Call to Order and Roll Call
Thesixth meeting of the Interim Joint Committee on Health and Welfare was held on Tuesday, December 11, 2012, at 10:00 a.m., in Room 129 of the Capitol Annex. Senator Julie Denton, Co-Chair, called the meeting to order at 10:07 a.m., and the secretary called the roll.
Members:Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators Joe Bowen, Tom Buford, Perry B. Clark, David Givens, Dennis Parrett, Joey Pendleton, and Jack Westwood; Representatives Julie Raque Adams, Bob M. DeWeese, Kelly Flood, Jim Glenn, Joni L. Jenkins, Mary Lou Marzian, Darryl T. Owens, Ruth Ann Palumbo, Ben Waide, Susan Westrom, and Addia Wuchner.
Guest Legislators: Representatives Jimmie Lee and Carl Rollins, John Will Stacy.
Guests: Lawrence Kissner, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; Mike Rodman, Executive Director, Kentucky Board of Medical Licensure; Jill Seyfred, Executive Director, Prevent Child Abuse Kentucky; Carrie Banahan, Executive Director, and Chris Clark, Program Manager, Office of the Kentucky Health Benefit Exchange, Cabinet for Health and Family Services; Mary Begley, Inspector General, and Stephanie Brammer-Barnes, Internal Policy Analyst, Office of the Inspector General, Lorna Jones, Office of Administrative and Technology Services, Cabinet for Health and Family Services; Chandra Venettozzi and Diona Mullins, Office of Health Policy, Cabinet for Health and Family Services; Colleen Kaelin, Department for Public Health, Cabinet for Health and Family Services; Bill Doll, Kentucky Medical Association; Jan Gould, Kentucky Retail Federation; Sara Boswell Dent, Administrative Office of the Courts; Sarah S. Nicholson, Kentucky Hospital Association; Mike Porter, Kentucky Dental Association; Andrea Bennett, Kentucky Youth Advocates; Eric T. Clark, Kentucky Association of Health Care Facilities; Nathan Goldman, Kentucky Board of Nursing; Clyde Caudill, Jefferson County Bible Schools, Kentucky Association of School Administrators; and Phyllis Sosa and Morallia Tran, Department for Aging and Independent Living, Cabinet for Health and Family Services.
A motion to approve the minutes of the November 9, 2012 meeting was made by Representative Burch, seconded by Representative Marzian, and approved by voice vote.
Recognition of Members
Senator Denton recognized and thanked Senators Pendleton and Westwood, and Representative Housman for their service to the committee and wished them well in their future endeavors.
Consideration of Referred Administrative Regulations
The following administrative regulations were referred for consideration: 201 KAR 22:001 – sets forth the definitions for 201 KAR Chapter 22 pertaining to the practice and credentialing of physical therapists and physical therapist assistants; 201 KAR 22:053 – establishes a code of ethical standards and standards of practice for physical therapists and physical therapist assistants which, if violated, are a basis for disciplinary action under KRS 327.070; 900 KAR 6:030 – provides for the adjustment of expenditure minimums for capital expenditures and major medical equipment in the Certificate of Need (CON) program; 900 KAR 6:125 – establishes the requirements for registration of Magnetic Resonance Imaging (MRI) units and the requirements for submission of annual survey data that are used to produce annual reports necessary for the orderly administration of the Certificate of Need (CON) program; and 910 KAR 1:260 – establishes the Kentucky Family Caregiver Program. A motion to accept the administrative regulations was made by Senator Denton, seconded by Representative Burch, and accepted by voice vote.
Medicaid Managed Care
Lawrence Kissner, Commissioner, Department for Medicaid Services (DMS), Cabinet for Health and Family Services, stated that the projected cost to Medicaid without managed care for 32 months is $7.75 billion and with managed care is $6.48 billion a savings of $1.27 billion. The enacted budget was based on achieving the projected $1.3 billion savings, therefore the savings have already been captured by the state. Of the $5.79 billion SFY 2013 enacted budget, $2,839,430,076 is fee-for-service, and $2,954,145,924 is for the Medicaid Managed Care Organizations (MCOs). MCOs service 85 percent of the Medicaid members. MCO per member per month (PMPM) costs is $354 and $1,852 for fee-for-service. Medicaid is on track for the overall Medicaid budget for SFY 2013 based on the first four months of SFY 2013. DMS conducts continuous network adequacy reviews from information submitted by providers. Open enrollment for the seven regions was August 29, 2012 through October 20, 2012. As of November 1, 2012, was Coventry lost 33,672 members, Kentucky Spirit lost 7,642, and Wellcare added over 41,264. Members have 90 days to change MCOs. As of December 7, 2012, Passport had 72,067 members or 43.9 percent of Region 3’s membership. As members change plans, health risks for the MCO change, so appropriate risk adjustments are being done every three months. The Request for Information (RFP) for the Medicaid Management Information System (MMIS) updates has not been released. DMS must contract with an independent External Quality Review Organization (EQRO) to evaluate the performance of the MCOs. The Island Peer Review Organization (IPRO) contract is effective September 1, 2012 through June 30, 2014. Rector & Associates is a firm retained to perform additional financial analysis in addition to the normal audits performed by DOI. The goal of this analysis is to achieve improved financial tracking through market conduct examinations of the MCOs and review of MCO financial data. The contract is effective July 1, 2012 through June 30, 2014. From November 1, 2010 through April 30, 12, the MCOs, excluding Passport, provided more services and drugs to members at a lower cost and the number of emergency room visits went down.
In response to questions by Senator Denton, Commissioner Kissner stated that from 2005 to 2011, the number of providers who accepted Medicaid patients increased 27 percent. The number of primary care providers increased 36 percent. The DMS receives a list of contracted providers several times per month and then a monthly report by region is done to make sure there is network adequacy. He stated that he would have to get her the information on how many providers in each MCO have closed panels where providers are employees of the MCO or of a group that contracts with MCOs. He also would have to find details about the $6 million monthly special expenditures/offsets and why they are higher than the $4 million enacted monthly budgeted. There is nothing in an MCO’s contract that guarantees a certain percent of the enrolled members. If Passport stays above 41 percent, the automatic algorism will assign new members to the other three MCOs, but these members will have the option to transfer to a different MCO. Wellcare and CoventryCares spread administrative costs statewide and it is helping to get additional members. Region 3 had a higher per member per month (PMPM) cost structure before the 2012 bid and, therefore was able to submit an appropriate bid. He stated that he would have to send her information as to why Region 3’s 2012 bid was 30 percent higher than 2011.
The RFP for the MMIS changes will be issued within the next 60 days for approximately $40 million per year. There are funds within the RFP for start-up and transition. There is a possibility that the current vendor will not be awarded the contract. After a state has met all the requirements of the Affordable Care Act (ACA), the match rate will be 90 percent federal funds and 10 percent state funds. The health care exchange requirements of the ACA become effective on January 1, 2014 and enrollment is effective October 1, 2013. The short-term goal of DMS is to develop a near real time interface with its current systems. The long-time goal is to have a real time review that occurs within seconds. After a plan has been approved by the Centers for Medicare and Medicaid Services (CMS), the 90 percent federal match can be drawn down as money is spent. CMS does a significant review to make sure Kentucky’s system is compliant with its plan. There are no plans to submit any other technology contracts related to Medicaid.
In response to questions by Senator Bowen, Commissioner Kissner stated that providers signed a contract with the MCOs and, therefore they need to work out problems themselves. DMS has facilitated meetings between the providers and the MCOs to work out issues so claims can be paid. The MCOs and the Kentucky Hospital Association meet weekly to discuss issues about what is included in the accounts receivable listing.
In response to a question by Representative Owens, Commissioner Kissner stated that that the overall costs of emergency room visits has gone down.
In response to questions by Representative Waide, Commissioner Kissner stated that the DMS is holding the MCOs accountable to Kentucky’s prompt pay standards. The MCOs submit quarterly financial data to the Department of Insurance (DOI). Two of the MCOs have submitted a corrective action plan showing steps to speed up claims payment. If an MCO violates its contractual obligations, a corrective action plan will be requested that that includes steps for improvement. If improvements are not made within several months, the Finance and Administration Cabinet can find the MCO in breach of contract and impose penalties. The MCOs have been responsive to submitting corrective action plans.
In response to questions by Representative Adams, Commissioner Kissner stated that based on the first four months of state fiscal year 2013, the Medicaid budget is on track for state fiscal year 2013. This does not include the economic impact if Kentucky Spirit leaves Kentucky. Information cannot be provided on the economic impact to Kentucky if Kentucky Spirit leaves because of legal issues. Letters were sent to members to let them know which MCO had been assigned to manage their care. Members will have a month to request a new MCO. CMS requires DMS to conduct readiness reviews with all the MCOs, and all of them are ready to accept the members.
In response to questions by Representative Stacy, Commissioner Kissner stated that he did not have nor has the department requested an estimate of how much money the MCOs currently owe providers. DMS is holding the MCOs accountable to the prompt pay law by submitting statutory filings to DOI. The MCOs have to report to DOI because they are licensed insurers in Kentucky.
In response to questions by Senator Denton, Commissioner Kissner stated that DOI requested corrective action plans from Kentucky Spirit and Wellcare. No penalties for non-compliance have been assessed against any of the MCOs. The process followed by DMS is set in state law and DOI is the regulatory agency for prompt pay. The MCOs have six months to submit the January through March quarterly report to DOI, and Kentucky Spirit and Wellcare were found non-compliant for prompt pay and were asked to submit a corrective action plan. The two MCOs have not been found in breach of the contract or state law. The process allows the MCOs to submit a corrective action plan stating how the problems will be corrected. If MCOs do not comply with state law, they can be found in breach of contract with the cabinet. The cabinet is not aware of any violations in the any willing provider laws, but is aware of termination letters being sent to hospitals and other providers. DMS runs a monthly network adequacy model. He would have to provide information on closed panels in relation to adequacy networks.
The DMS has reviewed the nationally recognized emergency rooms standards used by the MCOs and DMS is not requiring detailed algorisms of their programs. The MCOs claim it is proprietary information. In November, DMS provided to Mike Russ from the Kentucky Hospital Association an outline from each MCO on how to treat emergency room patients. The Emergency Medical Treatment and Active Labor Act (EMTALA) requires hospitals to provide services to anyone who seeks treatment at the hospital regardless of ability to pay. After determining that a person does not need emergency care, some hospitals have referred patients to an appropriate lower cost venue. He will look into the issue of why the MCOs do not consistently use child psychiatrists to review requests for services provided to children since federal rules require that only appropriately qualified physicians can deny care. The cabinet will find out why the MCOs have not provided specific reasons for denials, because the cabinet has approved all member-specific letters that site specific reasons why there is a denial of service or denial of prior-authorization. The DMS is not involved in negotiation of rates between MCOs and providers. The cabinet will continue to monitor network adequacy and access. Avesis, dental provider for Coventry, stated it needs to reduce the rates for general practitioners by ten percent and oral surgeons by five percent to reach a point of profitability within the state. Even though Passport withdrew its protest, the contract states that auto assignment would continue.
In response to questions by Representative Wuchner, Commissioner Kissner stated that the corrective action states that an MCO has not complied with state law for 90 percent of clean claims paid within 30 days and what action will be taken to correct the problem. MCOs have 30 days from date of corrective action plan to fix the problems.
Representative Marzian suggested the issues with MCOs should be dealt with by the Medicaid Oversight and Advisory Committee.
In response to questions by Representative Westrom, Commissioner Kissner stated that if the MCO does not comply with the corrective action plan within 30 days, DOI will impose sanctions.
In response to a question by Representative Waide, Commissioner Kissner stated that model procurement laws must be followed.
Prescription Pain Medication: 2012 SS House Bill 1 Implementation
Preston Nunnelley, M.D., President, and Mike Rodman, Executive Director, Kentucky Board of Medical Licensure (KBML), stated that since the last meeting the majority of the Board’s focus has been collaborating with different groups and revising several of its administrative regulations, specifically the prescribing regulation. As a result of the comments and collaborative efforts, the board completed revisions and on November 15, 2012 submitted amendments to the Administrative Regulations Review Subcommittee for 201 KAR 9:001 - definitions, 201 KAR 9:250 – pain clinics, 201 KAR 9:260 – prescribing standards, and 201 KAR 9:310 – continuing medical education. Some of the changes to 201 KAR 9:260 are 1) focus on pain standards for prescribing over 90 days; 2) exclude patients under 16 from pain standards; 3) include an exception for all Schedule V controlled substances from the regulatory standards; 4) develop standards for prescribing and dispensing for treatment of conditions other than pain and run an initial KASPER report; 5) perform a normal patient work-up; and 6) conform to the standards of the medical complaint and use of controlled substances after initial prescribing. Some changes for 201 KAR 9:250 are 1) remove requirement that a physician has to be board-certified to work in a physician owned pain clinic; 2) amend language for fees to be $500 per clinic; 3) attempt to expand who can own a physician owned pain clinic; and 4) require physicians who are employed in a pain management facility to complete a minimum of ten hours of Category I CME in pain management during the CME cycle in addition to the 45 hours required by statute.
In response to questions by Senator Denton, Dr. Nunnelley and Lloyd Vest, General Counsel, Kentucky Board of Medical Licensure, stated that the new regulations would become effective after review and approval by the Administrative Regulations Review Subcommittee and proper jurisdictional LRC committee. The original emergency regulations will stay in effect 180 days from July. Mike Rodman, Executive Director, KBML, stated that KBML informed the physicians that once changes have been made to the administrative regulations and posted on its web site, that document would be used to advise the board on how to deal with disciplinary and policy issues and standards. Dr. Nunnelley stated that the monitoring process is initially at the 90-day level, physicians would be required to conduct some monitoring. If a physician suspects something is wrong after the 90-day initial period, then urine screens, blood tests, or hair samples could be required but are not mandatory.
In response to a question by Representative Palumbo, Dr. Nunnelley stated that the regulation deals with chronic pain not scheduled drugs which will narrow the population that would require screenings and further monitoring.
Senator Pendleton stated that the cabinet needs to make improvements to KASPER to make sure there is real time reporting.
In response to a question by Senator Bowen, Dr. Nunnelley stated that the administrative regulations address the majority of complaints. Some unintended consequences were not anticipated, but are being addressed. The board wants to make sure that it operates within the intent of the law to reduce prescription drug abuse. The board wants to make certain that patients do not go without good quality healthcare. While the patients come first, physicians are very important in pain management.
In response to a question by Representative DeWeese, Dr. Nunnelley stated that the KBML monitors KASPER. Since the legislation was enacted, KASPER queries have gone from approximately 5,000 per day to 20,000. The cabinet is in the process of having KASPER report in real time.
Child Fatality Review Panel
Jill Seyfred, Executive Director, Prevent Child Abuse Kentucky, stated that the mission of Prevent Child Abuse Kentucky (PCAK) is to prevent the abuse and neglect of Kentucky’s children. PCAK believes this can be accomplished by valuing children, supporting families and engaging communities. The agency’s mission, values and principles provide the foundation for PCAK’s position regarding the need to implement a Child Fatality Review system in Kentucky. The death of any child by maltreatment is a tragic occurrence worthy of in-depth study and review. This review should be completed in the context of prevention, and information gathered should be used to develop strategies to prevent not only child deaths, but to implement model programs to minimize risk to all children.
The Board of Directors of Prevent Child Abuse Kentucky approved the following recommendations: 1) Support the establishment of a legislatively mandated Child Fatality Review system for all deaths suspected to be related to abuse or neglect; 2) Review cases individually and in aggregate with other sources of data to develop evidence-informed prevention and intervention strategies; 3) Engage community and multidisciplinary responses to prevent child maltreatment, as well as deaths and near; 4) Identify systemic assets and areas of needed improvement in regard to the cases served. All agencies must be accountable to the public they serve and, foremost, to the children and families they encounter. To be effective, the child fatality review process should be independent, and conducted in an atmosphere of trust and mutual respect; 5) Expect the information regarding families and children be treated confidentially and respectfully. The public also has an equally valid interest in transparency regarding the actions of those agencies intended to serve and protect children. Child Fatality Review processes should be crafted in a manner to allow for meaningful review of individual case records while protecting the individual family’s right to privacy.
Joel Griffith, PCAK and member of the Kentucky Child Fatality Review Panel stated that for several years PCAK has been committed to the need to establish an in Child Fatality Review Panel in Kentucky. The death of any child by maltreatment is a tragic occurrence worthy of in-depth study and review. This review should be completed in the context of prevention, and information gathered should be used to develop strategies to prevent not only child deaths, but to implement model programs to minimize risk to all children. Legislation is needed, not only to codify what has been initiated through the executive order, but also to address necessary improvement. In partnership with other advocates and professionals, PCAK has convened many professionals across the state who believe there is strong support for enabling legislation to address needed improvements. Information gathered from a case should be viewed individually and in aggregate with overall maltreatment data and other sources of child death data to develop evidence-informed prevention and intervention strategies. Prevention of child maltreatment, as well as deaths and near fatalities, requires community engagement and a multidisciplinary response. An effective child fatality review process will identify systemic assets and areas of needed improvement. Reviews must be conducted in an atmosphere of trust and mutual respect, and to the greatest extent possible, be independent of agency influence. Other states have utilized various strategies such as using subpoena power. Given the complexities of federal and state laws regarding medical, educational and social service records, this will require careful review. However, assuring the panel has access to necessary records is of critical importance, and is fully achievable. The public has a valid interest in transparency regarding the actions of agencies intended to serve and protect children. This is especially critical in light of the opportunity to improve practice by the study of these most tragic cases. The family’s right to privacy and the public’s expectation of transparency are not mutually exclusive. Child fatality review processes should be crafted in a manner to allow for meaningful review of individual case records, while protecting the individual family’s right to privacy. There seems to be consensus that this can best be achieved by carefully crafting legislation allowing the panel to operate in closed session when necessary while fully disclosing findings and recommendations increasing public confidence that these that these tragic cases are receiving necessary study and review. It is critical to address the issue of accountability. A system should be established either through statute, regulation or policy which ensures the Child Fatality Review Panel recommendations are published, tracked until completion, and evaluated for effectiveness.
Senator Denton stated that it is critical for the panel to have access to all information in a child’s file.
Kentucky Health Benefit Exchange
Chris Clark, Program Manager, Office of the Kentucky Health Benefit Exchange, Cabinet for Health and Family Services, stated that the Affordable Care Act requires that a health benefit exchange be established by states no later than January 1, 2014 that 1) facilitates the purchase of qualified health plans; 2) provides for the establishment of a Small Business Health Options Program that is designed to assist qualified employers in the state who are small employers in facilitating the enrollment of employees in qualified health plans offered in the small group market; and 3) meets the requirements of Section 1311(d). The Request for Proposal (RFP) was released on May 22, 2012, proposals received and evaluated on July 12, 2012, and a contract signed with Deloitte Consulting Services on October 3, 2012. The contract with Deloitte will run through December 31, 2014. Deloitte is subcontracting with CGI for the plan management and billing solution. CGI’s functions included quality health plan certification, health plan quality ratings, financial management, billing for premiums, collections, and reconciliation, and small business health options program employer setup to assist participating small employers in plan selection and administration. The eligibility of families and childless adults is based on the modified adjusted gross income (MAGI). Non-MAGI programs for the aged, blind, and disabled will be based on income and resources. Enrollment is the process of facilitating plan selection for a customer who has been determined eligible and elects to enroll into a qualified health plan and/or Medicaid managed care organization (MCO).
In response to questions by Senator Denton, Carrie Banahan, Executive Director, Office of the Kentucky Health Benefit Exchange, Cabinet for Health and Family Services, stated that on November 16, 2012 the cabinet has filed a blueprint application with the federal government to establish a health benefit exchange that included a budget estimate of $39.8 million in 2015 to operate the exchange. The $39.8 million funding would include and assessment on the health benefit plans offered by the insurers in Kentucky and transitioning approximately tobacco settlement funds currently used for the Kentucky Access, Kentucky’s high risk pool. The insurers would continue to have the opportunity to raise premiums to cover the assessment for everyone insured not just individuals participating in the exchange. The Department for Insurance (DOI) bases the assessment on approximately 600,000 insured individuals. Approximately $15 million of the $39.8 million will come from the tobacco settlement funds. It is estimated that the tobacco settlement funds will be allocated for at least ten years.
In response to a question by Senator Westwood, Lorna Jones, Office of Administrative and Technology Services, Cabinet for Health and Family Services, stated that the tobacco settlement funds are used for smoking cessation programs, Kentucky Access, KY-ASAP, and the Kentucky Lung Cancer Research Program. The exchange would only use the Kentucky Access portion of the tobacco settlement funds and would not affect any of the other programs.
In response to questions by Representative DeWeese, Ms. Banahan stated that the Affordable Care Act (ACA) includes a $63 re-insurance per person per year component.
In response to questions by Representative Stacy, Ms. Banahan stated that purpose of the exchange is to increase access and affordability for health insurance coverage. People will be able to access care sooner and become healthier which should lower the overall healthcare costs in Kentucky.
In response to questions by Senator Bowen, Ms. Banahan stated that the exchange will provide health insurance coverage to individuals who qualify in the individual market for small employer groups and its employees. Association groups in Kentucky will not be part of the exchange. Individuals who work less than 30 hours will be eligible to purchase health insurance through the exchange and receive premium assistance if their incomes are between 133 percent and 400 percent of the federal poverty level.
National Background Check Program
Mary Begley, Inspector General, Office of the Inspector General, Cabinet for Health and Family Services, stated that the National Background Check Program (NBCP) grant is administered by the Centers for Medicare and Medicaid Services (CMS). The fingerprint-supported state and FBI criminal background check program is for new employees in long-term care settings. Kentucky received $3 million in federal funds with a $1 million state match over three years. The Office of Inspector General with the Cabinet for Health and Family Services is responsible for administering the NBCP grant. It is a collaborative effort between CHFS, Kentucky State Police (KSP), and Department of Workforce Investment. The initiative is called Kentucky Applicant Registry and Employment Screening (KARES). Grant funds used to enhance the pre-employment screening process in long-term care settings will help reduce the potential for abuse, neglect, or exploitation of residents and replace the current less reliable name-based criminal background check. The KARES query fee for an applicant who has been previously fingerprinted or is eligible to be hired based on the results of a prior background check is $30. If the facility has paid the $30 KARES query fee but an application is not in the system, the facility pays an additional $19 for submission of applicant prints and associated criminal history.
Because additional authority under state law is needed to fully implement the grant’s requirements, legislation will be filed in the 2013 Regular Session. The legislation will require new employees in long-term care settings to submit to fingerprinting-supported state and FBI criminal history checks. The bill will identify what constitutes a disqualifying offense, reduce duplicative fingerprinting by establishing a process for continue employment assessment, provide applicants with a means to appeal the accuracy of information contained in a criminal background check, establish a rehabilitation review process, and consider mitigating circumstances.
In response to a question by Senator Westwood, Stephanie Brammer-Barnes, Policy Analyst, Office of Inspector General, Cabinet for Health and Family Services, stated that a disqualifying offense would be a conviction not just a charge.
In response to questions by Representative Burch, Ms. Brammer-Barnes stated that initially an individual will submit to a check of applicable abuse registries. If an individual has been cleared and the professional license is in good standing, an employer would submit a fee so the individual could submit to the fingerprint supported background check. Legislation is needed to mandate participation in the program.
There being no further business, the meeting was adjourned at 1:00 p.m.