Program Review and Investigations Committee




<MeetMDY1>November 8, 2012


Call to Order and Roll Call

The<MeetNo2> Program Review and Investigations Committee met on<Day> Thursday,<MeetMDY2> November 8, 2012, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Jimmy Higdon, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jimmy Higdon, Co-Chair; Representative Fitz Steele, Co-Chair; Senators Vernie McGaha, Dan "Malano" Seum, and Brandon Smith; Representatives Dwight D. Butler, Terry Mills, Ruth Ann Palumbo, Rick Rand, and Arnold Simpson.


Legislative Guest: Representative John Will Stacy.


Guests: Eric Friedlander, Deputy Secretary; Beth Jurek, Executive Director, Office of Policy and Budget; Betsy Dunnigan, Deputy Commissioner; Department for Behavioral Health, Developmental, and Intellectual Disabilities; Cabinet for Health and Family Services. Bruce Scott, Chairman, Advocates for Community Options. Diane Brewer, Personal Care Home Administrator, Seven Counties Services, Inc.


LRC Staff: Greg Hager, Committee Staff Administrator; Chris Hall; Colleen Kennedy; Katie Kirkland; Van Knowles; Lora Littleton; Jean Ann Myatt; William Spears; Joel Thomas; Leonard Evans, Graduate Fellow; Stella Mountain, Committee Assistant.


Senator Higdon said that a document has been placed in the members’ folders, addressing some of the questions from the September meeting about the retirement systems.


Approve Minutes for October 11, 2012

Upon motion made by Representative Steele and a second by Senator Smith, the minutes of the October 11, 2012 meeting were approved by voice vote, without objection.


Consideration of Staff Report: Implementation Status of Four Laws Related to Health and Welfare (presented at October 11 meeting)

Upon motion by Senator McGaha and second by Representative Mills, the report was adopted by roll call vote.


Staff Report: Personal Care Homes in Kentucky

Senator Higdon said that this report resulted from a situation that Representative Mills and he became concerned about last year when a young man from their community left a personal care home and was found deceased 30 days later. Many questions arose from that situation. There are some very good personal care homes, but there are others in which residents do not receive needed care. Representative Mills agreed and said that more needs to be done to address residents’ needs.


Van Knowles, Katie Kirkland, and Joel Thomas presented the report. Mr. Knowles said that the study focused primarily on a group of personal care homes (PCHs) that serve people who receive public assistance called state supplementation. Personal care homes are licensed health facilities and may have nurses on staff. They also are long-term care facilities. PCHs follow both sets of laws and regulations.


The Cabinet for Health and Family Services (CHFS) issues licenses for personal care beds within larger facilities, usually nursing homes. These are considered nonfreestanding PC units. Freestanding PCHs have only a personal care license.


Most freestanding PCHs can be distinguished as private-pay or supplement PCHs. Private-pay PCHs serve people with higher incomes who are retired. The report uses the term “supplement PCH” to refer to facilities that accept recipients of state supplementation. State supplementation is the public assistance program that permits people with low incomes who are elderly, blind, or have a disability to live in PCHs. The supplement program is based on eligibility for Supplemental Security Income (SSI). Most supplement recipients have a severe and persistent mental illness; others have intellectual and developmental disabilities.


The two types of PCH differed significantly in the variety and quality of food, appearance of the residents, cleanliness, and activities. Private-pay PCHs charge an average of $3,300 per month. Supplement PCHs must accept $1,158 per month from residents receiving state supplementation.


Program Review staff conducted a survey of all 81 freestanding PCHs. Twenty-three PCHs, with 1,054 residents, fell clearly into the private-pay category. Fifty PCHs, with 2,361 residents, accepted a significant number of supplement recipients. If they had private-pay residents, they paid only a little more than state supplement rates. The supplement PCH group includes three state-operated specialized PCHs for treatment of people with severe and persistent mental illness.


Of the 23 private-pay homes, 16 are in the urban areas of Fayette County, Jefferson County, and northern Kentucky. There are only two such homes east of Madison County and two west of Jefferson County. State supplement personal care home locations in Kentucky are dispersed, but distinct gaps in coverage are found throughout the eastern and south central parts of the state. Western Kentucky exhibits a greater concentration of supplement personal homes and total capacity. The urban areas of Louisville and Lexington do not have any supplement personal care homes except two of the specialized state facilities not intended for long-term residence. These gaps in coverage could impact the placement of residents, perhaps forcing a relocation that is far from home.


Ms. Kirkland said that in 2012 the payment standard is $1,218. When the $60 personal needs allowance is subtracted, that leaves $1,158 that goes to the personal care home. Adjusted for inflation, since 1990 the amount received by personal care homes has been above $1,000 and has averaged $1,164. Since 1998, the average has been $1,190.


The first major conclusion of the report is that supplement personal care home operators reported that the $1,158 they must accept each month is too low to support operations. Their staffing levels are minimal, and staff generally have no credentials and are paid minimum wage or slightly more.


Recommendation 2.1 is that CHFS should propose a state supplementation rate-setting process. This would involve a periodic financial audit of personal care homes accepting state supplementation recipients. CHFS should present the proposal, including its projected costs, to the Program Review and Investigations Committee by October 1, 2013.


Personal care home residents must pay for their own personal and medical expenses with their own resources, including any health insurance. Supplement recipients have full Medicaid coverage for health and behavioral health services. Some, who are called “dual eligible,” also have Medicare coverage. Some personal care home administrators and state guardians reported that some dual-eligible residents had trouble paying for medical expenses. Medicaid picks up the remainder of covered expenses after Medicare pays, but Medicaid is not permitted to pay for their prescription costs. The Medicare prescription plans available to dual eligibles have co-payments of up to $6.50. Co-payments might consume a significant portion of a resident’s $60 monthly allowance.


Private-pay residents of supplement PCHs have low incomes and sometimes high medical expenses. Medicare has significant premiums, deductibles, and co-payments, and these residents are not eligible for full Medicaid coverage. If a resident had insufficient funds to pay for prescriptions and needed items such as clothing, the PCH would have to discharge the resident or agree to pay the excess expenses from PCH funds.


The second major conclusion of the report is that residents at supplement PCHs have few organized activities and outings. Most residents are free to come and go, but they usually have no transportation except to go to appointments. Many supplement PCHs are not within easy walking distance of places to work, shop, or seek recreation. The $60 personal allowance is insufficient for many residents to obtain the things they need.


Recommendation 2.2 is that CHFS should propose a method for setting the personal needs allowance for state supplementation recipients based on a periodic assessment of personal expenses. CHFS should present the proposal, including its projected costs, to the committee by October 1, 2013.


Many of the costs associated with personal care home residents consist wholly or partly of state general funds. For FY 2011, costs totaled about $28 million, approximately $9,600 per personal care home supplement recipient.


Mr. Knowles said that another major conclusion is that supplement PCHs provide personal care assistance, manage residents’ medications, and arrange for medical and behavioral health care. Some provide additional nursing services, but they do not provide direct behavioral health services, and their plans of care are not designed to improve residents’ functioning or assist them in moving into more independent living arrangements.


The range of health services that a PCH may offer depends on whether the PCH has nurses on staff. Only 44 percent of supplement PCHs had a nurse, and none had nurses on duty at all times. There appeared to be different opinions about what health services PCH staff may provide. When a PCH has no nurse, the staff may keep medications in a central location and assist with self-administration, but they may not administer medications. Self-administration means that the resident makes all the decisions when the prescription says “take as needed” or permits a range of doses like “1 to 2 pills.” PCH staff cannot decide when a resident should take such medications or what the dose should be. When there is a nurse on staff, the nurse may train and delegate staff to administer medications and perform other basic nursing tasks.


The Kentucky Board of Nursing has issued an opinion that nurses may not delegate injections and other nursing tasks that require significant nursing skill or judgment. Nurses must perform those tasks themselves.


Regulations mention “certified medication technicians,” but the term is not defined. CHFS officials reported that the Kentucky Medication Aide program at the community and technical college system is the certification process, but the qualifications and certification process are not defined in regulations or in written policy. Medication aides or technicians are not licensed. A Board of Nursing opinion states that medication aides may administer medications only when delegated by a nurse in the same manner as other PCH staff.


Recommendation 3.1 is that the cabinet should through regulation clarify the health services that PCHs may provide and should uniformly define the title, education, and certification requirements for certified medication aides.


Primarily at private-pay PCHs, some elderly residents who are terminally ill receive hospice services. They view the PCH as home and would like to remain there to die, as they might in their own houses. Some PCH administrators reported that terminally ill residents had to move to a nursing home or hospital when they were no longer mobile, despite their and their families’ wishes to stay at the PCH. The administrators said their staff and hospice workers would be able to serve these residents safely at the PCH. Cabinet officials reported they had discussed a hospice policy but did not have one yet.


Recommendation 3.2 is that the cabinet should consider specifying a policy on hospice care for PCH residents. This probably could be done through a regulatory change.


People with severe and persistent mental illness or intellectual or developmental disabilities usually can improve their skills and become more independent. However, conditions at supplement PCHs are not conducive to those goals. Staffing is usually minimal, and staff are paid minimum wage or just a little more. They do not have professional credentials and do not provide behavioral health services such as counseling or psychotherapy. Resident activities are limited and were not designed to improve skills or increase independence or integration into the community.


Recommendation 3.3 is that CHFS ensure that personal care homes serving people with mental illness or intellectual or developmental disabilities increase their efforts to encourage healthy lifestyles, provide stimulating activities, teach skills that could lead to greater independence, and facilitate meaningful integration with people in the community at large.


Some PCH residents receive services at community mental health centers. They may go to the clinics for counseling, psychiatric prescriptions, therapeutic rehabilitation, and other behavioral health services. There did not appear to be any evidence that community mental health services resulted in greater independence or integration into the community.


Recommendation 3.4 is that CHFS should develop a proposal on how community mental health centers can demonstrate that the services they provide to PCH residents actually achieve increased integration into the community and more independence. CHFS should present the proposal, including its projected costs, to the committee by October 1, 2013.


Another major conclusion is that regulators do not verify that a PCH is the appropriate placement for all residents. Rather, regulators deem the PCHs responsible for determining whether they can meet the needs of residents they accept. PCHs have to identify all potential risks for each resident and develop effective plans to handle them. If a PCH cannot meet the needs of a resident, the PCH must transfer the resident to another facility. It can be difficult to transfer a resident who needs specialized or intensive services. Most PCHs look at a prospective resident’s health history and use their judgment to determine whether they can meet the resident’s needs. Judgment of this sort can be unreliable. Program Review staff did not find any reliable assessment methods in use, though some might be available. One indicator of risk is qualifying for one of certain Medicaid waiver programs. To qualify for these waivers, someone must need specialized services normally provided in a nursing facility or intermediate care facility. One reason that some people living in PCHs qualify or might qualify for Medicaid waivers is the shortage of waiver slots. People on waiting lists have not yet been assessed to determine whether they qualify for waiver services, but being on the list is an indication that they might need specialized services.


Recommendation 3.5 is that CHFS should inform PCHs not to admit anyone who is eligible to receive services under the relevant waivers unless the facility can provide or arrange for the specialized services the applicant requires. If anyone eligible for a waiver is already at a PCH inappropriately, the cabinet and facility should make every effort to transfer the resident to a more appropriate setting. PCHs should carefully screen applicants and current residents who are on a waiver waiting list because they might need specialized services.


For people on a waiver waiting list or potentially qualifying for a waiver or for the new Medicaid program for people with severe and persistent mental illness, Recommendation 3.6 is that the cabinet should develop a proposal to assess and divert them to an appropriate placement. The recommendation also asks the cabinet to explore ways to assess PCH applicants and residents generally for appropriateness. CHFS should present the proposal, including its projected costs and options for payment, to the committee by October 1, 2013.


Mr. Thomas said that the CHFS Office of Inspector General (OIG) has primary oversight of PCHs and is responsible for issuing PCH licenses, conducting annual relicensure inspections, and investigating complaints against PCHS.


KRS 216.530 mandates that the cabinet perform unannounced inspections of each PCH no later than 7 to 15 months after the previous inspection. The cabinet refers to these inspections as “relicensure surveys.” OIG conducted 246 relicensure surveys at 86 freestanding PCHs from July 2008 to June 2012. Of the 160 relicensure surveys for which Program Review staff were able to determine the number of months that had elapsed since the last survey, fewer than half were conducted within the 7-to-15-month window mandated by law.


OIG officials reported to Program Review staff that they had realized in December 2010 that relicensure surveys were behind schedule due to high staff turnover. Regional program managers were directed to ensure that all surveys were up to date by January 15, 2011. All but one PCH survey was current by that date. Program Review staff examined the number of months that had passed between the surveys that brought relicensures up to date as of Jan 15, 2011 and the next surveys. Thirty percent of PCHs were not surveyed within the 15-month mandatory period.


If upon inspection CHFS determines that a PCH has not met the regulations, standards, or requirements, a citation or a statement of deficiency is issued for each failure to comply. A Type A violation presents an imminent danger to any resident or staff person and can result in fines of $1,000 to $5,000. A Type B violation presents a direct risk to the health, safety, or security of any resident, but does not create an imminent danger to life and can result in a fine of $100 to $500. Noncompliance that does not rise to the level of a violation is considered a deficiency, which is not fined.


PCHs were in full compliance for approximately 40 percent of the surveys conducted from July 2008 to June 2012. Most surveys found minor noncompliance that resulted in a statement of deficiency. On 12 occasions, the surveyor found deficiencies and violations. Eleven of the 12 violations included a Type A citation. When a PCH is found in noncompliance, regulations require the facility to submit an acceptable plan of correction to the cabinet within 10 days. There are no specified limits in regulation on the overall time period or the number of proposed plans that may be submitted.


Of the 767 allegations filed with OIG from July 2008 to June 2012, 21 percent were classified as immediate jeopardy, 62 percent as high priority, 16 percent as medium priority, and less than 1 percent as low priority. The agency has a target date for responding to each type of complaint.


In 2012, 85 percent of immediate jeopardy allegations were investigated within the target date of 2 days, which is an improvement from the previous 3 years. The pattern for medium priority investigations is similar. However, only 32 percent of high priority cases were investigated within the target period of 10 days.


Review of digital documents for seven PCHs related to the past 4 years of relicensure and complaint surveys revealed inconsistencies in the thoroughness of relicensure surveys. OIG officials acknowledged that there is no agency-approved checklist or standardized form that surveyors use to ensure they have examined all the statutory and regulatory requirements, but they expressed hope that surveyors were going through the PCH Regulations book item by item. This was not always the case. In several instances, OIG surveyors found a PCH in compliance during a relicensure survey but found deficiencies during a later visit that would have been present earlier.


A major conclusion is that there have been inconsistencies in oversight of PCHs. For a period, responses to complaints were slow and relicensure surveys were not done on time. Responsiveness and timeliness have improved. Several other agencies are involved with PCHs and their residents, and those agencies need to coordinate their efforts.


Adult Protective Services (APS) is also responsible for investigating allegations of abuse, neglect, or exploitation at PCHs. Data provided by OIG and APS indicate instances for which only one of the agencies investigated an allegation.


Recommendation 4.1 is that OIG should ensure that PCH relicensure surveys are conducted in the 7-to-15-month time frame mandated by law and should adhere to its established targets for investigating complaints. Relicensure surveys should uniformly verify compliance with all applicable requirements and document their findings. The agency should monitor the cycle of correction plans and the number of serious violations that may occur before it takes licensure or injunctive action.


A major conclusion is that the Americans with Disabilities Act and the Supreme Court’s Olmstead decision require state-supported services for people with disabilities to be provided in the setting most integrated into the community at large. Use of facilities like PCHs in other states has been found to be in violation of the Act.


Another major conclusion is that the lack of housing options and treatment services would likely result in homelessness, frequent hospitalization, and possible jail time were it not for personal care homes.


The final major conclusion of the report is that people with severe and persistent mental illness have been unable to benefit from Medicaid funding for intensive support services in individual homes. The General Assembly provided funds for a new support service program; the cabinet is working to implement it. Clients must pay shelter expenses from their own funds with the help of limited housing subsidies.


Changes to the Social Security Act provide an opportunity to serve those with serious and persistent mental illness (SPMI) similarly to other populations but without a waiver. The General Assembly allocated $600,000 in general funds to serve 200 clients in FY 2013 and $1.2 million to expand to serve 600 clients by the end of FY 2014. After describing potential issues in implementation, Mr. Thomas noted that the program will offer a service similar to assertive community treatment (ACT). ACT may be customized, is flexible, and is comprehensive in its scope. The focus is on living with psychiatric symptoms, being integrated into the community, and having a behavioral health care plan that is tailored to individual needs. ACT has been shown to be successful in urban areas, where existing housing, infrastructure, and health care supports are readily available. Limited evidence exists showing how assertive community treatment might be implemented in rural areas.


In response to questions from Senator Higdon, Mr. Knowles said that the payments to PCHs per resident were the same as in 1998 adjusted for inflation. He was unaware of other state programs with the same funding as 14 years ago. Senator Higdon said he understands the problems personal care homes have to make ends meet. The General Assembly has not done a good job in providing them with adequate funding.


In response to a question from Representative Steele, Mr. Knowles said that the fines for Type B violations can be used to pay for fixing the problems resulting in the fine. He said that the cabinet could better respond as to what happens with the remaining fine amounts.


Senator Higdon said that it appears that OIG has improved on inspections. In response to a question from Senator Higdon, Mr. Knowles said that the latest numbers are better than in the past but still show room for improvement.


In response to a question from Representative Butler, Mr. Knowles said that ACT is similar to services provided through Supports for Community Living (SCL), but ACT is intended for people with SPMI who need an array of services.


In response to a question from Representative Butler, Mr. Knowles said that it can be true that residents have no place else to go if a home is found to be in violation, but when the Dry Ridge home was closed, places were found for residents. Overall, occupancy at PCHs is 88 percent, so there are openings. The problem can be finding a home willing to take someone who has risks involved with his or her placement.


Senator Seum asked whether inspectors check on residents to see if they are threats to others in the home. Mr. Knowles responded that surveyors typically do not go through residents’ records. Senator Seum cited the example of someone at a nursing home who killed a fellow resident. Mr. Knowles said that it is the responsibility of the home to determine proper placements according to OIG.


Senator Smith said that a few years ago he wrote self-determination legislation to enable the mentally ill to live in their own houses [HB 501, enacted in 2003] to help defray some of the costs related to the mentally ill. He asked whether that is still a need and whether that legislation is saving money in dealing with people with mental disabilities. Mr. Knowles said that the cabinet could better address this.


Responding to the report, Mr. Friedlander said that the report is an accurate and balanced study of a complex area. PCHs were an issue when he started with the cabinet in 1985. Addressing an earlier question, SCL, Michelle P, and other waivers have mostly served those with intellectual and developmental disabilities. Those with SPMI are not served by those waivers. This is the population that the cabinet is trying to address. ACT is more intensive than SCL; it helps with tasks such as finding housing, employment, and medicine dosages outside an institutional setting. The consumer self-determination is a great benefit for those with mental illness to pick their own service providers. It is also less expensive than placing someone in a facility.


Senator Smith said that self-determination is positive for the patient and for funding. It has been 9 years since the legislation was enacted. He would like to follow up on tweaking the self-determination approach.


Responding to an earlier question, Ms. Jurek said that fines go to the Board of Nursing for nursing scholarships.


In response to a question from Senator Higdon, Mr. Friedlander said that he does not think that the cabinet puts up any roadblocks to PCH providers. However, programs without increases in reimbursement include comprehensive care centers, particularly in the area of behavioral health, and funding is an issue.


Ms. Jurek said that not as much progress has been made for people with SPMI as for those with intellectual and developmental disabilities. The cabinet recognizes that this is an issue.


Senator Higdon said that based on his visits to PCHs, residents consider the PCH to be their home and a better job is needed in providing services in these homes.


Responding to an earlier question, Mr. Friedlander said that OIG is not caught up on inspections. Funding and staff turnover have been issues.


Ms. Jurek said that due to funding issues, it is difficult to recruit and retain nurses, who are the majority of survey staff.


In response to a question from Representative Steele, Ms. Jurek said that registered nurses are used as inspectors.


Responding to an earlier question from Representative Butler, Ms. Dunnigan said ACT is provided through a treatment team that is available at all times. SCL is more about providing personal services.


Representative Mills said that Kentucky spends less on mental health issues than other states. He asked whether there was anything in the report on this. Mr. Knowles said that staff tried to look at other states and how they do things similar to services provided in Kentucky PCHs. There was so much variety in how facilities are defined in statutes that it was not feasible to make good cross-state comparisons.


Senator Seum said that the report did not address the tort issue. Mr. Knowles said that staff did not hear from PCHs that this is a problem. Nursing homes probably face lawsuits more frequently because they have patients with much higher medical needs.


Mr. Scott said that he is chair of Advocates for Community Options, a group of stakeholders in Kentucky’s mental health system. The group’s concern is that thousands of Kentuckians with severe mental illnesses live in personal care homes because the state does not provide a similar level of support in their homes. His first major point was that CHFS needs to strengthen the system of community supports. The group’s studies indicate that the state money supporting people in PCHs is enough to support them in the community. Steps suggested to CHFS include prompt implementation of the Medicaid waiver program for people with mental illness approved by the 2012 General Assembly, revamping Medicaid mental health benefits to bring them into line with psychiatric rehabilitation science, transforming PCHs administered by the Department for Behavioral Health into community support programs, and making the state supplement for community support equal to that received by PCH operators. His second major point was that the legislative and executive branches need to address the civil rights issue raised by supporting people in PCHs without offering an alternative in the community. The civil rights issue was defined in the Olmstead decision and is being litigated in a dozen other states.


In response to a question from Representative Steele, Mr. Scott said that his last dialogue with the cabinet was within the past 30 days.


Ms. Brewer said that she was an administrator for one of the state’s three contracted PCHs. The Department of Behavioral Health has allowed the PCH to use funds designated for the operation of a PCH to provide in-home support services to former residents who are now living in apartments. The transition from a PCH program to a program providing permanent supportive housing is half completed. Clients are flourishing in their own homes with daily visits from former PCH staff. Kentucky has the opportunity to shift institutional support funding to community support funding to allow persons with disabilities to live in their communities.


The meeting adjourned at 11:27 a.m.