Interim Joint Committee on Appropriations and Revenue


Minutes of the<MeetNo1> 4th Meeting

of the 2005 Interim


<MeetMDY1> October 14, 2005


The<MeetNo2> 4th meeting of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Friday,<MeetMDY2> October 14, 2005, at<MeetTime> 9:00 AM, in<Room> the Singletary Center at the University of Kentucky. Representative Harry Moberly Jr, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Charlie Borders, Co-Chair; Representative Harry Moberly Jr, Co-Chair; Senators David E Boswell, Denise Harper Angel, Ernie Harris, Dan Kelly, Alice Kerr, Robert J (Bob) Leeper, Gary Tapp, Elizabeth Tori, Johnny Ray Turner, and Jack Westwood; Representatives Royce W Adams, John A Arnold Jr, Joe Barrows, Dwight D Butler, James R Comer Jr, Jesse Crenshaw, Bob M DeWeese, Jon Draud, Danny R Ford, W Keith Hall, Joni L Jenkins, Jimmie Lee, Mary Lou Marzian, Lonnie Napier, Fred Nesler, Stephen R Nunn, Don R Pasley, Charles L Siler, Arnold Simpson, John Will Stacy, Tommy Turner, Jim Wayne, Robin L Webb, and Rob Wilkey.


Guests:  President Lee Todd, University of Kentucky; Mr. Bob Quick, CEO of Commerce Lexington; Undersecretary Mark Birdwhistell, Cabinet For Health and Family Service; and Commissioner Shannon Turner, Department of Medicaid Services.


LRC Staff:  Pam Thomas, Spring Emerson and Sheri Mahan.


Representative Moberly and Senator Borders welcomed the members to the University of Kentucky.  Representative Ford moved that the minutes from the September 22, 2005 meeting be approved as written.  The motion was seconded by Representative Nesler.  Motion carried by voice vote. Representative Moberly then announced that the Legislative Research Commission is accepting donations to provide relief to the hurricane Katrina victims.


President Lee T. Todd, Jr., of the University of Kentucky welcomed the members to the university and provided an overview of the university's Top 20 Business Plan.  President Todd briefly discussed the challenge given to the university by the legislature to become a top 20 research university and the university's plan to reach this goal by 2020. President Todd stated that it is vitally important for Kentucky's economic future to have a top 20 research institution. He discussed basic indicators of progress and compared Kentucky to the national average and to those states with top 20 research institutions.  In all areas listed states which contain top 20 research institutions rank well above Kentucky's average.  President Todd then discussed the university's outreach activities and their impact on problems in Kentucky.  Among these activities are extension services, medical services and ongoing research projects.


President Todd discussed how the University of Kentucky plans to meet the goal of becoming a top 20 research institution by 2020.  He stated that the university is focusing on undergraduate and graduate education, faculty recognition, and research promotion.  At present the university ranks fortieth among 88 public research universities in undergraduate education (measuring SAT/ACT scores, graduation rates and student/faculty ratios) and thirty-ninth in graduate education (measuring doctorates granted and post-doctorate appointments). The university ranks thirty-seventh in faculty recognition (measuring faculty citations and awards) and twenty-sixth in federal and non-federal research.  Overall, the university is ranked thirty-fifth.  President Todd discussed the university's six-year graduation rate, stating that it has risen from 48.4% in 1997, to 61.1% in 2003.  The university is in the process of implementing strategies to increase this rate and are writing business plans to support these strategies.


President Todd then discussed various sources of funding for the university.  He highlighted the importance of increasing enrollment as a means of increasing income to the university. He also discussed external grants and contracts, annual giving, internal reallocations, and state appropriations.  He thanked the legislators for the increase in operating funds included within the last budget and then listed the university's financial priorities.  These include a new biological science and pharmaceutical complex and a UK hospital patient care facility.


Representative Moberly asked if the university should have greater accountability in reaching their goals if the legislature provides additional funding and greater flexibility to the university.  President Todd replied that the university would accept greater accountability if provided additional funding and greater flexibility.  Representative Moberly then asked what the responsibility of the university is to direct its attention to areas of the state, which are decreasing in population and are economically stagnant.  President Todd answered that he believes the university has a strong responsibility to those areas.  He then discussed several initiatives the university is currently participating in to assist under served areas of the state.


Representative Webb asked if the university is doing anything to attract students to pursue mining degrees.  President Todd replied that the university is encouraging coal severance counties to offer scholarships to local students to purse mining engineering degrees.


Representative Draud asked if the university could become a top 20 research university given the university's current funding.  President Todd replied no, not with the current level of funding.


Representative Pasley asked if the upgrades to the agricultural diagnostic laboratory were a priority for the university.  President Todd answered that the diagnostic lab was given $8.5 million in the last budget for equipment upgrades.  This improves the situation, but another $13.5 million would upgrade the laboratory to a world-class diagnostic facility.


Representative Marzian asked if retail pharmacies and pharmacy associations have offered to provide donations or grant money for the construction of the pharmaceutical complex.  President Todd stated that to date only $100,000 has been donated from these groups towards the construction costs.


Senator Leeper asked for more detailed information regarding the general status of the states which contain top 20 research institutions.


Mr. Bob Quick, CEO of Commerce Lexington, then welcomed the committee to Lexington and briefly discussed economic development efforts in Lexington.


Next, Undersecretary Mark Birdwhistell of the Cabinet For Health and Family Service and Commissioner Shannon Turner of the Department of Medicaid Services updated the committee on Medicaid and related funding issues.  First, Commissioner Turner discussed the department's recent implementation of contracts for a pharmacy benefits administrator (PBA), Medical Management Information System (MMIS), and Kentucky Meidcaid Administrative Agent (KMAA).  She said that implementation of these systems will assist in data collection which will allow the department to better analyze conditions in the system and make better informed decisions.


Commissioner Turner then discussed the current Medicaid budget.  She stated there is a currently there is a deficit of $425.9 million in Medicaid.  The state share of this deficit is $132.3 million.


Undersecretary Mark Birdwhistell briefly discussed the over-use of emergency room visits.  Over $100 million was spent in FY 2004 to cover the cost of emergency room visits.  A majority of these visits are for non-emergency health issues.  One of the costs saving measures Medicaid has implemented to address this issue is a 24 hour nurse advisory telephone number.


Commissioner Turner then addressed short-term and long-term strategies being implemented to address cost overruns in Medicaid.  She also addressed the KyHealth Choices 1115 Medicaid waiver being submitted by Kentucky to the federal government.  She discussed the concept paper issued by the department, which discusses the concepts addressed in Kentucky's waiver.  She provided basic statistics of the number and type of Kentuckians covered by Medicaid.  She discussed needed infrastructure improvements to prepare Medicaid for significant changes if the federal waiver is approved.  She stated the waiver has two major goals.  First, to stretch Medicaid resources to most appropriately meet the needs of members and second, to encourage Medicaid members to be personally responsible for their own health care.  Commissioner Turner briefly discussed the benefits of more customized benefit packages, which would be offered under the federal waiver. Undersecretary Mark Birdwhistell discussed the flexibility the waiver would allow Kentucky's Medicaid program.


Senator Borders asked if a waiver is required to limit the amount of emergency room visits and institute a co-pay for eligibles.  Commissioner Turner replied that a waiver is not required to institute these options.


Representative Webb asked if there is a correlation between areas of high emergency room use and areas where there are provider shortages. Undersecretary Mark Birdwhistell stated that if the waiver is approved; the department will have the flexibility to provide incentives to providers in underserviced areas, hopefully decreasing the use of emergency room facilities.


Representative Lee discussed the importance of educating Medicaid eligibles as to alternatives besides emergency room visits.


Representative Moberly thanked those who testified.  There being no further business, the meeting was adjourned at 11:10 a.m. A cassette tape of the meeting and all meeting materials are available in the Legislative Research Commission library.