Call to Order and Roll Call
The May meeting of the Administrative Regulation Review Subcommittee was held on Tuesday, May 14, 2013, at 1:00 PM, in Room 149 of the Capitol Annex. Representative Johnny Bell, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Johnny Bell, Co-Chair; Senators Joe Bowen, Perry B. Clark, and Sara Beth Gregory; Representatives Robert R. Damron, Jimmie Lee, and Tommy Turner.
Guests: Representative John Will Stacy; Gilda Hill, Ken Lucas, Department of Veterans' Affairs; Michael Burleson, Board of Pharmacy; Nathan Goldman, Board of Nursing; Margaret Everson, Karen Waldrop, Kentucky Fish and Wildlife Resources; Amy Barker, Department of Corrections; Dana Todd, Department of Criminal Justice Training; Virginia Carrington, Elizabeth Caywood, Christina Heavrin, Lawrence Kissner, Stuart Owen, Cabinet for Health and Family Services; Clifford Rippetoe, Kentucky State Fair Board; Nancy Galvani, Kentucky Hospital Association; Darlene Eakin, Kentucky Optometric Association; Nina Eisner, Kelli Reese, The Ridge Behavioral Health; Chris Slocum, Peter Harris, MHNET/Coventry Cares of Kentucky; and Steven McBride, Citizen.
LRC Staff: Dave Nicholas, Donna Little, Emily Caudill, Sarah Amburgey, Emily Harkenrider, Karen Howard, Betsy Cupp, and Laura Napier.
The Administrative Regulation Review Subcommittee met on Tuesday, May 14, 2013, and submits this report:
The Subcommittee determined that the following administrative regulation did not comply with statutory requirements and was deficient:
CABINET FOR HEALTH AND FAMILY SERVICES: Department for Medicaid Services: Commissioner's Office: Managed Care
907 KAR 17:005 & E. Definitions for 907 KAR Chapter 17. Christina Heavrin, general counsel; Lawrence Kissner, commissioner; and Stuart Owen, regulation coordinator, represented the department. Peter Harris, MD, PhD., and Chris Slocum, VP, Clinical Services, represented MHNet and testified via teleconference in support of this administrative regulation. Nancy Galvagni, Kentucky Hospital Association; Nina Eisner, CEO, The Ridge Behavioral Health; and Kelli Reese, director of admissions and utilization review, The Ridge Behavioral Health, appeared in opposition to this administrative regulation.
Representative Damron stated his rationale for his proposed amendments to this administrative regulation. Coventry Life Insurance owned MHNet; therefore, the insurance company was determining medical necessity payments to its own providing firm. Many MCOs were still owed money. The criteria used by MHNet are an entirely different system than that used by most providers, and it drives up healthcare costs. The use of the criteria by the same company that developed it did not provide a level playing field in Kentucky. His amendment would specifically require recognition of Interqual or Milliman Care Guidelines as the nationally recognized standards of care and written criteria.
Dr. Harris, testifying via teleconference, stated that MHNet’s program was developed by providers, and providers were still part of MHNet’s administration. MHNet’s medical necessity criteria were available online and had been scientifically validated. Providers made the final decision regarding medical care. MHNet differed from other programs in that its medical necessity criteria were never commercially available, though publicly accessible for review online. The criteria had been in place for 16 years, and the criteria was state specific, as appropriate. Criteria could be modified as necessary because other entities were not involved in establishing the standards. Dr. Harris asked the Subcommittee to oppose the proposed amendment to change the definition for “nationally recognized standards of care and written criteria.”
Mr. Slocum stated that problems with the medical necessity criteria could be addressed by modification of the criteria if the criteria continued to be solely established by MHNet. In response to questions by Representative Damron, Mr. Slocum stated that MHNet was owned by Coventry Life Insurance and profits for MHNet were reported to Coventry Life Insurance.
Ms. Galvagni stated that MHNet’s medical necessity criteria were not comparable to Interqual’s criteria. The Kentucky Hospital Association was opposed to a nonnational standard.
Ms. Eisner stated that MHNet experienced more denials and readmissions than more objective medical necessity criteria. She stated that even MHNet’s representative, Dr. Harris, described the criteria as a “guide.” MHNet did not update criteria, while Interqual had made many revisions. Readmission rates were double with MHNet compared to all other MCOs combined.
Ms. Reese stated that some cases that were denied pursuant to MHNet’s criteria were approved pursuant to Interqual standards. MHNet’s criteria provided more flexibility, but sometimes resulted in different answers from different MHNet representatives because of interpretation differences.
In response to a question by Senator Bowen, Ms. Eisner stated that other MCOs used Interqual. Dr. Harris stated that MHNet’s criteria were revised as necessary and were available online for review. Interqual was inflexible to unique patient needs. Mental health was a nuanced science. Physician providers made final medical decisions.
Co-Chair Bell stated that the MHNet system limited access. Patients did not get appropriate treatment at first application; therefore, readmission rates were higher. MCOs were not getting paid in a timely fashion. In response, Dr. Harris stated that each patient was unique, and the more flexible standards were appropriate. For example, not all patients who discussed suicide frequently needed to receive inpatient treatment. Outpatient treatment was still appropriate on a case-by-case basis. Partnership between the insurer and the provider was a better system than an adversarial system. In response, Co-Chair Bell stated that treatment for a patient frequently discussing suicide should not be limited by financial motives. Dr. Harris stated that sometimes inpatient treatment was worse for a patient than outpatient care.
Mr. Slocum stated that the readmission rate for Medicaid was double that of patients with other payors generally.
In response to a question by Senator Bowen, Dr. Harris stated that other states were not restricted to Interqual criteria. Some states had specific criteria, especially pertaining to substance abuse treatment.
Representative Lee stated that readmission rates were not all of the same acuity. The comparison was not a direct one. Criteria should be established by contractual agreement or by statute, not by administrative regulation.
Ms. Heavrin stated that the cabinet had approved the criteria established in all MCO contracts. Kentucky’s Region 3 used the Milliman Cure Guidelines rather than Interqual. Mr. Kissner stated that Coventry Life Insurance had been purchased by Aetna. The cabinet did not agree to the amendment to revise the definition of “nationally-recognized standards of care and written criteria.”
Co-Chair Bell stated that the cabinet’s function was to protect the health of Kentucky’s citizens in an efficient manner. The cabinet had a fiduciary duty to the Commonwealth, and was responsible for balancing treatment against cost. Youth with mental conditions were being incarcerated at an alarming rate because individuals did not meet treatment criteria. MCOs had destroyed mental health access in Glasgow and Barren County. Many providers had not received payment for eight or nine months. The cabinet did not appear to be fulfilling its statutory function.
In response to questions by Co-Chair Bell, Ms. Heavrin stated that the Department of Insurance approves MCOs, which were required to have certain reserves to ensure against bankruptcy. Mr. Kissner stated that further questions regarding reserves should be addressed to the Department of Insurance; however, Kentucky required 100 percent risk-based capital reserves.
A motion was made and seconded to approve the following amendments: to amend Section 1 to: (1) clarify that an “authorized representative” includes, for an enrollee who is authorized by Kentucky law to provide written consent, an individual or entity acting on behalf of, and with written consent from, an enrollee; or a legal guardian; and (2) comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
A motion was made and seconded to approve the following amendments: to amend Section 1 to insert a definition for “nationally-recognized standards of care and written criteria” and to renumber subsequent subsections accordingly. Because the agency did not agree to these amendments, the Subcommittee could not approve the amendments.
A motion was made and seconded to find 907 KAR 17:005, as amended, deficient. A roll call vote was conducted. With six votes in favor of a finding of deficiency, two votes opposed to a finding of deficiency, and one abstention, this administrative regulation as amended by the first amendment was found deficient.
Administrative Regulations Reviewed by the Subcommittee:
GOVERNOR'S OFFICE: Kentucky Department of Veterans' Affairs: Office of Kentucky Veterans' Centers: State Veterans' Nursing Homes
17 KAR 3:010. Calculation of resident charges at state veterans' nursing homes. Gilda Hill, executive director; Ken Lucas, commissioner; and Dennis Shepherd, attorney, represented the department.
In response to questions by Representative Damron, Ms. Hill stated that these administrative regulations did not change the maximum charge of $3,700, which was raised in 2012 in another administrative regulation. If residents qualified for Medicare or Medicaid, those residents would be asked to apply for those programs and the billing would be directed accordingly. Contract nurses were used if facilities were short staffed, such as during influenza and vacation seasons, and overtime was limited as much as practicable. Waiting lists at East and West were shorter than the waiting list for Thomas Hood. The department strove to maintain a good staffing ratio. Masser training was still provided as the department was financially able and as time permitted. Mr. Lucas stated that JECVO (Joint Executive Council of Veterans’ Organizations) had previously been concerned about the stigma of veterans being classified as Medicare or Medicaid eligible and that the changes might allow nonveterans to become residents in these facilities. A Kentucky statute prohibited nonveterans, except for spouses of veterans, from being residents in these facilities. Although the statute authorized spouses of veterans to be residents at these facilities, it was not a requirement, and the department had not made provision for spouses of veterans to become residents of these facilities.
In response to questions by Representative Lee, Ms. Hill stated that, when the plans were completed, the department expected 100 percent of beds to be classified as Medicare and Medicaid certified. Self-payors could stay in any bed, regardless of Medicare and Medicaid certification of the bed. The department did not foresee future problems of bed shortages for self-payors because beds were available on a first come-first served basis, not on payor classification.
A motion was made and seconded to approve the following amendments: (1) to amend Section 1(10) to make a technical correction for consistent formatting; and (2) to amend Section 7 to revise a form incorporated by reference. Without objection, and with agreement of the agency the amendments were approved.
17 KAR 3:040. Admission to state veterans' nursing homes.
GENERAL GOVERNMENT CABINET: Board of Pharmacy: Board
201 KAR 2:074. Pharmacy services in hospitals or other organized health care facilities. Michael Burleson, executive director, represented the board.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to add statutory citations; and (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1, 2, and 4 through 7 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
Board of Nursing: Board
201 KAR 20:059. Advanced practice registered nurse controlled substances prescriptions. Nathan Goldman, general counsel, represented the board.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to include a statutory citation; and (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. Without objection, and with agreement of the agency, the amendments were approved.
201 KAR 20:500. Nurse licensure compact.
A motion was made and seconded to approve the following amendments: to amend Sections 2, 3, and 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.
TOURISM, ARTS AND HERITAGE CABINET: Department of Fish and Wildlife Resources: Game
301 KAR 2:049. Small game and furbearer hunting and trapping on public areas. Margaret Everson, assistant attorney general, and Karen Waldrop, director, Wildlife Division, represented the department.
301 KAR 2:122. Seasons, methods, and limits for small game.
JUSTICE AND PUBLIC SAFETY CABINET: Department of Corrections: Office of the Secretary
501 KAR 6:070. Kentucky Correctional Institution for Women. Amy Barker, assistant general counsel, represented the department.
In response to a question by Co-Chair Bell, Ms. Barker stated that the department changed the units where services were located; therefore, the procedure needed to be revised accordingly. More inmate populations needed mental health services. There were two facilities that housed females, but the facility in PeeWee Valley was the primary facility.
A motion was made and seconded to approve the following amendments: to amend Section 1 and the material incorporated by reference to clarify provisions and to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
Department of Criminal Justice Training: Kentucky Law Enforcement Council: Council
503 KAR 1:170. Career Development Program. Dana Todd, assistant general counsel, represented the council.
In response to questions by Representative Damron, Ms. Todd stated that, other than one new certification, this administrative regulation was not an expansion of the program. This was a voluntary program, not tied to compensation. The council anticipated that the program would cost the agency approximately $1,000 per year. Ms. Todd stated that the council did not anticipate asking for more funding. This program was not tied to insurance surtax but another program administered by the agency was. In response, Representative Damron stated that the insurance surtax supported the agency as a whole, and this program was still an expense of the agency.
Senator Bowen verified the continuing agency cost stated in the Fiscal Note on State and Local Government.
A motion was made and seconded to approve the following amendments: (1) to amend Section 1 to add definitions for "public safety dispatch" and "public safety dispatcher"; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 17 and 18 to clarify provisions; and (3) to amend Sections 1, 2, 3, 9, and 10 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
CABINET FOR HEALTH AND FAMILY SERVICES: Department for Medicaid Services: Division of Provider Operations: Medicaid Services
907 KAR 1:056E. Repeal of 907 KAR 1:418 and 907 KAR 1:427. Christina Heavrin, general counsel; Lawrence Kissner, commissioner; and Stuart Owen, regulation coordinator, represented the division.
907 KAR 1:711E. Repeal of 907 KAR 1:705 and 907 KAR 1:710.
Commissioner’s Office: Managed Care
907 KAR 17:010 & E. Managed care organization requirements and policies relating to enrollees. Christina Heavrin, general counsel; Lawrence Kissner, commissioner; and Stuart Owen, regulation coordinator, represented the division. Peter Harris, MD, PhD., and Chris Slocum, VP, Clinical Services, represented MHNet and testified via teleconference in support of this administrative regulation. Nancy Galvagni, Kentucky Hospital Association; Nina Eisner, CEO, The Ridge Behavioral Health; and Kelli Reese, director of admissions and utilization review, The Ridge Behavioral Health, appeared in opposition to this administrative regulation.
In response to questions by Representative Lee, Mr. Kissner stated that the agency agreed to amendments proposed by Representative Lee to address written consent requirements. Ms. Galvagni stated that the Kentucky Hospital Association supported Representative Lee’s amendments to this administrative regulation.
Representative Damron stated that, in 2012, the cabinet assured the General Assembly that problems with payments to providers would be quickly remedied. After 14 months, the matter remained unresolved. If the problems were not rectified before the 2014 Regular Session of the General Assembly, legislative directives would be proposed to address the situation.
A motion was made and seconded to approve the following amendments: (1) to amend Sections 1, 4, 5, 7, 8, 11, 13, 16, and 17 to comply with the drafting and formatting requirements of KRS Chapter 13A; (2) to amend Section 4 to clarify that: (a) a written appeal shall be signed by the enrollee or the enrollee’s authorized representative; and (b) written notice that an appeal has been received and the expected date of resolution shall be sent to an enrollee’s legal guardian or authorized representative, if applicable; (3) to amend Section 5 to specify that a document supporting an MCO’s adverse action shall be received by the department no later than five days from the date the MCO receives the notice, rather than five days from the date a notice is sent to the MCO; (4) to amend Section 17 to specify that a child’s caretaker may attend each meeting held to discuss the health care needs of that child; and (5) to amend Section 4(4)(b) to: (a) specify that: 1. for authorized representative purposes, written consent unique to an appeal or state fair hearing shall be required for the appeal or state fair hearing; and 2. a single written consent shall not qualify as written consent for more than one (1) hospital admission, physician or provider visit, or treatment plan; and (b) delete the provisions of paragraph (b), which would have required that written consent be signed and dated by the enrollee no earlier than the date of the MCO’s action. Without objection, and with agreement of the agency, the amendments were approved.
Representative Damron withdrew the following proposed amendments: (1) to amend Section 4(4) to: (a) amend paragraph (a) to delete the requirement that the written consent be “for the specific action that is being appealed or that is the subject of state fair hearing”; and (b) delete the provisions of paragraph (b), which would have required that written consent be signed and dated by the enrollee no earlier than the date of the MCO’s action; (2) to amend Section 5(1) to specify that a provider shall have a right to a state fair hearing administered by the department in accordance with KRS Chapter 13B to challenge an MCO’s denial of coverage or payment for services rendered to a patient; (3) to amend references throughout Section 5 to correspond to that change; (4) to amend Section 6(3)(c) to require that an MCO facilitate direct access to a specialty provider, rather than specialty physician, for an enrollee with a chronic or complex health condition; who is aged, blind, deaf, or disabled; or identified as having a special healthcare need and requiring a course of treatment or regular healthcare monitoring; and (5) to amend Section 8(2)(c)1. to require that the MCO’s member handbook specify the names and contact information for all other providers included in the MCO’s network, rather than leaving the inclusion of that information for other providers to the discretion of the MCOs. Without objection, the proposed amendments were withdrawn.
907 KAR 17:015 & E. Managed care organization requirements and policies relating to providers. Representative John Will Stacy appeared in support of the amendment to this administrative regulation.
Representative Lee stated that he was proposing to amend Section 2 of this administrative regulation to use miles for measuring services in all regions except Region 3 and to use minutes or miles for measuring services in Region 3.
Representative Stacy stated that litigation on the matter of distance requirements was ongoing. In response to a question by Representative Stacy, Ms. Heavrin stated that the distance limit of 60 minutes was established in the original contracts, which had already been submitted to CMS. MCOs used GEOAccess to determine distances.
In response to a question by Co-Chair Bell, Ms. Heavrin stated that the contracts were in place prior to this administrative regulation. Co-Chair Bell stated his belief that the agency had entered into a contract without authority because this administrative regulation was not in place upon the contractual agreement. In response to a question by Co-Chair Bell, Mr. Kissner stated that the division did not agree to defer consideration of this administrative regulation to the June Subcommittee meeting.
Ms. Galvagni stated that the Kentucky Hospital Association preferred a single standard for all regions of Kentucky, but could live with the amendment to this administrative regulation.
A motion was made and seconded to approve the following amendments: (1) to amend Sections 1, 2, 4, 7, 8, and 13 to comply with the drafting and formatting requirements of KRS Chapter 13A; (2) to amend Section 4 to specify the deadlines for obtaining accreditation from the National Committee for Quality Assurance (NCQA); and (3) to amend Section 2(7), 2(8), 2(9), 2(10), and 2(11) to specify that a hospital; behavioral or physical rehabilitation service; dental service; general vision, laboratory, or radiological service; or pharmacy service shall be within the specified number of: (a) minutes for Regions 1, 2, 4, 5, 6, 7, or 8; or (b) minutes or miles for Region 3. With two objections, and with agreement of the agency, the amendments were approved.
The following amendments, proposed by Representative Damron, were not considered: (1) to amend Section 2(7), 2(8), 2(9), 2(10), and 2(11) to delete the references to miles for a hospital; behavioral or physical rehabilitation service; dental service; general vision, laboratory, or radiological service; or pharmacy service; (2) to amend Section 2(10)(a) to delete the reference to miles for a general vision, laboratory, or radiological service; (3) to amend Section 4 to create a new subsection (5) to require an MCO to reimburse a provider for covered services beginning on the date the provider applied to be a provider for the MCO; and (4) to amend Section 11(2) to specify that a provider has the right to file a request for a state fair hearing.
907 KAR 17:020 & E. Managed care organization service and service coverage requirements and policies.
A motion was made and seconded to approve the following amendments: to amend Sections 4, 11, and 13 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
907 KAR 17:025 & E. Managed care organization requirements and policies related to utilization management and quality. Darlene Eakin, executive director, Kentucky Optometric Association, appeared in support of an amendment proposed by Representative Damron.
Ms. Eakin stated that the Kentucky Optometric Association was concerned about access. Nonoptometric providers did not always understand the scope of optometry.
Mr. Kissner stated that the division did not agree to Representative Damron’s proposed amendment, which would require that a request based on optometry be reviewed by an optometrist.
A motion was made and seconded to find this administrative regulation deficient. A roll call vote was conducted. The motion was not approved.
A motion was made and seconded to approve the following amendments: to amend Sections 1 and 11 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendment was approved.
A motion was made and seconded to approve the following amendment: to amend Section 1(3) to specify that if a request is made by an enrollee or enrollee’s treating optometrist, the decision to deny a service authorization request or authorize a service in an amount, duration, or scope that is less than requested by the enrollee or enrollee’s optometrist shall be made by a Kentucky licensed optometrist. Without agreement of the agency, the amendment was not approved.
907 KAR 17:030 & E. Managed care organization operational and related requirements and policies.
Department for Community Based Services: Division of Family Support: K-TAP, Kentucky Works, Welfare to Work, State Supplementation
921 KAR 2:015 & E. Supplemental programs for persons who are aged, blind, or have a disability. Virginia Carrington, branch manager, and Elizabeth Caywood, policy analyst, represented the division.
The following administrative regulations were deferred to the June 11, 2013, meeting of the Subcommittee:
ENERGY AND ENVIRONMENT CABINET: Department for Environmental Protection: Division of Water: Water Quality Standards
401 KAR 10:030. Antidegradation policy implementation methodology.
PUBLIC PROTECTION CABINET: Department of Alcoholic Beverage Control: Quotas
804 KAR 9:040. Retail liquor package license quota.
804 KAR 9:050. Retail liquor drink license quota.
Department of Housing, Buildings and Construction: Division of Building Codes Enforcement: Kentucky Building Code
815 KAR 7:120. Kentucky Building Code.
OTHER BUSINESS:
TOURISM, ARTS AND HERITAGE CABINET: Kentucky State Fair Board: Board
303 KAR 1:041. Certain objects and attire prohibited on premises. Clifford Rippetoe, president and CEO of the Kentucky State Fair Board, represented the board. Steven McBride, citizen, appeared in opposition of this administrative regulation.
Mr. McBride stated that this administrative regulation: (1) was a violation of the Second Amendment to the Constitution of the United States; (2) had been in effect since 1978 and did not provide for the 1996 Kentucky Carry and Conceal statute; (3) was in violation of several statutes pursuant to KRS Chapter 13B; and (4) was onerous in regards to weapon searches.
Co-Chair Harris stated that only statutes, not administrative regulations, could provide requirements pertaining to weapons on state property. In response to a question by Co-Chair Harris, Mr. Rippetoe stated that the board agreed to defer consideration of this administrative regulation until the matter could be fully investigated. He stated that the board intended to amend this administrative regulation for compliance with all applicable law, federal and state, including provisions regarding weapon searches.
Without objection, and with agreement of the agency, the administrative regulation was deferred for consideration at the June Subcommittee meeting.
The Subcommittee adjourned at 3:15 p.m. until June 11, 2013 at 1 p.m.