Medicaid Oversight and Advisory Committee (HB 90)


<MeetMDY1> June 25, 2007


The<MeetNo2> Medicaid Oversight and Advisory Committee (HB 90) meeting was held on<Day> Monday,<MeetMDY2> June 25, 2007, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Representative Jimmie Lee, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Dick Roeding, Co-Chair; Representative Jimmie Lee, Co-Chair; Senators Walter Blevins, Tom Buford, Julie Denton, and Dan Seum; Representatives Bob DeWeese, Joni Jenkins, and Brandon Spencer.


Guests:  Valerie Mudd, Destin Strauss, Yolanda Kelsor, Faye Morton and Kelly Gunning for the National Alliance on Mental Illness; Randy Luttrell for the Cabinet for Health and Family Services; Bill Doll for the Kentucky Medical Association; Phyllis Culp for the Division of Aging and Independent Living; Susan Stokes for HMR; Steve Shannon for the KY Association of Regional MH/MR Programs; Patty Dempsey for the ARC of Kentucky; Sheila Schuster for the Kentucky Mental Health Coalition, and Anne Joseph for the Kentucky Task Force on Hunger.


LRC Staff:  Barbara Baker, Ben Payne, and Cindy Smith.


The minutes of the April 11, 2007 meeting were approved without objection.


The first item on the agenda was an update on Medicaid modernization by Secretary Mark Birdwhistell, Cabinet for Health and Family Services, Commissioner Glenn Jennings, Department for Medicaid Services, and Carrie Banahan, Deputy Commissioner, Department for Medicaid Services.  Secretary Birdwhistell began with a  reflection of the Medicaid Department in 2004.  In 2004, there was a sizable deficit, an out-of-date computer system, paper identification cards, overutilization of brand name prescription drugs, limited access to data, and other problems.  At that time, Kentucky envisioned a new Medicaid program that would: (1) improve the health status of Kentuckians enrolled in the program; (2) ensure people receive the right care in the right setting, at the right time; (3) ensure the solvency of Kentucky Medicaid for future generations of Kentuckians; and (4) transform Kentucky Medicaid into a 21st century health care system.  Another item added by Senator Roeding and agreed to by the Cabinet was for Medicaid recipients to ensure personal responsibility in their own healthcare.


Secretary Birdwhistell compared Kentucky's Medicaid reform to a three legged stool, with Kentucky Health Choices being in the center of the stool.  The three legs of the stool are improved technology, care management and benefit management.  Phase I of the modernization including building the infrastructure consisting of technology and administrative reorganization.  The Medicaid Department was reorganized to resemble a health plan and the Division of Quality Assurance was created.  Phase II involved implementing flexible benefit packages, benefit design and care management. In regard to the technology infrastructure, Secretary Birdwhistell said that the Cabinet sought a new Kentucky Medicaid Administrative Agent (KMAA) for better care management and pharmacy management.  The new Medicaid Management Information System (MMIS) resulted in improved claims and an administrative infrastructure which is now the most sophisticated MMIS in the United States.  The MMIS technology is important because it is easier for Medicaid staff to use, requires less money for programmers making changes, and results in fewer errors and follow-ups on claims.  The technology also results in better information from highly automated databases, and is easy for providers to use.  He reviewed the four targeted benefit plans; global choices, optimum choices, comprehensive choices, and family choices.  Secretary Birdwhistell talked about Medicaid prior to the Deficit Reduction Act of 2008 (DRA).  He described the program as "one size fits all" with identical programs statewide regardless of need.  There was very limited (if any) consumer involvement and there were no limitations on benefits or services.  He said that KyHealth Choices has new rules for prescription drug coverage which include cost sharing and alternative premiums, co-pays for emergency room visits for non-emergency care, tailored health benefit packages, increases in the use of home and community services rather than institutional long-term care services, service limitations, best practices from the commercial market, maximum out-of-pocket expense limits, a tiered formulary, and consumer involvement in prevention and care management.  In regard to benefit design and cost sharing, he said that most members enrolled in KyHealth Choices will be required to share in the cost of covered services.  The maximum amount of cost-sharing shall not exceed five percent of a family's income per quarter.  In addition, some services and prescriptions have limits.  For example, prescription medicines are limited to a total of four per member, per month.  These policy changes have not resulted in an increase in access to care issues.  In regard to care management, Secretary Birdwhistell said that $2 billion has been spent currently on the conditions of diabetes, COPD, asthma, heart disease, stroke, heart failure, and neo-natal babies.  Chronic illness accounts for 74 percent of the total medical spending.  After including all behavioral health issues, this increases to 82 percent.  Disease management pilots were initiated in counties with high risks.  Nurses utilize community services to connect member with services not ordinarily covered by Medicaid.  In regard to the administrative infrastructure, Secretary Birdwhistell said that Kentucky had to remove the silos to achieve the right care, in the right setting, at the right time.


Next, Secretary Birdwhistell discussed aging issues, and long-term living initiatives.  He said the Cabinet's vision was to use the new flexibility in Medicaid to redesign long-term care services and programs in both the public and private sector to enable easy consumer access, a full continuum of services to match consumer needs, and the delivery of quality services in a timely manner.  He said that KyHealth Choices and the Long-Term Living Initiative are helping Kentuckians with Medicaid to direct and manage their own personal assistance services according to their own specific needs.  The Consumer Directed Option (CDO) program is providing consumers the option to control their non-medical services to stay in their homes and communities.  The Money Follows the Person (MFP) eliminates barriers that prevent or restrict the flexible use of Medicaid funds to enable individuals in institutions to received support for appropriate and necessary long-term services in the settings of their choice.  The Self-Directed Option (SDO) Pilot will give even greater freedom to individuals to direct their own care and will extend the scope of services.  Medicaid's CDO and SDO programs operate in collaboration with the Area Agencies on Aging (AAAs).  Currently there are over 270 enrollees in the CDO program, mostly frail and elderly and physically disabled.  The Secretary announced that Kentucky awarded a $50 million, five-year grant from the Centers for Medicare and Medicaid Services in May, 2007.


Secretary Birdwhistell discussed wellness initiatives including the "Healthy at Heart" Initiative, the Smoking Cessation Program, and the Disease Management Initiative.  The "Healthy at Heart" initiative provides free health screenings, including glucose, cholesterol, and lipid levels.  The Smoking Cessation Program offers nicotine replacement products to Medicaid recipients who enroll in counseling through the Quiet Line.  In addition, Medicaid is committed to working with local health departments on disease management.


 Secretary Birdwhistell provided an overview of the Medicaid e-health initiatives.  He reported that Kentucky received $4.9 million from CMS over 2 years to support the initial development of the Kentucky Health Information Partnership (K-HIP). K-HIP is a Medicaid-led alliance of payors working together to develop a statewide health information exchange.  Other technology advancements in Medicaid include the implementation of a new data warehouse, physician profiling, InterQual Criteria, and  the new MMIS Administrative System.  In addition, the Kentucky All Schedule Prescription Electronic Reporting System (KASPER) has been connected to the MMIS.


Next, Secretary Birdwhistell discussed signs that Kentucky's efforts are working.  He said the Medicaid budget is balanced without reducing enrollment or hurting access to care.  They have changed from and illness model to a wellness model.  The number of uninsured is down in Kentucky and employer sponsored health insurance is up according to the Kaiser Family Foundation.  The new approach is allowing Kentucky to attract and leverage external funding to help Kentucky fundamentally transform systems and services.  Kentucky's per member per week costs, the average inpatient length of stay, and the inpatient cost per claim have decreased.  Also, monthly pharmacy claims have been reduced and more generic prescriptions medications are being used.  In addition, enhanced data matching with private insurance and Medicare has resulted in a 42.5 percent increase in cost avoidance and nearly a 100 percent increase in recoveries. Improvements in the outcomes of individual enrolled in the diabetes program were reviewed.  These included increased number of diabetics who receive HgbAlc levels, lipid screenings, eye examinations and monitoring for kidney complications.


In conclusion, Secretary Birdwhistell said that KyHealth Choices: (1) eliminates the "one size fits all" approach to Medicaid; (2) is transforming Medicaid into a 21st century health plan; (3) empowers members to be active participants in their own healthcare; (4) improves wellness and quality of care delivered to its members; (5) enables the Commonwealth to break down the silos that hinder true coordination of care and services; and (6) improves the long-term solvency of the Medicaid program.


Representative Lee asked about the effectiveness of the four prescription limitations.  Secretary Birdwhistell said the average number of prescriptions is decreasing and is currently about 3.6 prescriptions per month.  Representative Lee asked how many Medicaid recipients are authorized to have over 4 prescriptions  per month.  Secretary Birdwhistell said he is not sure of that number.


Representative Lee asked about case management and clinical involvement and asked if there is a problem discussing treatment of individuals with another professional. Secretary Birdwhistell replied that information can be shared with case managers and clinical involvement.  Representative Lee inquired about prior authorization and how it works with physicians.  Commissioner Jennings replied that a physician is on the other end of the phone. 


Representative Burch asked about how strict the four prescription limit per month is.  Secretary Birdwhistell said that it is a soft limit and there are exceptions.  Over four prescribed prescriptions triggers some type of communication between the pharmacist and the patient. 


Senator Roeding asked about utilization and about the use of diabetes specialists and asthma specialists and how they affect access.  Secretary Birdwhistell replied that they have a lot of resources available. 


Representative Lee asked about transportation under the DRA.  Secretary Birdwhistell said that transportation was outsourced to the Transportation Cabinet.  Representative Lee asked about transportation under the SDO.  Carrie Banahan noted that this would be provided through the DRA


Representative Lee asked about the difference between CDO and SDO.  Secretary Birdwhistell replied that under CDO, the recipient can establish a financial reserve.  SDO is the next stop which allows additional services. 


Senator Roeding asked if flags come up if there is a problem with transportation.  Commissioner Jennings said that under the SDO, it is for 200 people with a  fixed budget.  Representative Lee asked if that is with an advisor.  Deputy Commissioner Banahan responded that it is. 


Representative Lee asked about training of Area Agencies on Aging (AAA) personnel regarding case management.  Commissioner Jennings replied that Medicaid will be doing this education.  Representative Lee commented that it is important that AAA's be able to distinguish between wants and needs


Representative Lee asked for a comparison of the enrollment in the CDO of the population with special needs.  Secretary Birdwhistell said he can get that info. 


Senator Roeding asked about benefit design and whether different benefits can be provided to different groups in the Kentucky Children's Health Insurance Program (KCHIP).  Secretary Birdwhistell replied that it mirrors what the state has now.  The Department is exploring the benefits of outsourcing KCHIP to a commercial carrier and asked if it improves access to the pediatric network.


Representative Lee asked about the anticipated enrollment in K-HIP.  Commissioner Jennings said that the high estimate is 1000 people at the end of three years. 


Representative Burch asked what would be the impact on Medicaid if large companies begin to drop their retirees from their health plans.  Secretary Birdwhistell said he doubts that population would spill over into the Medicaid population. 


Representative Lee asked about rebates, prior authorizations and 3rd party liability.  Secretary Birdwhistell said there has been a 42 percent increase on data match and 100 percent on recoveries and that is matching up nicely with Medicare. 


Commissioner Jennings said that there is on-going dialogue with the TWIST system, and they are beginning the automatic interface. 


Representative Lee asked about building the e-health system with $4.9 million.  Commissioner Jennings noted that the Cabinet is in the process of getting commercial insurance companies to contribute. 


Representative Lee asked about the cost of a Buy-In program.  Commissioner Jennings stated this will be a percent of the adjusted gross income. 


Representative Lee asked about the anticipated enrollment of the Buy-In.  Commissioner Jennings estimated that it would be 1,000 people.


Representative Lee asked about dental services for children and adults and if the regulated changes affected children with overbites.  Commissioner Jennings noted that funds were redirected from orthodontic services to preventive services for children.  It did not take away services for children with overbites.


Senator Roeding asked about the dollars saved from the decrease in emergency room visits.  Commissioner Jennings noted that the data presented was for a small group enrolling in the Diabetes program.


Representative Lee asked if they would collect from the insurance companies or if they demand the money back from the parents.  Commissioner Jennings said they demand the money back from the families.  He stated that the physicians should know  up front as to whether the patient has insurance and who to bill first.

            Representative Lee asked if there is any pushback from providers.  Commissioner Jennings said there has been some, but not much.  He also said they need to be able to go after the self-insurers and the Office of Insurance should be looked at to provide that help. 


Representative Lee said he is very excited about all the pilot programs that are going on and that he would love to be here in 20 years when all these programs become a reality and are no longer pilot projects. 


Representative Lee asked for the toll free number for Medicaid Customer Service.  Secretary Birdwhistell said it is 1-800-635-2570.  Senator Roeding asked for the number for the Resource Market for seniors.  Secretary Birdwhistell said he would have to get that number. 


The next item on the agenda was an update on the Medicaid Management Information System by Glenn Jennings, Commissioner, Department for Medicaid Services.  Commissioner Jennings said that on June 4, 2007, Kentucky went live with the MMIS system.  The implementation has not been seamless, but on day one claims were processed.  To ease the burden on providers, the 21 day hold will be stopped for now.  Last week, $110 million worth of claims checks were processed.  After the 21 day hold is lifted, $50 million will be released.  There were early problems with on-line claims adjudication.  There have been 1.5 million claims processed to date.  There have been 84,000 prior authorizations sent to MMIS.


Representative Lee said he has had some complaints about providers not being paid in a timely fashion.  Commissioner Jennings said $65 million will be released this week to providers.


Representative Lee asked if funds were being held until the next fiscal year.  Commissioner Jennings said they are not.


Representative Burch asked what the turnaround time is for private pay to providers.  Commissioner Jennings said they have to pay within 30 days or they pay interest.


The last item on the agenda was a presentation on the National Provider Identifier by Glenn Jennings, Commissioner, Department for Medicaid Services.  Commissioner Jennings said that the National Provider Identifier is less of an issue than it was.  CMS told states if they are using due diligence, they would get a one year window.  He said it is not mandatory that providers use an NPI number.  He said that 67 percent of pharmacy claims are being processed under NPI number, so there is already compliance.


Representative Lee asked if there is a long delay to get the provider number.  Commissioner Jennings said that in April there were 331 applications in the system, but back in October, 2006 there were 1000 in the system.  The length of time to get the number is normally 45 days, unless there is a flag which requires a physician to review the application. 


Susan Stokes, and ABI services provider signed in to speak, but said that Commissioner Jennings answered most of her questions.  She said that the Cabinet has been very responsive and helpful.  She noted that she was advised by Cabinet staff to wait for the letter to get her number and she is doing that. 


The next meeting of the Medicaid Oversight Committee will be August 20th in Louisville.  A time and location will be announced.


The meeting was adjourned at 3:00 p.m.