Arkansas Legislative Council (ALC)

Representative Jean, do you have discussion or what do you have? Uh, I have a substitute motion. We'll hear it. I would like to make a substitute motion to adopt the whole report with the exception of the Pelfre versus uh R dot which I'd like to be taken up for a separate vote. That's a proper motion. You have a 2. 2nd. All those in favor say aye. Hold on. Hold up. Discussion. You're recognized Uh, thank you, Mr. Chair. Uh, that particular item was discussed in claims review for well over an hour, uh, during the subcommittee and, uh, I think maybe 1.5 to 2 hours, there's a lot of discussion, debate back and forth on that particular, uh, issue and the claims committee, uh, Voted the way they did. I, I would. Speak against this particular motion and ask the, the, the full committee go to adoption of the full report. Senator Dismay, do you have discussion on this as well? Well, I had a question on the original motion. I mean, it. And, and I guess my question now is, I mean we just had a vote on the substitute. We didn't have a vote. I held it. You did held it. I held it for discussion. I didn't realize discussion was, uh, was needed. No, mine was just a question on the original, uh, I mean, I just had some questions about what it is we're saying because it's not clear in the report what we're doing with this RO claim. So I just, I wanted a little bit more detail, but we can get to that later, I think. Yes, sir, uh. Since this motion is only to pull that claim out, we will have discussion on that claim separately prior to a vote on it. Senator Hester, do you have a discussion on this motion? I do. Uh, I just want to make on, on the substitute motion, I would like to, uh, divide, uh, roll call and divide the house. That's a proper request. Do I have? Do I have 3 hands? I have 3 hands. So, members, that ends discussion. We'll move to the vote of division of the house. Sarah Payton, I'm gonna let you go ahead and have a discussion. Thank you, Mr. Chair. It's basically a question if the substitute motion were to pass, When would we Here the testimony and all the evidence and and things on, on the, uh, we would take up the claim that's being pulled out immediately after a substitute motion if it passes. OK. And do we know if those parties are here to. Make their arguments and, and testimony. I do not. OK, thank you, Mr. Chair. All right, see you and no other questions, I'm ending it. It's over. We're gonna take the vote, Miss, Ms. Gerty, if you would start the roll call we'll start in the Senate. The motion is only to pull out the Ardo claim from the rest of the, uh, reclaims report and to adopt the rest of the claims report. Peelfre versus Ardot. Senator Dodson. Senator Peyton. Senator Peyton is no. Senator Petty. Senator Petty. Senator Petty not being here, first alternate, Senator Bryant. Senator Bryant. Senator Boyd. Senator Boyd, Senator Penzo, Senator Penzo, Senator McKee. Senator McKee is no. Senator Murdoch. Senator Murdoch. Senator King, Senator King is no. Senator Tucker. Senator Tucker's no Senator Sullivan. Senator Sullivan is no. Senator Hammer. Senator Hammers, no. Senator Ledding. Center letting us know. Senator Mark Johnson. Senator Mark Johnson is no. Senator Hill. Center Hill is no. Senator Davis. Senator Davis says no. Senator Wallace. Senator Wallace says no. Senator Blake Johnson. Senator Blake Johnson is no. Senator Flippo? Senator Flippo is no. Senator Hester. Senator Hesters, no. Senator Hickey. Senator Hickey is, no. Senator Stubblefield. Senator Stubblefield is no. Senter English. Senter English. Senator Caldwell. Senator Caldwell is no. Senator Dismay. Senator Dismay is, uh, Senator Urban. Senator Urbanist, no. Senator Chesterfield. Senator Chesterfield is no. Senator Gilmore. Senator Gilmore is no. Motion has failed from a lack of enough positive votes in the Senate. So with that we revert back to the original motion for the full claims review. I have a motion and a second. All those in favor say aye. All opposed? I just have it All right, roll call. Representative Painter. Represent painter. Represent painters, yes. Representative McAlinden. Represent McClendon's, no. Representative Barry. Represent Barry is no. Representative Beatty. Representative Beatty is no. Representative Evans. Representative Evans is no. Representative Collins. Represent Collins is no. Representative Garner. Representative Garner. Representative Crawford. Representative Crawford. Representative Richardson. Representative Scott Richardson. First alternate. Representative Dalby. Represent Dalby is no. Representative Pilkington. Representative Pilkington is yes. Representative Watson. Watson is no. Representative Gazaway. Represent Gazaway. Representative Kavanaugh. Kavanaugh's yes. Representative Fortner. importantners no Representative Vaut. Representative Vaut. First alternate represented McGrew. Represent my group alternate represent Maddox. Represent Maddox. Representative Kenneth Ferguson, Kevin Ferguson as a no. Representative Beck. Yes. Represent Beck is yes. Representative Bentley. Represent Bentley is yes. Representative Ladyman. Representative Long first alternate. Representative McNair. Representative McNair is no. Representative Eaves. Representative Eaves is no, Represent Deborah Ferguson. Representative Deborah Ferguson. First alternate representative Jeremiah Moore. Represented Moore is a no. Representative Whitaker. Whittaker is a no. Representative fight. Representative fight is yes. Representative Womack. Represent Womack. Representative Miller. Representative Miller is. Yes, is a yes. Representative Eubanks. Representative Ew Banks says no. Representative Speaker Shepherd. Speaker Shepherd. First alternate Uh, represent fight fight is no. Representative Jean. Representative Jeus no. Represent Meeks. Representative Meeks says yes. Representative Cozart. Representative Cozart is not here. Representative Warren. First alternate Second alternate representative Holcombe. Represent Holcombe is yes, uh. Represent painter has changed his from yes to no? Represent Wardlaw. OK. Moving to the Senate. Senator Dotson. Senator Dodson is yes. Senator Peyton. Senator Payton is yes. Senator Petty. First alternate center Bryant. Senator Boyd. Center Boyd, Senator Pennzo. Senator Penzo, Senator McKee. Senator Key is, yes. Senator Murdoch, Senator Murdoch. Senator King. Sing is yes. Senator Tucker. Senator Tucker, S Tucker? No. Senator Sullivan, Senator Sullivan is yes. Senator Hammer. Senator Hammer, yes, Senator Ledding. Senator Ludding is no. Senator Mark Johnson. Senator Mark Johnson is yes, Senator Hill. Senator Hill is, yes, Senator Davis. Senator Davis says, yes, Senator Wallace. Senator Wallace. Yes, Senator Blake Johnson. Senator John Blake Johnson, yes, Senator Flippo. Senator Flippo's yes, Senator Hester. Senator Hester's, yes, Senator Hickey. Senator Hickey is no Senator Stubblefield. So Stubblefield is, uh, yeah, sorry, Senator English. Senator English, Senator Caldwell. Senator Caldwell. Senator Dismay. Senator Dismay is no. Senator Irvin. Senator Irvin is yes, Senator Chesterfield. Senator Chesterfield is yes, Senator Gilmore. Senator Gilmore is yes. Senator Rice. Representative Holcomb changed his vote to a yes, to a no, I'm sorry, to a no. Senator Chesterfield changed her vote to a no. Voting is closed. The review of the report has failed. So we're moving on to the EBD subcommittee. Representative Pilkington, you're recognized. Thank you, chair. The Employee Benefit division oversight subcommittee met on Wednesday, September 18th at 10:00 a.m. in room Mac A. The subcommittee heard an update from the Siegel Group concerning the diabetes management program study and the wellness program costs. The subcommittee will consider final recommendations related to the diabetes management program study at its October meeting. The subcommittee adopted a motion to not move forward with the full wellness program, but requested that the SQL Group provide additional information concerning a possible incentive related to Participation in annual wellness visits. The subcommittee reviewed and approved the following actions of the state board of Finance. The EBD drug formulary report for June, July and August, and the Labor first contract. I move we adopt this report and I move that we authorize the EPD oversight subcommittee to meet once the board of Finance has approved changes to the United Healthcare contract, MAPD contract based on the newly negotiated rates and if the subcommittee meets between September 30th and October 11th, the sub These actions concerning approval of the contract will be final and report to ALC at its October meeting. That's proper motion. Do I have a second? Second, members, I would say that the second part of his motion is very important to understand because that will change the rates of the MAD plans and the key to that is that has to be done and the reason we're given that special authority is because that open enrollment actually starts November 1st, so that has to be done prior to council week of October. So with that or any other questions? Seeing none, all those in favor say aye. All opposed, ayes have it. Thank you, Representative Pilkington. We'll move on to the game of fish, state police subcommittee, Senator Hill, you are recognized, uh, Representative Miller, you recognize. Thank you, Mr. Chair. Uh, the game and fish State Police subcommittee met on September 4th, 2024, the subcommittee discussed and adopted the recommendations to be included in the final report, the subcommittee met again on Monday, September 16th, 2024. Subcommittee discussed and adopted additional recommendations to be included in the final report. The subcommittee also requested the report deadline be extended until October 17th, 2024 at the next executive subcommittee meeting. I move adoption of the report. That's a proper motion. Do I have a second? 2nd, all those in favor, say ah. opposed, eyes have it, but that we move on to Senator Sullivan. Thank you, Mr. Chair. The higher ed subcommittee met on Tuesday, September 3, 2024 at Arkansas State University in Jonesboro, the subcommittee discussed the conclusion of the study regarding diversity, equity, inclusion as it relates to institutions of higher ed in the state. The subcommittee heard testimony regarding an academic overview of Arkansas State University, including New York University Institute of Technology, College of Osteopathy Medicine. And the role of higher ed and professional development. Additionally, the subcommittee received an annual certification of the solvency report for our fiscal year 2022, 2023 as required by ACA 6-62-109. Mr. Chair, I move for adoption of the report. That's a proper motion. Do I have a second? I have a second. All those in favor say aye. All opposed, I have it. With that, we'll move on to the highway commission, uh, representative, uh, McNair. The highway Commission review advisory subcommittee met Tuesday and heard testimony on the quarterly land conveyances reports, reports of highway construction projects of $10,000 or more. Efficiency study recommendation rules for implementation and the Office of Internal Audit report. I move adoption of this report. That's proper motion to have 2. All those in favor say aye. All opposed, I have it. Would that move on the lottery oversight. Representative McAllen. Thank you. Thank you, Chairman. The lottery oversight subcommittee made Thursday and heard testimony on on the Arkansas Lottery director's report proposed FY 2025 annual budget, ADHE report and Arkansas Challenge and Workforce Challenge scholarship report and move adoption of the report. That proper motion. 2. All those in favor say aye. All opposed, ayes have it. that move on to the occupational license committee, Representative Meeks. Sherman, The occupational licensing subcommittee met yesterday to receive reports from the Arkansas State Police regulatory Services division, um, of the adoption of this report. Has proper motion. Do I have a second? I have a 2. All those in favor, say aye. All opposed. I have it. That will move on to the uh peer subcommittee. Representative Kavanaugh. Thank you, Mr. Chair. The Pierce subcommittee met on Tuesday, September 17th. Subcommittee received reports, reviewed requests, and approved the following. Various temporary appropriation, American rescue Plan Act appropriation, infrastructure Investment and Jobs Act appropriation, restricted reserve fund transfers, a fund transfer request for R dot and a modification to a payment schedule for Henderson State. I moved for adoption of the report. That's proper motion to have a 2nd. All those in favor, say hi. All opposed. I have it. With that, we'll move on to the review subcommittee. Representative Eaves. Thank you, thank you, Mr. Chairman. The review subcommittee met on Tuesday and reviewed methods of finance, discretionary grants, and services contracts. Additionally, the subcommittee approved 3 member disclosures, no items were held. I move adoption of the report. Members will do something a little different from the chair. The ADC contract was reviewed in committee. Correct, Mr. Chairman? So because of that, I'm gonna go ahead and bring the secretary to the table. And allow discussion on that contract before we move forward. Seeing no objection, that's what we'll do. Secretary Wallace, you're recognized to introduce yourself and give your statement. The members, I believe there's a handout coming around, so we'll pause for a second to make sure everybody's got it before Miss Secretary Wallace gets started. Secretary, you're recognized. Thank you, Mr. Chairman, members of the committee with a little latitude from you, I'm going to, you all have a statement in front of you from me, um, and I'm just going to, so I don't. Mess anything up when I'm going through this. Can y'all hear me? I apologize. Um, with a little latitude, I'm going to read through this statement. There are some figures with scores on here, but for the sake of wanting clarity for you all. I'm gonna read through this and after that I'll be happy to answer any questions you may have. Um, to start with, um, I want to apologize for any of the confusion that our presentation on Tuesday caused in trying to explain why only 3 vendors were selected for interview, a member of my team referred to a Section of the RFP, um, that prohibited prohibited opening pricing for vendors scoring less than 3 points on 300 points, I'm sorry, on the technical proposal, instead of the provision that provided only the top 3 technical proposals would be interviewed. This RFP contained both provisions which resulted in the department only considering the top 3 technical scores for progressing to the oral interviews. Um, while we understand that it, it was confusing. We didn't receive any questions related to that. During the process, um, nor did we have any protests filed by vendors. The language in this RFP mirrored what we utilized in 2022 when we went through this RFP procedure for the medical services at that time. And as with that solicitation, we only considered the technical scores when determining which vendors to advance to interviews. And as in 22, only, only the top 3 vendors, um, I'm sorry, only the top 3 technical scores were interviewed. I believe we did a very poor job on, on Tuesday explaining to you how this process worked. Um, I always strive to follow and meet the intent and the spirit of the law, and I pride myself on maintaining open lines of communication with you all. We've had a lot of interactions and I think we've always maintained good communications. So this RFP has been pending in some form or fashion for over 2 years now, and I've gotten a lot of questions and a lot of feedback about it, but I've never received any questions related. To this and it caught us off guard. And I will admit that we were not prepared to answer that. I think that led to some of the confusion and for that, I very much apologize and I wanted to take this opportunity to try to clear some of that up. So we might, while we might have left the impression that we did not consider price. It was considered during the process. Um, we received 5 proposals from vendors and as stated in the RFP, only the top 3 vendors after technical proposals were scored, moved on to oral presentations. After those 3 completed their oral presentations, the cost proposals of the top 3 were considered after using the scoring methodology that was outlined in the RFP which was word for word what we utilized in 2022, the top three scoring vendors were Wellpath, Vitalcore, and Centurion. And on that page in front of you, you've got their scores there, weighted scores of technical and oral. Um, but in the interest of full disclosure, um, after we had the meeting on Tuesday and there was confusion. Um, we opened all 5 of the pricing scores, um, using the technical proposal scores and cost proposals, those scores that you see on that second chart, um, are those scores for technical with cost. Um, once again, the top 3 vendors were Wellpath, Vital Core, and Centurion. Um, keep in mind since two of the vendors did not progress to oral presentations. This is their flat technical score with no adjustments from oral, um, and additionally, it should be noted that Wexford, one of the vendors who did not make the top 3, did not submit a bid that was in fact lower than the lowest scoring vendor. Um, over the possible 10-year term of the agreement, Wexford's bid was well over 400, 430 million higher than the successful vendor. With that said, since Tuesday, I've spoken to several of you and I realized that how we did this, whether it was what was outlined previously, um, and we believe to be the right. Method. Um, it is clear that we didn't meet your expectations. And the two provisions related to progressing to the next step were poorly written, um, we believed only taking the three top technical scores was the appropriate way to proceed. But since we've opened all of our scores and as we just discussed, the result was the same even when we did consider the pricing. Um, just by way of an update, we have been utilizing the map process. I know there were some questions about why we chose the traditional route. We've already procur a Priya contract which you all approved a couple of months ago, utilizing for pre auditors the map process and we are now in the process of drafting, um, an inmate communications contract utilizing the map process. So with that, I will say again how apologetic I am for the poor, um, explanation that we provided on Tuesday, and I hope that this, um, addresses your concerns and with that, I'll take any questions you may have. Senator Irvin, you'll recognize. Thank you. Thank you, Mr. Chair. Thank you so much. I really, really appreciate the statement. I appreciate the transparency, the accountability that you have displayed. I mean, you're, you, you know, your character is obviously shine through on this, and I really, I do appreciate it because at the end of the day, you know, we want to make sure that we're getting the best value for this, the taxpayers' dollars, and I think that's really important and that you have all the tools in your tool chest that you can in order to negotiate the best price and the best deal. For what we're trying to enter into and this is a massive undertaking, and I think, you know, I think there's improvements that can be made in the procurement process overall that will benefit all of the state agencies, but I really appreciate your statement and bringing us this information, which is exactly what we were asking for on Tuesday. Thank you so much. Thank you, Mr. Chairman, uh, Madam Secretary, uh, I don't have a question as much as I want to thank you for the hard work you've done and, and the remainder of my commentary is, is going to be to the chair and my colleagues. I think the instruction in this is that when we're talking about this much money and, and I believe that Senator Has told us this is the largest single contract in the history of the state of Arkansas, which kind of gives me a chill when I say that. Because of that, I think that, uh, without any criticism of anything that your department's done or the vendors proposed vendors have done when we're talking about this much money, Mr. Chairman, I believe we need to. Perhaps have another layer of review by the General Assembly, maybe even a more stretched out, uh, process and uh just it's just when it's this much money, maybe we need a better magnifying glass, and that is no criticism of everyone involved in the process from from uh our procurement officials to your department and to all the people been involved, but I think we need to look at that in 2025, Mr. Chairman, that was really all I had and, and thank you, Madam Secretary. Thank you, Mr. Chair. Senator, I think you'll be very pleased with the next motion that will be made. So with that members, we have motion on the floor with a 2 for the review of the review subcommittee report. All those in favor say aye. All opposed, I have it. Thank y'all, uh, Senator Hickey. You are recognized. Thank you, Mr. Chair. There's a handout that's going to be coming around, so I don't know if we want to wait just 30 seconds or so so all the members can have it. are. Thank you. I think I got it. Mr. Chair, I'll just wait till you tell me to start. Sarah Hickey, I think you're ready to go. Thank you, Mr. Chair. OK, members, if you want to follow along with this, this, this could be confusing because I've been looking at it and others have been looking at it for two days and the more you look at it, the more confused you'll get. But I'm gonna try to explain this. So the procurement method that was used, uh, under this certain contract is what I'm gonna make a motion to rescind, but just to kind of give you a background and review the other day, we were told by OSP that, you know, there are multiple, there could be multiple contracts in the state that are using this. So the handout that you have in front of you, if you'll look. Which is Senate Bill 448. What that is is a bill that we passed whenever we had done a large procurement study and most of you, or a lot of you had went through, you know, a year's year's worth of your life to, uh. To get to this point, so out of that, this was one of those bills and so that was done in 2017. There were rules that were promulgated what you have in front of you, although it has May May at the top they were actually promulgated in August of 2019. This was just the first time that we had received it. So the thing is, is that whenever we did that. These rules really do not line up with this act although this act whenever you or this bill, which is now Act 696. is actually a great bill and we want to keep this in place, but the rules. Which is how this past contract was used where Technical was used before tech instead of including technical and price of the contract. So the motion that I'm about to make, if you don't mind listening, it's got 3 parts. I moved that we were seeing the review and approval of the Office of State Procurement rules concerning RFP procurement processes that was approved by the ALC. At its meeting on August 23, 2019. The basis for this request is that the rules is adopted are not consistent with state law and that the legislative intent in passing the procurement laws provided the review subcommittee's procurement study and this is the second part. Any RFPs released as of today's date may continue. But the resulting contract should be flagged when submitted to the review subcommittee. Indicating that the procurement was undertaken with the process it's been rescinded. And the third part is this, and we request that the executive subcommittee contract with the consultant. To ensure that OSP rules are in compliance with the procurement laws and recommend revisions to the rules to bring them into compliance. And with that, I will attempt to uh answer any questions. That's a proper motion. Do I have a second? I have a second from Senator Irvin. So with that, members, we're gonna go to discussion. Uh, there will be no questions to any department in the discussion phase of a motion. I just want to be clear. Members will go to Senator Tucker That Senator Johnson, I'm sorry, it's confusing. Thank you, Mr. Chairman. I, I. I will be brief, uh, and I guess it's a question for Senator Hickey, um. Is there a monetary threshold involved in the process that you're you're putting forth in this, these recommended changes or is it could it apply at any level? I mean, I'm not saying we shouldn't look at everything carefully, but you know, let's be candid we can't always look at the little tiny things we have to trust the people that have done the the footwork on it. Could you answer that, sir, as far as any thresholds, I'm gonna say no. It's, it's whatever it was because we're not we're. Act 696, of course, will stand and Act 696 has written in the statute, even with the without the rules can still be used in our procurement process. So the, the problem was is that the rules that were actually passed. Is the way that uh somehow we have designed some process that uh allows technical scores but does not consider the price. So we're actually beginning negotiations, we're beginning negotiations on, on that at the improper time. So, This whole bill, if you just even read the title that's in front of you, was to promote efficiency and state procurement. And to negotiate contracts. So, no, sir, there's not just to answer your specific question is no, there's not any thresholds unless there's something that just as it relates to another statute we have on a smaller bid price or something of that nature. OK, well this, this looks like a good start and I, I, I, I think we'll all agree it's not the end of it it's a good start. Thank you, Senator Hickey. Thank you, Mr. Chairman. Representative E you recognize? Thank you, Mr. Chair. And Senator Irvin may have answered my question inadvertently by seconding your motion and I'll ask this question to either you or uh Senator Hickey or Senator Irvin. Um, Senator Urban made A, a pretty long motion and review subcommittee that included some of these same items. Can you verify or let me know does that kind of go in line with what you've just made the motion on? OK, yeah, number, the second part, uh, where we say any RFPs released as of today's date may continue. Because here's the thing, this process is in place and I don't know how many RFPs may be out there. I don't want us to say, well, if they're that they're already started if they've already started before today. Then we're gonna allow those to continue, but we want them to be flagged when they come to you all in your review subcommittee, so that, uh, we could make sure and scrutinize them, uh. To the point to make sure that. You know, all intent and efficiency and as this bill says collusion and things like that to make sure that none of that's transpired with anything, not suggesting that it would, but that's our job to look at Senator Irvin's motion I think included some reporting and that was also in yours as well. I don't, Senator Irvin, do you, or Mr. Chair, can Senator Irvin answer that? Yes, sir. Thank you. uh, thank you for the question. Yes, so the third part of the motion then would be for OS uh for executive subcommittee to consider having a study, um, and utilizing the same folks that we had previously utilized for that whole year-long procurement study that we did in review subcommittee. I'm, I'm assuming that the chairs of review subcommittee and, and that may go through review subcommittee for that study to kind of rework our rules and that was the whole intent of Wanting that report. So, So that, yes, this motion would, would meet, I think, both of my emotions that were approved in review subcommittee. It just reaffirms that here. Thank you. Thank you. Sit or hell, you recognize. Senator Johnson, I'm sorry. Y'all look so much alike. I'm sorry. So yes, Senator Hickey, why would, why would a consultant be needed? Dre rules for OSP. To match the law. Well, the, the actual motion is, is just to request that the executive subcommittee, uh. Look at the consultant. Uh, we had had one before whenever we had done this. It's just, uh, of course, as was stated, you know this one contract, of course, was $1.6 billion. Uh, I don't know how many more out there. We just want to make sure that there is no flaw whatsoever, you know, within our procurement process that we took so long to do so that's the request there is just to have a little, uh, and again, that's going to be up to them whether or not they'd actually hire them or not, but just if, uh, if they want to, this, this motion would give them that authority to do it. Thank you. Thank you, sir. S dots and you recognize you, Mr. Chair. Um, this is You know, you were talking a little bit about the consultant. I, I don't think we currently have a consultant retained, so, uh, your motion would require us to To get a, get a consultant if I'm understanding it correctly, or at least confer with one if that's, if that's necessary, um. But really the, uh, uh, kind of the question I have in it, this might be more for. It may be more for staff. I'm not sure on regards to, uh, I'm, I'm with you. As far as your intent. But as far as the process in your motion, do we have the actual authority. To Change a rule. Because that's more of an executive function to start the process of changing a rule. Now if it's not in compliance with the law, I'm not sure exactly where, where we go from there. Uh, but if this is we adopted it, we reviewed and approved it and now it carries the force and weight of law just we might have to wait till the next session to do something. Well, uh, and I can answer both of those or I think or I'll attempt to as far as the, uh, answer to your first question is, uh, uh, it was a motion by ALC and again, this statute, which was voted on the full legislature is still going to stand. So yes, as far as I'm concerned, I feel like that we have the authority to to rescind a motion of ours and furthermore, and that's why I put in there that it did not follow the, uh, intent of the legislature, uh, Because whenever you look at the rule, it does not line up with this bill. In multiple, multiple places and that it also violates state law. It's fairly easy to show that it violates state law, uh, at least from my opinion because the uh it says specifically that within our scoring prize that we'll use the technical and the price and, you know, It's almost like we've got that process in reverse where those negotiations have started prior to that. And the second part of uh a second part of your. They answered your question is why not wait till session? Actually, again, the, the statute itself is a good statute, so I don't know what we would repeal. We, if we were going to repeal something, we'd repeal the statute, but that's not what we want and I think there's, uh, uh, there's a reason because with these other agencies if they're using this procurement process, I believe that the state could actually be using could be losing millions upon millions of dollars just because, you know, of the process that. This rule is allowing them to do right now. Uh, and, and I'm in agreement with, with that. I want to do it as quickly as possible. I'm just wondering if we have the actual authority since this rule. Has been in force since 2019, it was approved by a previous General Assembly, um, I, I don't know that I, I'm not sure if we can rescind our approval. You know, 5 years after the fact. I understand it's, uh, uh, I'm, I'm, I personally am gonna stand on the fact that we can because I mean we're the one that uh we're the one that actually, uh, adopted that. So it's just like we're sending our vote on it, especially since it's, uh, as I said, in conflict with our intent. Uh And state law was just to be blunt. All right. Thank you. Yes, sir. Senator Hammer, you recognize. Thank you, Mr. Chair. I'm with you in spirit. Senator Hickey, if I may address Mr. Senator Hickey, chair. Um, On the back page of the bill, the act itself. It says suspension from consideration for award of a contract if there's probable cause for suspected collusion as determined by the Attorney General State procurement director. You're asking. Don't have the benefit of seeing your motion in front of me to read it, but having heard what I understood, you're asking that anything from this point forward that's going to come before us will be flagged so that we would know it was being done under the old procurement process and not under the new one. Do you feel that any of the ones that may come before us will rise to the level of collusion or is that the intent of your motion to try to capture those that may have collusion involved? No, sir. I mean, uh, I confidence in the state of Arkansas, uh, and I don't, I don't feel that that's happening. However, I just believe that since, uh, what's transpired, especially with this contract, uh, that, uh, uh, it would, it would be prudent for us just to scrutinize those, uh, maybe in a little bit higher level. So that's that is actually the reason for my motion as far as what you read as far in the statute, again, I'm gonna state that the statute would stand in the uh attorney General would. have that authority. And Mr. Chair, um, On the question that Senator Dodson asked. Do we, is it appropriate for Marty or someone to render a statement regarding do we have the authority in full ALC. To address something that should have been addressed in the rules based on the argument that there are 2 reasons that uh a rule would not go through and, and that is not up for debate in here, I don't guess. and do we, do we have the legal authority as ALC body. To Have Have that in here when that should have been dealt with in the rules whenever this went through. Ms. Gerty will answer that. Senator Hammer, this committee has the authority to take action as it sees fit, um, whether it's a prior rule or not, um, this committee, if it chooses, can take this motion and adopt it or not adopt it. OK, because I was just. Contemplating lawsuits down the road and I just wanted that knowledge to know that we do have that full authority to do it in here. Thank you. See, no further questions? Senator Hickey, do you want to restate your motion just so everybody understands exactly what we're voting on? OK, sorry. I'm used to green being go, not red, so I understand. OK, members, again, I'm gonna read this, uh, of course I talk slow anyway, but I'm gonna read this in the three parts that it is that we have. OK, we rescind the review and approval of the Office of State Procurement rules concerning RFP procurement processes is approved by the ALC at its meeting on the August 20 August 23, 2019. And again, what that is, is, is the handout that was just given to you at the at the top which states state of Arkansas Department of Finance, uh, Office of State Procurement. It says May 9th on there, but we actually did it in August. This was just the first time that we received it, so don't get confused with that. The basis for this request is that the rules as adopted are not consistent with state law and the legislative intent in passing the procurement laws following the review subcommittee's procurement study, which is the study that as you all know, we did for over a year. And Any RFPs released as of today's date may continue. But the resulting contract should be flagged when submitted to the review subcommittee indicating that the procurement was undertaken with the process that has been rescinded. So in other words, if, if there's an RFP or the RFPs are out there that used this process they're gonna have to flag them so that the committee will know whenever they're reviewing them in there. And the last part and we request the executive subcommittee contract with the consultant to ensure that the OSP rules are in compliance with the procurement laws and recommend revisions to the rules to bring them into compliance. And I could say if needed there, but And that's my motion. Or that's me resting my motion. Thank you, uh Senator Hickey. And we had a second from Senator Irvin. All those in favor say aye. All opposed. Eyes have it So, with that members, we're gonna go back to the executive subcommittee report for a question from Senator Dismay. With that, I would call the Arkansas Department of Insurance to the table? You guys would introduce yourselves for the record. Allan McLean, insurance commissioner. Booth ran general counsel AID Hatfield, chief of staff, Department of Commerce. Senator Dismay, you are recognized. I'm thinking Mr. Chairman and also appreciate latitude in coming back. There was a lot happening around my chair I can get centered Hickey to stop talking. It is difficult sometimes, but, but, but here's my, it's really a question and, and I think it's just how we address this as you're working through this process since it is an emergency rule. Because there's a conflict that I think is about to be created with the way that this is written. Um, the rule, and, and, and it really has to do with the department's fiduciary responsibility and who is it ultimately. A responsible too because it's really difficult to have fiduciary responsibility for two opposing sides which in a way this rule creates. So I mean, I would argue that you have your division that is solely responsible for making sure that there are fair rate increases on health insurance. That's one of your responsibilities. Um, And then you, now we're going to have a responsibility that we have to have fair and reasonable payments for the, you know, the, Uh, to the pharmacies for disbursement. Dispersing. I don't understand how those are going to reconcile and part of me, I thought, well, it addresses it in the responses. It says there, you know, if Uh, there's no known impact at this time, quote, If such payments are fair and reasonable, there will be no premium impact on the health benefit plans. But then when I go to today's paper, The testimony was that there could be an estimated 350 to $360 million worth of impact at a cost of 3 to 4% to health plans. And so, you know, if they were not going to be an increase, then I think the whole fiduciary responsibility probably doesn't have a great conflict. If there are going to be, you know, 3 to 4% increases. I mean, I think that's a lot living in a world of 20%, you know, inflation. Or that we've experienced. And so my, I don't know if it's a question or it's just I really think you've got to be mindful of that. As you're doing this, I like the fact that, that we're requiring this report to come out in November. Uh, I mean, I hope that we're able to look at that and, and, and be a part of that conversation because someone. Because now we've charged you with dual rolls. It's going to have to have a responsibility to the ratepayers. Or to the insured And I said, I think you've created a conflict for yourself in this world that's not going to allow you to be impartial both ways, but I'll, I'll, any comments you have, I'd appreciate it. I, I, I think it is a little bit confusing from the newspaper article this morning, um, the way that the, the proposed rule and the permanent rule, by the way, we filed this as a permanent rule, and it will go through joint insurance before October 11th or supposed to. So we will have more discussion on this as it goes forward. Um, the way the, the, the proposed rules to work is if the commissioner reviews the data from the health plans on or before November 30th, and he sees a stabilized network of pharmacies that aren't dropping out. And he's satisfied they're being paid sufficiently above acquisition cost and they're not being paid below cost from the data that we gather, um, we, we don't, we're not going to reward an additional dispensing fee. Therefore, there would be no fiscal impact. However, What I, I think I said yesterday was if we determine that the, uh, the pharmacy acquisition cost is not being met or is being paid below pharmacy acquisition costs are slightly above, not, not really creating a stable network of pharmacies. The commissioner would be permitted after analyzing the data, Senator Desma with our actuary to require the health plan to pay an additional dispensing fee. Um, And, and, and the 4, the 3 to 4% premium impact, uh, we got was from the notion that if he does have to, uh, require a fee of $9 for example, the health plans have been surveyed this summer several times in physical impact surveys and the fully insured market, um, it appears to, uh, our actuary estimates that 2 to 4% premium impact and the health plans are all about in the same. Are of about a 3 to 3.6% premium impact. That is if he has to require a fee and there is a fiscal impact. So I wanted to bring the fiscal impact information to to this body, um, even if there's an if involved in it, just so that you'll know that there is, and I agree entirely with you, uh, whether it's pharmacy reimbursement or mandates that this body, um, issues requiring health plans to recover, you know, to pay more for digital mammography. to pay more for autism or to pay more for those go into rates, they do affect rates. I agree that there is a, a balancing a Senator Dis as you so eloquently pointed out between what the insurance department has to weigh in terms of medical benefits, uh, pharmacy benefits for many of our medical providers and the rates the premiums pay horses have to pay because after all, it's the premium payors that are having to ultimately have to pay this. I appreciate it and, and again, just to reiterate my concern, this is different than the legislature has required. You know, Uh, you know, health insurance plans pay for lung cancer screenings or whatever. It's different than that. Like you would, you would take that into account, you would say legislature has said that this is a mandate, this is what we're going to do. And it, and it, you know, maybe it's a poorly written original law. I don't know, but the whole, you know, notion of fair and reasonable, I would have told you my expectation upon passage of that was that we would have developed some type of formula or something that would have been part of the rule that we work back into that way you weren't pitting yourself against yourself, um, but, but. At this point now, the way that it's written and this being the final rule, the only thing you can do is put yourself in the very middle as an arbiter and you're taking out the legislature or any of their authority to be a part of that process in a final rulemaking, um, so that's my concern. I mean, this all may amount to nothing. Um, I mean, if I'm understanding from my pharmacist correctly, there's going to be an increase if we want to have the same level of network. That exists today, um, I, I'm, but I'm also waiting to hear from the people we haven't heard from, which are, are, you know, insured and their rates and what that's going to amount to because again, everybody knows inflation's miserable. Hopefully we're plateauing and, and, but, but this is just going to add and take away a little or has the potential to. I agree and, and what's critical is going to be the bulletin that we write that defines these standards and I'm going to try to get that out within the next week. or two, and I will present that bulletin. I will voluntarily present that to the executive committee in the next meeting. I will present that joint insurance so there will be a discussion about the standards. So I entirely agree with you, uh, we, we have not yet had the opportunity to develop standards on what fair and reasonable means. It's not defined by statute, and we're just gonna have to do the best we can in our bulletin lastly, and so I saw the bulletin part. Is it required, I mean, so that this new rule is what's going to create the bulletin. Could it have created, I mean, I would have thought it would have created another rule. You know what I mean? Like we're choosing to go a bulletin route which is not reviewed by the legislature. Instead of having promulgating rules on what is fair and reasonable and that definition. Well, what we can do in the permanent rule as opposed to the emergency rule is embed or incorporate the bulletin into that rule and in, in the on the permanent side if you would like to do that. I, I believe, I think, I think there needs to be at some point for your own sake, that fair and reasonable has a second set of eyes because I think if it's just to the Department alone, again, you've, you've got a conflict against yourself and I don't, I don't even know how you would reconcile. I understand we have a, we have a long history of Uh, issuing our standards, uh, about reimbursement, whether it's auto, homeowners through bulletins as opposed to rules, and I know that we've gotten in trouble for that sometimes, um, but I will do the best I can to try to incorporate or embed that into the rules so that this body can review that. I would I think that, that helps me a lot in the conversation, me and it's already proved there was no pushback, the best I can tell. So obviously there was a need to do something and I understand and appreciate that. I just, And looking at it, I had some questions and I appreciate latitude and let me ask those today. Senator Dismay, I think I'll tell you that yesterday, there was a motion passed by Senator Gilmore that requires the department much like we do DHS here in a few minutes with the assisted living, they have to come to the committee every month. They have to come to joint budget every month while we're in session. Give a report, show their bulletins, everything has to be above board and up front and that process starts in the October council meeting. So you will hear from them, see them every single month. on a process of where they're at in this, in this endeavor. So thank you guys. Thank you. So that members we'll move on to the H section of our agenda. There's only one autumn of, um, of action as the Arkansas Development Finance Authority, and I do believe we have a question from Senator Peyton. So is there anyone here from the department that can answer these questions? And this will take a motion to review once questions have been answered. Sir, if you would introduce yourself for the record and Sarah Payton, you are recognized to ask your question. I'm Arrington. I'm director of homeownership and public finance for the Arkansas Development Finance Authority. Thank you, Mr. Chair. Mr. Harrington, I'm over here. Uh. So I just saw this item in our packet and I'm curious as to why the state of Arkansas is borrowing $500 million. And we've been running. Loads of surpluses and we have money in the bank. Why are we borrowing 5 borrowing $50 million and what's it costing us? It's a good question. Thank you. It's part of a housing program state of Arkansas isn't borrowing any money here. We are facilitating pooling of mortgages. We turn and use that money under a federal tax exempt program that we use. And, uh, do low to motor income, first-time home buyers. So that $50 million will turn into mortgages that go out through our lending network. So are we not the guarantor? No, we are not. Who is the guarantor on the board guarantor is the indenture that was started in 1995 and uh the security for the bonds is the underlying mortgages which are guaranteed by the federal government. So if I may, uh, how does one apply? For a mortgage through any lender, uh, any qualified lender, a bank, mortgage companies throughout the state of Arkansas. We have over 205 lenders, I believe, participating. OK I'd be interested if you could get me some information on your program. Certainly will. Thank you, Mr. Chair. Senator Hammer, you recognize. Like was she on those lending institutions, do they have to be FDIC insured or organizations like Habitat Free Manatee or other organizations that help low-income families to be able to get into uh housing, are they allowed to participate in this program? You have to be a qualified lending institution. We ask that they have a certain financial standing because we need a, a, a certain level of security that they're capable to participate and Uh, issue mortgages that qualify under the federal guarantee guidelines, so you would have to go through, and I don't think it is FDIC or FSLIC or any other guaranteeing organization has ever been uh required, but we do have certain standards that they have to live up to, uh, and you have to be a financial institution, so habitat for humanity which we work with a lot of programs. Uh, they're not a lending organization, so that would not be a source. So they would not have access to these funds. Mm Uh, no, because, again, just think of wherever you might get your any home loan, that's where you would get it. And I don't think Habitat for Humanity, uh, while final organization, I don't think they're financial organization. OK, thank you. You got it. See no questions, do I have a motion to review? Have a second. 2nd, all those in favor say aye. All opposed, I have it. Members, if you would, I want to take a moment, um, to honor. One of our members, uh, has lost his wife this week and, uh, later to rest yesterday. So if you would, if you guys would take a moment to stand with me and we'll take a moment of silence Representative Ladyman. Thank you. With that we'll move on to the DHS report. Senator Putton, Secretary Putin, sorry, I just. Put you in the legislature. I'm not sure you want to be here with us. You're recognized. Good morning. Thank you, chair. Well, happy Friday, everyone. Always glad to be here with you all, um. Appreciate some leeway for some family. Time that I had that I wasn't able to appear last month. Um, wanted to appear before you all, uh, each month as directed by Section 15 of Act 213 of 2022. I'm here to report to the Arkansas Legislative Council, the status of our efforts to increase reimbursement rates under the Living Choices Assisted Living waiver. DHS completed all the work necessary to implement Act 198 of 2023, which authorized us to establish cost reporting for Medicaid funded assisted living facilities. We have previously reported to the committee that our contractor Myers and staffer completed the cost report last January 16, 2024, we shared the information with providers, presented the, uh, rate study report to the ALC Hospital and Medicaid Studies Subcommittee on February 7th. Um, the report continues to be posted online. On the DHS website. In January 2024, we also received formal approval to make the temporary rates of 88159 for urban facilities in 8567 rural facilities permanent for the duration of the current Living Choices waiver with an effective date of March 1st. We then petitioned CMS for approval to implement a new rate of 8673, which represented the highest rate resulting from the, the study report. In addition, we continue to engage with providers to make programmatic and policy changes submitted during public comment. On July 3rd, 2024, we received formal approval of the Living Choices waiver amendment from CMS approving the new proposed rate to begin on July 1st of 2024. We presented the proposed rate increase. To Public Health Committee on August 14th and received full ALC approval on August 23rd. Assisted living facilities will now be reimbursed retroactive to July 1st at the new increased rate. The new rate was implemented effective September 1st for all new claims submissions and all claims submitted between July 1st and August 31st have now been reprocessed at the higher rate and an adjustment to those payments has been made. In addition, we're continuing to update the living choices provider manual. To reflect those cost reporting requirements of Act 198, and we did receive approval at the June ALC meeting for those changes. Annual cost reporting for Medicaid funded assisting living assisted living facilities will now be implemented on an annual basis and determinations will be shared with ALC. Um, finally, as requested at the May 31st ALC meeting. We have a monthly report that was attached to our agency report, uh, indicating any facility changes or ownerships of changes of ownerships or closures for the previous month. Uh, we will continue to provide this updated list of information each month in addition to providing immediate emails and texts to leadership to make sure that we keep you updated as to any changes in facility status. And that does conclude our report. Thank you, Secretary Putnam, uh, for your report and what I understood you to say the retroactive payments have gone out. Is that correct? That is correct. The retroactive payments. Thank you. I appreciate your report on the back sheet of, uh, H5A, uh, that's showing the 6 closed facilities. Uh, identified and then the poor that have had a license issued are all four of those, uh, for Medicaid. Uh, for some Medicaid patients whether uh a percentage or whatever I will confirm that for you I believe only 2 of those had Medicaid residents as part of their private pay, they're still going through the same process. Yes, sir, they are. So at least some of these are for Medicaid. That is correct. OK. And as far as you know, all displaced. People have been able to. Be moved to other places whenever we've had a shift in, uh, facility and a facility has closed or has, has changed its, its provider type, we have been able to move all residents to close by in the same county in most cases or in the next county over. OK, I appreciate that and I think you're, you're probably aware, uh, we had a, uh, fair bit of discussion in one of the subcommittees on the residential care, different, different item I realized. But the concern there. and for those of us who. Don't understand the whole program and how it changes. For, for some people with mental health challenges. Uh, being able to have a place for $35 to $50 a day and we're saying we can't do that anymore or we we're having to limit and move people and and some may go back out on the street. Uh, to say we've got this program over here that we can pay you $350 a day for. Because it's, again, it's different it's got some inside mental. When you, when you change taking care of 7 people to take care of one. For, for what I'm saying may be an important technicality, but uh it's to meet the CMS or whoever else. I, I just won't. I, I say this all the time to committee members there's. There's concerns out here that that I'm seeing and again that population is at risk already, so I just want to make you aware of that and the committee members are aware that uh there's things changing and sometimes the feds are telling us what we have to do if we can ask to do something that makes more sense. I wish we would do that. I sometimes when we do ask, um, and we do, uh, provide additional information and some of the hardships that the state could encounter as a as a results of some of the federal changes that have been, um, Brought down recently, uh, as far as, as nursing ratios and that sort of thing and facilities. So we will continue to do that, but we also would be glad to provide if it's helpful, some additional clarification on some, some differences between the RCFs, the ALFs, and some of the other facility types and maybe just an update. On what the federal regulations are that have changed if that would help. Thank you, Madam Secretary, we always appreciate your attention and in communicating with us. Thanks again. Thank you very much. Representative fight you recognize? Thank you, Mr. Chair, and, uh, Senator Rice basically asked my question. Are you aware of any other facilities that are on the verge of having to close or in danger. We have not been notified of any on the verge, um, when, as soon as we receive any kind of communication, we do reach out to leadership to make sure that they're aware as well, uh, but we are not aware at this time of any on the verge. I'll talk to you offline afterwards. Thank you. Sir justfield you recognize? Thank you and good morning. How are you? Ye who would not let me vote. Good morning, Secretary Putnam. Good morning, and I'm not sure the chair will correct me if I'm, if I'm offline. You have been handed something that DHS has never had before, and that's the TAF program. Yes, ma'am. Would you care to share with us some of those challenges that you're facing right now because a number of people rely on that program and with the change, it's giving you something that you had not anticipated having. So would you talk to us a bit about that. Yes, to be fair, uh, DHS did work with DWS for the transition of TANFF back to DHS. Uh, it had been with DHS, um, a number of years ago, I, I think probably 15 or so years ago. And, um, for a very high just answer to your question, we have been conducting analysis of all of the financials, the sub-grants, and working on a strategic investment plan for TANFF. And so we will be working with the, um, governor's office and our team to finalize that. And at the at the appropriate time would like to actually provide an update to this group. All right. Thank you. Thank you, Mr. Chair. Thank you very much. Send Irvin, you're recognized. And, and first off, Senator Chesfield, it is always great to see you in committee. Thank you. Um I, I just wanted to, to bring this up and I appreciate it it's a little off, off the topic of the assisted living, but I know that we have closures, but I think what's really impactful for me right now is that only 25 of over 75 counties offer labor and delivery. Services right now. That's, that's really a state of emergency. And I hope everybody in this room is listening. These, these women don't have 5 lobbyists hired to come and sit here and help us through this. So, at our next public health meeting and, and I think it's would be prudent, honestly, to come before this body and give us a report on the Live360 maternal homes. I know you've worked really hard on that. Um, but this is a state of true emergency in my opinion, when only 25 of the 75 counties in the state of Arkansas can offer labor and delivery services for our. ing women. And like I said, they don't have 5 hired lobbyists down here. We've got to address this. It's a true emergency, and I, I, I, I think we need to have a discussion or a report or something. I know you're working really hard on this, but I think it's something that everybody in this room needs to be fully aware of, and I'll, I'll, I'll defer to you as to how you want to proceed with that, but I really think ALC also needs to. Here those reports and we could do that through the hospital and Medicaid subcommittee or public health or both, but I just wanted to ask your opinion about what you think would be helpful. As we move through this. Sure, um, happy to answer that. Thank you for the question. Uh, we have an incredible team of people, as you're well aware, who have been working not just on the Life360s, but also on the maternal health report, the strategic strategic Committee for Maternal Health at the governor's executive order established back in March. Uh, we did submit our first report in September. We also just yesterday, uh, submitted the Transforming maternal health grant, um, And it's probably helpful any of, any of the legislators who were involved in the maternal health subcommittee work groups, um, you know, we did include and indicate that you participated in helping us plan for that grant. Um, it is a grant through the Center for Medicare and Medicaid Services in the amount of $17 million.15 states will be awarded the grant and it's posted on our website, um, happy to share it, uh, with staff so that it can be sent to members, um, but we'd be happy to come give a full report, uh, and again, I have some incredible team members who have Poured their hearts into this, we do agree. Um, it is, you know, maternal health is at a critical point in Arkansas particularly. Um, I do want to make sure that this body knows that Arkansas is the only state that has a strategic plan, a statewide strategic plan, and all of the groups that were out working in sort of separate silos to do the same things are all working incredibly well together and I just we appreciate the support we've had from this group and from the governor's office and moving this forward. Happy to come back with a full report. If you would just get that to staff. Definitely. Seeing no further questions. I'm gonna recognize Speaker Shepherd. hold on speaker, uh, Madam Secretary, you're good. Thank you. Speaker Shepherd, you're recognized for your motion. I move that we expunge the vote by which the, uh, claims review and litigation report adoption failed. That's proper motion driving seconds. I have a second. All those in favor say aye. All those opposed? No. All right, that's the motion passes. You have a second motion, Mr. Speaker. So members, uh, I'm gonna move that we adopt the claims review and litigation, uh, oversight report, and I think that, uh, what, uh, maybe the previous motion had highlighted is the fact that, uh, you know, the claims review subcommittee, it can be a very challenging committee because you're dealing with information that has gone through in many cases, uh, multiple years of litigation in the Claims commission and then they're brought forward, uh, for a sub. Committee to review. Oftentimes with without as much information, sometimes there are new arguments are being made. And so that's what I think some of this discussion has reflected, uh, nonetheless, I'm gonna go ahead and move that we adopt that the claims review, uh, report. That is a proper motion. Do I have a second? I have a second. All those in favor say aye. All those opposed? No. The motion does pass. See, we do have an interim study without objection that interim study will be adopted. Seeing no other business, we stand adjourned.