Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> 1st Meeting

of the 2006 Interim


<MeetMDY1> June 21, 2006


The<MeetNo2> 1st meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Wednesday,<MeetMDY2> June 21, 2006, at<MeetTime> 1:00 PM, in<Room> Room 129 of the Capitol Annex. Senator Julie Denton, Chair, called the meeting to order at 1:10 PM, and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators Charlie Borders, Tom Buford, Perry B. Clark, Denise Harper Angel, Alice Forgy Kerr, Joey Pendleton, Richard "Dick" Roeding, Ernesto Scorsone, Dan Seum, Katie Stine, and Johnny Ray Turner; Representatives John A. Arnold, Jr., Scott W. Brinkman, James R. Comer, Jr, Robert R. Damron, Bob M. DeWeese, David Floyd, Joni L. Jenkins, Mary Lou Marzian, Stephen R. Nunn, Darryl T. Owens, Ruth Ann Palumbo, Jon David Reinhardt, Ancel Smith, Kathy W. Stein, Susan Westrom, and Addia Wuchner.


Guests: Eugene Foster, Undersecretary for Children and Family Services, Cabinet for Health and Family Services; Tom Emberton, Jr., Commissioner, Department for Community Based Services, Cabinet for Health and Family Services; Mary Henderson, parent; David and Anita Gibson, former foster parents, and Crystal Blackburn, member, Women in Transition; Mark D. Birdwhistell, Secretary, Cabinet for Health and Family Services; Thomas Badgett, M.D., Acting Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; Nici Gaines, Department for Medicaid Services, Cabinet for Health and Family Services; Susan G. Zepeda, Ph.D., Executive Director, Foundation for a Healthy Kentucky; David Richart, Executive Director, National Institute on Children, Youth and Families; R.A. Shepherd, Department for Public Health, Cabinet for Health and Family Services; B. Russell Harper, Christian Care Communities; Elizabeth Cobb, Kentucky Hospital Association; David Mossbrook and Scott Williamson, Cabinet for Health and Family Services; Jill Seyfred, Prevention Child Abuse Kentucky; Willa Thomas, Division of Aging Services, Cabinet for Health and Family Services; Kevin Delon, Auditor's Office; Crystal and Mamibo Suzuki, Women in Transition; Brad Hall, Kentucky Pharmacists Association; Rich Seckel, Kentucky Legal Services; Sue Deroven, Kentucky Board of Nursing; Karen Hamilton and Elizabeth Vessels, KBHC; S. Cunningham, Mental Health Association; Debi King, Kathy Bailey, and Jenny Schaaf, Court Appointed Special Advocates; Mary Ellen Nold, Kathy Adams, and Mike Grimes, Department for Community Based Services, Cabinet for Health and Family Services; Jan Gould, Kentucky Retail Federation; Bonnie Thorson Young, Seven Counties Services Inc.; Gene Huff, Marymount Medical Center; Michael Ahrens, Our Lady of Peace; Michelle Sanborn, Children's Alliance; and Anne Joseph, Kentucky Task Force on Hunger.


LRC Staff:  Murray Wood, CSA; Barbara Baker, Eric Clark, Miriam Fordham, DeeAnn Mansfield, Gina Rigsby, Cindy Smith, and Michelle Woods.


First was a discussion on foster care and adoption by Eugene Foster, Undersecretary for Children and Family Services, Cabinet for Health and Family Services; Tom Emberton, Jr., Commissioner, Department for Community Based Services, Cabinet for Health and Family Services; Mary Henderson, parent; David and Anita Gibson, former foster parents, Crystal Blackburn, a member of Women in Transition; and David Richart, Executive Director, National Institute on Children, Youth and Families. Undersecretary Foster stated that the cabinet is committed to assuring the safety, permanency, and well-being of the children placed in their care, and sometimes this requires removal of children from their homes. He said that 7.8 percent of the children that are removed from home because of child protection are adopted, 54 percent are reunified with parents, and 31 percent are reunified with family members. The last resort is that the cabinet seeks termination of parental rights to free a child for adoption.  The cabinet is bound by state and federal laws and regulations. The federal Adoption and Safe Families Act (ASFA) builds in safeguards and protections for parental rights through the entire process. He said that parents participate in all the reunification planning and development of the reunification plan. He said that there is no financial incentive for states to promote adoption; however, there are bonus funds available to states who perform well in completing adoptions for children when it is appropriate. In 2005, Kentucky received $1 million, and the funds were reinvested into the adoption system in the form of adoption subsidies and post-adoption services. In 2005, the cabinet spent $37 million in adoption subsidies and it is projected to be higher in 2006. Adoption subsidies are funds paid to adoptive parents to meet the special needs of children they have adopted. Of the 902 children adopted in federal fiscal year 2005, the average amount of time spent in out-of-home care was 38.2 months. As of June 4, 2006, there were currently 1,256 children in out-of-home care that were legally available for adoption. He stated that during the 2006 Regular Session, funds were allocated to the cabinet for the increases in the cost of out-of-home care. He said that there are financial disincentives for states to promote adoptions.  After the National Institute on Children, Youth, and Families and the Kentucky Youth Advocates voiced concerns in a joint report about the adoption processes, the Department for Community Based Services requested an investigation by the Inspector General's Office. The department will take the Inspector General's recommendations and any problems found will be corrected. He stated that the best permanency plan for a child is to be reunited with the family, but only when the safety and well-being of the child can be assured. The cabinet takes terminating parental rights seriously.


Commissioner Emberton stated that  the (ASFA) was enacted by Congress in 1997, and the primary goal was to ensure safety and expedite permanence for children in the child welfare system. He said the following steps are followed during the process from entry into out-of-home care to finalized adoption: 1) emergency custody order obtained from court; 2) temporary removal hearing held with 72 hours; 3) 5-day conference/family team meeting; 4) adjudication hearing; 5) 3-month family team meeting; 6) 6-month family team meeting/periodic review; 7) 9-month family team meeting/periodic review; 8) pre-permanency meeting conducted by regional attorney to review the prospect of involuntary termination of parental rights (TPR) if DCBS is considering changing the child's goal to adoption; 9) annual permanency hearing held every 12 months to determine the progress/status of the child and the case; 10) involuntary TPR hearing if necessary; 11) appeal to the Court of Appeals within 30 calendar days of the judge's decision; 12) petition for adoption filed when a child placed by the cabinet and for whom an adoption placement agreement has been signed by all applicable parties; and 13) adoption judgment.


Commissioner Emberton said that the Child and Family Services Review (CFSR) is conducted by the federal government to ensure compliance with the ASFA and other federal child welfare standards. A Program Improvement Plan (PIP) was developed after the 2003 CFSR review and was completed in November 2005. The Council on Accreditation provides objective statewide reviews to determine if the agency meets national standards of organizational strength and quality of service and the cabinet achieved accreditation in 2001. The Citizen Foster Care Review Boards, operated by the Administrative Office of the Courts (AOC), review out-of-home care cases and make recommendations for improvement. Reviews include interested parties such as attorneys, foster parents, social workers, CASAs, and treatment providers, and the boards are administered by AOC. The Kentucky Citizens Review Panels for Child Protective Services, a requirement of the federal Child Abuse Prevention and Treatment Act, meet quarterly to review policies and procedures in the areas of foster care, child protection, and adoption. He said that the cabinet conducts internal Continuous Quality Improvement (CQI) case reviews where random protection and permanency cases are reviewed each month in a 3-tier review and suggested improvements and/or corrections are discussed with field staff. Individuals found or substantiated by the cabinet to have abused or neglected a child can file an appeal to that finding through a administrative hearing. In a Service Appeal, individuals aggrieved by an agency action resulting in the denial, suspension, reduction, modification, or termination of services or federally-funded benefits, payments, or financial assistance to which an individual may be entitled may request an administrative hearing. He stated some actions the cabinet has taken to improve the process is to educate staff regarding adherence to policies, procedures, and expectations regarding case work, institute an anonymous process via the intranet to enable caseworkers to request a specific case review by Central Office Protection and Permanency staff; and DCBS modernization initiative.


Commissioner Emberton stated that the following services are offered to parents to facilitate reunification: 1) appointment of an attorney for the parents at the temporary removal hearing; 2) appointment of a guardian ad litem (GAL) for the child at the hearing; 3) appointment of a court appointed special advocate (CASA), who are specially trained community volunteers that advocate for the best interests of abused and neglected children (although CASAs are not available in every county); 4) Targeted Assessment Project (TAP) designed to identify and assess multiple barriers to family self-sufficiency and safety among TANF recipients and TANF-eligible clients that include TAP assessments specialists conduct assessments, pre-treatment and follow-up services focused on identifying and addressing mental health, domestic violence, substance abuse and learning problems; 5) parenting classes; 6) drug and alcohol counseling and treatment; 7) drug testing; 8) psychological assessments including the Comprehensive Assessment and Testing (CATS) program offered by a contract with the University of Kentucky; 9) anger management; 10) domestic violence counseling; 11) family and individual counseling; 12) preventive assistance; 13) safety net for families being discontinued from the Kentucky Works Program; 14) supervised and unsupervised visitation; and 15) family reunification services provided to families and children with open cases in all 120 counties.


Representative Burch asked if services are free to parents. Commissioner Emberton stated that the department works with the community partners for some services. Representative Burch asked how an individual could access services if they were unable to pay for services. Commissioner Emberton stated the department would work with families, community partners, and courts to provide alternative resources to help secure some of the services.


Representative Palumbo asked that if the cabinet has 7,000 children in out-of-home care and only 1,256 are legally available for adoption, what is the status for the rest of the children. Commissioner Emberton stated that it depended on each child's permanency plan. Undersecretary Foster said that the large majority of the cases probably were working toward reunification with their families, and therefore, parental rights have not been terminated. She asked if any of the children were in out-of-home care because of substance abuse, and Commissioner Emberton said approximately 80 percent of the cases indicate issues relating to substance abuse. Representative Palumbo asked about the ages of the children, and he stated the average age of a child placed in out-of-home care is between 9 and 10 years old. Undersecretary Foster stated that the average age of children in care gets younger each year.


Senator Scorsone asked about current caseloads of social workers. Commissioner Emberton stated it varies by county, but it is higher in urban counties and lower in western Kentucky. Commissioner Emberton said that the department's modernization plan should create greater equity by lowering caseloads in counties with higher caseloads. Senator Scorsone asked about individual social workers' caseloads. Commissioner Emberton stated caseload and case weight are looked at separately. Case weight includes food stamp eligibility, Medicaid eligibility, TANF, and complexity of family issues. Senator Scorsone asked about the recommended average caseload, and Commissioner Emberton said 17. Senator Scorsone asked if the cabinet requested additional funds to reduce caseloads for social workers. Commissioner Emberton said the governor's recommended budget did not include funds for additional staff and the department would reduce the caseloads through modernization and a plan to realign staff to look at greater efficiencies and best practices.


Commissioner Emberton answered Representative Owens by saying that substance abuse, abuse, and neglect were the top three reasons for a child to be removed from a home. Commissioner Emberton also said that the length of time from removal to reunification would depend upon the permanency plan of each child. Representative Owens asked if the subsidies were for special needs adoptions. Commissioner Emberton stated that the majority of adoptions receive subsidies until the child is 18 years of age. Representative Owens asked about guidelines to receive subsidies. Commissioner Emberton stated the guidelines would meet special needs of the children such as medical or behavior services. Representative Owens asked if prospective adoptive parents are told of these benefits, and Commissioner Emberton said absolutely. Representative Owens asked about adoption rates by race, and Commissioner Emberton said that he would get the information and report at the next committee meeting. Representative Owens asked Commissioner Emberton to supply information on removal rate by race broken down by abuse, neglect and substance abuse.


Senator Pendleton stated that substance abuse has become such a huge problem throughout the state, and that it is time to take control of the situation. He stated that there need to be treatment programs and halfway houses for individuals who want to change their lives and become productive citizens. If we don not have these services, there will be more children in out-of-home care because of neglect and abuse and more adoptions because parents are unable to find treatment. Substance abuse hurts families, friends, and even the economy. He stated that it is time for  the General Assembly to allocate more funds to build more halfway houses for people who are serious about getting treatment, and for parents being reunited with their children.


Representative Floyd asked if a child was automatically removed if there is a drug bust in a home and if the particular drug found would make a difference. Commissioner Emberton stated  typically, yes, but the decision is based on the circumstance of each case. The first place the cabinet would try to place a child is with relatives.


Representative Marzian asked about the average salary and education requirement for a state social worker. Commissioner Emberton said that he did not have the average salary but a bachelor's degree is required. There are incentives and tuition reimbursement encouraging employees to obtain a master's degree. There is a Public Child Welfare Certification Program (PCWCP) that partners with universities to start social workers at an elevated salary. These social workers have completed two years of training. She asked what was the entry level salary for a social worker, and Commissioner Emberton stated that he would have to research to find the information. Representative Marzian asked that if there are 1,256 children available for adoption, how many adoptions are completed per month. He said there were approximately 500 this fiscal year. Undersecretary Foster stated there were approximately 75 per month in 2005. She asked why the total was so low, and Commissioner Emberton said the cabinet recognized that children do better in a permanent environment and multiple placements are not healthy for children. Representative Marzian stated that there is not a safety net for 18 to 21 year olds who have aged out of foster care and this problem needs to be addressed, and Commissioner Emberton agreed. She asked if the department was looking at housing for these individuals, and Commissioner Emberton stated that the department would continue to work with community partners and advocates to secure services within the perimeters of available resources. Undersecretary Foster said the only federal funds available for services to children aged out of foster care is from the Chaffe Independent Living Program funds and they are inadequate.


Commissioner Emberton answered Representative Wuchner by saying that there are Court Appointed Special Advocates (CASA) available in all 120 counties, but he could not say how active the organization is throughout the state. She asked if there is a spreadsheet available that indicates why each child is not being adopted, and he stated that the cabinet tracks each child and tries to remove barriers to permanent placement. Representative Wuchner asked if keeping the child on Medicaid is an incentive to an adoptive parent. Commissioner Emberton said that each adopted child receives a medical card and monthly subsidies until the age of 18 years.


Representative Nunn stated that it is important to get a grip on the drug problems, and there would not be such a need for out-of-home care. He thanked the social workers and said that each one needs a raise. He asked about the percentage for the time the family court judges followed the cabinet's recommendations. Commissioner Emberton stated that the majority of cabinet's recommendations are followed, but in certain regions, judges allow children to remain parents. Representative Nunn said that $1 million was allocated in the 2006-2008 executive budget for each fiscal year for Foster Youth Transitional Assistance.


Representative Westrom asked  if treatment programs were different for middle class parents versus low-income and or disabled parents. Commissioner Emberton stated the cabinet is working with community partners for free services. Representative Westrom asked about flexibility in a permanency plan if a parent finishes a 30-day treatment program but relapses and has to go back into another 30-day treatment program. She stated that relapses are for individuals with chemical or substance abuse problems are very common, and there may need to be a broader length of time than the nine months to determine if there has been success in a treatment program. Commissioner Emberton stated the permanency plan can include language for reunification if an individual shows progress toward overcoming the addiction of the drugs. Representative Westrom asked if a parent follows the permanency plan and accomplishes are the goals and objectives, are the children always returned to the parent. Commissioner Emberton said the department has to make evidence-based decisions. Representative Westrom asked if there is domestic violence in a home, would a child ever be placed with the abusive parent. Commissioner Emberton stated that domestic violence cases were difficult and each case would be looked at carefully, but the health and safety of the child would always come first. Representative Westrom asked if an independent study had ever been conducted to examine the number of caseloads per social worker, and he said not one that would be conclusive and accurate. She asked if a study had been conducted on reunification rates of people with resources versus those without resources, and he said not to his knowledge. Representative Westrom stated that termination of parental rights is a life-changing event for everyone involved.


Representative Stein stated that if there was more funds in the budget to hire more social workers and to adequately pay the ones the cabinet already has, it would go a long way  toward solving the caseload problems and making children safer.


Senator Stine said there may be a correlation between high caseloads and the underfunding of mental health/mental retardation and substance abuse in Kentucky.


Senator Roeding said that overseas adoptions are still taking place, and people need to know about the availability of children in Kentucky. He said that once parental rights are terminated, the child needs to be placed into a permanent home. He stated that there is a difference on the effect of abuse and sexual abuse on a child and these differences should be addressed.


Representative Owens asked if the cabinet had a Program Improvement Plan (PIP) in place to address the problems associated with the disproportionate number of minority children in care. Undersecretary Foster stated the Casey Foundation is funding a pilot program in Jefferson County dealing with the disproportionality issue. The information gathered from the pilot program will be used to begin a PIP.


Representative Burch asked about the percentage of children removed because of neglect due to poverty. Commissioner Emberton stated that the cabinet does not remove a child because the family is poor. They look to see if the child is in a safe and stable environment and if the child's health and welfare is not in jeopardy. Representative Burch asked about services and resources are available to low-income individuals, and Commissioner Emberton stated that services are provided through the strength of community partnerships.


Representative Wuchner asked how many families are waiting to adopt, and Commissioner Emberton stated that he would get the information to the committee.


Next Mary Henderson testified about her experiences with the cabinet when her children were placed in foster care. She stated that because of the cabinet's involvement with her family, she was able to seriously look at her condition and take steps to correct the addictions in her life and get on the road to recovery. However, she did have concerns with the cabinet. She said that on two separate occasions, the Foster Care Review Board Chairman was asked to withhold reports from the court record. The Chairman had concerns about how fast the case was moving toward adoption even though all steps of the permanency plan were being followed. She said there is something alarming if evidence is suppressed from a board that is supposed to be there for protection. She stated she was not granted due process on several occasions. The children were removed from the home of the first foster parents and placed with Mr. and Mrs. Gibson. The cabinet granted visitation rights to the first foster parents even though the child psychologist and Foster Care Review Board did not think it in the best interest of the children. The children were removed from the Gibson home abruptly and returned to the other foster home. The cabinet allowed the foster parents to move to Illinois which caused the children to have to have a 6.5 hour drive (one way) for the weekly visit with their mom and put undue stress on the children. She said that she filed formal complaints with the Ombudsman's office, but because they were not administrative complaints, the complaints were forwarded to DCBS. She stated that two days after contacting the Governor's office for help, the cabinet sent two caseworkers to supervise her visitation with her children; however, during the 13 months prior she had had supervised visits. Also, after the therapist testified on her behalf, the therapist was denied access to information about the children, and the caseworker who testified on her behalf was fired. She feels that retaliatory actions were taken against her because she fought for her children, and she feels she was not treated fairly. The CATS assessment was conducted by a clinic at the University of Kentucky, through a contract with the cabinet, and determines if someone is fit to be a parent and provides recommendations regarding termination of parental rights. She said that she was able to prove that the CATS report was flawed and should not have been used to terminate her rights. There are policies and procedures in place that should be followed. She stated that she feels very blessed and fortunate that her children were returned to her. She attributed the hard work of her court-appointed attorney, Ms. Robin Cornett, and the fairness of the family court judge, Judge Tim Philpot, as the main reasons that her children were returned. She stated court-appointed attorneys are only paid $500 per case, and most of them only show up the day of the hearing and do not get involved; therefore, she is grateful to Ms. Cornett for her 18 months of dedication to her case. She said that just as she had to face her deficiencies, she hoped the cabinet would take a serious look at these concerns and take an effort to correct them.


Senator Roeding asked Ms. Henderson why her parental rights were in jeopardy, and she said because of excessive drinking and abuse of prescription drugs. Ms. Henderson stated that the children were justifiably removed from her home. Ms. Cornett stated that her client was very grateful to the cabinet for the help that was provided to her, but she also had concerns about the system. Ms. Cornett said that Ms. Henderson had worked very hard to get her children back and basically was very lucky to have an open-minded judge and professionals in the community to donate time pro bono or at reduced rates to present her case in court. She stated that parents need more resources to be able to defend themselves. The judges she is familiar with do not believe they have the statutory authority to pay for parents to have independent evaluations and assessments or their own experts without donated or reduced rate time. The judge has to rely on the cabinet and court-appointed attorney in determining the outcome of the case. She said that it is also hard to find outside experts to challenge findings on the CATS report because parents cannot usually afford to hire them.


Representative Burch stated that the cabinet is willing to make changes where necessary.


Representative Owens stated that Ms. Henderson was lucky to have an attorney willing to give of her time. He also thanked the cabinet for allowing Ms. Henderson to break confidentiality rules and come before the committee to testify about her case and the willingness to make necessary changes.


Representative Wuchner told Ms. Henderson that it took courage to fight to be her children's mom. She also said that the intent was not to attack the cabinet but the goal is to reunite children with their parents or the best possible outcome for the children.


Senator Buford stated told Ms. Henderson that she was lucky to get a judge and attorney willing to help. He stated that economically-challenged individuals are not adequately represented. He asked for recommendations that could change the system.


Anita Gibson, former foster parent, testified that she went into foster care because she cares about children, not because of money. Her main concern is that someone needs to have a voice for the children. Ms. Cornett stated often if fairness is provided to the parent, it will be the same as the best interest of the children. There are statutory problems that need to be corrected. One specific provision in the Juvenile Code that says the judge does not have jurisdiction over the care, placement, or treatment once they are committed to the cabinet.


Representative DeWeese stated that it takes information to make changes, and the General Assembly can have input into those changes.


Representative Stein asked Ms. Gibson if she and her husband were still foster parents, and she said they lost their license when she let Ms. Henderson's mother see the children. Ms. Gibson stated that Ms. Henderson and her children now live with her and her husband.


Representative Jenkins asked if the cabinet could evaluate services better if they conducted exit interviews, random interviews, or received feedback from individuals involved in the process.


Representative Westrom stated that Ms. Cornett and Ms. Henderson have ideas and solutions that could be beneficial and both are willing to share them with the cabinet. She said that this is a child's right issue.


Next Crystal Blackburn, member of Women in Transition (WIT),  testified that WIT is a grassroots organization run by and for poor people in Kentucky using a human rights framework of issues identified by members. She stated that one focus is neglect because of the strong association between poverty. The state's definition of neglect is the lack of adequate care, supervision, food, clothing, shelter, education, or medical care necessary for the child's well being. She said that WIT does not believe the lack of shelter, food, clothing, and all the other things does not necessarily make someone a neglectful parent. There may be circumstances where the parent is simply poor. WIT has researched the child welfare system and found that once families are brought into the system, they are overwhelmed with unrealistic case plans that are not individualized and include too many court-ordered services. She said that there are more frequent fast-track adoptions than attempts to reunify families. Another problem is that the court-appointed attorneys do little to advocate on behalf of the parents. The attorneys typically do little research about the case and often sign off on the cabinet's recommendations without any questions. She said that the bottom line is families need more financial support so they will not lose their children.


Next, David Richart, Executive Director of the National Institute on Children, Youth, and Families, testified that the institute, in conjunction with the Kentucky Youth Advocates, published a report, "The Other Kentucky Lottery", that includes recommendations on changes in the child welfare system. The problems within the system have been there for a long time. He stated that while most social workers do a good job, there is an organizational culture within the cabinet and within some offices that when some individuals make a decision, they will not reverse that decision no matter what evidence is presented. He said that the federal government provides an incentive to increase adoptions, but there is no incentive to reunite families. He said that he believes quick-triggering adoptions occurs in some circumstances. In most cases the guardians ad-litem, (attorneys appointed to protect the interest of the child), do nothing but show up in court on the hearing date. The Administrative Office of the Courts trains the Guardians ad litem, but 85 percent of them are not representing their clients effectively. Judges do not always take the department's recommendations. There is an incentive to put children up for adoption that is not only financial. He said that 34.2 percent of all children are removed because of dependency (someone not looking after them) and 43 percent are removed for neglect.


Representative Stein stated the statutes were clear that a child cannot be removed based on poverty alone.


Representative Brinkman asked if family courts are making a difference with better outcomes. Mr. Richart stated that it depended on the judge, judicial training, and personal demeanor.


Next, an update on Medicaid was provided by Mark D. Birdwhistell, Secretary, Cabinet for Health and Family Services; Thomas Badgett, M.D., Acting Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; Nici Gaines, Department for Medicaid Services, Cabinet for Health and Family Services; and Susan G. Zepeda, Ph.D., Executive Director, Foundation for a Healthy Kentucky. Ms. Gaines stated that the goals of the Medicaid Modernization initiative are 1) to improve the health of status of members by getting the right care at the right setting at the right time; 2) to encourage members to be responsible and involved in their own care, and 3) to ensure the solvency of the Medicaid program. The Deficit Reduction Act (DRA) of 2005 would allow Kentucky to amend its State Health Plan instead of submitting an 1115 waiver and this approach should allow more flexibility and without demonstrating budget neutrality. She said that the cabinet is focusing on a July 1, 2006 deadline for KyHealth Choices and the draft administrative regulations have been posted to the cabinet's web site.


Secretary Birdwhistell stated that the focus needs to be on KyHealth Choices. Most of the changes will be made with a state plan amendment except the mental retardation and developmental disabilities population will have through a 1115 waiver. Kentucky is the first state to receive permission for comprehensive reform using the flexibility of the DRA. The cabinet has been working on the infrastructure for two years. With the DRA approach, they now have the flexibility to implement it.


Representative Nunn asked that the cabinet keep the committee informed on the progress. He asked how the Medicaid budget would end at the end of the fiscal year. Secretary Birdwhistell said it was right on plan and it should break even.


Senator Pendleton said that there needs to be services for mentally ill individuals who are hard of hearing services.


Representative Jenkins asked about changing policy to allow providers, not just pharmacies, to deny services to beneficiaries who do not make required co-payments. Ms. Gaines stated that it is a part of the DRA but she would check to see if this would conflict with Kentucky statutes.


Representative Floyd asked about the process of determining the amount of adjustments made to Medicaid reimbursements for nursing home services. Secretary Birdwhistell said the current administrative regulations on nursing home reimbursements state that Medicaid will give an inflationary adjustment to the nursing home patient rates annually. Last year it was one percent increase and the cabinet is in negotiations with the nursing home on raising it to 2.6 percent or more.


Representative Burch asked how recipients would be able to pay the five percent co-insurance. Ms. Gaines stated that many member groups do not have co-payments and some have $1 co-pay , $2 co-pay, and 5 percent co-insurance tiered for prescription drugs. The goal in structuring the prescription drugs this way is entice recipients to use the cheaper-tiered co-pays if the drug is available. There is a yearly out-of-pocket co-pay maximum of $225 for pharmacy and an additional $225 for health services, and once it is reached, a recipient does not have to pay anything beyond that amount. Representative Burch asked what would happen if someone could not pay the co-payment. Ms. Gaines stated that it would be up to the provider. She said that some antipsychotic drugs do not have any first- or second-tier drugs available to substitute for the third-tier drug, and members will only have to pay the first-tier co-pay. Representative Burch asked if there is a process or procedure to exempt specialized drugs from the five percent co-insurance for patients, such as cancer drugs and other drugs for patients with serious diseases that have no therapeutic or generic equivalent. Ms. Gaines said that some of the cancer and/or biologic drugs flow through the medical side and not the pharmacy side because an individual can obtain them from a physician's office. The office visit to obtain these medications would be $2 for the individual.


Next Susan Zepeda, Executive Director of the Foundation for a Healthy Kentucky, testified that Kentucky is one of the first in the nation to use the new federal Deficit Reduction Act opportunities to redesign Medicaid to make it both more responsive to consumer needs and more cost-effective. As the pilot for this innovative, patient-centered approach to care, Kentucky must carefully document the impact of these efforts. She requested that the committee ask the cabinet for annual written reports on the number of patients being reached by KyHealth Choices, whether patients are seeking care sooner or later, the use of emergency rooms, the impact of co-payments, and the number avoidable hospital admissions for chronic health problems.


Ms. Zepeda stated that some concerns are 1) requirements for documentation of birth; 2) the impact of co-payments and soft service caps on prescriptions and therapies and possible conflicts with state statutes; 3) making eligibility determination a more user-friendly process; and 4) redirecting funds to expand care for adults in need.


The following administrative regulations were referred to the committee for review:  201 KAR 20:070 - establishes the licensure requirements of nurses by examination, 201 KAR 20:110 - establishes the requirements for licensure by endorsement and establishes the requirements for a temporary work permit for an applicant to practice nursing while the application for licensure is being processed, and 902 KAR 4:030 - expands the newborn screening program from the current four disorders to 29 disorders, specifies the requirements of the newborn program, and establishes a fee to cover the actual cost incurred by the Cabinet for Health and Family Services beginning  July 1, 2005.


There being no further business, a motion to adjourn at 3:56 was made by Representative Nunn, seconded by Representative Smith, and adopted by voice vote.