Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> August 5, 2009


The<MeetNo2> 6th meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> August 5, 2009, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Representative Dottie Sims, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Dottie Sims, Co-Chair; David Givens, Vernie McGaha, and Joey Pendleton; Representatives Royce W. Adams, James R. Comer Jr., Charlie Hoffman, Tom McKee, and Tommy Turner.


Legislative Guest:    Representative Fred Nesler.


Guests:  Roger Thomas, Joel Neaveill, Angela Blank, and Brian Thomas, Governor’s Office of Agricultural Policy; Sharon Clark and Tonya Parsons, Department of Insurance; Van Ingram, Amy Andrews, and Heather Wainscott, Kentucky Agency for Substance Abuse Policy.


LRC Staff:  Lowell Atchley, Biff Baker, Dane Bowles, and Kelly Blevins.

The July 1, 2009 minutes were approved by voice vote and without objection, on a motion made by Representative McKee, seconded by Senator McGaha.


Co-chair Sims asked Mr. Roger Thomas, Executive Director, and Mr. Joel Neaveill, Chief of Staff, Governor’s Office of Agricultural Policy (GOAP), to report on the projects considered by the Agricultural Development Board (ADB) during its July meeting.


Mr. Neaveill reviewed the County Agricultural Investment Program (CAIP) report for July. No state projects were acted on at the previous ADB meeting. He then turned to the Deceased Farm Animal Disposal Program, which prompted additional discussion and questions from committee members. They told the committee that 16 counties had developed local disposal programs thus far, with most contracting with hauling services to pick up dead livestock. A total $83,042 had been committed to the overall program.


Responding to Representative McKee, Mr. Thomas said they did not know what will happen as renderers face an October 2009 deadline to fully comply with a federal Food and Drug Administration rule dealing with processing cattle carcasses. Mr. Thomas said he hoped Griffin Industries and other renderers would continue their service.


According to Mr. Thomas, who responded to questions from Senator Givens later in the meeting, livestock picked up in 11 counties under the Deceased Farm Animal Disposal Program undergo rendering. Other disposal methods include landfills or shipment to fertilizer production facilities. Landfill disposal is viable option based on the landfill disposal experience of Madison and Estill counties, according to testimony.


During his appearance, Mr. Thomas told the committee that, of the approximate $17 million available to counties through the CAIP, approximately $11.3 million had been committed to projects. He announced that Karen Curtis of Robertson County was recently appointed to the ADB. Also, the ADB was approved for $2 million in federal stimulus funds to commit to energy-related investments in agriculture.


Next, Co-chair Sims called on Ms. Sharon P. Clark, Commissioner, Department of Insurance, and Ms. Tonya Parsons, Director, Kentucky Access, to discuss the Health Care Improvement Authority (HCIA) and the Kentucky Access insurance program.


First, Ms. Clark discussed the activities of the HCIA, which has oversight over four programs receiving tobacco settlement funds – Kentucky Access, the Kentucky Lung Cancer Research Program, the Tobacco Use Prevention and Cessation Program, and the Kentucky Agency for Substance Abuse Policy (KY-ASAP).


In particular, Ms. Clark directed the committee’s attention to charts showing FY 09 tobacco settlement appropriations and expenditures by the agencies. She noted that in FY 09, a total of $64,139,300 was transferred from Kentucky Access accounts to the general fund. She said they were able to retain approximately $10 million to assure adequate funds are available to cover claims the next year. A total of $5,385,900 is anticipated to be transferred from Kentucky Access to the general fund in FY 10.


Ms. Clark told the committee the program continues to function well and continues to experience challenges. They continue to monitor the Congressional health care reform debate, she said.

In response to Co-chair Sims’ question about ovarian cancer screening, Ms. Clark indicated representatives of the Kentucky Lung Cancer Research Program could answer specific questions, but the program seemed to be a success.


Next, Ms. Parsons briefed the committee on the status of Kentucky Access, a state-run health insurance program that receives tobacco settlement funds. According to her report, Kentucky Access, as of June 30, had a total enrollment of 12,440. Their fiscal year budget totaled $62,595,505. Member claims payments totaled $57,926,986.


According to their report, new developments included an on-line application procedure, a new disease management program, and the introduction of a new insurance carrier in the state.


In subsequent discussion, they told Representative Adams that the new on-line application process would be implemented in the fall.


Responding to Senator McGaha, Ms. Parsons said the average premium among all plans is about $480 per month, with premium rates varying depending on one’s age or other factors.


In continuing discussion with Senator McGaha about the $64 million-plus budget transfer, Ms. Clark said Kentucky Access began FY 10 with about $10 million, but had the assurance of the State Budget Office that funds would be available to pay claims. According to Ms. Clark, the program maintains 6-7 percent administrative costs, which are low. Ms. Parsons said they anticipate premium revenues will increase in FY 10.


The witnesses told Senator Givens that the number of applicants is increasing, although slowly, with about as many leaving the program as come into the program. They said there are eligibility requirements such as the availability of other coverage, like Medicare or Medicaid, or residency status.


Responding to Representative McKee, they indicated they periodically review the plans offered, and are considering a higher deduction plan, which would be more affordable. Representative McKee complimented them on their work.


In later discussion, Senator Givens asked about trends they are seeing. Although they had not studied trends per se, according to the witnesses, they will use data from the disease management program to help track trends. They described the disease management plan to the senator, noting the plan administrator provides patients with materials that they need to cope with their disease, as well as work with physicians.


Following that discussion, the chair called on officials with KY-ASAP. In brief remarks, Mr. Van Ingram, Executive Director, Office of Drug Control Policy (ODCP), described KY-ASAP and how it is structured. 


Next, Ms. Andrews, Coordinator, KY-ASAP, discussed the board’s organizational structure, events of the past year, which included a review by the Legislative Program Review and Investigations Committee, the status of the state board and its meetings, their budgetary situation, the outcome of a state audit, and their partnerships with other agencies.


Following Ms. Andrews, Ms. Wainscott, Branch Manager, ODCP, described KY- ASAP’s association with the Partnership for a Drug-Free America. She discussed how they are creating localized media messages for distribution through local media.


Responding to Senator Pendleton and Co-chair Sims, Ms. Wainscott described public service work in the legislators’ particular districts.


Mr. Ingram elaborated on a question that Representative Nesler asked earlier about dealing with efforts to combat drug abuse. He told the committee that the most critical drug problem currently is the rise in prescription drug abuse. To combat that, he said they have had a number of meetings with insurers, health agencies and associations, and others to discuss the problem and how to combat it.


Representative Nesler said he would be interested in knowing how much is spent in Kentucky to deal with the problem. Mentioning the stories that he sees in the local newspaper, the representative expressed a hope that the state is making some headway. In subsequent discussion, Mr. Ingram described some of the agencies involved in the anti-drug abuse effort. Alluding to the KY-ASAP funds available for local boards, Mr. Ingram indicated that as more local boards are formed, the amount of funds of available for them will shrink.


Representative Nesler asked about funds for drug treatment. Ms. Wainscott said counties have differing initiatives and they may receive funds from other sources in addition to the KY-ASAP funding.


Senator McGaha asked about any involvement in local drug courts. According to Ms. Andrews, counties may use funds to help train drug court staff and pay for some incentives for those involved in drug recovery classes, such as limited use gas and phone cards.


In later discussion, Ms. Andrews told Co-chair Sims that only Jessamine County did not apply for funding during the fiscal year. She said the county was going through a transition. According to the testimony, they are working at this time with seven of the counties that do not receive KY-ASAP funds.


Senator Givens complimented the KY-ASAP administrators. He asked if they have some performance measures that they use to measure their progress. Ms. Andrews mentioned a survey that is geared to assessing alcohol and tobacco use among young people. She said that is a way to gauge what is happening in communities because young people are forthright in their responses. Mr. Ingram said they also monitor the National Alliance for Health survey. According to that survey, there are states with worse prescription drug problems than Kentucky, but not many, his testimony revealed. He added that 10 percent of young people in Kentucky responded they have used powerful pain killers.


Asked if the system allows them to be nimble regarding emerging trends and if counties share information with each other, Mr. Ingram said they can be flexible because of their small staff. He said Ms. Andrews and Ms. Wainscott urge local boards to work together. He said they would like to offer some regional training, but that would require more funding.


Responding to Co-chair Sims about investigating known methamphetamine labs, Mr. Ingram, a former law enforcement officer, indicated it is sometimes difficult to prove something is occurring.

Documents distributed during the committee meeting are available with meeting materials in the LRC Library. The meeting adjourned at approximately 11:45 a.m.