Call to Order and Roll Call
The 3rd meeting of the Budget Review Subcommittee on Human Resources of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Thursday, August 27, 2015, at 10:00 AM, in Room 154 of the Capitol Annex. Senator Ralph Alvarado, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ralph Alvarado, Co-Chair; Representative Joni L. Jenkins, Co-Chair; Senators Carroll Gibson, Denise Harper Angel, Christian McDaniel, and Morgan McGarvey; Representatives George Brown Jr., Tom Burch, Bob M. DeWeese, Mary Lou Marzian, Donna Mayfield, Darryl T. Owens, David Watkins, and Addia Wuchner.
Guests: Neville Wise, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services (CHFS); Carrie Banahan, Executive Director, Kentucky Health Benefit Exchange, CHFS; Nicole Comeaux, Deputy Director, Kentucky Health Benefit Exchange, CHFS; and Matthew Harrell, Managing Agent, Health Insurance Choice Centers.
LRC Staff: Cindy Murray, Jim Bondurant, and Benjamin Thompson.
Medicaid Managed Care Organization Medical Loss Ratios
Mr. Neville Wise spoke on Medical Loss Ratios (MLRs) for Medicaid Managed Care Organizations (MCOs).
In response to questions from Sen. McDaniel, Mr. Wise stated that the total expenditures to MCOs was close to seven billion dollars. Mr. Wise noted that if any MCO falls below the 85 percent target for MLRs, part of the premium payments would be recouped and placed back into Medicaid funds.
In response to a question from Rep. Jenkins, Mr. Wise noted that Medicaid would likely need to continue with a $7 billion expenditure to MCOs in future years.
In response to a question from Rep. Wuchner, Mr. Wise confirmed that the $7 billion allocation was for 2015.
In response to a question from Rep. Watkins, Mr. Wise noted that MCOs are supposed to notify all providers if there is a change in subcontractors and inform them of where any claims should be sent.
In response to questions from Chair Alvarado, Mr. Wise confirmed that reviews on MLRs are done annually. Mr. Wise noted that Medicaid hires an actuary to review all numbers from the MCOs and an accounting firm to review the actuary’s work in order to safeguard against false numbers from MCOs. Mr. Wise stated that funding for Graduate Medical Education has not changed on the non-managed care side.
Health Benefit Exchange Options
Ms. Carrie Banahan, Ms. Nicole Comeaux, and Mr. Matthew Harrell spoke on the differences between Kentucky’s Health Benefit Exchange and the federal Health Benefit Exchange.
In response to questions from Chair Alvarado, Ms. Banahan noted that the state of Kentucky owns the hardware, software, and Intellectual Property of kynect. Ms. Banahan continued that although Kentucky owns the intellectual property of kynect, since it was paid for by the federal government, the state would be required to share with other states that request it. Ms. Comeaux confirmed that Kentucky could charge an administrative fee to run a regional Health Benefit Exchange for other states.
In response to a question from Rep. Marzian, Ms. Banahan noted that roughly one third of the expanded population is under the age of thirty five.
In response to a question from Rep. Jenkins, Ms. Banahan confirmed that there is funding in the Medicaid budget for continuing education and health literacy programs.
There being no further business before the subcommittee, the meeting was adjourned at 12:02 PM.