Medicaid Managed Care Oversight Advisory Committee


Minutes of the<MeetNo1> 10th Meeting


<MeetMDY1> December 1, 2000


The<MeetNo2> 10th meeting of the Medicaid Managed Care Oversight Advisory Committee was held on<Day> Friday,<MeetMDY2> December 1, 2000, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Gerald Neal, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Gerald Neal, Co-Chair; Senators Vernie McGaha and Julie Rose; Representatives James Bruce,  Stephen Nunn, and Dottie Sims.


Guests:  Gary Kupchinsky for the Department for Public Health; Dr. Karen Krigger for the University of Louisville School of Medicine; Glenn Bryant for the Office of Inspector General; Jo Crockett Zingg for the Lexington-Fayette County Health Department; Greg Lee for the Lexington-Fayette County Health Department; Sara Robeson for the Department for Public Health; David E. Clark for the Department for Public Health; Jodi Davis for the Department for Corrections; John McCarthy for Amerihealth; Rev. Pat Delahanty for the Catholic Conference; Krista Wood for Heartland Cares, Inc.; Bill Doll for the Kentucky Medical Association; and Walker Borie for Glaxo Wellcome.


LRC Staff:  Robert Jenkins, Murray Wood, Perry Nutt, Eric Clark and Cindy Smith.


The first item on the agenda was an update by the Department for Public Health relating to HIV/AIDS.  Dr. Rice Leach, Commissioner of the Department for Public Health, presented testimony. Seventy-four percent of HIV transmissions are due to sex or drugs, 23% are not reported, and 3% result from treatment for hemophiliacs, transfusions, and infections at birth.  Updated numbers are received from death certificates, laboratory reports of positive HIV tests, and clinical reports from physicians and others, and are accompanied by laboratory confirmation.  With regard to epidimiology, there are more than 4,100 cases of people living with HIV/AIDS.  Of this total, approximately 1,600 have AIDS, and 2,600 have HIV with no symptoms.  The number of new AIDS cases per year has dropped from a high in 1995 of 333 new cases, to 224 new cases in 2000.  The number of new cases of HIV is running similar to the number of new cases of AIDS.  The majority of the cases of HIV or AIDS is in males, although, in the last twenty years, the percentage of females with HIV or AIDS has increased.  About 2,800 of the total cases occur in people between the ages of 13 and 40.  In regard to prevention, the department does a lot of planning, counseling, testing and outreach activities to try to educate local communities, and it has an HIV care coordinator program to monitor services.  The department uses some federal dollars to purchase health insurance for some of its HIV clients, and it has an outpatient health care program and a state support service program.


Next, Commissioner Leach gave an implementation update of 2000 RS SB 227.  He said the three sections of SB 227 that affected the Department for Public Health directly were:  (1) the establishment of an Advisory Council; (2) the unique code identifier; and (3) guidelines for peer reviews and outcomes.  The department looked at existing resources to see if it could locate money to expand as requested by the legislature, but it has only been able to sustain the existing relationships with the community through the outreach groups and communication with outreach providers.  The unique code reporting law became effective by administrative regulation on December 15, but many providers across the state had already begun to voluntarily report using the new coded identifier.  The department managed to implement this reporting system within existing resources, although it increased the workload.  The department obtained Ryan White Healthcare Act funding to support a new, full-time staff person to deal with guidelines, peer reviews, and outcome evaluations.  The department tried to accomplish, with existing resources, access to Spanish-speaking interpreters and to encourage community-based outreach, but was not able to do so.  The remaining portions of SB 227 encouraged the department to implement other programs subject to staffing and funding availability, but sufficient funds are not available.


Next on the agenda, the Committee participated in a videoconference with the Federal Health Care Financing Administration (HCFA) relating to federal Medicaid requirements for expanded HIV/AIDS coverage.  Participating from HCFA were:  Randolph Graydon, HIV/AIDS Policy Coordinator; Terry Pratt, Director, Division of Integrated Services; Anne Wedgeworth, Deputy Director of the Division of Integrated Services; Aaron Blight, Division of Advocacy and Special Issues; and Ed Hutton, Wayne Furguson, Deidre Abbott, Marie Applemeddis, Sandy Corn, Shebell Thomas, Andrew Mack, Liz Mack, Sue Davidson, and Carrie Smith.


Senator Neal said the Committee is interested in what would be necessary to expand Medicaid coverage to nondisabled persons with HIV.  Mr. Hutton said the first option is flexibility under the Medicaid program, by virtue of a demonstration waiver,  referred to as Section 1115.  This authority would focus on payment of care on a population that is not yet disabled but that is at-risk for becoming Medicaid-eligible because of a disability in the future.  Through Section 1115 authority, there is an existing example to refer to with a program in Maine.  The budgetary requirements of a Section 1115 demonstration waiver require the state and federal government to agree on a fiscal cap for federal financial payments.  HCFA will work with states from the concept phase or draft proposal stage, which is the beginning point of review of Section 1115 demonstrations, to provide guidelines.  Demonstration programs can be approved without enactment of statutes by the legislature.


Senator Neal asked about budget requirements.  Mr. Hutton said it is a simple concept that becomes difficult to implement and design, and the HIV demonstrations are the most challenging to the budget.


Senator Neal asked if there were any states that stand out.  Dr. Graydon said Maine has been approved and is working toward implementation.


Representative Nunn asked about the timeline for a Section 1115 waiver application.  It can vary from 90 to 190 days, but there is a quicker turnaround when HCFA works with states from the concept phase.  The Kaiser Family Foundation has provided assistance to states in developing models to show budget-neutral waivers.  Representative Nunn asked for an explanation of HCFA’s definition of budget neutrality.  HCFA looks to develop an estimate of what expenditures would be for people who develop a disabling condition with HIV or AIDS.  Representative Nunn asked if it is a Medicaid-neutral budget or a total-neutral state budget.  HCFA requires a Medicaid- neutral budget.


Mr. Blight said a demonstration grant, Demonstration to Maintain Independence and Employment, does not require budget neutrality, and it is available under the Ticket to Work and Work Incentives Improvement Act.  The demonstration allows states to provide Medicaid-equivalent services to employed people who have physical or mental impairments that are likely to lead to disability.  The demonstration budget for the next 6 years will be $250 million.  Mississippi and Rhode Island currently have the Demonstration to Maintain Independence and Employment demonstrations. States are allowed to choose up to three different conditions that can be targeted for the provision of Medicaid-equivalent services.  Right now, HCFA is only spending approximately 10% of allotted funds.  The deadline for a demonstration application is April 30, 2001, and it will be awarded in October, 2001.  Both the Section 1115 waiver and the demonstration grant need state-matched Medicaid funds.


Senator Neal asked if there were any pending legislation that would affect HIV Medicaid coverage.  Dr. Graydon said that a bill has been introduced that would permit states to expand Medicaid to nondisabled persons with HIV.  There are other waivers for Medicaid eligibles to provide additional services to persons with HIV.


Senator Neal asked if there were any other waivers offered.  Under authority of Section 1915C of the Social Security Act, the Home and Community Based Services waiver program was established for Medicaid eligibles could receive services under this program if they are eligible for institutional care that would be provided in a hospital, nursing facility, or intermediate care facility for the mentally ill.  States are not limited to a number of services under 1915C, and have the option to provide other services to defined and specific target populations and to limit the geographic location.  Some target populations specified in the regulations for this waiver include physically disabled persons, aged, or a combination of physically disabled and aged persons.  There are options to provide programs to mentally ill and developmentally disabled individuals.


Next on the agenda, Dennis Boyd, Commissioner of the Department for Medicaid Services in the Cabinet for Health Services provided testimony relating to coverage of HIV/AIDS in Kentucky’s Medicaid program.  Commissioner Boyd said that nationally Medicaid serves over 50% of all persons living with the HIV virus and up to 90% of all children, making Medicaid the largest payor for medical services to persons living with AIDS.  An estimate of $1.4 billion was spent last fiscal year for medical services.  In Kentucky, for the fiscal year ending June 30, 2000, there were approximately 1,100 HIV/AIDS Medicaid clients who were served at a cost of approximately $10.5 million, which includes all services, and averages approximately $9,513 per person.  These figures do not include Regions 3 and 5.  The eligibility requirements for Medicaid for adults with the HIV virus are total disability, low-income, and limited resources of approximately $532 per month.  There is a ceiling of 185% of poverty for pregnant women.  The Medicaid program covers all FDA-approved drugs.  For individuals under 21, there is an Early and Periodic Screening Diagnosis and Treatment Program (EPSDT) that covers services in the federal plan but not in the state plan.  Targeted case management, which is allowable under federal regulations, helps individuals obtain medical, social, educational and other services that can be provided for Medicaid-eligible persons living with HIV/AIDS, but Kentucky does not offer this optional service.


Commissioner Boyd said Kentucky has looked into both the Section 1115 waiver and the Ticket to Work and Work Incentives Improvement Act Program.  The Ticket to Work Program became available after the last legislative session when budgets were appropriated.  A letter of intent was sent to HCFA to participate in the Ticket to Work Program.  This would have caused an expansion of persons eligible for Medicaid and would have required state-matched funds of approximately 30% for benefits and 50% for administration.  Kentucky has an 1115 waiver now that has statewide applicability but has submitted an amendment to restrict this to Region 3.  Kentucky could apply for a new 1115 waiver targeted to the HIV population or try to amend the current waiver after it is amended to the Region 3 partnership alone.  The Cabinet for Health Services is aware of available programs, although pursuing these programs would require state-matched funds to be allocated in the next budget cycle.


Senator Neal expressed concern that this issue would not be raised to a level of importance and that necessary steps would not be taken to take care of the problem.  Commissioner Boyd said the Cabinet needs to take a look at whether it can develop a program that can be budget neutral.  The Executive Branch budget preparations start in late spring or early summer, and decide, at that time, what programs are needed, costs,  and priority.  There is still a need to continue to fund existing programs.


Representative Sims asked what percentage of the 1,104 clients would be infants and children.  Commissioner Boyd said he did not have that information with him, but suspected it would be a small percentage.


Representative Nunn asked if the Ticket to Work Program would cover all types of disabilities including the MMRD people.  Commissioner Boyd said the Ticket to Work Program can be done as targeted or to cover others.  There is one component of Medicaid that will allow the cabinet to continue to cover people who are disabled and return to work, and it would depend on Kentucky’s initial application to HCFA and the federal government’s flexibility.  Representative Nunn asked if the cabinet had decided which option Kentucky would use.  Commissioner Boyd said the Ticket to Work Program is a program the Cabinet looked into, and it was determined that there would be costs that would preclude an application.


Representative Nunn asked who conducted the EPSDT and Impact Plus screenings.  Commissioner Boyd said these are done by licensed physicians only.  Under EPSDT, any medical condition covered under the federal plan, even if not under the state plan, is covered.  Representative Nunn asked who could conduct behavioral health screenings, and Commissioner Boyd replied that physicians do all of the screenings.  Representative Nunn asked about the screening rates.  Commissioner Boyd said the Cabinet is working with the Department of Protection and Advocacy on a plan to improve rates.  In regular Medicaid, although doctors conduct screenings, they are not billing them as a complete set.  The Cabinet has encouraged doctors to use the EPSDT screening billing criteria to receive the correct credit for screenings, and the percentage of compliance is gradually rising.


Commissioner Boyd responded to Representative Nunn and said the unique identifier had not jeopardized any federal funding.  Commissioner Boyd said there were 4,153 people diagnosed with AIDS statewide inclusive of Regions 3 and 5.  There are 1,100 people diagnosed exclusive of Regions 3 and 5.  Dr. Leach said existing federal funding is not jeopardized but the Center for Disease Control is not optimistic on giving Kentucky help with the unique coding because they want recorded names.


Commissioner Boyd said only state funds are used to cover services for people in the Department of Corrections.  Representative Nunn asked if there were any focus on the Department of Corrections in regard to prevention measures.  Dr. Leach said the Cabinet maintains communication with the department, but did not have a specific answer to the question.


Senator Neal asked why the advisory council was such a big budgetary problem and how much funds would be needed.  Dr. Leach said that money is an issue, but the bigger issue is which programs within the Department for Public Health would have to be stopped to transfer money to the council.  Senator Neal said the council should be a priority.


Last on the agenda was testimony by Karen Krigger, M.D., Associate Professor of Medicine, at the University of Louisville School of Medicine, Clair Pomeroy, M.D., Associate Professor of Medicine at the University of Kentucky College of Medicine, and Krista Wood, Executive Director of Heartland CARES, in Paducah, Kentucky.  Dr. Krigger began by saying the numbers of HIV infections in Kentucky are not set in stone because the mandate for reporting of HIV will not take place until December 15, 2000.  Kentucky already had mandatory AIDS reporting but not mandatory HIV reporting.  The states surrounding Kentucky on the CDC roster already mandate HIV reporting, and are carrying higher numbers.  There are a lot of people on the borders of Kentucky and Tennessee being diagnosed with advanced stages of AIDS at their initial screening because they have not been diagnosed in their communities.  There are some people totally asyptomatic for 10 to 12 years who do not know they have it or are at risk for it.


Dr. Krigger said there is a high percentage of African-Americans diagnosed with HIV/AIDS, and there are additional resources coming into Kentucky to help with prevention and testing efforts which will find increased numbers of cases of HIV/AIDS.  Since 1996, there have been decreases in mortality and areas of incidence.  People are living longer and healthier with the advent of protease inhibitors, but the infection rate of HIV is still the same.  Kentucky does not have a good understanding of its number of cases because there has not been mandatory surveillance for HIV.  Fifty percent of women in Kentucky have contracted HIV heterosexually.  Since 1994, when HIV screening has been offered as part of the prenatal visit, more women have been detected.  The number of adolescents with HIV has not increased.  Kentucky should take advantage of all available federal funding.


Dr. Krigger said studies indicate that when drugs are made available to people who have been diagnosed early, the overall costs for in-patient hospitalizations and opportunistic infections decline.  If support services are in place with a primary care model and early identification, there is not such a high price at the end of the disease.  There are not enough Ryan White II funds to cover Kentucky.  Since February 1, 2000, there have been 161 people on a waiting list to receive medications and only 35 have been helped.  Every Kentuckian, no matter where they live, deserves the opportunity to have quality HIV care and access to health care.  There has to be statewide coordinated care.  Dr. Leach said he would provide the committee information on how much money would be needed to fund the advisory council as requested by Senator Neal.  Dr. Krigger said it is more cost effective to prevent a disease than to treat one.


Dr. Pomeroy said HIV infection and AIDS is a hidden disease. A patient is taken off the Kentucky AIDS Drug Assistance Program if he or she does not refill a prescription within 90 days.  Major changes have been made in HIV care that necessitate new approaches to financing.  Cost analysis by the federal government, Kaiser Foundation, and universities have shown that if money is put upfront, there is less cost overall.  Because of drugs, we have shifted from in-patient to out-patient costs. 


The Medicaid spend-down allowable income in Kentucky is $217 a month, which is 31% of poverty level.  Dr. Krigger said that in Medicaid policy, they have different options.  Kentucky’s spend-down amount is one of the lowest in the nation.  This is one of the reasons for the difficulties serving disabled clients.  If disabled, the person can get Social Security Disability, making his or her income above the $512 limit and thus unable to get Medicaid.  When they cannot get Medicaid, they have to spend-down to the $217.  The person must wait a year to get approved for Social Security Disability.  When receiving Social Security Disability, the individual cannot get Medicare for two years.  With Medicare disability, there is no medication component.


Senator Neal asked if the legislature was responsible for the income limits.  Dr. Pomeroy said the limit was set to encourage people to get off welfare.  Senator Neal said this was an issue that must be explored.  Dr. Pomeroy said she was angry on behalf of her patients because she is unable to take care of her patients correctly.  Under Medicaid, the person must be poor and disabled.  To be disabled, the patient must have end-stage AIDS by the CDC criteria.  Kentucky is not taking advantage of demonstration projects that would allow expanded eligibility to people who have asymtomatic HIV infection.


Representative Sims said California has more resources than Kentucky and asked how Kentucky could receive more resources.  Dr. Pomeroy said limited resources are real, but the fact is Kentucky is penny-pinching up front and costing more in the long run.  One study reported that Medicaid could save $241 per patient annually and increase life expectancy by .45 years per patient if eligibility were expanded and if care began before the patient developed an AIDS defining lesion.  Senator Neal said Kentucky needs to address this.


Representative Nunn said in the 2001 Regular Session, the priority being discussed is eliminating the vehicle tax that would create a $40 million to $80 million shortfall.  There is already a $10 million to $12 million Medicaid deficit.  The insensitivity to the plight of people who have specific identifiable needs that would save us money is being neglected.  Dr. Pomeroy said Kentucky does not have a good handle on what kind of population is being talked about.  In 1995, at the University of Kentucky Hospital, 250 patient visits were provided for HIV care.  In 2001, there will be 2,400 patient visits for HIV care with no increase in resources, and the projections will only rise.  There are only 2 private infectious disease practices in Lexington that provide HIV care.  It is not cost effective to depend on the University of Kentucky Hospital to provide the vast majority of the care.  The universities are donating a tremendous amount to battle the HIV problem in Kentucky but they still need help.  Dr. Krigger said the impact of the disease is far more than the number of infected HIV patients but also includes their families.  Helping a family structure stay healthy will help all of Kentucky.  Dr. Pomeroy said the reason there are not many people in eastern Kentucky with HIV is because they have to move to Lexington to receive treatment.


Ms. Wood said she encourages her patients to move to Illinois because they have better benefits and her clinic can still service them.  This is not the answer.  Kentucky needs to be in the forefront in treating the sick and disabled.  She said her clinic was the first Ryan White Title III clinic in the state of Kentucky and is a model program.  She is involved in an initiative with 85 other clinics throughout the United States through the Institute of Health Improvement.  As Title III clinics, the Institute of Health Improvement puts criteria upon them that must be met.  One criteria is making sure 95% of patients are on HART (Highly Active Antiretroviral Therapy), which includes a minimum of three drug cocktails, and this high drug utilization rate is one reason that KADAP Medicaid costs have increased. Her clinic operates on a $1,000,000 budget per year, of which approximately $500,000 are Ryan White funds for primary care and the other $500,000 comes from grants used for prevention and education.  The money she has to provide drugs would not take care of 2 patients.  She has 17 patients on the KADAP waiting list.  Her clinic covers all of western Kentucky and southern Illinois.


There are 20 patients on Compassionate Use.  Clinic personnel have to fill out KADAP forms, Compassionate Use forms, and disability forms every day to make sure patients receive medications.  If clinics cannot guarantee continued drug coverage for a patient, patients cannot be put on drugs.  Ms. Wood said in the past two years since her clinic opened, they have seen 120 patients and currently have 150 active patients.  Her clinic receives 6 to 10 new patients a month. Major problems for the clinic involve transportation issues and the large number of patients with full-blown AIDS needing comprehensive services.  Recently they have been receiving referrals from hospitals.  Approximately 95% of her patients live at or below poverty level because they cannot consistently maintain a job or are fired because someone found out they have HIV.  If the Advisory Board is not up and running soon, Kentucky will never receive any federal money.  Senator Neal said the Advisory Board is very important.


Representative Nunn asked how much money is needed.  Dr. Krigger said KADAP patients will need approximately $2 million.  There are federal resources available, but the Center for Disease Control is not wanting to help Kentucky because of the unique identifier reporting system.  Kentucky must match federal funds.  There are 18 FDA approved drugs and 20 more waiting to be approved.  In the next two years, there will be 2 more classes of HIV.  Senator Neal said the establishment of the Advisory Board has to be done and does not care where the money comes from.


Mr. Kupchinsky told Senator Neal that the KDAP program is comprised of $3.2 million which includes $90,000.  Approximately $1.6 million has already been spent.  The grant year will end in March, 2001.  There are 160 people on the waiting list and 323 people being served at an average cost of $654 per client per month.  Since 1996, there has been an increase in federal funding from approximately $196,000 to $3.2 million.  In terms of the insurance program Dr. Leach referred to, there is a need for another $500,000 in the next grant application.  Additional pharmaceutical needs would cost $2.5 million.  The funds received through the Ryan White Care Act are based on patients living with AIDS.  This information is obtained through the surveillance program, and these are the numbers used to request funds.  There is a formula used to calculate how much funds the state receives and is based upon the number of Kentuckians reported with AIDS.  There are 30 drugs on the KADAP formulary.


There being no further business, the meeting adjourned at 12:05 PM.