What was announced on December 15, 2021?
As part of the release of the Governor Dunleavy’s fiscal year 2023 budget, he has announced his intention to introduce an executive order (EO) which would divide the Department of Health and Social Services (DHSS) into two new departments. The FY2023 budget proposal details how the different programs and DHSS staff would be divided.
On the first day of session, January 18, 2022, the new EO will be introduced. The EO becomes law on March 19, 2022, and will go into effect July 1, 2022, unless the Legislature disapproves it by a majority vote in joint session.
How will the new EO be different from EO 119 that was introduced last year?
During the legislative review process last year, several drafting issues were identified in EO 119. An EO can be reviewed by legislative committees but cannot be amended before it becomes law. Therefore, EO 119 had to be withdrawn and redrafted to make any corrections.
The new EO corrects these minor technical issues. In addition, the new EO contains conforming edits based upon legislation that passed during the 2021 legislative session.
How will the department reorganization effect agency partners, clients and other stakeholders?
Over time, the reorganization of DHSS into two departments will improve the focus of the new agencies, providing more time for the staff to work with providers, clients and federal partners to improve the services provided to Alaskans. Changes will not happen immediately, and the primary goal is to avoid any disruption in services or delay in payments to providers.
What has the department learned since introduction of EO 119 last year?
Over the past year, department staff have actively solicited input from stakeholders and the public. Commissioner Crum has personally met with Tribal leaders, providers and advocates for seniors and individuals with developmental disabilities, health care providers and member organizations, business groups and others to hear their questions and concerns. The information gathered from these meetings has been vital in the development of transition plans for the reorganization.
For example, after discussions with our partners, the department has identified the need to designate transition liaison roles in the Office of the Commissioner of both new departments. These transition liaisons will be the point of contact for any questions or concerns that arise during implementation and will actively work with stakeholders and constituents to help prevent any disruption in services.
Why use an Executive Order?
An EO is the proper constitutional authority available to the governor under Article III, Section 23 of the state constitution, which holds that
[t]he governor may make changes in the organization of the executive branch or in the assignment of functions among its units which he considers necessary for efficient administration. Where these changes require the force of law, they shall be set forth in executive orders.
Although it is not a bill, the EO process still provides opportunity for legislative review, committee hearings and public comment.
How does an Executive Order work?
Once an EO is introduced, the Legislature has 60 days to disapprove the EO by a resolution concurred on by a majority of the members in joint session. During this time, the Legislature can hold hearings, take public comment and otherwise engage with the public regarding the proposal. If the Legislature takes no action or does not disapprove the resolution by a majority, the EO becomes law.
“Alaska’s Constitution – A Citizens Guide” by Gordon Harrison and published by the Alaska Legislative Affairs Agency offers good context to how an executive order works and can be found at this link on page 87 of the document under “Section 23. Reorganization.”
How can I be involved?
DHSS will continue to meet with providers, employees and other stakeholders to address concerns with the proposal and refine implementation planning. Additionally, you can contact DHSS regarding any questions, concerns or input on the reorganization at dhssreorg@alaska.gov.
State employees with personnel questions should contact their human resources representative.
Why is it necessary to reorganize the DHSS?
DHSS is the largest department in the state. No other department can rival the amount of personnel, size of budget and array of services that DHSS is responsible for. The DHSS budget is equivalent to that of 12 other state departments, the Alaska Court System, the Legislature, and the Office of the Governor combined. The number of personnel in DHSS equals that of six other state departments combined.
By narrowing the scope of work in each department, the agencies will be better able to implement system improvements and facilitate better services for Alaskans.
What will the reorganization look like?
The reorganization would divide DHSS into two separate departments, Department of Health (DOH) and Department of Family and Community Services (DFCS). The proposed reorganization is designed to better align the services that each new department will provide, based on the core functions of each division.
The proposed DOH will include the Divisions of Behavioral Health (DBH), Health Care Services (HCS) and Senior and Disabilities Services (SDS), which all provide regulatory oversight, claims processing and facility licensing of Medicaid programs. The Division of Public Assistance (DPA) will remain the front door for Medicaid eligibility and other assistance programs. The Division of Public Health (DPH) will also be part of DOH as it aligns with the work of the other divisions with its focus on population health, chronic conditions and efforts that can help reduce the cost of health care. With this cohesive and focused mission, DOH will have more time to work with all stakeholders to improve and implement innovation for the single largest budget item in the state, Medicaid.
DFCS will align the work of divisions which provide 24/7 care for specific populations and/or are in the role of a direct care provider. It will include the Division of Juvenile Justice (DJJ), the Office of Children’s Services (OCS), the Alaska Pioneer Homes (APH) and the Alaska Psychiatric Institute (API). This will allow expertise and attention to be directed to supporting and improving our child welfare system and our facilities that serve Alaskans around the clock.
With the reorganization, divisions will receive support specific to their mission. For example, API and APH provide care for patients and elders and will be in a department that focuses on this care. These facilities will be able to focus on operations and submit any Medicaid billing to an external entity (DOH) just like private hospitals, clinics and assisted living facilities.
How does this help Alaskans?
The reorganization into two separate departments will improve operations, delivery of services and will provide each department with a commissioner and staff who have expertise in the work of that department. This will provide expanded capacity and ability of the commissioner and team to focus on a consistent mission.
The benefit to communities can be illustrated with two specific examples. First, each department will have increased capacity to identify opportunities for systems improvement, which will create more efficient delivery of services. Second, the capacity of departmental leadership to engage with stakeholders and individual beneficiaries will be greatly expanded.
How will divisions in the two departments continue communicating and collaborating?
Under the reorganization, each of the divisions will continue to function as they do currently for client care and coordination. The reorganization does not change the goals or responsibilities of the divisions. Existing programs for the continuum of care will remain in place.
DHSS works with other state departments on a daily basis to ensure beneficiaries receive services and continuous care even while moving between jurisdictions. One example is how DJJ frequently works with the Department of Education & Early Development and local school districts to ensure that youth at their facilities continue to receive an education.
Since there will be generally no change in division operations due to the reorganization, the divisions’ move to another department should be essentially invisible to beneficiaries – that is, members of the public will see no change in who they contact, methods of contact or systems used for assistance.
Planning for the reorganization has prioritized continuity of service, and there should be no disruption to data sharing or client coordination between the divisions in DOH and DFCS. There are multiple mechanisms in place to ensure this work and collaboration will continue without interruption, including:
- Current law will continue to provide for the cooperation and coordination between divisions and departments.
- Business associate agreements are used when different departments and divisions need to share information to ensure beneficiaries receive services. When required, under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), DOH and DFCS will have these business associate agreements in place.
- Memorandums of agreement and memorandums of understanding are also currently used, which allow divisions to share information and collaborate on behalf of beneficiaries.
Additional documents that will be used to assist in the continuation of services, include court orders and releases of information. While some of the releases may point to DHSS, most if not all are directed to individual divisions or programs and since those names are not changing, there will be no need to update those documents prior to the change to the two departments.
Will the reorganization impact the collaboration between API and DBH?
Each division will continue to function as they do currently for patient care and coordination. Cross-divisional and cross-departmental collaboration would be used to help find placements, if needed, and ensure that individuals receive the best level of care for their needs. Currently, DHSS has a complex placement team with employees from multiple divisions including DBH, HCS, SDS, API, OCS and DJJ to assist in finding placement for both youth and adults that have complex needs.
There should be no disruption to communication between DBH and API regarding beneficiaries. In fact, a specific team for Designated Evaluation Services and Designated Treatment and Evaluation (DES/DET) coordination, as well as a DES/DET coordinator will be placed in the DCFS Office of the Commissioner, providing increased support at the commissioner level for the management of DES/DET agreements and secure transportation.
How will this help providers?
Providers will have more frequent opportunities for direct engagement with department leadership, in settings such as continued town halls and meetings between providers and the Office of the Commissioner. This ongoing dialogue will allow the department to be more attuned to provider needs with more capacity to respond quickly.
Additionally, due to the expanded capacity and ability of the commissioner to focus on a consistent mission set, there will be more time and resources to support innovation in Medicaid and other areas. This will allow us to invest in vital work including long-term Medicaid sustainability and pilot projects such as health homes, global budgets, savings and suggestions from stakeholders and advocacy groups and other provider-led initiatives.
How will this help health care reform?
The Alaskans that we serve deserve cabinet level focus and expertise for all programs. The reorganization will result in both a cabinet level position in the DOH (with a direct focus on regulation of health care services, payment and public health) and a cabinet level position in the DFCS (with a direct focus on our child welfare system and our facilities that serve Alaskans around the clock). The leadership of each department will have the opportunity to focus on work processes to maximize efficiencies and incorporate innovative ideas, with the mission of improving outcomes for the Alaskans that we serve.
Does the reorganization require reduced staffing?
There is no proposal for reduced staffing as part of the reorganization. The budget proposes ten new positions and ten reclassed positions in order to fully stand up both departments.
How will the new departments be structured?
Each new department will have a fully functional Office of the Commissioner with a commissioner, deputy commissioner and special assistants. Each department will also have its own department support services, which includes financial management, personnel, grants, information technology, public information and regulation drafting.
Will there be disruption to Finance and Management Services (FMS)?
The reorganization of FMS is being thoughtfully planned and paced in order to ensure continuity of operations. This includes ensuring that data sharing agreements, confidentiality concerns and inter-departmental communication mechanisms are in place to keep each division fully functional and able to deliver services. Due to these complex interactions, and so FMS can maintain operations, it is likely this process will happen on a slightly extended time frame. Some items, like the security office, will be shared at first to be more efficient. Ultimately, each department will have its own FMS which will operate similarly, but with specific focus on its departmental needs.
Each section of FMS has done an analysis to determine the best way to serve the two departments. This will look different for each section – for instance, most of the grant support will stay with the DOH since the bulk of the grants are issued by DBH, DPH, DPA and SDS. Information Technology (IT) is ensuring the subject matter experts for data systems will point to the department the data system serves.
What will be the structure of IT and their personnel?
Both departments will have the required IT functions to meet their needs. There will be some IT staff moved to DFCS for support. DOH’s IT will continue with the same five areas it operates now, just on a slightly smaller scale. These service areas are Business Applications, Network Services, Customer Service, Planning and Technical/Security. DFCS will have Business Applications, Network Services and Customer Service.
The Planning and Security functions for DFCS will be provided by DOH’s IT staff initially as the optimum HIPAA status of the new department is determined. IT services will be gradually untangled based on the different areas while focusing on minimizing service impact to the two departments. IT is working hard to ensure a smooth transition so that there is seamless service for staff and enables Alaskans to not even notice the transition.
Personnel services throughout the State of Alaska were consolidated into the Department of Administration this year in response to Administrative Order 305, which established a statewide human resources consolidation. Neither department will have a personnel section. However, DOH will retain a senior human resources staff and DFCS, due to the large number of employees and 24-hour facilities, will retain two senior human resources staff to facilitate high level strategic planning.
What about HIPAA?
HIPAA mandates privacy and security safeguards for medical information about a person’s health status, care or payment for care, all of which are considered protected health information (PHI). Companies that utilize PHI in electronic communications, such as submission of health care claims, querying eligibility for a health plan or coordinating benefits, are subject to the requirements promulgated under HIPAA to protect PHI.
A HIPAA hybrid entity is an entity that performs some business functions (healthcare functions) that are functions that a covered entity performs (that is, it performs covered functions, defined as any activity that would make the entity a health care provider, a health plan, or a healthcare clearinghouse), and also performs some business functions that a covered entity does not perform. Business functions that are not functions a covered entity performs, are referred to as “non-covered functions” or “non-healthcare functions”.
If an entity properly designates, per the HIPAA regulations, which of its business activities are healthcare components subject to HIPAA regulation, and properly designates those business activities that are not healthcare components, the entity has the legal status of a HIPAA hybrid entity. Having valid HIPAA hybrid entity status offers entities a certain regulatory relief. As a general matter, only the designated healthcare components of the entity will have to comply with the full scope of the HIPAA Privacy and Security Rules; the non-healthcare components need not.
Under the proposed reorganization of DHSS, DOH will remain a HIPAA covered entity. It is our intent to work with the IT Security Office to move the DFCS towards a hybrid HIPAA entity. As that will take some time, both departments will be covered entities at first. DFCS becoming a hybrid entity will be of particular help to OCS, which has long asked for HIPAA relief. Most of OCS does not need to be under a HIPAA umbrella, but because the whole department currently is a covered entity, they must follow all HIPAA protocols. With a hybrid HIPAA status for the new DFCS, OCS front-line social workers will have more options on how they can use items like mobile devices in the field which will make their jobs more efficient.
Is the reorganization a way to move toward privatization?
No. There are no plans to privatize any programs, facilities or divisions under the reorganization.
Furthermore, no substantive law can be changed, or privatization implemented through an EO.
How will this effect Tribal collaboration?
Each of the new departments will have a designated Tribal liaison in the Office of the Commissioner. DFCS will work closely with Tribal partners and is committed to continuing in the framework of Tribal consultation. DOH will contain the Medicaid divisions and will continue to carry out Tribal consultation as required by the Social Security Act.