State of Alaska
Fiscal Note
Bill Version: SB 112
2019 Legislative Session
Fiscal Note Number: 8
(S) Publish Date: 4/15/2019
Identifier: LL0146-DHSS-MS-4-10-2019 Department: Department of Health and Social Services
Title: MEDICAID EXPANSION; DRUG COST Appropriation: Medicaid Services
CONTAINMENT Allocation: Medicaid Services
Sponsor: RLS BY REQUEST OF THE GOVERNOR OMB Component Number: 3234
Requester: Governor
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2020 Governor's
Appropriation FY2020 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2020 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
Personal Services *** *** *** *** ***
Travel
Services
Commodities
Capital Outlay
Grants & Benefits (663,000.0)
Miscellaneous
Total Operating 0.0 (663,000.0) *** *** *** *** ***
Fund Source (Operating Only)
1002 Fed Rcpts (Fed) (450,000.0)
1003 GF/Match (UGF) (213,000.0)
Total 0.0 (663,000.0) *** *** *** *** ***
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2019) cost: 0.0 (separate supplemental appropriation required)
Estimated CAPITAL (FY2020) cost: 0.0 (separate capital appropriation required)
Does the bill create or modify a new fund or account? No
(Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? Yes
If yes, by what date are the regulations to be adopted, amended or repealed? 07/01/22
Why this fiscal note differs from previous version/comments:
The reductions included in the Governor's amended FY2020 column are the total Medicaid reductions proposed. The total reduction is
not completely dependent on this legislation but is provided for informational purposes. This reflects the Governor's 3/27/2019
amendment package which reflects $12.0 million moving from the Behavioral Health Treatment and Recovery Grant Component to
Medicaid Services in acknowledgement of additional 1115 waiver revenue provided to these grantees.
Prepared By: Donna Steward, Deputy Commissioner Phone: (907)269-7827
Division: Department of Health and Social Services Date: 04/10/2019 10:30 AM
Approved By: Sana Efird, Administrative Services Director Date: 04/10/19
Agency: Office of Management and Budget
Printed 4/15/2019 Page 1 of 3 Control Code: hXovp
 SB 112 - Fiscal Note 8
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. LL0146
2019 LEGISLATIVE SESSION
Analysis
This bill creates a framework for the Department of Health & Social Services (DHSS) to make adjustments to the Medicaid
program in FY 2020 and beyond. With the new flexibility sought from the Centers for Medicare & Medicaid Services
(CMS) as authorized by this bill, a continuum of coverage for low income Alaskans will be created.
DHSS expects to make the changes to the Medicaid program in two major phases. Phase One, planned for FY2020, will
focus on more immediate changes to the program that are currently within the control of the department, seeking
regulatory changes and state plan amendments through the Centers for Medicare & Medicaid (CMS) as necessary. This bill
updates cost containment options for DHSS under AS 47.07.036 by providing for the adoption of emergency regulations to
expedite implementation of these changes. Phase Two, to be implemented in FY2021 and beyond, will be a more
extensive transformation of the current Medicaid program in partnership with leadership at CMS. These changes will be
accomplished through participation in federal waiver programs.
This legislation allows the pharmacy program to incorporate the preferred drug list and prior authorized medication list to
material adopted by reference. This will allow the Medicaid Pharmacist to respond quarterly when drug rebates are
changed, less expensive generics are added to the market, or other changes lower the cost of medications for Medicaid
beneficiaries. The current regulation process can leave a higher cost drug on the preferred list for 6 months to a year
before changes can be made to the list.
Phase one savings are projected to total $174,979.6 ($90,907.1 GF and $84,072.5 Fed); however, an additional $12.0
million reduction (GF) will be taken from community behavioral health treatement and recovey grants in recognition of
ongoing redesign efforts surrounding the 1115 waiver for behavioral health services which will leverage federal resources
to pay for activities currently funded by state grants.
During Phase Two, DHSS will seek a public-private partnership to increase access to health care coverage for Alaskans at
0%-400% of the federal poverty level, easing the transition between Medicaid and the marketplace and supporting the
enrollment of eligible Medicaid enrollees into private health plan coverage. Phase Two overall cost savings are
indeterminate at this time.
A table on page three of this fiscal note shows the capital costs and IT projects associated with passage of this legislation.
(Revised 9/05/18 OMB/LFD) Page 2 of 3
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 SB 112 - Fiscal Note 8
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. LL0146
2019 LEGISLATIVE SESSION
Analysis
Phase One Capital Costs:
(Revised 9/05/18 OMB/LFD) Page 3 of 3
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Statutes affected:
SB0112A, AM SB 112, introduced 04/15/2019: 47.05.012, 47.07.065, U.S.C, 47.07.020, 47.07.030, 47.07.036, 44.62.250