Interim Joint Committee on Seniors, Veterans, Military Affairs, and Public Protection


Minutes of the<MeetNo1> 7th Meeting

of the 2005 Interim


<MeetMDY1> December 1, 2005


The<MeetNo2> 7th meeting of the Interim Joint Committee on Seniors, Veterans, Military Affairs, and Public Protection was held on<Day> Thursday,<MeetMDY2> December 1, 2005, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Representative Mike Weaver, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Elizabeth Tori, Co-Chair; Representative Mike Weaver, Co-Chair; Senators Carroll Gibson, Denise Harper Angel, Vernie McGaha, Joey Pendleton, Jerry P Rhoads, J Dorsey Ridley, Richard "Dick" Roeding, Dan Seum, Katie Stine, and Jack Westwood; Representatives Sheldon E Baugh, Carolyn Belcher, Tom Burch, James Carr, Bill Farmer, Mary Harper, Gerry Lynn, Fred Nesler, Tanya G Pullin, Steve Riggs, Tom Riner, and Charles L Siler.


Guests:  Larry L. Arnett, Joint Executive Council of Veterans Organizations (JECVO); Carlos Pugz, VFW; Bobby Hazen, Richard Eisert, James Chambers, Don Dixon, Howard Howells, Frank Konerman, JECVO; Paul Schlissel, NCOA; and Micah Spicer, Graves County High School.


LRC Staff:  Scott Varland, Clint Newman, Mustapha Jammeh, Ashley Sanders, and Rhonda Schierer.


Representative Nesler introduced his guest, Micah Spicer, a junior at Graves County High School. Co-Chair Weaver welcomed Representative Ballard and all the members of the House Subcommittee on Veterans’ Affairs.


The committee then discussed two Kentucky veterans’ nursing home issues: operational funding and expansion of an existing home or construction of a new home.


Co-Chair Weaver introduced Col. (Ret.) Larry L. Arnett, Chairman and Legislative Liaison for the Joint Executive Council of Veterans Organizations (JECVO). JECVO is an umbrella organization with membership representing the twenty-five veterans’ service organizations in Kentucky. Col. Arnett spoke against Medicaid funding for Medicaid eligible veterans at the three Kentucky veterans’ nursing homes. He began by thanking the committee and introduced Bobby Hazen, the new Chairman of JECVO and Howard Howells, the past Legislative Chairman for JECVO. Col. Arnett noted that the three nursing homes housing elderly veterans in Kentucky do a great job and also commended the Kentucky Department of Veterans Affairs (KDVA) and its staff.


Col. Arnett stated that JECVO is opposed to the KDVA’s proposal to turn the three veterans’ nursing homes in Wilmore, Hanson, and Hazard into Medicaid recipient homes, because, in the long term, such funding will be detrimental to Kentucky’s veterans and their families.


Col. Arnett added that with the interim joint committee’s assistance, JECVO has contributed to providing quality care to the state’s elderly veterans. He pointed out that he oversaw the construction, opening, and operation of Thompsonhood Veterans Center in Wilmore, Kentucky. He also oversaw the initial construction of the homes in Hanson and Hazard.


Col. Arnett said that the first of four major issues of concern to JECVO is that the three nursing homes are currently doing very well and putting them on Medicaid will jeopardize that.


Second, putting the nursing homes under Medicaid will subject the residents to Medicaid requirements. Currently, the United States Department of Veterans’ Affairs and the Kentucky Department of Veterans’ Affairs regulate those three homes. Col. Arnett further noted that JECVO feels that the Kentucky Department of Veterans’ Affairs (KDVA) needs to retain that flexibility as opposed to the Medicaid program.


The third concern to JECVO Col. Arnett pointed out is that the Medicaid program will tap into the estates of veterans to recoup Medicaid expenses paid for the care of veterans after their death. He noted that going under Medicaid violates the set of principles and rules under which veterans currently in the nursing homes were put there. He also stated that if KDVA goes through with its proposal, all new veterans will be forced to sign on to Medicaid or to pay the maximum rate of $3,100.00 for private pay residents.


The fourth concern that Col. Arnett raised is that changing to Medicaid is a very slippery slope in that it opens the door for non-veterans to be placed in the veterans nursing homes and any new ones built in the future. Veterans and their families are going to suffer, because opening up beds to non-veterans will systematically limit beds available to veterans in the future.


Col. Arnett urged the committee to oppose turning veterans’ nursing homes into Medicaid homes.


Howard Howells commented that Kentucky citizens might be troubled by veterans “double dipping” by receiving money from the VA and Medicaid. He also stated that if the Medicaid proposal goes through, it wouldn’t make sense for veterans to travel to veterans’ nursing homes on Medicaid when the veterans can stay at nursing homes in their home counties funded by Medicaid.


Co-Chair Weaver pointed out that the Medicaid issue is not subject to a vote and is being discussed only to inform the members on the issue, so they can talk intelligently to their constituents. Co-Chair Weaver then introduced BG (Ret.) Les Beavers, Commissioner at KDVA.


Commissioner Les Beavers started by introducing David Huddleston, the Executive Director at the Office of Kentucky Veterans Centers; Lisa Augg, Public Information Officer, and Lt. Col. (Ret.) Dennis Shepherd, Attorney, the latter two new at KDVA. Commissioner Beavers went on to state that he understands the concerns of Col. Arnett and Mr. Howells but the world has changed. The proposal to apply for Medicaid was necessitated by three factors: a change in federal law that allows states to receive VA Per Diem and Medicaid without offset, federal budget restriction of per diems to only veterans with service-connected injuries and disabilities, and budget guidance from the LRC and the Governor’s program management office to flat-line the general fund portion of his budget. Commissioner Beavers stated that in President Bush’s FY-06 budget proposal to Congress, the Federal VA initially cut $9M in per diem funding for Kentucky. Congress later reinstated VA Per Diem.  He emphasized that in order to maintain quality care at the nursing homes, KDVA have to apply for Medicaid funds. He went on to say that the nursing homes will not become Medicaid homes.


Commissioner Beavers said that there are three sources of funds totaling $36.5M for the current FY: the General Fund (39%), Resident Charges (31%), and VA Per Diem (30%). If Medicaid is added as the fourth source of funds, the General Fund component will be reduced by almost half. He stated that adding Medicaid has advantages, among them, a net gain of approximately $6 million to the KDVA with no impact on the Medicaid system for the State and a decrease in charges for married residents.


Commissioner Beavers stated that the acceptance of Medicaid money will not have a negative impact on the residents and the quality of care will remain high. He went on to address the issue of veterans’ estates paying for care. Only out of pocket Medicaid cost will be recovered and the co-pay part is not recovered. He called on Dennis Shepherd, an attorney at KDVA, to further explain an amendment to the Medicaid law of 1993 that provides for a recovery of Medicaid cost from the estates of Medicaid patients who die. Mr. Shepherd explained that the amendment requires Kentucky to establish a recovery program. He listed ways in which estate recovery can be avoided or delayed.


Commissioner Beavers stated that even when a veterans' nursing home receives substantial Federal money, the United States Code of Federal Regulations permits the homes to remain veterans nursing homes rather than become Medicaid homes. He doesn’t view being on Medicaid a stigma but an entitlement. It will be to the advantage of some of the current residents to use Medicaid funding, but it will not be a requirement because they came into the homes under a different set of rules. New residents will not be required to submit to Medicaid rules and admission is on a first come, first served basis. He added that he has a real challenge in Western Kentucky right now, with thirty-five on a waiting list for Alzheimer care.


Commissioner Beavers said that Medicaid will not open the door to all non-veterans. The only non-veterans allowed, he said, are spouses of veterans, Gold Star parents, and if there is enough room, parents who lose all of their children while in the service of armed forces.


Commissioner Beavers noted that the Millennium Act which establishes the number of beds for every state also mandates the VA to provide skilled nursing care to any veteran who is at least 70% disabled due to service connected injuries or disabilities. He said that the three sources of skilled nursing care are VA, Community Home, and State Veterans Homes. He added that there is currently a glitch in the law that makes veterans pay co-pays when they come to state veterans’ homes when the VA is mandated to provide that care. Commissioner Beavers also said that he had being working on a national piece of legislation to fix that problem and will like to continue receiving veterans who need skilled nursing.


Commissioner Beavers concluded by stating that state veterans’ homes are exempted from a certificate of need and are under a different jurisdiction as provided by federal code and state statute. States like Kansas, which is transitioning to Medicaid and Pennsylvania, which is on the way to transitioning, did for the same reason as Kentucky is planning to—a law change and the loss in per diem funds. He cautioned that per diem will be lost in the future because of the growing cost of health care and the only way to get ready for it is to apply for more funds through Medicaid entitlement.


Representative Belcher asked Commissioner Beavers for a time frame on the federal budget proposing to limit per diem. Commissioner Beavers said that President Bush’s budget proposal for FY-06 eliminated per diem for veterans without service-connected injuries and disabilities. He said that they were able to convince both the Senate and House congressional committees to reinstate per diem eligibility for all veterans, on the basis that it puts the state veterans’ homes in jeopardy. He further stated that $9M out of $11M for Kentucky, which was initially eliminated from the proposed budget was reinstated for FY-06.


Rep. Belcher asked if President Bush will veto the per diem. Commissioner Beavers answered that his assessment is that it will be there for FY-06, but he has been told directly that in the preparation of the FY-07 budget that the per diem issue will come up again.


Col. Arnett added that if the per diem issue comes up again next year, Congress will likely do the same thing they did this year by restoring it.


Representative Farmer asked Commissioner Beavers if he was abandoning the split between Medicaid dollars going to the state and Medicaid dollars coming back to the veterans as indicated at the Eastern Kentucky program they had about a month and a half ago. Commissioner Beavers answered in the negative. He stated that unlike the General Fund which cuts off every year, Medicaid money and co-pays are restricted funds. He stated that the issue of being able to do renovations and construction or preparing for another home comes down to the restricted funds carried forward. This, he said can be used to pay the state’s 35% portion of funds with the federal government for renovation and expansion.


Rep. Farmer further stated that his concern is that in the past two budget cycles, the legislature was able to raid some of these funds and he asked if the legislature could have access to some of these funds for other purposes. Commissioner Beavers answered in the affirmative, but stated that if he committed restricted funds to a 35% renovation or expansion, then it is obligated money and they can’t take it.


Representative Riggs asked Col. Arnett to expand on how his concern of getting the new stream of income (Medicaid) will affect the quality of care in the nursing homes when everything else is staying the same. Col. Arnett said that he expects the quality of care for the next twelve to twenty-four months to remain unchanged if Medicaid is added as a fourth stream, but he is concerned about the unknown conditions, rules, and regulations of Medicaid that are going to be placed on Kentucky. He also said that in addition to the prospect of losing per diem, congress is debating a $10B cut in Medicaid which when passed will require Kentucky to raise its share to maintain the same level of care. He further said that the impact of the continuing Medicaid cuts in Kentucky and at the federal level is unknown.


Rep. Riggs followed by asking if the quality of care won’t drop if the cost continues to climb, without revenues going up and more Medicaid funds are not sought. Col. Arnett said that revenues have consistently gone up from the resident VA Per Diem every year, and the KDVA systematically reviews the resident cost and raises the resident cost to match the per diem. Rep. Riggs then asked if that is guaranteed in the future. Col. Arnett said that the regulations provide the flexibility to review the resident cost of the facilities and if necessary raise the resident       co-pays. He said that has been done in the past ten years. He further said that the veterans’ organizations are concerned about Medicaid jeopardizing the current situation.


Commissioner Beavers added that without Medicaid his General Fund according to the budget guidelines will stay at $14M for the FY-07 and FY-08, and his design calculation for FY-07 shows a cost increase of $3M. He said that the co-pays will have to counter that without an increase in the General Fund.


Representative Baugh asked Commissioner Beavers if the nursing homes accept or could accept out of state patients. Commissioner Beavers stated that Kentucky statutes require residency for admission. Rep. Baugh followed by asking if children or parents of veterans can be accepted in the nursing homes. Commissioner Beavers answered in negative and pointed out that federal statutes allow for only veterans, veteran spouses, or parents who have lost all of their children in the service of the armed forces.


Rep. Baugh also asked if any veteran has left the nursing home because he or she improved as a result of the care provided to them. Commissioner Beavers said that very few were discharged under these circumstances, but he does not have the data at hand as far as actual numbers are concerned. The problem with tracking discharges is that they may end up at other homes after being discharged from one home. In some cases, veterans are moved to other states because their children want them moved closer, but if there are residency requirements, they will have to wait until they become eligible.


Senator Seum asked both panelists if the state’s ability to build new homes will be compromised in any way by going the Medicaid route. Commissioner Beavers answered in the negative. Col. Arnett also answered in the negative and added that the only issue of concern is the certificate of need process requirement that might come about because of pressure on the General Assembly from the private nursing homes and the nursing home associations. He added that if the certificate of need exemption is lost, it might jeopardize the state’s ability to get more funds for new homes.


Sen. Seum asked if Kentucky will be in a competitive mode with the private sector for Medicaid dollars. Col. Arnett said that the state is not constrained in the construction process but that will be jeopardized if the homes lose their certificate of need exemption. Sen. Seum followed up asking if this Medicaid proposal affects the folks in the nursing homes who can pay their way. Commissioner Beavers answered in negative.


Sen. Seum also asked Commissioner Beavers if Social Security is considered a pension. Commissioner Beavers answered no. He added that if the state changes the status of veterans’ homes by requiring a certificate of need, Kentucky will be liable to pay back the 65 percent in VA funds for the construction of the of homes over a twenty year period. He added that this will amount to about $40M in recapture of funds to the federal government. Col. Arnett added that certificate of need will not be an issue for existing homes where recoupment takes place, but will only apply to new homes.


Representative Lee commented that he takes great exception to Col. Arnett’s position that a stigma is attached to those receiving Medicaid. Col. Arnett answered that the issue of stigma is a personal opinion and that the bigger scare is the $425M deficit in Medicaid in the state and a $10B act of Congress wanting to cut the federal revenue stream of Medicaid. Rep. Lee added that Col. Arnett’s argument that eligibility for Medicaid will change in the future doesn’t carry more weight than his arguments that the VA will never lower their portion of funds to the state. Col. Arnett stated that eligibility is only one tangent that will have to change if the federal revenue stream and Medicaid is reduced. He added that the real issue is that of the unknown as far as the ability to keep the revenue streams solid are concerned.


Co-Chair Tori then thanked Col. Arnett and Commissioner Beavers for their presentation and asked what will happen if the federal government decides it can no longer pay Medicaid or Medicaid will pay for only veterans with service-connected injuries and disabilities. Commissioner Beavers answered that Medicaid is not in the business of service-connection or non-service-connection, and that Medicaid entitlement eligibility is under a different set of rules from VA. He said that the VA per diem is based upon the veterans’ status, and VA can establish whether they separate between veterans with service-connected injuries and disabilities and those without service-connected injuries and disabilities. He said that he is trying to maximize a fourth source of funds because he currently has twenty-five veterans who are all Medicaid eligible who pay nothing and applying for Medicaid is an opportunity to take care of them. He added that in order to be prepared for the potential loss of per diem with renovations, expansion and setting the basis for a new home coming up, the need to apply for Medicaid makes good sense.


Co-Chair Tori also asked if the status of veterans currently in the nursing homes will be jeopardized if Medicaid is withdrawn. Commissioner Beavers answered in the negative, but said that he will have to turn to the state for more funds from the General fund, cut services, or close a home and pay a recapture fee.


The committee then turned to the second issue of expansion of the existing nursing home at Hanson and building additional nursing homes.


Col. Arnett stated that JECVO voted not to oppose the 90-bed expansion of a home in Western Kentucky, but they are seriously concerned that adding to the number of beds will affect the state’s competitiveness for matching funds. This, he added could jeopardize the ability for Kentucky to build another home somewhere else in the state.


Co-Chair Weaver then asked Commissioner Beavers to explain the process of expanding and building a new home and also how long it will take to get funds and the project completed.

Commissioner Beavers said that for the application process, states are divided into two groups with states that can certify and guarantee 35% matching funds placed in the priority group. He stated that states in this group are considered for funding every year. He also said that priorities are broken down to health and safety issues or renovations; great, significant and limited needs. He further added that Kentucky has always been a limited needs state, because none of its veterans’ nursing homes has more than 1000 beds. He added that right now, there is a $413M backlog of funds for states that have provided matching funds for projects. He noted that the project for the expansion of Western Kentucky is currently on the bottom of the list for a share in the over $200M fund approved for projects. He said that he will be applying for funds for a new home whose site is currently unspecified, because it takes a long time to get funds.


Senator Roeding asked if there is any way to look at local funding for the matching funds and also if Commissioner Beavers can give the cost for the construction of a new home. Commissioner Beavers answered that local funding could be used in addition to state funds and that a bond could be issued to have the matching funds. Around $20M will be needed to construct a new home with 160 beds.


Representative Ballard thanked Co-Weaver and Co-Chair Tori for inviting members of the House Subcommittee on Veterans’ Affairs to the meeting. He then asked if opening a property for the expansion is related to having the matching funds. Commissioner Beavers answered in the negative. Rep. Ballard added that he is for the expansion since a huge waiting list of about sixty or seventy already exists.


Representative Farmer asked Commissioner Beavers what the impact will be if he didn’t have to pay prevailing wage on building a new home or expanding one. Commissioner Beavers stated that the prevailing wage will have to be paid since it is a federal construction project.


Co-Chair Weaver then thanked both Commissioner Beavers and Col. Arnett for presenting both sides of the issue.


Co-Chair Tori introduced Ken Mitchell, Executive Director, Office of 911 Coordinator/CMRS Board, and Marilyn Givans, Executive Administrator, MetroCall 311, Louisville Metro, to brief the committee on 911 and 311.


Mr. Mitchell introduced Jennifer Jackson, the financial officer and staff assistant with the Office of the 911 Coordinator and began his presentation by stating that Office of the 911 Coordinator/CMRS Board is attached to the Kentucky Office of Homeland Security.


Mr. Mitchell said that in the months ahead, Voice over Internet Protocol, a new technology that uses the internet as medium for telephone service, will be added to the 911 system. The Office of 911 Coordinator/CMRS Board is moving towards enhanced 911 which allows dispatchers to readily identify phone numbers and location of where a call is originating from. Mr. Mitchell further stated that this is currently going on in two phases, Wireless Phase I which has 86 CMRS certified Public Safety Answering Points (PSAPS) and Wireless Phase II which currently has 90 applications for certification.


Mr. Mitchell pointed out that the number of wireless subscribers has risen in Kentucky while the number of subscribers to landline phones is on the decrease.


Mr. Mitchell said that they are currently working through some technical and funding issues of Voice over Internet Protocol in order to make it more effective. He stated that four counties have applied for Phase II certification that are not currently Phase I certified. One county closed its dispatch center, and Kentucky State Police has assumed comprehensive receipt of 911 calls in that area. Mr. Mitchell added that fourteen counties have expressed an interest in becoming Phase I or II certified.


Mr. Mitchell also said that 311 is among various numbers set aside by the Federal Communication Commission for non-emergency police and other governmental service calls. He added that the only 311 number in the state is that of Louisville’s Metrocall, and his office has no jurisdiction or interest over 311. He added that the United Way of the Bluegrass has also recently started a 211 for social services calls. Mr. Mitchell concluded by stating that these numbers should lessen the burden on 911.


Senator Stine asked Mr. Mitchell if the build-out of the Wireless Phase II has been completed. Mr. Mitchell stated that the Wireless Phase II build-out has not been completed, and that the carriers have to have an approved cost recovery (reimbursement) plan before they can receive money from the CMRS board.


Sen. Stine added that it has been proposed to her by local officials who are struggling to maintain their dispatch centers that surplus funding could be given to them. Mr. Mitchell said that was correct to a degree, but that there are some recurring cost issues which may come up.


Sen. Stine asked when the Wireless Phase II build-out will be completed and if there are any penalties for failure to comply with the deadline. Mr. Mitchell stated that the build-out is running behind on the December 31, 2005, deadline, but the FCC has allowed for the build-out to go past the deadline. He said that he is not aware of any penalties for failure to meet the deadline.


Co-Chair Tori thanked Ken Mitchell for presenting and invited Marilyn Givans to make her presentation. Co-Chair Tori said that there had been several inquiries why various communities have not instituted 311, because they felt that it will be a terrific saving over the 911.


Marilyn Givans started by stating that she has been with Metrocall 311 since its inception, almost seventeen years ago. Ms. Givans pointed out that Metrocall is the customer service center for the Louisville Metro Government. She said that 311 was developed as a non-emergency number when President Clinton signed it into law in 1996 to take the burden off of 911. She added that there are two types of 311 numbers, the combined 911/311 and stand-alone 311 centers. The combined 911/311 centers are usually police operated and are cross-trained to handle both types of calls. Ms. Givans added that the big result of this is that it significantly improves police response. She added that the stand-alone 311, such as Metrocall 311, is normally city or county operated with an emphasis on customer service. Metrocall answers calls for all government services and also some non-emergency police calls, such as reporting abandoned vehicles.


Ms. Givans added that a 1998 study by the Institute of Justice indicated that 311 greatly reduces the burden on 911 calls. She added that it removes duplication of services and empowers citizens to be responsible callers.


Ms. Givans added that Metrocall started as a 7-digit number and changed to the 3-digit number in 2003 when Louisville and Jefferson County merged.  She claimed that Metrocall is the first full government call center in the nation and that in its first year of service, 911 calls decreased by 40,000. Ms. Givans added that Metrocall 311 can be contacted by phone, e-mail, or online. They also have an online computer tracking system that makes information readily available. She said that Metrocall currently has thirteen service representatives and is operational 24/7. They answer about 4500 calls a week and 60% of them are for information and 40% result in entries being put in their tracking system. They answer about 1000 e-mails a month and that number is growing.


Ms. Givans further stated that 311 is important, because citizens’ concerns are documented and government is held accountable. She added that with 311, there is only one number to remember, and duplication of government services is eliminated. She mentioned the Geographic Information System (GIS) feature, an interactive mapping system as another important feature of 311. She also said that 311 decreases the burden on 911 and Emergency Operational Centers (EOC). The Association of Government Call Center Employees, a national organization that meets once a year will be holding its 6th annual conference in Louisville between April 26-28, 2006. She noted that they will have a section in the conference devoted to providing information to cities and counties planning to set up a 311 or 7-digits call center.


Co-Chair Tori thanked Marilyn Givans for her presentation and asked whether she has figures on the cost savings of 311 and what the source of funding was. Ms. Givans stated that it was difficult to determine but added that the start up cost was about $91,000 and that the funds come out of city general funds. She said that her budget right now is a little over $700,000 a year, with most of it taken up by salaries. Her operating costs are under $25,000 a year and once the center is set up, the long-term expenses are very minimal. She also said that it is harder to find smaller cities with 311 because it is fairly new. Lexington and Owensboro which have small call centers came to Louisville to learn about their call center. She pointed out that larger cities like Baltimore, Houston, and Chicago are good examples for hard figures.


There was no further business and the meeting adjourned.