - Performance Based Grants
Report: CON Committee
Report: Medicaid Spending Forecast 2007 - 2027
Report: Service Rate-Setting Methodology
Report: SB 61 Medicaid Progress
Denali KidCare is Funded Uniquely Among SCHIP Programs
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National Osteopathic Medical Foundation

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Alaska Physician Supply Task Force Report

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Cornerstone Clinic
From The Editor  

Dear Reader ...

In this issue of Alaska Health Policy Review I am pleased to present an interview with Dr. Byron E. Perkins D.O., president elect of the board of directors of Northwest Osteopathic Medical Foundation, and medical director of Cornerstone Clinic Medical and Counseling Center in Anchorage. In this interview Dr. Perkins presents the case that, with minimal additional public and/or private support, Alaska students could be recruited into new regional Osteopathic medical schools, and return to Alaska as doctors of Osteopathy. This could play an important role in Alaska filling the critical and growing shortage of primary care providers in the state. Further, he discusses a model private/public program in Alabama that has charted this course, and we provide a link to more information about the Alabama program.

During the 25th Legislature, 2007/2008, a number of important reports on a variety of health policy issues were produced by the DHSS for the legislature. In our featured article, Review of Alaska Department of Health and Social Services Reports to the 25th Legislature, we provide summaries of these key reports and links to the full text of all of them. These reports cover issues such as the Bring the Kids Home program, projected Medicaid costs to the state in coming years, The Alaska Health Care Strategies Planning Council Final Report, Certificate of Need (CON) Negotiated Regulations Committee Report, and several more.

We wrap up this issue of the Review with an analysis conducted by Kelby Murphy, our new associate policy analyst, who is just wrapping up her new Master of Public Health degree at UAA.  Kelby discusses the complicated but important relationship between federal Medicaid policy and State Children's Health Insurance Program (SCHIP) on the one hand, and Denali KidCare on the other. She focuses on the consequences here in Alaska regarding program costs, and ultimately regarding Alaska children who retain or who lose health insurance coverage under this program.

Your comments on current and potential content, and on the Review format appreciated.  Thanks so much for your support of Alaska Health Policy Review.

Lawrence D. Weiss PhD, MS
Editor, Alaska Health Policy Review
Office: 907.276.2277
[email protected]

Interview with Byron Perkins, DO
Angela Salerno Dr. Byron E. Perkins D.O. is president elect of the board of directors of Northwest Osteopathic Medical Foundation, and medical director of Cornerstone Clinic Medical and Counseling Center in Anchorage. In addition, he is affiliated with numerous local and national professional organizations, colleges, and hospitals. In this interview Dr. Perkins presents the case that, with minimal additional support, Alaska students could be recruited into regional Osteopathic medical schools, and return to Alaska as Doctors of Osteopathy. This could play an important role in Alaska, filling the critical and growing shortage of primary care providers in the state. He discusses a model private/public program in Alabama that has charted this course. Dr. Perkins was interviewed on October 14, 2008. This interview has been edited for length and clarity.

AHPR: I would like to congratulate you for being elected -- just last month -- as board president for 2009 of the Northwest Osteopathic Medical Foundation.

Perkins: Thank you.

AHPR: You're welcome. Would you please tell us what the foundation does?

Perkins: The foundation is public charity, serving the people of the Northwest, providing resources and programs to improve the health of our communities and really, to provide or promote a greater understanding of osteopathic medicine and the distinctive aspects of the osteopathic medical profession. It's a regional foundation based in Portland, Oregon, but it serves the five Northwest states.

AHPR: I assume it's a nonprofit organization.

Perkins: That is correct.

AHPR: Does the foundation take any stands on state or federal legislation or does it espouse principles against which legislation can be assessed?

Perkins: That's a good question. Really, we're not a legislative or an initiative-driven foundation. Our goal, our mission is to increase awareness of the osteopathic profession and in such, we sometimes seek positions on matters that sometimes influence the profession, but for the most part we're in[to] getting education, we're getting students into medical school, helping them find their way into the osteopathic profession and bringing those students back into the Northwest. That is our primary mission. That's what we exist for.

AHPR: Just to follow up on that, does the foundation submit questionnaires to legislators or invite them to speak? For example, I think you have an annual conference.

Perkins: We have a confluence in April every year. We've been doing this now for four years. These are opportunities for different folks in the Northwest to present and discuss ideas that we think are important to the osteopathic profession. We have representatives there from the various medical schools that are represented in the Northwest. We have the various osteopathic state associations present and often, leadership from the national American Osteopathic Association. Again, taking a regional approach: How can we do this more effectively, in the Northwest, to educate and bring back osteopathic medical physicians to our communities?

AHPR: What direction would you, or the board of directors, like to see the foundation go in the future? Are there any initiatives or new directions you've been contemplating?

Perkins: A lot of funding has been granted by the foundation to our state organizations. Alaska, for the last several years, has received grants of about $7,000 per year to help our state association function more effectively. The confluence began four years ago with this idea of bringing people, stakeholders -- shareholders if you will -- to the table to talk about what are our needs in Alaska and are they different than the needs in rural Oregon or rural Washington, Idaho or Montana.

So we have now a community in which to discuss these issues. State-to-state there are some differences but if we can approach it in a regional way, we can get more accomplished and really, it's a fundamentally new way of doing business for the foundation. As a result of this vision, the whole by-laws and orders were changed so that each state had an elected representative to sit on the foundation board. Dr. Ray Andreassen was our first representative and I have replaced him as the Alaska representative to the foundation board this year. It's the first time they've elected a physician -- other than someone from Oregon -- to be the president of this foundation board. I'm privileged to be that.

"We are not primarily involved in legislative activity. Certainly we can take positions on issues that may affect us as a profession but ultimately our charter as the Alaska Osteopathic Medical Association has been to promote osteopathic physicians and the profession in the state."

AHPR: I also note that you are affiliated with the Alaska Osteopathic Medical Association (AKOMA). Does that organization have an interest in, or act for or against, particular pieces of legislation in the state, in this state?

Perkins: That's a good question as well. We are not primarily involved in legislative activity. Certainly we can take positions on issues that may affect us as a profession but ultimately our charter as the Alaska Osteopathic Medical Association has been to promote osteopathic physicians and the profession in the state. We exist really to provide continuing medical education for osteopathic physicians. We have to be very careful in taking positions on legislation that's pending because we're not organized that way. We have a board of directors and a president and a vice president and so on. But to take a position statement, we circulate information to members and ask, "Do we want to make a physician stance on this or not?" We have spoken in support of some legislation that we felt was appropriate, that was supported by our national association. We voiced through a letter of support [in favor of] that, but on the whole we are not politically oriented.

AHPR: The legislation you were referring to: was this state or federal legislation that you wrote a letter for?

Perkins: We have actually done letters at both levels. We commented on issues related to practice rights -- I think in the last two years expanding practice rights for naturopaths and I believe also for mid-level practitioners.

AHPR: Were you in support of that?

Perkins: I think that we took a position unfavorable towards expanding practice rights for naturopaths, prescribing rights. This is also at the national level, expanding practice rights seems to be a big issue, and we've been asked to comment on that. We sent a letter of support for the national position.

AHPR: It sounds like that the Alaska Osteopathic Medical Association doesn't actively lobby.

Perkins: That's correct. We have gone to Juneau twice now in my tenure where we visited to say, "We're osteopathic physicians. If there's anything you want to talk to us about, we're here," but we had no issues, no agenda, nothing that we were seeking for support.

AHPR: Are there any pieces of legislation you think you might be interested in, in the coming year, even if you don't actively lobby for or against them?

Perkins: I don't know what's on the table for the coming year. We do not have a piece of legislation or a champion for a particular piece of legislation that we particularly want to see introduced. We have had some discussion related to health manpower shortage issues and getting some support for the osteopathic education programs that we're involved in. We have not approached any legislator and said, "Will you champion this and do this for us?" The interest is there. We believe that the osteopathic profession provides a viable alternative for physicians in the state; in fact, we probably do as good or better job providing primary care physicians to our state -- traditionally and statistically.

Our interest, when it came to the health manpower shortage issue, was just getting some parity so that students who might elect to choose osteopathic education could do so as a viable alternative to the WWAMI program [a regional program which offers the first two years of medical school in Alaska] that's currently available. Right now, if I had a student who has rotated with me, done some of their pre-med work, come and showed up in my office or a patient of mine who says, "Doc, I want to be a doctor just like you." I could say, "Apply to WWAMI because it's really an excellent program and it turns out a very good product and yet, if they want to be an osteopathic physician they really can't compete with what WWAMI offers -- the two years here in the state, or the year in-state and then return.

So we would be interested in seeing some kind of parity where a student could choose to go to an osteopathic medical school and have some of their undergraduate debt covered, or even in the old WICHE [Western Interstate Commission for Higher Education] program, where they could elect to choose an osteopathic medical education and enter at in-state resident fees. This would be very desirable for the profession here.

AHPR: So currently there's no opportunity for a student who's interested in or enrolled in a school of osteopathy to do that in Alaska?

Perkins: That's correct. By choice, if a student chooses to go to an osteopathic medical school, they will pay private school tuition between $25,000 and $35,000 -- actually up to $38,000 -- per year for that education. It's quite expensive.

"We do not have an official place at the table with the Alaska State Medical Association. Most of our members are members of both associations, with the state medical association and AKOMA."

AHPR:
Does the Alaska Osteopathic Medical Association have a working relationship with other provider organizations? For example, I'm thinking of the Alaska State Medical Association.

Perkins: We recognize one another. We do not have an official place at the table with the Alaska State Medical Association. Most of our members are members of both associations, with the state medical association and AKOMA. Interestingly this past year, Dr. Russ Tanner, who served as the president of ASMA, is an osteopathic physician. That's the first time that's ever happened in the history of the ASMA organization, that an osteopathic physician has served at such a high level of leadership. He was a champion and proponent of increased cooperative relationship between AKOMA and ASMA.

AKOMA is a small organization. We have about 32 members. There are about 100 licensed osteopathic physicians in the state so there are many more osteopathic physicians out there who could be members of AKOMA who either choose not to or don't participate. For the most part, our membership is primary care physicians. We get together so that we can provide CME opportunities for our members in state and not have to travel so far to get the certified education credits that are required for our license.

AHPR: Continuing with the discussion of professional training opportunities, this summer two new training opportunities in the Northwest opened their doors to train osteopaths: the Pacific Northwest University of Health Sciences College of Osteopathic Medicine, and the Rocky Vista University College of Osteopathic Medicine. Together these two institutions have nearly 235 students. Are these for-profit, private non-profit or public sector institutions?

Perkins: Both. I am quite familiar with Pacific Northwest University. I know some of the staff, the dean there, the president, [and] the chancellor. We have been supporting that as an association -- Alaska Osteopathic Medical Association -- as a regional medical school that will be attractive to students from the Northwest.

AHPR: And that's located where?

Perkins: Yakima, Washington. It's been in development now for about six years; it opened its doors in August for its first class. There are four Alaska residents in the first year class at that school. We're excited about that. We'd like to see that be ten. We'd like to see ten Alaska students committed to going to the Yakima program. We think it's going to make a good product. There are 75 students there, and it's roughly 50/50 male and female. Seventy-five percent of those students are from the Northwest states.

There's a traditional thought that [if you] take them from home, train them at home, they are going to return home, and we've not had that opportunity for a long time. I mean Washington has its medical school; Oregon has its medical school. The states of Idaho, Montana -- they do not. Alaska certainly didn't; WWAMI is our Alaska medical school.

By providing an opportunity for an education closer to home -- a different kind of education perhaps than you would get at the WWAMI program, but still a viable education that trains good, primary care physicians -- we've increased the likelihood of retaining our Alaska residents, coming back to the state and serving our state. That's our goal. That's what we exist for.

The Yakima program is designed to do that. It's certainly not competing with the University of Washington. It's not an urban environment. It's a rural community-based system that I think will attract a different kind of student. The kind of student that I think will make a great osteopathic physician. The Yakima program is a non-profit organization. It's not publicly funded. It's not run through the state of Washington university system.

The Rocky Mountain Vista system by contrast, to my understanding, is the first for-profit medical school in this country. It's a unique model, and even within the profession there's been some discussion about this model -- Is this the way we want to do medical education?

AHPR: Is this in Colorado?

Perkins: It's in Colorado. Both schools opened together. I believe there are 150 students at the Rocky Mountain Vista program, 75 at the Yakima program.

AHPR: Is there any relationship between the two of them, or is it just by happenstance that they opened at the same time?

Perkins: An osteopathic medical school takes years of preparation and development before it's ever accredited and allowed to function. As I said with the Yakima program, about six years have been involved from conception to initiation. It takes a lot of steps. Each one of those steps is kind of governed by the national organization. [It] makes sure that they have the right faculty ratios, and they have the funding committed before they get started.

There's got to be some kind of guarantee that they can get the post graduate medical training that they need. You can't just start a medical school and turn them out willy-nilly. This whole approach to medical education is in dynamic flux in our country today. The University of Health Sciences in Oregon and Oregon Health Sciences has expanded their program; they're taking new students from out of state. WWAMI certainly has its unique contribution bringing students from the different states.

I believe that the Yakima program has the potential of being a regional medical school. It's the first medical school opening in the Northwest in 100 years. It's a big event. This is historic for us and certainly in the osteopathic profession, which has been somewhat underrepresented in the Northwest states. This is a major event for us.

There are many other osteopathic medical schools who have traditionally recruited students from our area. I went to Kansas City. A large number of the osteopathic physicians here in Alaska are graduates of Kansas City but many went to Western in Pomona, and many have gone to Kirksville in Missouri and [to] Chicago and Philadelphia -- and many of the other states have schools that take out-of-state residents as private education. It's not that Yakima will supplant that but Yakima will be a desirable location for many students in the Northwest because it's close to home, and if you keep them home, they're likely to return home.

AHPR: Do you happen to know if there are any Alaska students at the Rocky Vista University campus?

Perkins: I do not have that information. I interviewed two students that were going to schools. Both were accepted at Rocky Mountain. I don't know -- one elected to go to Western instead, the other one I believe chose to go to Yakima. The increased numbers of seats available in the short term has been a boom to Alaska students who can now choose an osteopathic medical education versus going overseas offshore to one of the Caribbean schools.

AHPR: Does the foundation itself have any particular special relationship with either one of these new schools that have opened?

Perkins: Not directly. We support what they're about because they support our mission. Let me say this in a right way: We believe our role as a foundation is to facilitate and encourage discussion [and] cooperative effort with all of the medical schools because ultimately all of them play a role in educating physicians of the future that are from the Northwest. We can't really tell them how to run their programs, we can't tell them what to do but we can tell them: this is the kind of osteopathic student we want to see coming back to our region -- and in that way perhaps referee some disagreements that occur, or if they want to place their students back into our region for externships and clinical training, this is what we desire of a program that wants to return students back to us.

"I think that around any given table the physician is judged on their skill and ability, not on what degree they own or carry. We believe as an osteopathic profession that we provide a different piece of the puzzle."

AHPR: I'm curious. Do MDs support the development of these new programs to train osteopaths, or do they see osteopaths as competition somehow, or is this not an issue at all?

Perkins: I can't speak for MDs. I work directly with a lot of MDs in my role here in Alaska. All of us see the need for more physicians -- good physicians, quality trained -- primary care physicians in particular. When I gave testimony to the physicians supply task force -- the need is beyond what we're going to be able to meet in the coming twenty years. We understand that. The demographic is changing. Physicians that are currently practicing in the state, myself included, we'll see a day when we'll no longer practice, and is the pipeline full of enough students who will become physicians to replace us as we leave?

We're already short of the current need. I believe the prejudices of the past that said, "Well osteopathic physicians are not real doctors," I think that's gone. That's not the case. I think that around any given table the physician is judged on their skill and ability, not on what degree they own or carry. We believe as an osteopathic profession that we provide a different piece of the puzzle. Osteopathic physicians are trained as primary care physicians first. Many of our specialists here in Alaska are osteopathic physicians. They chose to specialize.

They're renowned in their field as specialists within Anchorage, but a good number of us are in primary care in places like Kotzebue and Nome and Barrow and Dillingham. We believe we do a good job of training a primary care physician who can meet the challenges of our rural population, not just in Alaska but when you get out of the I-5 corridor in Washington and Oregon, it's rural. There's underserved areas in those states just as there are in Alaska.

AHPR: What kind of impact do you think the opening of these two institutions will have on the growing shortage of providers in the Northwest and particularly in Alaska? You addressed this to some extent just now. Will we see some of these students?

Perkins: I believe so. Already there are four students from Alaska in the entering class at Pacific Northwest University. Two, I know, were interviewed there and elected to go to one of our other osteopathic [training programs] -- so there's at least six osteopathic students this year out there from Alaska, who I believe have a good [chance] of returning to our state.

The biggest issue for us looking forward is not: are there enough medical school slots? Those are increasing. The demand is increasing. The slots are opening. We have ten new slots in the WWAMI program. The issue for us in Alaska, and I believe also in the remaining Northwest states, is post-graduate training. We have one residency-training program in Alaska, a family practice program. It is a primary care, family practice training site. It is dually credited, both osteopathic and allopathic -- MD, DO.

They have recruited osteopathic physicians there preferentially. Talking with Harold Johnston, the director there, they want to see osteopathic physicians in their program and they have an osteopathic director of medical education to help facilitate that part of their program. It's the only recognized osteopathic post-graduate training program in the Northwest right now -- and it happens to be based here in Anchorage. That's going to change.

Western University in Pomona has entered into a long-term agreement in Lebanon, Oregon for a large residency based out of the Samaritan Hospital group there. They just announced it at the board meeting I was at last month. This will be a major player -- with as many as 20 residencies opening up in Oregon for post-graduate training. It's the need, if we're going to keep our students in the Northwest, we need to train them in the Northwest -- and there are a limited number of residencies -- both allopathic and osteopathic. But certainly osteopathic is underrepresented.

It is our challenge in Alaska. We'd certainly like to see our residency options expanded -- not just for the family practice program but other specialty residencies. That is a federal issue; those are state and federal issues about funding for post-graduate education. Senator Murkowski had a hearing here last spring. I gave testimony on that -- basically addressing the issue of post-graduate education and the need for opening the purse strings to allow that to happen. We are at a freeze -- or a funding freeze -- on post-graduate education so residencies cannot expand.

AHPR: And these are federal funds ...

Perkins: These are federal Medicare, HCFA [Health Care Financing Administration -- changed to CMS] funds that really go towards supporting post-graduate education -- allopathic or osteopathic.

AHPR: There have been discussions of loan forgiveness programs as a way to entice providers to come and stay in Alaska. Is that something that sounds of interest to you or that AKOMA, for example, has supported?

"If the state of Alaska had some similar featured program that would allow students to return to Alaska to do payback as they do with WICHE, this would be very effective in recruiting. I'm not as interested in recruiting outsiders here. I'm interested in keeping those who have grown up here -- to come back."

Perkins: This is one of the conclusions of our Physician Supply Task Force. One of the ways of recruiting physicians to Alaska would be by loan forgiveness and so on. We support that. We see it as essential for bringing osteopathic students back to Alaska. Right now, because there's no public funding for osteopathic medical education, it's all channeled into WWAMI.

If a student from Alaska goes to an osteopathic program, they will graduate between $120,000 and $150,000 in debt. They would love to come to Alaska, but if they have to go into specialty training to become a surgeon to be able to generate the income that they need to pay off their debt, we're going to lose some of those students into a surgical residency and they'll stay in the Midwest or wherever they're trained because that's where the economies are.

We believe that assistance with loan forgiveness, assistance with recruiting dollars [will work]. The Indian Health Service has done this remarkably well. You come and serve here; we forgive loans over a period of time. It's a federal program. The average person can't participate in that unless they sign up for the Indian Health Service or the National Health Service Corp.

If the state of Alaska had some similar featured program that would allow students to return to Alaska to do payback as they do with WICHE, this would be very effective in recruiting. I'm not as interested in recruiting outsiders here. I'm interested in keeping those who have grown up here -- to come back. We'll take anyone. The need is great. You live in Florida and you want to live and work in Alaska, come and work in Alaska. But the likelihood of that person making a long term, a lifelong commitment to Alaska may be a little less than somebody who's grown up and raised here.

AHPR: The mission of Pacific Northwest University is in part, and I'm quoting here, "To train and educate health professionals for the region, particularly its medically underserved areas." The mission of Rocky Vista University is in part -- again quoting, "  ... improving medical access for at-risk and rural populations." To the best of your knowledge, how can either of these institutions insure that their students will fulfill these important missions?

Perkins: Another good question. I know in the profession, this is kind of the bedrock of what we're looking for in a student who's coming to medical school in the first place. To choose an osteopathic medical education -- the selection process weans out those students who really aren't in it for that. How they carry out that mission as an educational institution is going to be determined by their success. I mean we'll see how well they do.

I don't know enough about Rocky Vista. I don't have direct contact and I really shouldn't comment about their program. I do know about Yakima and the Pacific Northwest. This is the fruit-growing region of Washington. [There are a] lot of migrant farm workers, and a lot of rural-kind of medical care is rendered there.

The idea of starting a medical school in that kind of location -- away from the big urban population centers -- [is that] a student who will elect to go there [will] have different self selection criteria than a student who wants to go to UW [University of Washington] and live in the city and be part of urban, Microsoft, Boeing corporation, you know.  So it will attract a different kind of student, in my mind, I think that's the belief of those of us who support this program in Yakima.

Others have said, "Well, how can you do it in Yakima. I mean it's not a big urban center." Bottom line -- it doesn't have to be. We can provide the kind of training education and quality clinical experiences based out of a more rural farm community-based setting and instill the values and the philosophies of the profession at those foundational layers of first and second and third year medical school.

They will take those students and say, "You know what? Serving out in the bush in Nome or Alaska is really a desirable thing, and it can be very rewarding." We have doctors who do that right now. Ray Andreassen up in Delta Junction has been up there for 27 or 28 years. Committed, the only doc, he does it all and it's because he believes in it and he's called to it.

"The osteopathic profession has traditionally been about primary care medicine. That has been historical. It goes back to our roots."

AHPR:
According to a speaker at a recent conference sponsored by the foundation -- the confluence -- over 60 percent of DOs [Doctors of Osteopathy] in Alabama have primary care practices compared to only 10 or 20 percent of medical doctors in the state. Is this a general characteristic of doctors of osteopathy and is it a steady or a declining trend?  I ask that because with medical doctors, it's been a very rapidly declining trend -- that they would want to be trained in primary care. I think the latest statistic I heard was something like only 2 percent of new physicians -- new medical doctors -- are actually getting trained in primary care.

Perkins: That's correct and that statistic blew me away. I know the trend has been down. It's been hard to recruit into the primary care specialties: family medicine, internal medicine, pediatrics -- this is largely an economic driver. I need to be frank with you. A student coming out of medical school saddled with debt says, "I can be a family physician and work for 50 years and barely break even or I can be a surgeon and retire in 15 years and live a good life."

Well, you can do a lot of good as a surgeon, you can help a lot of people, you can still fulfill that desire we all had when we went into medicine to do good and to help people, but the cost differentials of what you can earn as a specialist and what you can earn in primary care are real drivers. And when you add to that the economic burden of indebtedness, the driver is towards specialty and not primary care.

The osteopathic profession has traditionally been about primary care medicine. That has been historical. It goes back to our roots. It has something to do with the fact that in our early days we were not respected as physicians. Particularly if you go back to World War II when our physicians tried to volunteer for service, they were told, "You can't serve in the U.S. military", so they stayed home and took care of the medical needs of our population, and during those four years of the great conflict they became recognized by their communities as "real doctors," and established themselves as primary care physicians in time of need.

We would have served. We could not serve. We were not allowed to serve in the medical corps. That was true in the Korean conflict. It was not until Vietnam that osteopathic physicians were enlisted and enrolled as physicians in the medical corps. We still have this emphasis on primary care, and all of our training is towards that. We still have an osteopathic rotating internship to complete our fifth year of training. You go through a rotating internship so that you're a complete doctor before you become a surgeon or before you become a psychiatrist or before -- it's part and parcel of our educational process.

[In] the allopathic program [students] become specialized before the second or third year of their education process. They're already tracking towards a program in specialty, whether it's a surgical specialty or a primary care specialty. Does this trend hold? It continues to be about 60 percent of our physicians are graduating and going into primary care. I think we have a corner on the market, so to speak, in terms of turning out a good primary care physician who can serve in diverse locations and serve well.

You mentioned the Alabama project [The Alabama Medical Education Consortium] and we heard from Dr. Baker. He presented this program to us, and our eyes lit up. We thought, "Whoa, can we reproduce this in the Northwest?" Because in a nutshell, Alabama looked at their success at placing primary care physicians in rural places and they were losing the battle. Their physicians attending the University of Alabama at Montgomery and at Huntsville -- they were turning out specialists and nobody was going to the rural areas that had primary need and they looked around the country and they did data research and this was done at the university level by the state university and they said, "You know what? The people who are doing this the best are the osteopathic physicians. Let's talk to them."

Out of that generated some dialog and ultimately some relationships where students from Alabama now are allowed to do their medical training at the University of Kentucky in Pikesville, Kentucky -- that's an osteopathic college there, the A.T. Still University in Phoenix, all with the idea of returning back to Alabama as osteopathic physicians. They worked out contractual relationships and now they are returning to their state students who went to pre-med and went into osteopathic medical education knowing that they would be coming back to their state and serving. They went to the osteopathic profession because that's where primary care was happening.

AHPR: So there's been some state money involved in doing this?

Perkins: This is the state of Alabama through their university system, which is training and raising up their students through pre-med programs and getting them into medical school -- not into the University of Alabama Huntsville or Birmingham -- but they're going off to osteopathic school already committed. They've got a slot guaranteed, and they've got these contractual relationships. It's called the Alabama Medical Education Consortium. They have a web [site]. It's fascinating. I've been on that web [site] and I'm going, "Oh, could we do this in Alaska? Could we make this happen in the Northwest?"

"Osteopathic medicine, osteopathic training programs, do a better job, in my mind, of training the primary care physician who can work in places like Nome and Kotzebue. They hold their own in those environments and are capable of doing it."

AHPR: And the benefit that Alabama sees is that they're getting a much bigger bang for the buck in terms of training and recruiting primary care physicians essentially?

Perkins: That's what we're hearing. That's what the take home is right now. They're getting students who are committed to rural primary care who believe in it, who are trained for it. That's the other thing. I need to say this. Osteopathic medicine, osteopathic training programs, do a better job, in my mind, of training the primary care physician who can work in places like Nome and Kotzebue. They hold their own in those environments and are capable of doing it.

I've had medical students come to rotate with me who could not function outside of an urban environment -- if there's not a specialist to consult with, if they don't have a lab, if they don't have the x-ray -- they can't function in that environment. That's part and parcel of our training as osteopathic physicians from the time we start medical school. I have to be careful; I can't say that the other programs aren't doing as well but I do say that the osteopathic profession is renowned for turning out a quality product that does primary care very well.

AHPR: I'm going to change the tenor of the subject a little bit and focus more on you. You are the medical director of Cornerstone Clinic Medical and Counseling Center in South Anchorage. What kinds of services are offered in this clinic, and is the clinic organized as a for-profit or a non-profit?

Perkins: It is a 501(c)(3) non-profit corporation. It's actually operated under the auspices of Christian Health Associates. We have a Christian mission statement. We have missions as part of our goal -- not just locally but world missions. Our goal is to treat the patient -- mind, body and spirit -- so we have a counseling center to address issues of the mind and the psyche, we have the medical center to deal with medical and illness but we want to be able to preserve or present those services within the context, of my own personal religious faith, which happens to be Christian.

The folks who are employed there are all Christian by determination. They're not all from one church. We have about twelve churches represented in the clinic but to function as a religious organization in a medical community, we had to set it up as a non-profit structure. I couldn't be advertising "Doc wants Christian nurse, come work in a Christian clinic." That's really against the law. You can't discriminate based on race, religion, creed, code, or etc.

But to function as a non-profit with this mission statement: that our goal is to serve our community -- body, soul and spirit -- and to reach out across the waves and help other communities in foreign countries etc. through world missions, that's how we organized Christian Health Associates and ultimately, the counseling and medical center.

AHPR: Well, I'm please to tell you that we have actually reached the end of my structured questions. Is there any final statement or additional comments that you would like to say to the readers of Alaska Health Policy Review?

Perkins: I would like to go back to something we talked about earlier: legislative priorities. We really do feel like the osteopathic profession brings something unique and different and special to the health care community. We do believe there's great need in supplying physicians for the future. We are totally in agreement with the findings of the Alaska Physician Supply Task Force. We believe that with proper encouragement, and perhaps funding, through our state legislature, we could make that educational opportunity competitive and that would be a goal. We just don't know how to go about doing it as Alaska Osteopathic Medical Association and as the Northwest Osteopathic Medical Foundation.

Part of my goal in this tenure as president in the coming year, is to explore those things. The confluence in the spring is going to be addressing these very issues. How do we work to get students who want to become osteopathic physicians into our osteopathic colleges and back to our communities and make it work for them? Right now that's a problem with third and fourth year rotations. They're not well organized. If there's a student who wants to come and work in my office -- I see students, I have them work with me, and most of the osteopathic physicians here in Alaska do that because that's the way we trained -- it's not structured and organized.

The WWAMI program has a well-structured third and fourth year program. They have 20 students coming out now every year who are going to need sites and homes to do their third and fourth year clinicals. If we have ten more students per year going through osteopathic programs, we need to expand those training sites to allow third and fourth year students to come back to Alaska for that purpose. That will require some funding, maybe some forward thinking on the part of some members of our legislature who value the idea of an osteopathic medical education, and our goal would be to bring those things forward and seek participation as we try to see that happen.

AHPR: If I could just follow up on that. My understanding is that these third and fourth year training sites are really, in many ways, limiting factors for the training of nurses, the training of PAs, the training of the medical doctors here in this state.

Perkins: It's true. We have had students from the nurse practitioner program circulate through Cornerstone Clinic. We've been a training site for them. For many years I had a nurse practitioner working in the clinic. He just left us this summer to take a job over at the Native hospital. We support mid-level education; we believe it's a real way to supply the needs in our communities. Having said that, our students are looking for training sites. The closer to home we can make them, the more likely that we are to keep recruiting and retain those students coming back home.

AHPR: Thank you very much for taking the time to interview with me.

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Introduction: DHSS Legislative Reports

Following are short summaries of selected reports sent to the 25th Legislature by the state of Alaska Department of Health and Social Services (DHSS). Many of these reports are updates on the research findings of provisions initiated by the legislature, as well as progress of recently-implemented programs, such as the Bring the Kids Home initiative.

We've focused on pieces of each report that we feel are most notable. In some cases we added a summary paragraph before quoting or paraphrasing key portions of the report. Additionally, items in bold highlight areas of significance in each report.

These reports, while lengthy and verbose at times, typically contain vital information regarding the efforts of DHSS to improve health in Alaska, as well as future topics to be covered by the 26th Legislature in January 2009. Links are provided so that readers can access the full reports. This series of summaries was written by Kelby Murphy, associate policy analyst.

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Report: BTKH 3-Year Update

Bring the Kids Home 3-Year Update

Background


Between 1998 and 2004, out-of-state placements for children with severe emotional disturbances in residential psychiatric treatment centers (RPTC) grew by nearly 800%. During this time, the children's behavioral health system in Alaska became increasingly reliant on institutional care for treatment of youth with severe emotional disturbances (SED). At any given time, approximately 350-400 children were being served in out-of-state placements. Alaska Native children represented 49% of the custody children in out-of-state placements and 22% of the non-custody children in out-of-state placements. Bring the Kids Home (BTKH) is an initiative to return children with severe emotional disturbances from out-of-state residential facilities to treatment in Alaska and to keep new children from moving into out-of-state care.

The Family Impact

For many of the children and families who received out-of-state mental health care, access to care came at a price: disruption of family relationships and cultural identity, disconnection of parents and family from participation in the youth's treatment, and difficulties with transitions/re-integration into home, school and community.

The Systems Impact

Over-utilization of out-of-state care also comes at a price for the system: state resources support highly restrictive out-of-state residential treatment resources instead of building in-state capacity. Developing capacity means investing in the Alaskan workforce and building in-state resources: in-home, in-school/community, therapeutic foster/group care, and residential services for Alaskan children.    

Three primary goals guide Bring the Kids Home
  • Minimize children and youth in out-of-state care and ensure that the future use of out-of-state facilities is kept to a minimum.       
  • Build capacity within Alaska to serve children with all intensities of need.
  • Develop an integrated, seamless system that will serve children in the most culturally competent, least restrictive setting and as close to home as possible.
Capacity Development
  • 28 new BTKH operating grants are developing services in 12 communities. During fiscal year 2006 and 2007, 56 new in-state beds were developed, 236 children were stepped down from more restrictive instate or out-of-state care and approximately 500 children were served.
  • Regulations were developed for school Medicaid mental health service delivery as part of a child's individualized education plan. During fiscal year 2008, a "tool kit" will be created to assist with expanding school mental health capacity. Two schools enrolled in fiscal year 2007.
  • New capital funding is developing residential treatment/group homes in Anchorage, Fairbanks, Juneau, Ketchikan, Kenai, Kotzebue, Dillingham and Eklutna.
  • New funding is supporting expanded tribal mental health services that are culturally competent, closer to home, and that access the 100 percent federal reimbursement rate. One new tribal facility estimates full year savings of state general funds of $500,000.
System Management, Outcomes Tracking and Continuous Quality Improvement
  • The new care coordination team developed a database to track out-of-state referrals.
  • The success of educational transitions will be monitored starting in fiscal year 2008.
  • The Alaska Automated Information Management System (AK AIMS) is being developed to track and monitor behavioral health service delivery and system outcomes.
  • The Department of Health and Social Services and the Department of Education and Early Development developed an agreement for the committees that review children for residential care. The departments are also jointly staffing an "Education Subcommittee" to address system gaps related to education for children with severe emotional disturbances.
Overview of Progress to Date

Between fiscal year 1998 and fiscal year 2004 the total number of youth with severe emotional disturbances served in out-of-state Residential Psychiatric Treatment Centers care per year steadily increased, with 46.7 percent per year on average. However, between fiscal year 2006 and fiscal year 2007 (i.e. after BTKH implementation) there was:
  • a decrease of 19.8 percent in out-of-state Residential Psychiatric Treatment Centers recipients;
  • an increase of 33.8 percent in in-state Residential Psychiatric Treatment Centers recipients; and
  • a decrease of 4.8 percent in total Residential Psychiatric Treatment Centers recipients.
Between fiscal year 2006 and 2007, the exponential growth in out-of-state care was reversed:
  • the number of children admitted to out-of-state residential psychiatric treatment centers dropped by 37 percent. This meant that 176 fewer Alaska children moved into out-of-state care.
  • a decrease of 36.3 percent in out-of-state non-custody Residential Psychiatric Treatment Centers admissions;
  • a decrease of 37 percent in out-of-state Residential Psychiatric Treatment Centers admissions; and
  • a decrease of 6.6 percent in total Residential Psychiatric Treatment Centers admissions.
Between fiscal years 2006 and 2007, Medicaid expenditures for out-of-state residential psychiatric treatment care decreased by 8.16 percent as fewer children accessed out-of-state care. This represents the first decline in out-of-state expenditures for residential psychiatric treatment since Bring the Kids Home efforts began.

This document includes an extensive report of additional markers of program success, as well as future directions.

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Report: BTKH 2007 Review

Bring the Kids Home 2007 Annual Report

There is substantial overlap between this report and the 3-year update referenced above. This report contains information specific to changes during 2006 and 2007.

The figures and data illustrated in this report signify the beginning of a trend of declining out-of-state expenditures for residential care and the expansion of capacity and utilization of residential psychiatric treatment care within Alaska.

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Report: Governor's Health Care Council

The Alaska Health Care Strategies Planning Council Full Report Summary and Recommendations

Submitted December 23, 2007


On February 15, 2007, Governor Sarah Palin issued Administrative Order #232 establishing the Alaska Health Care Strategies Planning Council in the Office of the Governor. The purpose of the Council was to build the foundation for developing a statewide plan to identify both short-term and long-term strategies that effectively address issues related to access, cost and quality of health care for Alaskans. Members of the Council, all appointed by Governor Palin, are listed in Appendix C of the final summary. This report summarizes the work of this Council, which unfortunately had only 24 hours of face-to-face meeting time. Thus, identification of the fiscal impact of recommendations went unaddressed, and must be a top priority in future consideration by this or subsequent bodies.

Background

The Council interpreted its charge from Governor Palin broadly, to focus on the overall goal of improving the health of Alaskans. Within that broad charge, the Council considered health care to be an important component in improving the health of Alaskans. According to the Council, health care is a broadly defined term, relating to the prevention, treatment and management of illness, preserving mental, behavioral, physical health, and dealing with chemical dependency.
In accordance with the order, the Council reviewed and synthesized the extensive body of existing research on the subject, agreed upon the most salient facts, and identified the most significant health care issues in the state. Based on seven overarching healthcare challenges identified by the Council, members articulated the following seven comprehensive health care policy goals:
  1. Personal responsibility and prevention in health care will be top priorities for government, the private sector, tribal entities, communities, families, and individuals;
  2. Health care costs for all Alaskans will consistently be below the national average;
  3. Alaska will have a sustainable health care workforce;
  4. All Alaskan communities will have access to clean and safe water and wastewater systems;
  5. Quality health care will be accessible to all Alaskans to meet their health care needs;
  6. Develop and foster the statewide leadership necessary to support a comprehensive statewide health care policy;
  7. Increase the number of Alaskans covered by health insurance and encourage employers to offer a range of health insurance options.
Based on the vision of a healthy Alaska, a one-page "Alaska Health Care Action Plan" was developed by the Council. During its work the Council was able to generate dozens of possible solutions to address the challenges, much of that the result of "brain-storming." The identified solutions are presented in Appendix A of the full document. Most require development of implementation plans, which was considered beyond the scope of the Council's work, especially given the short window for completion of its tasks. Although they are not developed fully, the articulated solutions in the plan, and within Appendix A, present a real and actionable foundation for helping to meet the goals in the "Alaska Health Care Action Plan."

Summary and Conclusions

Resolving the health and health care issues in Alaska will not be the result of a single solution. Instead, bringing real and lasting change means working together in partnership. Many of the solutions presented within this report fall squarely within the purview of state government. But no matter how committed state government is, solutions will not be forthcoming without involving all stakeholders as partners for change - from individual Alaskans to families, nonprofit organizations and private sector employers and employees, communities and local governments, tribal entities, state government, the governor, the legislature, and the federal government.

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Report: Behavioral Health - Performance Based Grants

Behavioral Health Performance Based Grants Funding Report to the Legislature

Submitted January 28, 2008

Background


The legislature recently implemented Performance Based Grants to ensure grant applicants are regularly evaluated on their performance in achieving outcomes consistent with the expectations and missions of the Department related to their specific grant. The recipient's specific performance should be measured and incorporated into the decision whether to continue awarding grants. Performance measurement should be standardized, accurate, objective and fair, recognizing and compensating for differences among grant recipients including acuity of services provided, client base, geographic location and other factors necessary and appropriate to reconcile and compare grant recipient performances across the array of providers and services involved.

This document provides an update on the DHSS/ Behavioral Health efforts to comply with the legislative intent language for Performance Based Granting. The document outlines the methodology, FY 08 funding impacts, successes and challenges, and provider participation. Also discussed is the role of performance based funding (PBF) and the national accreditation initiative within the broader effort by DHSS/BH to redefine more effective business practices. Characteristics of behavioral health services are broken out into categories of Prevention/Early Intervention and Treatment & Recovery Services.

Performance Based Methodologies

The development of PBF has several phases. Phase I of PBF for Treatment and Recovery
Services focused on addressing an immediate $1 million dollar shortfall for SFY 08. These were addressed using separate methodologies to determine performance in 3 categories: grant performance, unit cost, and residential utilization.

Phase II of the PBF effort is looking ahead to SFY 09. Using the Performance Based Funding Work Group, Behavioral Health has collaborated with grantee providers in establishing the foundation of a PBF methodology for the allocation of grant dollars in SFY 09. This workgroup has been convened, and is meeting once a month. The state is drawing on expertise from national resources in the development of a framework for performance measures. The framework of the SFY09 PBF measures continues to be defined, and preliminary planning is considering regional level performance measures and provider level performance measures. The measures will include data quantity and quality submitted by providers (minimal data set) and outcomes, using the Client Status Review of Life Domains (CSR). Additionally, by using prevalence estimations, indicators will also be focused on identified needs of services, the degree to which services meet or do not meet the local need, and cost of service delivery.

Findings

Grantees were rank ordered from highest to lowest within each group. Score ranges were:
  • Rural Providers 92-52
  • Urban Providers 97-55
  • Multi-program Grants 95-60
  • Substance Abuse Residential Providers 95-48
Average Unit costs for each region were:
  • Rural Providers $2,284
  • Urban Providers $2,617
  • Multi-program Grants $2,479
  • Substance Abuse Residential Providers $6,042
Successes and Challenges

Prevention/Early Intervention Services


The authors stressed the question, "Is anyone better off because of the service you provided or the strategy you employed?" Throughout FY06 and FY07 the Prevention Project Coordinators worked closely with all grantees to assist them in identifying their long-term and short-term outcomes (via the required development of a logic model) and to develop appropriate evaluation tools to begin documenting the outcomes. With the addition of Performance Based Funding, it has taken the drive for outcomes to the next level. While it continues to be a struggle for some grantees to understand the importance of outcomes measures and how this information can be used to improve their prevention strategies, much progress has been made and PBF has assisted in reinforcing the importance of outcomes.

Treatment & Recovery Services

The DHSS / Behavioral Health has actively been moving forward in redefining a new business model that reorients away from compliance-related activity, towards quality of services and outcomes. Performance Based Funding provides a mechanism to further structure and organize division business practices with a focus and value on outcomes. The effort in developing meaningful PBF measures is driven, and dependent upon data. An identified success resulting from the PBF effort includes grantee organizations giving greater value to the quality and quantity (i.e. minimal data set requirements) of data that is submitted to Behavioral Health. This has also resulted in provider grantees diligently seeking out AKAIMS training for their staff. A corresponding challenge for Behavioral Health is that the reliance on AKAIMS as the primary data source for PBF has further highlighted the current and historical lack of necessary resources to adequately address longstanding deficiencies that prevent the system from realizing its full potential.

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Report: CON Committee

Certificate of Need (CON) Negotiated Regulations Committee Report

Submitted December 28, 2007

Summary of Report


The Negotiated Rulemaking Committee meetings for the Certificate of Need (CON) held in October and November this year produced several strong recommendations based on high consensus of the group. They included:
  • That the CON process is currently broken
  • It should not be eliminated
  • Clear definition and specificity on the Physician office exemption (POE)
  • CON covered entities should be required to serve all regardless of their ability to pay
  • CON should be in alignment with Medicare guidelines
Several other areas of consensus of the committee included:
  • The need for an ad-hoc advisory group to support the state in reviewing equipment thresholds, new procedures and remodels/renovations related to CON
  • The state would benefit from having an ad-hoc advisory group for technical expertise in disputed CON situations
  • Recommendation that the state collect data that shows whether the CON process actually accomplishes its stated purpose of cost containment and access
  • The State be empowered to a higher level of enforcement and monitoring that providers are staying within their CON
  • That for definition purposes Anchorage, Mat-Su, and Fairbanks would be considered large communities and all other areas in Alaska would be considered small communities
Efficacy of the CON was a major discussion topic. Where the CON is designed to contain costs and improve access, the committee noted a lack of data on whether the CON process actually accomplishes its intended purpose. The Physician office exemption (POE) definition was the most discussed and contentious topic at every session. The committee debated throughout the sessions the definition of what a physician office is and is not for purposes of exemption from the CON. While the committee did reach consensus on specific language for the POE, it was based on the fear of the misuses of the POE process as perceived by many members versus a more positive outcome driven definition.

In this first attempt to reduce the litigious atmosphere surrounding the CON, there were two distinct stakeholders not represented on the committee:
  1. Patient /consumer representation was absent from the committee. The absence of patient viewpoint would be valuable in future committees to ensure that the committee stays focused more on what is best for the citizens of Alaska rather than healthcare business interests.
  2. State of Alaska Healthcare point of view and plan. Several times the lack of state and or community healthcare plans/goals, vision was notably absent as needed information for the committee to use in making decisions. If a plan was developed the CON decisions could be made in reference to the community and state plans as a guide.
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Report: Medicaid Spending Forecast 2007 - 2027

Long Term Forecast of Medicaid Enrollment and Spending in Alaska 2007 - 2027

Submitted January 28, 2008 by the Medicaid Budget Group of DHSS Finance and Management Services


This is an extensive analysis of the recent trends and projected enrollments and spending for Medicaid in Alaska over the next 20 years. The document is layered with Tables and Figures that show anticipated changes in the age, race/ethnicity, and other characteristics of Medicaid enrollees. Notable are the projections that enrollment of the elderly will increase substantially as baby boomers fill in the age category of 65 and older, but not as anticipated in earlier reports. Following is the executive summary of the report. It is important for the reader to keep in mind that the projections for spending presented in this report assume that the mix of Medicaid services remains constant and that eligibility criteria do not change in the future. These assumptions are necessary to show how Medicaid spending in Alaska would grow under the program's status quo. Because the forecast represents a 20 year projection based on today's status quo, it does not take into consideration the dynamic nature of Medicaid policy and changing funding mechanisms that may take place throughout the forecast period.

Executive Summary

This is the second update to the 2005 Long-Term Forecast of Medicaid Enrollment and Spending in Alaska: 2005-2025. In this update, we develop long-term forecasts of Medicaid program enrollment, utilization, and spending from 2007-2027. Total spending on the elderly (ages 65+ years) is expected to converge with spending on working-age adults (ages 20-64 years) and children (ages 0-19 years) in 2027. This is a shift in the expected outcome from the baseline 2005-2025 forecast which predicted spending on the elderly would exceed spending in all other groups in 2018. This nine year shift is caused by slower growth in expenditures on the elderly than predicted in the baseline. Policy changes to control growth in Personal Care have begun to show up in the base data and the resultant changes are apparent in the forecast. This forecast predicts that each age group will comprise approximately 33 percent of total Medicaid spending by the end of the forecast period. Changes between the two forecasts are caused by two main factors: enrollment and cost containment measures.

Total spending in 2027 is expected to reach $4.1 billion. The average annual growth rate is 7.4 percent overall; however, state spending will grow faster at 8.4 percent. Spending per enrollee will increase from $7,523 per enrollee in 2007 to $24,218 per enrollee in 2027. State spending per enrollee will increase from $2,636 in 2007 to $10,261 in 2027. The proportion of state spending per enrollee will increase from 35.0 percent to 42.4 percent. It is important to note that this is based on incurred services by fiscal year and not paid claims by fiscal year. The rate of growth for enrollment will slow throughout the forecast period. The average annual rate of growth for enrollment is 1.28 percent - slightly faster than the population which is growing at 0.98 percent. The elderly (65+) are the fastest growing age group growing at 5.47 percent. Children (0-19) and Working-Age Adults (20-64) are growing slightly slower than overall enrollment, 0.69 and 1.06 percent, respectively. Utilization will see the highest average annual growth rates in Home and Community Based Waivers (6.18 percent), Personal Care (5.91 percent), and Health Clinics (5.41 percent).

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Report: Services Rate-Setting Methodology

Establishment of a Rate-Setting Methodology for Home and Community-Based Services in Alaska: Recommendations

Submitted and Prepared for DHSS Division of Senior and Disabilities Services by
Myers and Stauffer LC, CPAs, on January 14, 2008

The Alaska Department of Health and Social Services (DHSS) is in the process of reviewing the reimbursement methodology for home and community based (HCB) services provided under Medicaid waiver programs. The Myers and Stauffer firm was engaged by DHSS to perform research of HCB reimbursement methodologies and provide recommendations for revisions to the current HCB rate setting process. This report is intended to build upon preliminary research* as well as information obtained during meetings with DHSS staff and provider organizations. This report presents an overview of possible rate methodologies and proposes three recommendations for the reimbursement of HCB services. A future report from Myers and Stauffer will present a transition and implementation plan for the reimbursement methodology selected by DHSS.

Overview of Rate Methodologies

There are a wide variety of strategies that state Medicaid programs can use to design their rate setting methodologies. Some rates are provider-independent and are not directly linked to the costs incurred by a specific provider to render services. Provider-dependent rates are linked to the historical or projected costs of the specific provider for which a rate is being set. Provider-dependent rates can be retrospective, in which an interim rate is paid based on cost estimates, but is later settled to actual historical costs incurred by the provider. Alternately provider-dependent rates can be prospective, in which rates are established and paid without a subsequent settlement to the provider's actual cost experience. Each of these reimbursement methodologies comes with its own set of advantages and disadvantages.

The current reimbursement methodologies used by DHSS for HCB services include both provider-independent rates and provider-dependent rates. Services provided by HCB agencies are reimbursed according to rates that have a basis in projected agency costs and are provider-dependent. Rates for personal care agencies, assisted living homes and care coordinators are a combination of flat rate and price systems, but are primarily provider-independent.

All HCB providers have been subject to a "rate freeze" since 2004. In addition to restricting escalation of HCB rates, aggregation of historical state expenditure data to determine the freeze rates has blurred the historical origins and cost basis that the rates once had. Both DHSS staff and provider stakeholders have expressed concerns with the current HCB rate structure and the rate freeze.

Recommendations for an HCB Rate Methodology

Three Recommendations: The primary recommendation includes components that are essential to all three recommendations; the second and third recommendations, though independent of each other, are both predicated on the primary recommendation. The primary recommendation is a pricing methodology implemented statewide with prices derived from a periodic survey of historical costs incurred by providers of HCB services. The second recommendation is to differentiate the pricing methodology by provider peer groups that accommodate valid and predictable cost differentials. The third recommendation adds regionalization of prices.

This report highlights the need for DHSS to have data on the cost of providing HCB services. Recent and accurate cost data should be available before final decisions can be made regarding the precise methodology for determining prices. One way to do this is through a cost survey, which will take much time and effort, but the need exists. Although a price-based system is relatively straightforward, implementation of a periodic survey will require several important implementation steps. These include developing a survey instrument, completion standards, cost finding methodologies, survey distribution procedures, review procedures and analytical procedures.

Future Steps

The HCB rate-setting methodology recommendations in this report are being presented to DHSS for further review and discussion. Following DHSS determination on a new rate-setting approach, Myers and Stauffer will assist in the development of a transition plan. The transition plan will include a discussion of implementation issues such as recommendations for changes to regulations and applicable timelines. Myers and Stauffer will also advise DHSS on next steps relating to any interim rate changes that may be considered prior to obtaining the results from the first HCB cost survey.

* Access the preliminary report here: Establishment of a Rate-Setting Methodology for Home and Community-based Services in Alaska: Preliminary Research and Initial Report

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Report: SB 61 Medicaid Progress

SB 61 Progress Report- January 2008
SB 61 Progress Report- October 2007
SB 61 Progress Report- July 2007

These are a series of progress reports for Senate Bill 61, which, in its original version, states:

"An Act making appropriations for qualified regional seafood development associations, for investigation and litigation relating to the public employees' retirement system and the teachers' retirement system, and for a special advisory election; and providing for an effective date."

In its final version, signed by Governor Palin, states:

"An Act transferring funds to the public education fund; making supplemental and other appropriations; amending appropriations; and providing for an effective date."
 
SB 61 has had an impact on Medicaid reform, which is the subject of this 13-page letter to Senator Hoffman detailing progress to date on implementation of provisions outlined in the final version of the bill. It is noted that some areas have already made substantial progress, others are in their final stages, and a final report detailing all actions will be submitted to the 2009 Congress. The ultimate goal of the department is sustaining a Medicaid program, which guided the provisions of SB 61.

Focus areas of this report include the following:
  1. Study of a tiered pharmacy pricing model where reimbursement tiers are available for rural and urban pharmacies
  2. Implement additional medications under Prior Pharmacy Authorization
  3. Level of Care Controls in Personal Care Attendant program
  4. Implement Disease Management Program
  5. Federal financial participation in Pioneer Homes
  6. Federal funds participation for Chronic and Acute Medical Assistance (CAMA)
  7. Substance Abuse/Mental Health Waiver
  8. Long-term care planning
  9. Cost development, reporting, and billing infrastructures
The final four pages are updates on the Alaska Tribal Health Care progress for similar areas and provisions. 

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Denali KidCare is Funded Uniquely Among SCHIP Programs

In 1997, the Balanced Budget Act outlined the State Children's Health Insurance Program (SCHIP), a commitment providing the nation's neediest children with health insurance. Nearly $44 billion in federal dollars were allocated for the 10-year period between 1998 and 2007 to provide children in families at or below 200% of the Federal Poverty Guidelines (FPG) with low-cost or free health insurance. The initiation of SCHIP reached a crucial demographic; it ensured that children ineligible for Medicaid due to their higher income status, but whose families may not be able to afford private health insurance, would have access to low cost or free health care.

Prior to SCHIP implementation, states were offered three program options: an SCHIP separate from Medicaid (S-SCHIP); a combined program, where states expand their Medicaid program for children and also initiate a separate SCHIP for children above the expanded Medicaid levels (S-SCHIP and M-SCHIP); or a Medicaid expansion SCHIP, where states increase the percentage of FPG eligibility requirements for children (M-SCHIP).

Alaska is one of the few states that operate as a Medicaid Expansion program (i.e. Medicaid fallback program), which means that when Title XXI SCHIP funding is exhausted, the state reverts to Title XIX regular Medicaid funding to maintain services and enrollment. However, states with M-SCHIPs must follow the requirements and stipulations of both funding sources, and are subject to differences in the matching rates, or Federal Medical Assistance Percentage (FMAP), between Title XXI and Title XIX funding.  

2,553 Alaska Children Lose Health Insurance

Changes in legislation have had an impact on eligibility and enrollment requirements for Alaska's M-SCHIP throughout the ten years of SCHIP implementation. In September of 2003, the Alaska state legislature froze Medicaid income eligibility standards for children whose eligibility is managed through Denali KidCare. Eligibility was reduced from 200% of the FPG to 175% of the FPG  of 2003, with no adjustment for inflation (due to the federal poverty guidelines being written into statute). This change applied to Alaska children in families with incomes of 151% of the FPG and higher as well as pregnant women who applied for assistance with Denali KidCare. Although children and women with incomes at or below 150% of the FPG were not affected by the eligibility freeze, enrollment in Alaska's Denali KidCare and SCHIP declined.  

According to the fiscal notes for Senate Bill 27, sponsored by Alaska Senator Bettye Davis, the number of children enrolled in the effective income category dropped by 2,553, and the number of enrolled pregnant women decreased by 436 between 2003 and 2006. This bill, which was approved and signed by Governor Palin in late 2007, proposed the restoration of the original income eligibility standards for children and pregnant women. The result was an increase for Denali KidCare income eligibility standards from 151% to 175% of the prevailing FPL, effective July 1, 2007, and a positive shift in enrollment of children and pregnant women in the affected income category.

President Vetoes SCHIP and Alaska's Funds Threatened

Despite strong praise, twice-passed reauthorization bills in Congress, and bi-partisan support, reauthorization of the State Children's Health Insurance Program was vetoed by President Bush in late 2007. To compromise and deter any detrimental consequences of severed funding for health insurance, Congress extended the SCHIP program funding through March 31, 2009 through the Medicare, Medicaid and SCHIP Extension Act (Extension Act). The intention of the Extension Act was to forestall the severance of funding for enrolled children until SCHIP reauthorization passed all levels of government and received presidential approval.

Under the original law, SCHIP provided funding through September 30, 2007. The extension act ensured that states received adequate federal funding for needs projected in November of 2007, to be provided through the end of March 2009. States that did not accurately project needs, and therefore those that ran out of federal monies in the Federal Fiscal Year (FFY) 2008, would be eligible for supplemental federal funding of up to $1.6 billion and $275 million in FFYs 2008 and 2009, respectively.

It was estimated that 19 states, Alaska included, would run out of federal funding, and thus were eligible for additional federal support to account for projected needs through March 2009. Ideally, Alaska will receive $1.5 million in federal funds in addition to $10-11 million originally allocated for the FFY 2009.

Implications for State Funding and Alaska's Children

States that opted to have separate SCHIPs and combination SCHIP programs might be scrambling to cover children who are already enrolled in SCHIP after March 31, 2009; however, on the surface, Alaska's children will not be affected when federal SCHIP funds expire. Where Alaska's Medicaid expansion program differs from states that have separate SCHIPs and combination SCHIPs, is that when a Medicaid expansion program runs out of Title XXI annual allotment and any other federal carry forward dollars that may apply, Denali KidCare automatically reverts to Title XIX, regular Medicaid funding, at the lower Federal Medical Assistance Percentage (FMAP).

Because Alaska can fall back on Title XIX Medicaid funding, Denali KidCare will unlikely experience changes in access to care and enrollment. However, because of the differences in the FMAP rates between Title XIX and Title XXI, Alaska's general fund (GF) will be required to contribute more per enrollee.

In FFY 2008, the enhanced FMAP for children funded under Title XXI in Denali KidCare was 66.74%. The corresponding state GF contribution is the difference between 100% and the FMAP, which was 33.26% for FFY 2008. In contrast, the regular Medicaid FMAP was 52.48% in FFY 2008, meaning that Alaska's GF contribution for Title XIX was just over 47% per enrollee. For FFY 2009, the enhanced FMAP is 65.37% for Title XXI funded children and the regular Medicaid FMAP for Title XIX is 50.53%. Thus, when Alaska reverts to Title XIX funds, it will be responsible for almost 50% matching funds as opposed to almost 34% matching funds through the enhanced FMAP of Title XXI.

At this time, the effects of this increased GF matching rate on access to care, enrollment, and any other concerns are unknown. Although funding for Alaska's children and pregnant women will remain, Denali KidCare is still subject to legislation regarding the FPG, which is affected by changes made to the Alaska statute. In a state where the cost of living is one of the nation's highest, it will be important that legislators fight to ensure appropriate federal poverty guidelines for medical assistance, as well as flexibility for inflation to avoid any freezes in eligibility requirements.

Health Care for the Children: Economic Sense and the Right Thing To Do

One of the major barriers to total support for SCHIP and adequate FPG eligibility requirements is the fear of some legislators that too high an FPG will allow for eligibility of too many middle income families for government-subsidized health insurance. Legislation to reauthorize SCHIP in the coming year will require clarification of eligibility standards so as not to deter the availability of health insurance to those who need it most.

The economic impact of underinsured and uninsured children must be at the forefront of any discussion involving SCHIP and federal poverty guidelines. Long-term consequences include more visits to the emergency department, which state governments, including Alaska, often cover in end-of-year write-offs for hospitals. These visits also have an impact on health insurance premiums. So, the result of under- and uninsured children is government-subsidized health care, yet at a higher cost to taxpayers.  

Prevention of these visits involves a consistent and effective program that can provide health insurance to those who need it most. In Alaska, where health care and living costs are higher than in other states, the eligibility requirements for Denali Kid Care and SCHIP have the potential to either provide or deny health care to thousands of women and children.

Article by Associate Policy Analyst Kelby Murphy, B.S.

Sources
  • Personal communication with staff at the Department of Health and Social Services, September 16, 2008.
  • Congressional Research Services Report for Congress. What Happens to SCHIP after March 31, 2009. July 22, 2008.
  • Georgetown University Health Policy Institute, Center for Children and Families. SCHIP Funding in the Year Ahead: Implications of the Medicare, Medicaid, and SCHIP Extension Act. March 2008.
  • Senate Bill 27, Fiscal Notes.  Relating to Eligibility for Medical Assistance. Sponsored by Alaska Senator Bettye Davis.
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Alaska Health Policy Review Staff and Contributors

Lawrence D. Weiss, PhD, MS, Editor
Kelby Murphy, Associate Policy Analyst
Ann Conducy, Administrative Assistant
Jacqueline Yeagle, Newsletter design and editing

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