Notes from Secretary Alexander's Confirmation Hearing

The committee met to consider the nomination of Gary D. Alexander as the Secretary of the Department of Public Welfare (DPW).

The nomination was unanimously reported favorably to the Rules Committee.

In a brief summary of his prepared statement, Alexander thanked the committee for holding the confirmation hearing. Alexander also thanked Gov. Tom Corbett for the invitation to join his team, commenting that they both share a vision for what DPW can and should be moving forward. Alexander stated that "despite all the good work that many have done in this department over the years, there is a clear consensus that there is more work to be done, greater efficiencies to be achieved and greater cost savings that can be made." He laid out three things that will be done in the first few months of his tenure: 1) a top to bottom internal audit, review and inventory of all operations and programs; 2) reach out to the line staff to hear their concerns; and 3) visit the consumers and facilities. "This is a difficult job," he conceded and he asked for suggestions and comments and expressed his optimism that he would be able to work closely with all members of the legislature.

Sen. Kim Ward (R-Westmoreland) commented that as Chairman of the Senate Aging and Youth Committee, she is aware that Area Agencies on Aging (AAA) currently assess individuals to determine eligibility for nursing home or waiver services. The legislature has opposed previous attempts to take away this function and she asked Alexander for his position on who should make those assessments. In his response, Alexander commented that a federal agreement has been entered into by the Pennsylvania Department of Aging to continue this process. "I have every reason to believe that the counties are doing a good job," he said, adding "of course we can always improve." Alexander asked for any suggestions on how to improve services at the county level.

Later in the confirmation hearing, Sen. Ward asked if the ChildLine program is fully staffed. Alexander replied that he did not think it is but would look into it. Sen. Ward asked for a timeline for how long it would take to find welfare fraud. "I'm hoping within the next 30 to 60 days to give you something definitive," Alexander answered.

Noting that DPW accounts for 42 percent of the state budget, Sen. Bob Mensch (R-Montgomery) commented that the three points that were previously testified upon were excellent, especially the ones calling for an audit and to visit facilities. The senator added that group homes would be impacted by budget cuts and he asked if there have been any discussions on how to "bring some help back to that line item." Alexander replied that he would be open to doing so if possible but "unfortunately, we don't have an abundance of money." The proposal could be re-tooled, he added. Sen. Mensch commented that collaboration is needed and he thanked Alexander for being aware of the cost and efficiency issues.

In his second round of questioning, Sen. Mensch noted the lag between private providers and counties and DPW with getting paperwork completed. Alexander responded that he is aware of this issue and he has asked members of the department to create a streamlined contracting process to work with providers and counties. He noted that in his meetings with counties, they have voiced similar frustrations with the state. Hiring is very difficult for counties, Alexander acknowledged. Sen. Mensch stated that counties should be empowered in this process.

Acknowledging that he had a litany of prepared questions, Sen. Vincent Hughes (D-Philadelphia), asked for a discussion on how DPW can address the increased growth in Medicaid enrollment and subsequent Medicaid costs to the state. He noted that in FY 2011-2012, Medical Assistance will provide health care coverage and long-term care services to 2.3 million Pennsylvanians, which equates to a 4.5 percent increase from this current year. Additionally, Sen. Hughes asked if DPW is moving towards a statewide managed care system. In response, Alexander explained Medicaid enrollment is growing due to a sagging economy, which means an increase in costs. "We have to be a smarter purchaser of services," he said, noting national statistics show that managed care helps drive down costs. Pennsylvania does not have a statewide managed care plan for Medicaid and "I certainly would welcome that," and "we have no other choice," he stated. Sen. Hughes asked if this is something that Alexander would attempt to do this budget cycle. Alexander answered that if the legislature wanted to implement this system, DPW would work immediately to get it done. It would take some federal approval, he added. Sen. Hughes asked if DPW has a plan to address loophole kids and also, how much savings would be realized by implementing a sliding scale model. Alexander replied that initial estimates of applying a co-payment to loophole kids would amount to $70 million, from which $30 to $40 million would be from the state. He acknowledged that some low-income families may not be able to afford the payment. The initiative may need to be re-tooled so that higher income people, those making more than $100,000 or $150,000 per year, would pay more. "Everybody should pay something," Alexander commented, opining the potential for abuse is there when people get something for free.

Later in the proceedings, Sen. Hughes asked for further discussion on the concept of a global waiver. He asked if this is something that is a viable option in the short term. Alexander said states should never be a one size fits all. Data needs to be analyzed to determine what is appropriate for Pennsylvania. "Flexibility would be nice to have," he added. Sen. Hughes noted that there was a recent appointment to the Office of Income Maintenance and he voiced concern to the appointee's lack of experience. Alexander replied that a long-time deputy secretary chose to retire and he wanted someone to replace her who was not "entrenched in the system" and able to "think outside the box." Alexander noted that he has been working within a welfare department for close to 15 years and has the ability to make the necessary personnel decisions. Sen. Hughes noted that he has a complex series of questions that he would provide to Alexander for his consideration.

Sen. Mary Jo White (R-Venango) commented that she has received a lot of communications from her counties that "silo" funds were the only funds that give them the flexibility to use the funds where they are needed and she asked if there were discussions on preserving those type of funds. "Yes," replied Alexander. Sen. White asked where the proposed elimination of $490 million from the DPW budget would be coming from and if it is a realizable figure. Alexander replied that he was not aware of specifics and it would difficult for him to comment. He acknowledged that cuts would be difficult but there are areas where savings could be found. Sen. White noted that she has heard from her facilities, specifically the Erie Home for Children and Adults, that reimbursement formulas have changed and that certain costs of their facilities such as rent are no longer reimbursable. Alexander offered to look into the rate changes and get back to the senator. Sen. White also expressed her concern over the group home waiting list and she expressed her opinion that facilities should be used as an emergency setting while people are on the waiting lists.

Stating that the House has proposed a $470 million funding decrease for DPW, Sen. Edwin Erickson (R-Delaware) asked for further discussion on if there is that amount in current waste, fraud and abuse. Alexander replied that in any large governmental system, both federal and state, there is going to waste, fraud and abuse. "Currently, we have found some things that are very eye opening," he said. Thousands of Social Security numbers have been found that do not potentially match up and there are some providers that may have a suspect background. "It is a delicate process," but there is definite savings and this is one of our top priorities, he emphasized. Sen. Erickson asked for clarification on a point that was made in the prepared testimony that points to the 12 percent annual growth in DPW spending and how that growth is unsustainable, both financially and morally. In his response, Alexander clarified that DPW has a moral obligation to take care of those who are truly entrusted to DPW and that unsustainable growth would cause yearly cuts. Sen. Erickson agreed that it is up to government to take care of those who can't take care of themselves. He then asked if the cap that Alexander implemented in Rhode Island as a cost containment strategy was rationing. "No, it's not," Alexander explained. States need to be incentivized to keep people out of facilities and nursing homes, he said.

In the second round of questioning, Sen. Erickson commented that the proposed budget cuts $27 million by placing a limit on the payment of food and housing costs for people with intellectual disabilities. The senator asked if a study has been done to determine if the rates are unreasonable. The danger is that the facilities may close, he added. Alexander replied that he would provide the data that was compiled. Sen. Erickson voiced his support for giving counties flexibility.

Sen. Lisa Baker (R-Luzerne) voiced her support for the HSDF program and encouraged a review of that program as well. She then expressed her serious concern with welfare fraud and recounted a recent incident in Hazleton where an illegal immigrant was arrested for speeding with two access cards on his possession. She also cited a Hazleton Standard-Speaker news article that indicates 1.7 million Pennsylvanians have some type of access card, almost 150,000 cards were lost or stolen, and more than 8,000 were replaced at least 20 times. Sen. Baker asked if DPW has the tools necessary to fight abuse. Alexander echoed the Senator's concerns. "There is abuse out there" and it is our job to eradicate this, he stated. An OIG presence in Pennsylvania would give DPW the tools to fight abuse, he said. Noting that she authored the Child Death Review Law in Pennsylvania, Sen. Baker voiced her concern that even though child abuse statistics show a decline, many believe the root problem is not being addressed. Alexander replied that the tracking is not being done well and he offered his suggestion that a task force be formed to look at this issue. Sen. Baker noted that she would like to be part of that effort.

Sen. Judith Schwank (D-Berks) commented counties are essential in the delivering of social services. The senator then asked how effective global waivers have been. Alexander replied that he found a lack of empirical data at the secretarial level to assist in decision making. "It is, I believe, deplorable that we have been making decisions without solid data," he declared. Sen. Schwank asked what he would do differently in Pennsylvania. Alexander replied that in Rhode Island, nothing negative was done to hurt a beneficiary. In Rhode Island, a framework was implemented. He explained that an effective nursing home diversion and transition program, which is viewed as a national model, was done in Rhode Island and should be brought to Pennsylvania.

After noting that she represents a state run hospital in Hamburg, Sen. Schwank stated that a balance needs to be in place to determine who should be in state run institutions and who should be out in the community and she asked for Alexander's philosophy on this issue. Alexander replied that he has always felt that people should be out in the community whenever possible. "My mind can always be changed," Alexander noted and he offered as an example, his recent visit to the White Haven facility where he saw first-hand how the facility provides wonderful care to the members. "Everyone is an individual" and some may need that type of facility, he added.

Sen. Baker commented that she represents the White Haven Center and she expressed her optimism that a private-public relationship could exist. The senator also voiced her support for the emergency facility idea for those on waiting lists.

Chairman Patricia Vance (R-Cumberland) asked if DPW can find the large amounts of fraud and error during this budget time, in the next month or so. "Time is of the essence, if we are going to have a timely budget," Chairman Vance warned. There is definite saving, Alexander replied. He noted that significant "scrubbing" still needs to take place. Chairman Vance asked if a global waiver is being planned for Pennsylvania. 'The answer to that right now, is no," Alexander answered, explaining the governor wants flexibility but nothing is definitive. "Right now we are in the fact-finding phase," he explained. Chairman Vance asked how the global waiver affected eligibility for those disabled in Rhode Island. The protections in Rhode Island were greater than those here in Pennsylvania and no eligibility reductions were implemented, Alexander replied. Chairman Vance asked what percentage of the population in Rhode Island is elderly. Alexander replied that it is similar to that of Pennsylvania.