Call to Order and Roll Call
The January meeting of the Administrative Regulation Review Subcommittee was held on Monday, January 9, 2012, at 1:00 PM, in Room 149 Annex of the Capitol. Representative Johnny Bell, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Joe Bowen, Co-Chair; Representative Johnny Bell, Co-Chair; Senators David Givens, Alice Forgy Kerr, and Joey Pendleton; Representatives Robert R. Damron, Danny Ford, and Jimmie Lee.
Guests: Melissa Bell, Travis Powell, Council on Postsecondary Education; Maryellen Allen, State Board of Elections; Janice Campbell, Karen Greenwell, Amanda McCord, Frances Simpson, Janet Simpson, Hartsel Stovall, Board of Barbering; Nathan Goldman, Board of Nursing; Margaret Everson, Karen Waldrop, Kentucky Fish and Wildlife; Nancy Albright, Ann D'Angelo, Cass Napier, Donald L. Smith, Transportation Cabinet; Pamela Holloway, Virginia Moore, Commission on the Deaf and Hard of Hearing; Stuart Benson, Stuart Owen, Kevin Mudd, Ray Peters, Cabinet for Health and Family Services; Ted Burgin, Kosair Shriners; and David A. James, Louisville Metro Council.
LRC Staff: Dave Nicholas, Emily Caudill, Donna Little, Sarah Amburgey, Emily Harkenrider, Karen Howard, Betsy Cupp, and Laura Napier.
The Administrative Regulation Review Subcommittee met on Monday, January 9, 2012, and submits this report:
Administrative Regulations Reviewed by the Subcommittee:
COUNCIL ON POSTSECONDARY EDUCATION: Public Educational Institutions
13 KAR 2:110. Advanced practice doctoral degree programs at comprehensive universities. Melissa Bell, director of student services, and Travis Powell, general counsel, represented the council.
A motion was made and seconded to approve the following amendments: to amend Sections 1 through 4 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
KENTUCKY STATE BOARD OF ELECTIONS: Statewide Voter Registration
31 KAR 3:020. Designated Disability Services Agencies. Maryellen Allen, interim acting executive director, represented the board.
In response to a question by Co-Chair Bell, Ms. Allen stated that accommodations for disabled persons voting in Kentucky have already been made. The purpose of this administrative regulation was to comply with federal requirements to specifically designate voter registration for disabled persons in an administrative regulation.
A motion was made and seconded to approve the following amendments: to amend the STATUTORY AUTHORITY paragraph and Section 2 to make technical corrections and for clarification. Without objection, and with agreement of the agency, the amendments were approved.
GENERAL GOVERNMENT CABINET: Board of Barbering: Board
201 KAR 14:180. License fees, examination fees, renewal fees, and expiration fees. Karen Greenwell, administrator; Francis L. Simpson, board member; and Hartsel Stovall, chairman, represented the board.
In response to questions by Representative Lee, Ms. Greenwell stated that, without the fee increases, the board forecast a carryover into 2013 of only $2,345, which would put the board in the red before the end of Fiscal Year 2012 – 2013. The fee increases would provide approximately $57,000. All licensees had been notified, and the board did not receive public comments during the public comment period. The largest financial need the board had was for part-time barber shop inspectors in order to protect public health and safety.
In response to questions by Co-Chair Bowen, Ms. Greenwell stated that the board’s financial problem resulted from board funds being swept in addition to rising costs. The board’s funds had been swept three times in recent memory. She said that all five board members were in attendance at this meeting to demonstrate the board’s solidarity supporting the need for the fee increases.
Board of Nursing: Board
201 KAR 20:085. Licensure periods and miscellaneous requirements. Nathan Goldman, general counsel, represented the board.
In response to a question by Co-Chair Bowen, Mr. Goldman stated that the board made name changes almost instantaneously upon submission of a notice from a nurse licensee.
In response to a question by Senator Givens, Mr. Goldman stated that the board had experienced some situations of license falsification, but this administrative regulation was primarily for name changes pertaining to marital status.
In response to questions by Co-Chair Bell, Mr. Goldman stated that this administrative regulation did not include a penalty for not submitting a name change, and that there was nothing that needed to be added to these requirements.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to add a statutory citation; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220; and (3) to amend Section 1 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
201 KAR 20:260. Organization and administration standards for prelicensure programs of nursing.
A motion was made and seconded to approve the following amendments: to amend Sections 1 through 3 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
201 KAR 20:340. Students in prelicensure registered nurse and practical nurse programs.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to add a statutory citation; and (2) to amend Section 1 to comply with the formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
201 KAR 20:410. Expungement of records.
A motion was made and seconded to approve the following amendments: to amend Section 3 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
TOURISM, ARTS AND HERITAGE CABINET: Department of Fish and Wildlife Resources: Game
301 KAR 2:082. Transportation and holding of exotic wildlife. Margaret Everson, assistant attorney general, and Karen Waldrop, director, Division of Wildlife, represented the department. Stuart Benson, councilman, District 20, Louisville Metro Council; Ted Burgin, circus chairman, Kosair Shriners; and David A. James, councilman, District 6, Louisville Metro Council, appeared in support of this administrative regulation.
In response to a question by Co-Chair Bell, Subcommittee staff stated that the amended after comments version of this administrative regulation added criteria the commissioner would use to determine if a permit shall be issued.
In response to questions by Representative Lee, Ms. Waldrop stated that elephant rides were permitted only at circus events. An expert was available to testify regarding safety precautions and the mechanics of an elephant ride.
Mr. Burgin stated that elephant rides took place within a double-caged ring. The rider walked up a ramp to mount the elephant. The elephant made three trips around the ring. He had been providing elephant rides as a Kosair Shriner for approximately 35 years. The price for an elephant ride was ten dollars per rider for three trips around the ring.
In response to a question by Representative Lee, Mr. Burgin stated that he had not experienced an accident or dangerous situation involving an elephant ride.
In response to questions by Co-Chair Bowen, Ms. Everson stated that elephant rides had been prohibited for the past few years because this administrative regulation did not make an exception for them. Ms. Waldrop stated that a Kentucky statute authorized local governments to regulate the holding of wildlife. To receive a permit for elephant rides, a circus was required to be in an area with a local ordinance that allowed elephant rides. Additionally, the circus was required to comply with the safety standards established in this administrative regulation. Mr. Burgin stated there were approximately three cities with a local ordinance to allow elephant rides. Ms. Waldrop stated that Kentucky requirements regarding elephant rides were fairly stringent in comparison with other states.
Representative Damron stated that his membership as an Oleika Shriner did not influence his actions regarding this administrative regulation. He stated that this was not an issue between Oleika and Kosair Shriners, but the issue was public safety.
In response to questions by Representative Damron, Mr. Burgin stated that only Asian elephants were used in elephant rides. African elephants tended to be unpredictable, but Asian elephants were very docile and easily trainable.
Representative Damron stated that elephant rides were stopped in Louisville in 1994 after a person was gored and severely injured. Millions of dollars in damages were awarded. The Louisville Zoo no longer allows elephant rides. There were recently 43 incidents of persons being killed or injured in relation to elephants. In 2005, there were two separate Shriner Circus elephant-related incidents that resulted in the death of members of the public. The Shriner’s mission is to help children. Injuring a child could cause damages to both the Shriner’s image and mission. The elephant rides were too financially risky from a liability standpoint to outweigh the revenue from the rides.
In response to a question by Representative Lee, Mr. Burgin stated that parents and riders were not required to sign a waiver or disclaimer prior to participating in an elephant ride.
Mr. James stated that in the incident described by Representative Damron, a contractor for the Louisville Zoo had inadvertently left the elephant’s fence gate open. The elephant, which was not an elephant trained to provide rides, escaped through the open gate. An untrained person tried to capture the elephant and was subsequently injured. This administrative regulation had stringent safety requirements, including prohibiting elephant rides from an elephant that had had a safety incident in the past five years. Tranquilizers and firearms were required to be on the premises. The circus was required to have an emergency plan.
Mr. Benson stated that experts in public safety assisted Louisville Metro Council in the drafting of the local ordinance regarding elephant rides.
In response to a question by Representative Damron, Mr. James stated that the Louisville Metro Council’s local ordinance regarding elephant rides provided a financial liability requirement of $500,000. The ordinance limited elephant rides to Asian elephants that were not altered, that were not in heat, and that did not have a calf. Additionally, the Shriner Circus had its own financial liability of $5,000,000.
In response to questions by Co-Chair Bell, Mr. Burgin stated that a typical elephant weighs approximately eight tons. Ms. Waldrop stated that elephants were tested for tuberculosis, and an elephant that tested positive was quarantined.
Co-Chair Bell stated that wild animals are unpredictable, and the required financial liability would not be enough if a young professional, for example, were killed or disabled as a result of an elephant ride.
Mr. Benson stated that he was the sponsor of the Louisville Metro Council’s local ordinance regarding elephant rides. African elephants were known to be unpredictable, but Asian elephants were very docile and easy to train. The Asian elephant was one of the first species of animals domesticated by man. Statistics show numerous injuries to people by horses, but horseback riding was not prohibited. Elephant rides are valuable events that raise revenue for the Shriner’s mission to help children.
Mr. Burgin related a story about one of the largest elephants in the world, Bo. Mr. Burgin told of sharing fruit with Bo, who responded with audible joy. Bo was a gentle Asian elephant, very different from unpredictable African elephants.
A motion was made and seconded to approve the following amendment: to amend Section 3 to raise the required liability insurance from $500,000 to $3,000,000. Without objection, with agreement of the agency, and with a roll-call vote, the amendment was approved by a unanimous vote of the members.
TRANSPORTATION CABINET: Department of Highways: Division of Maintenance: Right-of-Way
603 KAR 4:035. Logo signs; placement along fully controlled and partially controlled access highways. Ann D'Angelo, assistant general counsel, and Cass T. Napier, office project delivery, represented the division.
In response to questions by Co-Chair Bell, Mr. Napier stated that the tier classification system was created because federal requirements for logo signs had become less stringent. Federal requirements reduced standards for logo signs to a facility that served at least two meals per day, even if the hours of operation were limited. Industry requested the tier classification system so that the traveling public would be provided logo options other than just fast food options. Tier one facilities were given priority because they were other than fast food. The requirements were not intended to limit opportunities for facilities to advertise on logo signs, but to give priority to provide a balance of facilities listed on the signs. If a business met the standards in this administrative regulation, that facility would get tier one priority for placement on a logo sign. If the business did not meet the standards, it would be placed in the tier two classification but could still be placed on a logo sign if there was room. The classification system would not affect those facilities already on logo signs. Those facilities would remain on the logo sign unless the business no longer complied with this administrative regulation.
A motion was made and seconded to approve the following amendments: (1) to amend Sections 1, 4, 5, 7, 8, and 9 to make CONFORMING AMENDMENTS to correct inconsistencies between the currently effective administrative regulation and the proposed administrative regulation filed by the agency; (2) to amend Section 4 to: (a) establish that tier one (1) businesses shall have priority over tier two (2) businesses if logo signs are full; and (b) clarify that the tier classification system is for urban areas; and (3) to amend Sections 4 through 12 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
EDUCATION AND WORKFORCE DEVELOPMENT CABINET: Commission on the Deaf and Hard of Hearing: Telecommunication Device for the Deaf
735 KAR 1:010. Eligibility requirements, application and certification procedures to receive specialized telecommunications equipment for the deaf, hard of hearing, and speech impaired. Rowena Holloway, internal policy analyst, and Virginia Moore, executive director, represented the commission.
A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph and Sections 2 and 4 to conform with the drafting and formatting requirements of KRS Chapter 13A; and (2) to amend Section 2(2) for clarification. Without objection, and with agreement of the agency, the amendments were approved.
735 KAR 1:020. Processing system including vendor participation, security, and maintenance and repair for specialized telecommunications equipment.
A motion was made and seconded to approve the following amendments: to amend Section 1 to correct inconsistencies between the currently effective administrative regulation and the proposed administrative regulation filed by the agency. Without objection, and with agreement of the agency, the amendments were approved.
CABINET FOR HEALTH AND FAMILY SERVICES: Department for Medicaid Services: Division of Administration and Financial Management: Medicaid Services
907 KAR 1:018 & E. Reimbursement for drugs. Stuart Owen, regulation coordinator, represented the division.
In response to questions by Representative Lee, Mr. Owen stated that medication reimbursement was approved or denied within 24 hours. The patient’s care provider provided the prescription, but the pharmacist submitted the reimbursement request. The pharmacist was not liable if medication was dispensed after the reimbursement request was submitted, even if the request was later denied; therefore, the patient should not have to wait for disbursement of medication.
In response to a question by Co-Chair Bowen, Mr. Owen stated that the cabinet exempted certain populations from being included in the managed care part of the system.
In response to questions by Senator Givens, Mr. Owen stated that a separate administrative regulation included scope standards for reimbursement for managed care recipients. This administrative regulation did not include provisions for managed care recipients, but for that population exempt from the managed care part of the system. The cabinet was not authorized to establish pricing reimbursement for the population in the managed care part of the system. Approximately 20 percent of Medicaid recipients were exempt from participation in the managed care part of the system. This administrative regulation was filed on October 3, 2011 as an emergency and an ordinary administrative regulation. The organization previously responsible for establishing the average wholesale price used to calculate reimbursements was found guilty of collusion to elevate the average wholesale price. As a result, the average wholesale price index was no longer available. The cabinet had to find a new price index for calculating reimbursement and switched to using the wholesale acquisition cost, which required a different formula in order to calculate the reimbursement commensurate with the reimbursement established under the average wholesale price index. The change to this administrative regulation was revenue neutral because the reimbursement rate itself did not change, just the algorithm used in calculating the rate now that the average wholesale price index was no longer available. The cabinet was aware of concerns expressed recently by the House and Senate Standing Committees on Health and Welfare.
In response to questions by Co-Chair Bell, Mr. Owen stated that the cabinet’s only hesitancy to agree to a request to defer consideration of this administrative regulation to the February 13 meeting of the Subcommittee was that the emergency administrative regulation would expire before the ordinary administrative regulation could become effective, causing the cabinet to return to the old reimbursement rate system, which is based on a price index that is no longer available.
Representative Lee stated that he was unaware of a need to defer consideration of this administrative regulation to the February 13 meeting. Co-Chair Bell retracted the deferral request.
In response to a question by Co-Chair Bowen, Mr. Owen stated that there was a 14 percent difference between the average wholesale price index and the wholesale acquisition cost; therefore, the reimbursement calculation algorithm needed to be revised so that the rate was commensurate with the old pricing index and revenue neutral. Reimbursements themselves would not change.
In response to a question by Senator Givens, Mr. Owen stated that pharmacists knew how to calculate the formula but did not know the price and did not have to calculate the reimbursements.
A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph to correct statutory citations; and (2) to amend Sections 1 through 5 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
The following administrative regulations were deferred to the February 13, 2012, meeting of the Subcommittee:
PERSONNEL CABINET: Personnel Cabinet, Classified
101 KAR 2:102. Classified leave administrative regulations.
101 KAR 2:140. Workers' Compensation Fund and Program.
Personnel Cabinet, Unclassified
101 KAR 3:015. Leave administrative regulations for the unclassified service.
GENERAL GOVERNMENT CABINET: Kentucky Boxing and Wrestling Authority: Athletic Commission
201 KAR 27:011. General requirements for boxing and kickboxing shows.
201 KAR 27:017. Requirements for elimination events.
201 KAR 27:035. Seconds.
201 KAR 27:055. Physicians.
Board of Licensed Professional Counselors: Board
201 KAR 36:060. Qualifying experience under supervision.
201 KAR 36:070. Education and examination requirements.
Department of Agriculture: Office of State Veterinarian: Division of Animal Health: Livestock Sanitation
302 KAR 20:052 & E. Animal Carcass Composting.
CABINET FOR HEALTH AND FAMILY SERVICES: Office of Health Policy: Data Reporting and Public Use Data Sets
900 KAR 7:030 & E. Data reporting by health care providers.
Department for Mental Health and Mental Retardation Services: Division of Administration and Financial Management: Institutional Care
908 KAR 3:050. Per diem rates. Kevin Mudd, director, and Ray Peters, program administrator, represented the division.
Co-Chair Bell stated that he was adamantly opposed to this administrative regulation because the cost per patient for institutional care was alarming. Rates increased constantly, but reimbursement for home care had been lowered. Mr. Peters stated that the agency agreed to defer; however, he was under the assumption that today’s consideration was limited to typographical errors and technical changes. Subcommittee staff stated that the typographical and technical changes were approved when the suggested amendments were approved, but the Subcommittee’s scope of consideration included the initial amendment filed by the agency. The initial amendment included substantive matters, including reimbursement rate adjustments.
In response to questions by Representative Lee, Mr. Peters stated that this administrative regulation was revenue neutral because the cabinet was not changing the base appropriation, but was reorganizing how the base appropriation was allocated. The cabinet’s general goal was to reduce the number of patients institutionalized and promote home care as possible and appropriate. The reimbursement rate was usually different from the actual cost and was the amount that was received by the provider. The Oakwood population decrease resulted in a daily rate per-patient increase.
Representative Lee stated that the commissioner needed to address the House and Senate Standing Committees on Appropriations and Revenue in order to explain cost reconciliation at facilities such as Oakwood. Mr. Mudd stated that fixed costs were involved, and the cabinet’s goal was transitioning to home care as possible and appropriate.
Co-Chair Bell stated that it should not cost $500,000 per year per patient for care. He stated that it appeared that an entity was making a lot of money while home care providers were having funding cut. Co-Chair Bell emphasized that this was his opinion and did not necessarily reflect the opinions of other Subcommittee members.
In response to questions by Senator Givens, Mr. Peters stated that the agency would revise the REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT to correct responses pertaining to third-party payments. He added that most payments were from Medicaid, but a small percentage came from independent insurers.
Subcommittee staff directed the agency to follow up with explanations regarding this administrative regulation that staff would forward to Subcommittee members.
A motion was made and seconded to approve the following amendments: (1) to amend Section 1(1)’s table to make CONFORMING AMENDMENTS to correct the rates being deleted for four (4) facilities to reflect the rates established in the amendments approved at the January 2011 ARRS meeting; and (2) to amend Section 1 to comply with the formatting requirements of KRS 13A.220. Without objection, and with agreement of the agency, the amendments were approved.
A motion was made and seconded to request deferral of consideration of this administrative regulation as amended to the February 13 Subcommittee meeting. Without objection, and with agreement of the agency, this administrative regulation as amended was deferred.
The Subcommittee adjourned at 3:30 p.m. until February 13, 2012.