House Finance hears broad support for HB73 to create complex care residential homes; department seeks regulatory flexibility

The House Finance Committee heard testimony and questions on House Bill 73, which would create a new licensing category for complex care residential homes to serve Alaskans with severe behavioral, medical or developmental needs. Deputy Commissioner Emily Ricci of the Alaska Department of Health summarized the bill and said it is intended to “help fill a critical gap in residential care options and improve outcomes for Alaskans with complex needs.”

Why it matters: Supporters said the licensure would provide community‑based alternatives to hospitalization and out‑of‑state placement for people with complex needs, potentially reducing long hospital stays and helping keep individuals closer to family and support systems.

Multiple provider groups and advocates testified in favor. Kim Champney, executive director of the Alaska Association on Developmental Disabilities, said the existing system is “failing for a subset of individuals” and praised the bill as providing a framework for “stability and quality support.” Philip Tafts, a board‑certified behavior analyst and owner of Method Works Alaska, said the current approach is “very patchwork” and that a systematic option would reduce trauma and costs associated with out‑of‑state or institutional placements.

Health care leaders also supported the bill. Jared Kosen, president and CEO of the Alaska Hospital and Healthcare Association, told the committee that about one in seven hospital beds in Alaska are occupied by patients who no longer need inpatient care and that a community option could ease that pressure. He later provided an approximate count of acute inpatient hospital beds, saying the state has about 1,491 acute care inpatient beds (excluding specialty and behavioral hospitals); Kosen said he would follow up with final data for the record.

Southcentral Foundation’s Michelle Baker urged removal of a statutory census limit in the draft bill. At the hearing she recommended deleting the phrase “not more than 15” from the statutory definition, noting that the federal Institute for Mental Disease (IMD) exclusion sets an adult‑facility threshold of 16 beds while children have no federal limit. “Removing ‘not more than 15’ will create more flexibilities as providers partner with the state to plan for clinical service delivery,” Baker said.

Deputy Commissioner Ricci said the department supports removing the statutory bed limit and prefers to craft detailed capacity and staffing requirements through regulation rather than statute. Ricci also said the department can remove longer timeline language in sections 6 and 7 and instead use a July 1, 2026, effective date to speed implementation while the department works with the Centers for Medicare & Medicaid Services (CMS) on Medicaid funding mechanisms.

Committee members expressed mixed views about statutory bed caps and cautioned against co‑mixing children and adults in the same residential programs. Ricci said the department “does not support integrating adolescents and adults in a residential setting” and that age‑specific requirements would be handled in regulation.

Action and next steps: The committee closed public testimony and members instructed staff to draft a committee substitute (CS) to reflect agreed technical and policy changes. Members discussed moving the bill out of committee after the CS is available; no formal committee vote on HB73 occurred during the hearing.

(Ending) Committee members asked the department to work with stakeholders on regulatory detail, and staff said they would prepare a CS for consideration at a subsequent meeting.