Medicaid Oversight and Advisory Committee (HB 90)


<MeetMDY1> February 27, 2006


The<MeetNo2> Medicaid Oversight and Advisory Committee (HB 90) meeting was held on<Day> Monday,<MeetMDY2> February 27, 2006, at<MeetTime> 2:00 PM, in<Room> Room 131 of the Capitol Annex. Senator Richard "Dick" Roeding, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Richard "Dick" Roeding, Co-Chair; Representative Derrick Graham, Co-Chair; Senators Tom Buford, and Julie Denton; Representatives James E Bruce, Jimmie Lee, and Stephen R Nunn.


Guests:  Helane Miller and Michelle Conlov for Abbott; and Sarah Nicholson for the Kentucky Hospital Association.


LRC Staff:  Barbara Baker, Eric Clark, Miriam Fordham, and Cindy Smith.


The minutes of the September 12, 2005 and November 28, 2005 meetings were approved without objection.


First, Senator Roeding welcomed Representative Graham as a new member of the Medicaid Oversight and Advisory Committee.


Next was election of a House Co-Chair for the committee.  There was a motion made by Representative Lee, and seconded by Representative Bruce to elect Representative Graham as co-chair of the committee.  There was a motion by Representative Nunn, seconded by Representative Lee and approved by voice vote that nominations cease.  Representative Graham was elected by acclamation.


Next on the agenda was a Medicaid update from Shannon Turner, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services.  Commissioner Turner introduced the following members of the Medicaid staff:  Jan Howell, Deputy Commissioner of Medicaid; Neville Wise, Director of Finance and Administration; and Chris Stewart, Director of Pharmacy Operations.  Ms. Howell said the smooth transition to EDS occurred on November 28, 2005.  This year, the legacy system will be upgraded to a new system.  She said providers will be contacted in the next few months and told about changes.


Mr. Stewart provided information on Medicare Part D.  He said there were some problem areas.  Many plan sponsors did not have up-to-date information from CMS, some members were not recognized as enrolled, and the entire eligibility record was not updated.  He said many plan sponsors were applying utilization tools that were not approved by CMS.  Also, the point-of-sale pharmacies were overwhelmed during the first few weeks of usage.


Representative Burch asked how many dual eligibles there are in Kentucky.  Mr. Stewart said there are 95,000 full benefit dual eligibles in Kentucky.


Senator Roeding asked if pharmacists would be reimbursed for their expenses.  Commissioner Turner said she was not sure what the federal government is looking at in that regard.  Senator Roeding asked what the problems were that were being experienced with Part D.  Commissioner Turner said that the global problem was that Part D plans can complete their own formularies and nothing prevents the plans from changing their formularies.


Commissioner Turner informed the committee that the federal CMS has proposed a Medicare Part D waiver, which would reimburse states for expenditures for prescriptions and associated administrative costs incurred as a result of providing prescriptions to dual eligibles during the January, 2006 start-up period.


Senator Roeding asked how easy it is to obtain services beyond the Medicaid limit.  Commissioner Turner said with Part D it depends on the plan and what limit is hit.  There is coverage up to a point, and then there are out-of-pocket expenses.


Representative Lee asked if there is an appeal process built in.  Mr. Stewart said there is a two level appeal process, both clinical and administrative appeals.


Representative Nunn asked for the amount of the administrative costs.  Commissioner Turner said they are still quantifying, but believes it is between $100,000 and $200,000.


Representative Nunn asked if the eligibility issues were Medicaid's problem.  Mr. Stewart said it wasn't because the process started in August and the records were double checked.  There was an agreed upon final number in November.  On January 1st the database was sent to the sponsors.  The data wasn't updated afterward.  There is a question of how fast CMS records can be updated.


Commissioner Turner discussed the recent administrative change which limits prescription drugs to four per recipient per month.  Nursing home residents and children are exempts.  She listed various medical diagnosis for which the pharmacist can override the four prescription limit.  She stated that pharmacies would be audited if their use was two standard deviations from the mean. 


Representative Lee asked if the insurance was subject to the provisions of KRS 304.17A.  Commissioner Turner said not that she is aware of, and there is an exemption at the federal level.


Next, Commissioner Turner spoke about the federal Deficit Reduction Act. The Act changed the current 36 month look-back period for transfer of assets by individuals entering long-term care to a look-back period of 60 months. Also, annuities were not listed as assets and that has been added.  There are not disqualifications for individuals that have $500,000 in home equity.  Some states can increase that amount to $750,000.


She said that long-term-care partnership programs have been opened up so more states can participate.  There is enhanced ability to insure reimbursement for third parties.  She said that premiums and cost-sharing is prohibited for certain populations including hospice, pregnant women, and individuals in an institution.  There is increased flexibility in cost sharing, including increased co-payments for individuals seeking non-emergent care in hospitals.  The aggregate cap for co-payments were increased to twenty percent for individuals with family income over one-hundred fifty percent of the federal poverty guidelines.  The co-payment limit was increased from five percent to ten percent for individuals with a family income between one hundred and one hundred fifty percent of the federal poverty guidelines.  The provider tax on Passport was terminated.  Kentucky did have theirs in place on December 8, 2005, therefore they can keep it until October 1, 2009.


Representative Burch asked if Passport will remain and if they will cover more counties.  Commissioner Turner said she expects Passport to remain for some time, but it is not on the horizon now that Passport will be covering more counties.


Senator Denton asked if there was a decision on adult dental benefits.  Commissioner Turner said that they are now allowed two cleanings per year under the preventive services model.


The last item on the agenda was an update on Passport Health Plan by Bill Wagner, Chairman, Passport Health Plan Partnership Council, Robert Slayton, Executive Vice-President, University Health Care, and Jill Bell, Vice-President, Passport Health Plan.  Mr. Wagner said Passport has been in existence for eight years and is very successful as one of the top Medicaid managed care plans in the country.  In 1987, they had 95,000 members and currently there are 135,000 members enrolled in sixteen counties.  They have accomplished the initial goal of controlling the rate of increase and the cost of services in the region.  In eight years there has been $191 million dollars in savings.  They were also successful in creating Passport Advantage with 11,000 members.


Representative Nunn asked what the per member/per month cost is.  Mr. Wagner said he did not have that number with him, but could get it.


Representative Nunn asked what the percentage of increase in Passport's Medicaid budget was.  Mr. Slayton said it has been 3-4 percent per year for the last few years.


Mr. Wagner reviewed the Region 3 Medicaid Partnership Organizational structure and said that for the most part it had remained constant over the past eight years.  He also reviewed data from selected HEDIS measures, including childhood immunizations, adolescent immunizations, comprehensive diabetes care and EPSDT compliance.  He also discussed key success factors for Passport, such as Passport being a sole source and provider sponsored partnership model.  There is extensive physician/clinician involvement in developing, implementing and managing the plan.  There is collaboration with community agencies and health department and an extensive provider network and enhanced reimbursement.


The meeting was adjourned at 12:19 p.m.