Call to Order and Roll Call
The 2nd meeting of the Budget Review Subcommittee on Human Resources of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Thursday, October 26, 2017, at 10:00 AM, in Room 149 of the Capitol Annex. Representative Russell Webber, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ralph Alvarado, Co-Chair; Representative Russell Webber, Co-Chair; Senators Morgan McGarvey and Stephen Meredith; Representatives Joni L. Jenkins, Kimberly Poore Moser, Susan Westrom, and Addia Wuchner.
Guests: Tim Feeley, Deputy Secretary, Cabinet for Health and Family Services (CHFS); Eric Lowery, Acting Executive Director, Office of Policy and Budget, CHFS; Eric Clark, Chief of Staff, Secretary's Office, CHFS; Steve Miller, Commissioner, Department for Medicaid Services (DMS), CHFS; Veronica Cecil, Deputy Commissioner, DMS, CHFS; Russ Ranallo, Vice President, Finance, Owensboro Health Systems; Carl Herde, Vice President, Finance, Kentucky Hospital Association; Senator Dennis Parrett, Norma Hatfield, Kinship Care Program Participant; and Adria Johnson, Commissioner, Department for Community Based Services, CHFS.
LRC Staff: Miriam Fordham, Jake Fouts, and Benjamin Thompson.
Cabinet for Health and Family Services Budget Overview
Deputy Secretary Feeley provided a brief overview of the budget for CHFS.
In response to a question from Chair Webber, Mr. Lowery stated that CHFS had submitted a budget reduction plan to the Governor's Office of Policy and Management (GOPM) but had not received a determination yet.
In response to questions from Sen. Alvarado, Deputy Secretary Feeley said that additional 1915(c) waiver slots had been put on hold until the cabinet receives a response from GOPM on the budget reduction plan. Deputy Secretary Feeley noted that the cabinet is ready to implement the Medicaid 1115 waiver with the Governor's office but is waiting for a response from the federal Department for Health and Human Services.
In response to questions from Rep. Jenkins, Mr. Lowery stated that between sixty to seventy percent of the cabinet's funding is from the federal government. Mr. Lowery confirmed that the budget reduction plan could result in a loss of federal funds.
Medicaid Budget Overview and Update
Commissioner Miller provided an overview of the budget for the Department for Medicaid Services.
In response to a question from Rep. Wuchner, Commissioner Miller stated that the decrease in per member costs for Medicaid was not due to Managed Care Organizations (MCOs) neglecting to pay providers.
In response to questions from Sen. Alvarado, Commissioner Miller noted that MCO contracts for plans beginning January 1, 2019 would be up for bid in the spring of 2018. Commissioner Miller said that the cabinet is looking at limiting the number of MCOs beginning with the new contracts that will start on January 1, 2019. Commissioner Miller stated that fee-for-service Medicaid members are primarily the long term care and waiver populations.
In response to questions from Sen. Meredith, Commissioner Miller noted that the Medicaid 1115 waiver, if approved, would incentivize improving health outcomes. Commissioner Miller stated that the cabinet anticipates a savings of two billion dollars over five years if the Medicaid 1115 waiver is approved, with $300 million of that total being saved by the state.
Medicaid Disproportionate Share Hospital (DSH) Payments
Mr. Ranallo and Mr. Herde presented an update on DSH payments and the concerns of the Kentucky Hospital Association.
In response to questions from Sen. Alvarado, Mr. Ranallo confirmed that DSH payments help smaller hospitals to set yearly budgets.
Kinship Care
Senator Parrett and Ms. Hatfield presented on the issue of kinship care in Kentucky.
In response to questions from Chair Webber, Commissioner Johnson noted that 350 children are impacted by a recent court ruling on kinship care and that the cost to the state would be between three and a half and four million dollars. Commissioner Johnson stated that she was unsure of the time frame needed to fulfil the court order.
There being no further business before the subcommittee, the meeting was adjourned at 11:54 AM.