Medicaid Oversight and Advisory Committee (HB 90)


Minutes of the<MeetNo1> 1st Meeting

of the 2006 Interim


<MeetMDY1> October 31, 2006


The<MeetNo2>  Medicaid Oversight and Advisory Committee (HB 90) meeting was held on<Day> Tuesday,<MeetMDY2> October 31, 2006, at<MeetTime> 1:30 PM, in<Room> Room 171 of the Capitol Annex. Representative Derrick Graham, 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 Walter Blevins, Tom Buford, Julie Denton, and Dan Seum; Representatives James Bruce, and Joni Jenkins.


Guest Legislators:     Representatives Tom Burch and Tanya Pullen.


Guests:  Michael Vandeveer for Bristol-Myers Squibb; Jim McWilliams for the Governor's Office of Policy and Management; Ruby Jo Lubarsky for the Kentucky Association of Health Care Facilities; Mike Porter for the Kentucky Dental Association; Jan Gould for the Kentucky Retail Federation; Michael Wooden for Eli Lilly and Company; Ellen Kershaw for the Alzheimer's Association; Marilyn Minnick for the Kentuckiana Regional Planning & Development Agency; Sarah Nicholson for the Kentucky Hospital Association; Sheila Schuster for the Kentucky Medicaid Consortium; Sean Cutter for McBrayer, McGinnis, Leslie and Kirkland; and Anne Joseph for the Kentucky Task Force on Hunger covering Kentucky Kids and Families.


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


The minutes of the September 25, 2006 meeting were approved without objection.


The first agenda item was a presentation on the Deficit Reduction Act of 2005 (DRA) and its implications for the Medicaid program, by Donna Folkemer, Group Director, Forum for State Health Policy Leadership, National Conference of State Legislatures.  Ms. Folkemer reported that Medicaid serves a diverse and vulnerable population of about 55 million people, compared to less than 45 million in Medicare.  Medicaid expenditures are outpacing state revenues so the Medicaid program always gets budget and program attention.  Declines in employer-sponsored insurance coverage and state interest in preserving the number of insured puts pressure on states.  The federal government, through DRA, is supportive of state experimentation with changing benefit designs, increasing consumer responsibility, and increasing cost-sharing.  The DRA gives states new opportunities to provide long-term care in community settings. Since every state's Medicaid program is different, the extent of new flexibility afforded by DRA will be different in each state.  Federal interest in innovation and DRA changes do not mean that anything goes.  Many states are working on reform that is separate from DRA changes.  Mandatory provisions, including changes related to documentation of citizenship and identity, third-party recovery, fraud and abuse, and long-term care assets, are getting most of the attention from states this year and optional provisions may get more attention in 2007.  The state Medicaid initiatives getting attention are: (1) coverage for the uninsured; (2) Medicaid coverage through private insurance; (3) benefit package changes and cost sharing; and (4) long-term care.  Several states, including Kentucky, Idaho, West Virginia, and Florida have proposals approved by the Centers for Medicare and Medicaid Services that allow flexible benefit packages on cost sharing. These proposals include insurance premium deferred contribution, tailor benefit packages, enhanced benefit accounts, and private insurance options. The insurance premium defined contribution is a risk-adjusted monthly amount to used to choose among different insurance packages.  She reported that tailored benefit packages in Kentucky include a variation in benefit packages across groups or geographic areas.  There are three different packages in Idaho and four in Kentucky which are based on the population group.  All the changes in benefit packages that have been approved thus far were part of state reform plans developed prior to the DRA.  In regard to enhanced benefit accounts, financial credits for certain behaviors and credits can be used for specified non-covered services.  Some credits may be retained after Medicaid eligibility ends.  There are private insurance options that allow the individual to choose to enroll in a private insurance plan with the premium subsidized by the state Medicaid program. The individual is responsible for the cost-sharing or for premiums beyond the Medicaid payment.  Ms. Folkemer discussed the Mountain Health Choices proposal in West Virginia which provides an enhanced package for individuals who agree to and comply with a member agreement.  There is a more limited basic plan for those who do not enter into the agreement.  This plan will be piloted in three counties in late 2006 or early 2007.  Florida was cited as an example of a Medicaid program designed whose goal is to reinvent Medicaid  to create a competitive health care market driven by educated Medicaid consumers.  Eligible beneficiaries choose one of a variety of plans offering different benefits packages.  The state pays a premium amount adjusted for age gender, and health status.  Plans can add benefits or can limit some benefits, and the value of the benefits must meet actuarial equivalency tests.  As states move to different benefit packages, they should consider: (1) protecting access to care; (2) anticipating effects on behavior of insurers, providers, and employers; (3) reformulating the role of state agencies; and (4) developing new risk-management approaches.  Ms. Folkemer described the options for states to provide home and community based care and self-determined personal assistance under the state plan as opposed to a waiver. States have the option to make home and community based services available on less than a statewide basis and can limit the number of persons served. She described the Long-Term Care Partnership Expansion and the Money Follows the Person Demonstration.  A higher federal match is available to states for twelve month periods moving from institutions to community-based settings. Ms. Folkemer noted that the Family Opportunity Act for Children with Disabilities provides a new eligibility option for children with severe disabilities. 


Representative Burch commented on the number of Kentuckians receiving health benefits through Medicaid and the CHIP Program. He suggested that Kentucky needs to look at another option, like an umbrella plan.  He asked if Congress was focusing on a universal health plan and noted that there is enough money in the system to pay for it.  Ms. Folkemer said there has been proposals from the federal level to expand coverage.  There is a consensus issue around who is covered and how to pay.  She also noted that health care coverage will be a key issue at the polls.


Senator Roeding asked what an uncompensated care pool was and if it could be a funding source.   Ms. Folkemer replied that the pool is being used as part of the Massachusetts plan. It refers to funding coming into hospitals, but it is not compliant with federal rules.


Representative Pullen asked how Kentucky's plan compares to other plans and where Kentucky stands in terms of care for children.  Ms. Folkemer said she had studied the Kentucky plan and that all state plans have common elements.  She believes Kentucky's plan is similar to the Idaho plan.


Senator Seum asked if there are studies that break down non-emergent and emergency procedures performed in emergency rooms.  Ms. Folkemer said she did not have that with her, but studies have been done.  She said a lot of attention has been given to emergency room usage, and it is an important health care issue.  Representative Bruce noted that some hospitals have created dual emergency rooms, one for non-emergent care, which he thought could be a good option for all emergency rooms.


Representative Graham asked what the federal match rate is for the money follows the person demonstration authorized under the DRA.  Ms. Folkemer said that it is an enhanced rate for 12 months for people in the demonstration.  The enhanced match is the same as the SCHIP rate, but she was not sure of the Kentucky rate.


The last item on the agenda was a presentation on Long-Term Care Initiatives by Glenn Jennings, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services.  Commissioner Jennings reported on federal match rates.  He said the KCHIP match rate is 80/20, while the regular Medicaid match rate is 70/30.  He said the Cabinet is working on the money follows the person grant and it would be submitted October 31.  Commissioner Jennings described the Cabinet's "Long term Living Initiative". A single point of entry is a primary feature of the Long Term Living initiative. It would include screening, pre-admission assessment, financial assessment and more. It would include a technical interface, with coordination between agencies to build a concept of a continuum of care.  The goal of the long-term living initiative is to allow individuals to live in their home.  He reported that the goals of Medicaid transformation include building a continuum of care.  He reported that Kentucky is the first state to implement flexible benefit plans and cost sharing under the DRA.  He reported that the Cabinet has not yet met the commitment for the Optimum Choices or Comprehensive Choices benefit groups.  The Cabinet plans to go forward with the disease management and case management programs.  He reported that when CMS did not approve the 1115 waiver, the Cabinet recrafted the provisions to fit into the DRA, but it did not satisfy the cabinet's commitment to this group.  He reported that a combination model would be used to provide services to individuals under "Optimum Choices". This would include services under the DRA and a home and community based waiver. CMS recommended a 1915c waiver. A dialogue will be continued with CMS. He reported that workgroups consisting of Medicaid employees and advocates continue to work on the Long Term Living initiative, rate structures, and service delivery.


Representative Graham asked about the number of individuals receiving home and community based services who have incomes above the 150 percent limit.  Commissioner Jennings said there are 128 across all four waivers that have incomes above the 150 percent of the federal poverty level. Representative Graham asked if current home and community based recipients over the 150 percent of the federal poverty guidelines would lose their benefits.  Commissioner Jennings said they will and are hoping that work will help to subsidize benefits for that group of people. Representative Graham asked about future recipients and how many otherwise eligible people would fall under the 300 percent SSI standard, but above the 150 percent  of poverty each year.  Commissioner Jennings said very few because regardless of income, all services are available at all levels of care.


Representative Graham asked about the status of the Home and Community Based Waiver (HCBW).  Commissioner Jennings said that is not up for renewal at this time.  Currently, they are working on the renewal of the Acquired Brain Injury (ABI) waiver.  The HCB waiver is steady and the Supports for Community Living waiver will proceed. 


The meeting was adjourned at 2:50 p.m.