Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> 6th Meeting

of the 2008 Interim


<MeetMDY1> December 1, 2008


The<MeetNo2> 6th meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Monday,<MeetMDY2> December 1, 2008, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Representative Tom Burch, Co-Chair, called the meeting to order at 1:07 PM, and the secretary called the roll.


Present were:


Members:<Members> Co-Chair; Representative Tom Burch, Co-Chair; Senators Charlie Borders, Tom Buford, Perry B. Clark, Denise Harper Angel, Alice Forgy Kerr, Joey Pendleton, Dick Roeding, Dan Seum, Katie Stine, and Johnny Ray Turner; Representatives James R. Comer, Jr., Robert R. Damron, Bob M. DeWeese, David Floyd, Joni L. Jenkins, Mary Lou Marzian, Ruth Ann Palumbo, Kathy W. Stein, and Addia Wuchner.


Guests:  Larry N. Cook, Chairman and Chief Executive Officer, Shannon R. Turner, JD, Executive Vice President, University Health Care, Inc.; Ruth Atkins, Executive Director, Passport Health Plan; Shirley Hedges, Legislative Liaison, Kentucky Foster and Adoptive Care Association; Lisa Echsner and Kelly McKown, March of Dimes; Kimberly Alumbaugh, American College of Obstetrics and Gynecology; Terry Brooks, Kentucky Youth Advocates; Janie Miller, Secretary, Cabinet for Health and Family Services; Betsy Johnson, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; William D. Hacker, MD, FAAP, CPE, Commissioner, Department for Public Health, Cabinet for Health and Family Services; Jennifer and Marc Oligee, Kenton County; Dr. Howard F. Bracco, PhD, President and CEO, Seven Counties Services, Inc.; Eric T. Clark, Kentucky Association of Health Care Facilities; troy Bell, Foster Care Review Boards; Bill Doll and Marty White, Kentucky Medical Association; Mike Kuntz, American Lung Association; Anne Gregory, Families for Effective Autism Treatment; Donna Brown; Sarah S. Nicholson, Kentucky Hospital Association; and Anne Joseph, Covering Kentucky Kids and Families.


LRC Staff:  DeeAnn Mansfield, CSA; Mike Bossick, Miriam Fordham, Ben Payne, Gina Rigsby, Jonathan Scott, and Cindy Smith.


A motion to have a joint resolution drafted in memory of Senator Denton’s son, Taylor Rose, was made by Senator Buford, seconded by Representative Damron, and adopted by voice vote.


A motion to approve the minutes of the November 19, 2008 meeting was made by Representative Damron, seconded by Senator Buford, and adopted by voice vote.


A presentation on Passport Health Plan was given by Larry N. Cook, Chairman and Chief Executive Officer, and Shannon R. Turner, JD, Executive Vice President, University Health Care, Inc., and Ruth Atkins, Executive Director, Passport Health Plan. Dr. Cook stated that according to U.S. News and World Report “America’s Best Health Plans 2008-09”, Passport Health Plan is one of the two top ten nationally ranked Medicaid plans outside of the Northeast. Achieving a top ten national ranking represents a plan’s excellence in a broad arrange of categories including compliance, prevention, treatment, access, and member satisfaction. He stated that Passport has continued to meet the goals established at the inception of the health plan which were to increase health outcomes, access, and provider and member satisfaction while controlling rising costs to the Commonwealth of Kentucky. The key success factors include: 1) Being sole sourced and provider sponsored; 2) Having a partnership model; 3) Including extensive physician and clinician involvement in developing, implementing, and managing the plan; 4) Collaborating with community agencies and health departments; 5) Having extensive provider network and enhanced reimbursement; 6) Increasing member satisfaction and involvement; and 7) Including care management programs. The Commonwealth of Kentucky has a contract with University Health Care doing business as Passport Health Plan to provide services for Medicaid members in 16 counties. The Partnership Council is also a segment of the contract since it is a key component of the 1115 waiver. Despite requests to expand Passport Health Plan, it has not grown geographically since its inception. The Passport Health Plan is $200 million below the waiver’s budget neutrality requirement. Dr. Cook stated that the waiver has been approved for another three years.



Dr. Cook stated that an annual savings from a one percent increase in generic utilization in 2007 was $2.15 million. Passport Health Plan’s primary care model reflects a base payment with add-on reimbursement for quality, which has proven effective in the plan achieving its member access and quality improvement results. Approximately 92 cents of every dollar go to providers, with 8 cents going toward administrative costs. Targeted interventions are based on member health risk. For example, high risk members have specialized case management that includes smoking cessation, childhood obesity, and others, and disease management that includes diabetes, asthma, and Mommy & Me – High Risk Pregnancy. Well members and low and moderate risk members have specific care management designed especially for them. Clinical decision making is determined using nationally-recognized, evidence-based guidelines. Physician representation and input is integrated into national guidelines to address regional differences. Care is monitored against the guidelines and feedback is provided to the practitioners.


Passport Health Plan was awarded Excellent Accreditation by the National Committee for Quality Assurance (NCQA). Health plans undergoing NCQS accreditation are required to meet set standards covering both services and clinical care. The standards are organized into five categories: 1) access and services; 2) qualified providers; 3) staying health; 4) getting better; and 5) living with illness. According to the Agency for Healthcare Research and Quality (AHRQ), Passport Health Plan holds the ninth highest score in the nation for members, across Medicaid plans, reporting satisfaction with getting needed care, exceeds the national Medicaid averages for member access rates at all ages, and has achieved a ten percent reduction in the plan’s emergency room rate from 2005 to 2007 resulting in a medical cost savings of $1 million.


Senator Roeding asked how many providers are included in the Passport Health Plan network, and how many of those providers are also Medicaid providers. Ms. Atkins stated that all the Passport Health Plan practitioners are Medicaid providers. Senator Roeding asked about the number and money spent on the low to moderate and high-risk patients. Ms. Atkins stated the numbers in the various categories depend on the population. Senator Roeding stated that statistically, more money is spent on the 80 percent who are high-risk patients.


Representative Damron asked if there was a networth and capitalization rate report available. Ms. Turner stated that the initial capitalization was approximately $10.5 million at the plan’s inception. The 2007 year’s annual report filed with the Office of Insurance listed the total networth at $90 million. Dr. Cook stated that they try to keep it the networth equal to one month’s obligations which is currently $70 million. Representative Damron asked if Passport Health Plan ceased to exist, who has access to the $90 million. Dr. Cook stated that they are a not-for-profit entity so they do not pay dividends to stockholders. After all debts are paid, obligations to contracted services, all classes of providers, including hospitals, our distribution, in accordance with the articles of incorporation and by-laws would be a long percentages of initial capitalization.


Representative Stein asked if prescriptions or just counseling were provided in smoking cessation for pregnant women. Ms. Atkins stated that they do provide pharmaceutical support for members in the smoking cessation program. Representative Stein asked if smoke-free ordinances in Jefferson County have caused a decrease in emergency room visits due to asthma. Dr. Cook stated there are no county-wide figures available.


Senator Roeding stated that the most effective smoking cessation medications are available to Passport recipients, but not recipients in the Medicaid programs. He stated that all Medicaid recipients should have access to the same medications.


Representative Burch stated that the Passport Health Plan is a model that could be implemented in any part of the state.


Shirley Hedges, Legislative Liaison, testified about the legislative action proposal of the Kentucky Foster and Adoptive Care Association (KFACA). Ms. Hedges stated that in efforts to continue providing quality care for Kentucky’s children placed in state resource homes, the KFACA has the following concerns: 1) Allow resource homes to participate in the state medical insurance plan; 2) Investigate transportation brokers on denials for medical mileage reimbursements; 3) Utilize the resource home closest in proximity to the child’s county of residence in efforts to provide a safe, stable environment for our children and to reduce the costs associated with out-of-home care; 4) Require a minimum amount of training hours for Kinship Care Homes in efforts to provide children a more stable environment and help equip these homes with the tools necessary to deal with children; 5) Exempt resource parents from paying sales tax when transferring a car to a child at the age of 18 years; and 6) Consider raising the per diem for resource homes.


Representatives Burch and Lee commended Ms. Hedges for her love and devotion to helping the children of Kentucky through the years by becoming a foster parent and an advocate for foster care.


A presentation on the Healthy Babies Caucus and premature birth crisis was given by Lisa Echsner, March of Dimes Greater Kentucky Chapter, Kimberly Alumbaugh, MD, American College of Obstetrics and Gynecology, and Terry Brooks, Kentucky Youth Advocates. Ms. Echsner stated that the caucus has a broad support throughout the state. The March of Dimes released its first premature birth report card in November 2007. Each state and the nation as a whole were given letter grades rating their pre-term birth rates in comparison to the Healthy People 2010 objective. Kentucky received an “F” with a 15.2 percent premature birth rate. Approximately 8,500 Kentucky babies will be born premature this year. The nation received a “D” and no state received an “A”. The Healthy Babies Are Worth their Weight Project in Kentucky is the only one of its kind in the nation. The three most significant risk factors for prematurity are being uninsured, smoking, and having a previous late pre-term birth. The problem of prematurity is complex and has many root causes and defies easy solutions, but if Kentucky’s families and babies are ever going to be spared the consequences caused by prematurity, everyone must work together.


Dr. Alumbaugh stated that every minute in the United States there is a pre-term birth which accounts for more than 80 percent of prenatal mortality and 50 percent of all neurologic morbidity for children. She said that access to care has to be close and affordable. Unfortunately, there is a lack of reliable predictors of who has pre-term labor and the risk assessment tools used. The biggest risk factor for a pre-term birth is having a previous pre-term birth.


Mr. Brooks stated the national average of pregnant women smoke. The Kentucky Kids Count report shows that the average number of women who smoke during pregnancy in Kentucky ranges between 15 percent to 50 percent, depending on the county. Kentucky has segregation by region and race. Smoking during pregnancy creates more problems than just pre-term births. He said that a low-birth weight baby is 26 times more likely to die in the first 12 months than a normal birth weight baby. A Kentucky low-birth weight baby has a 34 percent chance of dropping out of school than a normal birth-weight baby.


Representative Stein asked if periodontal disease was prevalent in women who have premature births. Dr. Alumbaugh stated that periodontal disease is directly correlated with increased risk of prematurity and smoking.


Representative Damron asked in the past ten years if there had been an increase in young girls smoking and a decrease in young boys smoking. Dr. Alumbaugh stated that a large number of younger girls have started smoking earlier, but did not know if there was a decrease in younger boys who smoke. Representative Damron said the need to focus on additional education programs to stop kids from smoking before they start is indicated.


A presentation on the Kentucky Children’s Health Insurance Program (K-CHIP) was given by Janie Miller, Secretary, Cabinet for Health and Family Services. Betsy Johnson, Commissioner, Department for Medicaid Services, was available for questions. Secretary Miller stated that Congress passed the State Children’s Health Insurance Program (SCHIP) in 1997 to assist states in providing health care coverage to children under 19 years old. Funds were allocated over a ten-year period through a capped grant, and a subsequent act was signed by the President in December 2007 that provided extended funding through March 2009. K-CHIP participants were first enrolled in August 1998. Phase I encompassed children in ages 14 through 18 years of age in families with incomes at or below 100 percent of the federal poverty level (FPL) who were not yet in Medicaid. Phase II began in July 1999 and increased the threshold to 150 percent of the FPL. By 2001, Phase I and Phase II had enrolled 39,000 participants. Enrollment declined to 31,000 in 2003, and has slowly risen back to its present level of 35,000 children. In the fall of 1999, Phase III was implemented expanding eligibility to 200 percent of the FPL. Early Periodic Screening Diagnosis and Treatment (EPSDT) special services and non-emergency transportation were not included. The number of Phase III participants increased steadily through October 2003 reaching nearly 20,000. In November 2003, a $20 monthly family premium was instituted for Phase III. The number of Phase III participants decreased to 15,000 but is currently around 18,000. In July 2006, copayments were implemented for all K-CHIP recipients.


The current federal match rate for Medicaid is 78.85 percent. As of July 2008, there are 350,000 children enrolled in the regular Medicaid program, 53,000 in K-CHIP, and approximately 67,000 children are eligible for K-CHIP but not enrolled. She said that the cabinet is committed to simplifying the enrollment process, increasing retention efforts, increasing outreach, and allocating required resources. Health care coverage for children is a rational long-term approach because health problems are treated and mitigated before they become costly chronic conditions.


Senator Buford asked how many children have been enrolled since the K-CHIP expansion. Secretary Miller stated that from the three weeks data in November, 453 households sent in applications to a specialized unit. Of the 453 households, 54 households were enrolled, 40 households were not eligible, and the remaining needed further documentation. She stated that to enroll 35,000 children by FY 2010 would require an additional $6.1 million in state funds in 2008 and additional $25 million in 2010. He asked if the $6.1 million and $25 million included staff, and she said yes. He asked if the cabinet could accomplish enrolling the 35,000 within existing resources, and Secretary Miller stated that they would use the same resources that are being used to pay for all the chronic illnesses right now.


Senator Borders stated that the legislature needs to work with the administration to prioritize needs.


Representative Burch stated that the number one priority should be the citizens of Kentucky and their access to healthcare.


A presentation on tobacco prevention and cessation was given by William D. Hacker, MD, FAAP, CPE, Commissioner, Department for Public Health, Cabinet for Health and Family Services. Dr. Hacker stated that the 2002 National Vital Statistics Reports showed that the leading cause of death was heart disease in 2000. The 2004 Journal of the American Medical Association (JAMA) reported the actual cause of death in 2000 was tobacco. He said that over the past 20 years Kentucky’s health status has gradually gotten worse. In a report published in 2007, the Kentucky Institute of Medicine found smoking to be Kentucky’s greatest challenge. Cancer, cardiovascular disease, and respiratory illness are among the more well-known consequences of tobacco use. More than half of the individuals who smoke will die of smoking-related illness and more than 23 percent of all deaths in Kentucky are attributable to smoking, a modifiable health risk factor. Only five of Kentucky’s 120 counties have smoking rates below the national average.


Tobacco is the leading cause of preventable death and disease in the United States. Tobacco use is an addiction. Effective, evidence-based programs are available to the 70 percent of smokers who report they want to quit. Approximately 83 percent of smokers say they would not smoke if they could start over because of health, expense, addiction, disgust, and stigma. There is no safe level of exposure to secondhand smoke either. Smoking costs to businesses are increased: health care expenditures, lost productivity, absenteeism, and fire losses and maintenance costs. The annual average smoking-attributable deaths is 7,700. The annual costs incurred in Kentucky from smoking are $1.5 billion in medical care and $487 million in Medicaid. The 2007 tobacco settlement payment was $102.8 million with an estimated $185.4 in tobacco tax revenue. The Department for Public Health spends $3.9 million on tobacco prevention and cessation. Approximately 28 percent of adult Kentuckians, 26 percent of high school students, and 26 percent of women who are pregnant smoke.


The Centers for Disease Control and Prevention (CDC) recommended strategies to reduce tobacco use in youth are to increase the unit price for tobacco products, particularly through raising state and federal excise taxes, and to develop extensive and extended mass media campaigns. To decrease the effects of secondhand smoke, the CDC recommends that states develop laws and regulations to restrict or ban tobacco consumption in workplaces and general areas used by the public. The CDC recommended strategies to promote cessation among youth and adults are to: 1) use broadcast and print media to encourage people to quit along with other strategies; 2) increase the unit price for tobacco products; 3) use provider education and have providers implement self-reminder systems to ensure the issue is raised during a clinical examination; and 4) provide telephone counseling and support along with other strategies. Components of a comprehensive tobacco control program recommended by the CDC are state and community interventions, health communications interventions, cessation interventions, surveillance and evaluation, administration and management, and recommended funding based on Kentucky’s population per capita per year.


Senator Roeding asked which of the five counties have smoking rates below the national average, and Dr. Hacker stated that was in the Kentucky Institute of Health’s report, and he would get the information for the committee. Senator Roeding asked why Medicaid did not pay for smoking cessation in the Medicaid program. Commissioner Johnson said the Kentucky Medicaid Program does not currently pay for smoking cessation programs. There is a statute that requires the department to cover smoking cessation programs if funding is available, but Medicaid is facing a $183 million deficit. Kentucky Medicaid is committed to looking at the issues and getting individuals healthy on the front end.


Representative Comer asked if the funds given to the KY-ASAP for cessation programs has been successful. Dr. Hacker stated that a representative from the department has someone who works with the KY-ASAP.


Senator Clark asked when the tobacco settlement fund would expire, and Dr. Hacker stated in 20 years. Senator Clark stated that the revenue generated from the tobacco tax would be more effective if it is used for smoking programs instead of spreading it across all social services programs. Senator Clark asked how much of an increase in a cigarette tax would motivate someone to stop smoking. Dr. Hacker said that a ten percent increase in costs decreases youth smoking. The higher the cost, more people will stop smoking.


Representative Lee asked if a change in administrative regulations would be needed to change the requirement to offer pharmacy support for smoking cessation to all Medicaid eligibles, not just those enrolled with Passport Health Plan. Commissioner Johnson stated that no administrative regulation would be required because the statutes already say if funding is available, the programs would be covered. She said that it would require the department to get permission from the Centers for Medicare and Medicaid Services (CMS). Representative Lee stated that all Medicaid eligibles should be treated the same. Commissioner Johnson stated that Passport is a capitated plan.


Representative Burch stated that the revenue raised from a cigarette tax should be spent on other public health needs and other programs, not just smoking cessation.


Mike Kuntz, Kentucky Lung Association, stated that Kentucky spends $3.7 million on tobacco control spending while the tobacco industry spends $535.3 million on marketing. There is a 47 percent quit rate in the Passport program. The benefits of a 70 cent tax increase would keep 55,400 youth from becoming addicted adult smokers, save 19,000 premature deaths from tobacco, results in 34,900 few adult smokers, and raise more than $222 million in new tobacco tax revenues. A big tax increase is crucial because tobacco use declines when the price increases. Companies cut prices, use discounts and promotions to soften the impact of a tax increase, so it is crucial that the tax increase be big enough for smokers to feel the impact and want to quit.


 Jennifer and Marc Oligee testified about their experiences of trying to navigate the Northern Kentucky public school system with their child, Gabe, who has been diagnosed with an Autism Spectrum Disorder. She stated that there needs to be an immediate plan to help all children in Kentucky and not just those that are in close vicinity to either Louisville or Western Kentucky. There needs to be a specific centralized education plan in place and adequate training for teachers currently in our school systems and those getting a teaching degree in Kentucky. Having seen the difference in her child between a special education teacher that has not worked specifically with autistic children and a teacher that has, it has made a world of difference. She said that if there are no state-funded schools for children with disabilities, the least that can be done for the estimated 28,040 people with Autism Spectrum Disorders in Kentucky is to have the same special education plans in place for all areas of the state.


A presentation on Seven Counties Services was given by Howard F. Bracco, PhD, President and CEO. Dr. Bracco stated that Seven Counties is one of 14 community mental health and developmental service centers in Kentucky and delivers a regionwide system of care focused on the needs of individuals with mental illness, development disabilities, and addiction. Headquartered in Louisville, the service area covers a population of almost one million people who reside in Bullitt, Henry, Jefferson, Oldham, Shelby, Spencer, and Trimble Counties. In 2007, Seven Counties delivered face-to-face services to over 32,000 individuals at 20 service locations, 90 public schools, in client homes, and in numerous community sites. He said that they responded to more than 100,000 requests for crisis assistance and community resource referrals through the 24 hours, seven days a week phone center. Eight years ago House Bill 843 was enacted that established regional planning authorities to identify behavioral health care needs and develop strategic plans for addressing the needs. The Seven Counties region convened a council made up of dozens of representatives of business, government, educational, and nonprofit entities with a stake in mental health. The council continues to discover and implement new ways to collaborate and reduce duplication and unnecessary costs.  Decisions about resource allocation and service efforts should be evidence-based and should be made locally.


Kentucky made a good investment by developing community-based services. By ignoring good investments, we find ourselves going backwards to unsustainable systems. Examples are the growing costs for prison expansion, homelessness, and hospitalization. Kentucky cannot sustain this system. With a $3 million cut in the 2009 budget, Seven Counties cannot continue to succeed. Additional cuts to the behavioral health programs supported by the state will have very negative and potentially catastrophic effects. Individuals who need services do not disappear when appropriate services are unavailable or delayed. When community mental health centers are unable to meet their needs, they appear elsewhere, often in jails, emergency rooms, homeless shelters, and other more costly and less effective locations and methods of service.


There being no further business, the meeting was adjourned at 3:41 p.m.