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Alaska Senate passes Medicaid reform, Democrats demand Medicaid lawsuit be dropped

By Liz Raines 9:59 PM March 11, 2016

A subject that divided the Legislature last year united lawmakers Friday morning. The Medicaid reform bill — Senate Bill 74 — passed the Senate unanimously. Faced with a nearly $4 billion budget shortfall, legislators have called it a must-pass bill.

The Alaska Department of Health and Social Services estimates SB 74 will save the state about $100 million by 2022.

“The heart and the philsophy of this bill was not to restrict access to the people who needed it but to reform a system that was broken,” said the measure’s sponsor, Sen. Pete Kelly of Fairbanks, Senate Finance Committee co-chair. “So, we put the pressure on the system, not the patients.”

Kelly says it’s a new approach to previous attempts at reform, which when mixed in with a fight over the program’s expansion last year, lead to a contentious debate.

“Essentially, what they’ve tried to do is reform the patients, reform the behavior of the patients who are receiving Medicaid,” Kelly told colleagues on the Senate floor.

Kelly says he thinks the provisions in SB 74 will make sense to Alaskans.

“When you tell people we’re spending $79 million on travel in Medicaid, I think most constituents would say ‘You’re kidding me?’ Well, that needed some reform because it wasn’t being coordinated well,” Kelly said.

The bill also includes provisions to track the prescription of opioid drugs in an attempt to reduce substance abuse.

Minority members called it a humane bill they could support, though there were parts they didn’t like.

“The concerns that we had were a couple of the sections that dealt with privatizing, potentially, the Pioneer Home, the facilities for juvenile justice, Alaska Psychiatric Institute,” said Sen. Bill Wielechowski. “That was a big concern that many of us have.”

SB 74 includes plans to spend $1.4 million to study the effects of privatizing those facilities. Sen. Wielechowski says he realized it was a compromise.

Senate Bill 74 now heads to the House for review.

While Medicaid reform brought members of the Senate together Friday, the question of whether to continue spending money on a lawsuit over the program’s expansion divided the House just a day before. Minority members pushed late into the night Thursday with an amendment that would recover $150,000 allocated for continuing the lawsuit, dismissed by a superior court on March 1st.

The Legislature has 30 days to appeal the case to the Alaska Supreme Court. 

House Speaker Rep. Mike Chenault ruled the amendment out of order, questioning the legality of discussing litigation on the floor.

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