Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> 1st Meeting

of the 2003 Interim


<MeetMDY1> June 18, 2003


The<MeetNo2> 1st meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Wednesday,<MeetMDY2> June 18, 2003, at<MeetTime> 9:30 AM, at Toyota Motor Manufacturing North America Headquarters in Erlanger, Kentucky<Room>. Representative Tom Burch, Co-Chair, called the meeting to order at 9:30 AM, and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators Charlie Borders, Tom Buford, Richard Roeding, and Katie Stine; Representatives Brian Crall, Robert Damron, Bob DeWeese, Mike Harmon, Joni Jenkins, Mary Lou Marzian, Stephen Nunn, Jon David Reinhardt, and Ancel Smith.


Guest Legislator: Charlie Walton.


Guests: Ronny Pryor for the Kentucky Hospital Association; Judi Gerding, The Point/Arc of Northern Kentucky; Leshia Hynan, Lynn Carol Ray, and Jessie Hogg, United Way; Donna Grigsby, Early Childhood Authority; Sheena Bohannon, Tom Lottman, and Rick Hulefeld, Children, Inc.; Dennis Cuneo, Carri Chandler, and Suzanne Spicer, Toyota Motor Manufacturing North America, Inc; Donna G. Brown, Kentucky Association of Health Care Facilities and Associated Industries of Kentucky; Andrew Stukenberg, Kentucky Association of Health Care Facilities; Evette Hudson, Louisville Metro Health Department; George J. Graham, Ph.D., and Steve Englender, M.D., Department for Public Health, Cabinet for Health Services; Steve Shannon, Kentucky Association of Regional MH-MR Programs, Inc.; Linda Harney, Cabinet for Health Services; Mark Schenthal, Johnna Fasold, and Steve Stevens, Northern Kentucky Chamber of Commerce; Dave Ellington; Heather Quinn, Senate Presidentís Office; Sean Cutter, McBrayer, McGinnis, Leslie and Kirkland; Ben Sweger, Duane Dringenburg, and David Hamm, Department for Medicaid Services, Cabinet for Health Services; Marcia Morgan, Ann Gordon, Cabinet for Health Services; Scott Wegenast, Catholic Conference of Kentucky; Elaine Ward, 4C of Northern Kentucky; Kevin Londeen and Allan Hansen, Myers & Stauffer; Douglas Kennedy, UNISYS Corporation; Mike Wooden, Lilly & Company; Dustin Miller, State Farm; Kevin Payton, Childrenís Alliance; Paula Payne, Senate Minority Leadership Office; Karen Hinkle, Kentucky Home Health Association; Bill Doll, Jackson & Kelly, for Kentucky Medical Association; Ellen Kershaw, Alzheimerís Association; David Vance, Cull, Hayden & Vance; Dellisa Ford-Edwards, and Jennifer Briola Brighton Center; Keith James, Hager Education Foundation; Sheila Schuster, Kentucky Mental Health Coalition; Pat Dressman, Campbell County Fiscal Court; Gary Goetz and Ed Muntel, NorthKey Community Care; Marchetta Carmicle, Paula Woodworth, and Jason Dunn, Department for Community Based Services, Cabinet for Families and Children; Elaine Chisholm, Mental Health Consumer Advocate; Cathy Allgood Murphy, American Association of Retired Persons; Gary Crum and Evie VanHerpe, Northern Kentucky Health Department; Amy Stiber, Office of Inspector General; Leisha Thacker, The Commonwealth Group; Rita Brooks, Recovery Network of Northern Kentucky; Prentice Harvey, Norton Healthcare; Tina Lenta, Louisville Metro Government; Ted Smith, Regional Planning Council; Joe Wind and Jim Votruba, President, Northern Kentucky University; Jeff Jagnow, Cabinet for Families and Children; Ronnie Coleman, Schering-Plough; Mary Howard, Governorís Office on Early Childhood Development; Wilson Wong; Christopher Cecil, Donna Perkins, Kevin Lightle, and Kelly Ranvier, Department for Mental Health, Cabinet for Health Services; Ruth Webb, House Majority Floor Leaderís Office; Mark Bailey and John Horton, Cincinnati Airport Fire Department; Samantha Deegan, FBI; Sarah S. Nicholson, Kentucky Hospital Association; Bob Babbage, Babbage Co-Founder; John Cubine, LRC; Judy VanGinkle, President, Every Child Succeeds; and Tim McDermott, Saint Elizabeth Medical Center.


LRC Staff: Robert Jenkins, CSA, Barbara Baker, Eric Clark, DeeAnn Mansfield, Murray Wood, Gina Rigsby, and Cindy Smith.


The first order of business was the welcome by Senator Denton, Representative Burch, Dennis Cuneo, Senior Vice President, Toyota Motor Manufacturing North America, Inc., and Johnna Fasold, Northern Kentucky Chamber of Commerce.


The next agenda item was Quality Child Care Perspectives and Update by Steve Davis, M.D., Director, Adult and Child Health Division, Department for Public Health, Cabinet for Health Services. Dr. Davis reported on the Early Childhood Initiative. In addition to the 120 health departments, folic acid tablets and counseling are now being provided at eight state universities. Kentucky has had a 60 percent reduction in children born with neural defects. Approximately 346 pregnant women have engaged in treatment-related substance abuse services, and 1,840 pregnant women have received substance abuse prevention services.


37,542 children had a hearing screening, with 3,533 found to be at risk. Approximately 98 percent of newborns are screened at birth, and 5,062 children have received vaccinations. Forty-six children accessed funds for an eye examination, and the Oral Health program pilot test was finalized in December, 2002. Oral health training was provided at five sites to health department nurses and other providers. Approximately 500 children received an oral health screening.


All 120 counties have HANDS programs, and 10,914 families have received visits through the HANDS Voluntary Home Visiting Program. 74,068 home visits were conducted.


Fourteen Early Childhood Mental Health (ECMH) specialists were hired by the Regional Community Mental Health Centers, completing three local trainings. All ECMH specialists have contacted most of the Child Care Centers and other Early Childhood programs in their communities to introduce this initiative. 392 children/families/programs received services.


Funds support Medical Assistant Coordinators for four Childrenís Advocacy Centers that provided 253 specialized forensic medical examinations to children of alleged sex abuse. 400 children under the age of five are seen in the Childrenís Advocacy Centers quarterly.


56,000 children are served per month through child care subsidy. Enrollment of families in the child care subsidy program was stopped and waiting lists were started.


There are 525 Star Rated Centers and 86 Star Rated Family Child Care Homes. $276,600 was disbursed to centers and homes through Quality Incentive Awards. $168,800 was disbursed to centers and homes through Achievement Awards.


718 scholarships for childcare providers were awarded for the fall term of 2002. 1,148 scholarships for childcare providers were awarded for the spring and summer terms of 2003. 250 Commonwealth Child Care Credentials were awarded. 550 non-college credit awards were made. The Training into Practice Project provided opportunities for early childhood trainers to have access to knowledge and training that will develop and enhance skills as a trainer of adults working with young children and families.


The Healthy Start in Childcare program provided 2,664 phone consultations, 1,450 on-site consultations, and 147 playground inspections. 1,377 classes on health, safety, and nutrition were presented by 24,916 child care providers, parents, and children in collaboration with the Child Care Resource and Referral Agencies. Training for Healthy Start consultants on physical activity programs that can be implemented at child care centers was conducted in March, 2003. Healthy Start consultants collaborated with Early Childhood Mental Health specialists.


Funding was provided to 81 Community Early Childhood Councils in 99 counties. Eighty-six councils representing 105 counties submitted funding proposals on May 9, 2003.


Mr. Jim Votruba, President of Northern Kentucky University, emphasized implementation of child care programs because training must start early in childhood.


The next agenda item was a discussion on Early Childhood Visitation by Rick Hulefeld, Executive Director, Children, Inc. Mr. Hulefeld said that Children, Inc. provides care through six centers that are three-starred and one center that is four-starred. Care is provided at 50 before and after-school programs and 105 family-child care homes, and through home visits to 240 high-risk mothers. Eligibility to access child care funds after the freeze will be cut back to approximately 135 percent of poverty, which will be detrimental to low-income parents because they will not be able to afford quality child care. Statewide, approximately 35 percent of all children who enter school will be unprepared to succeed. In areas of high concentration of low-income families, the rate of children unprepared to enter school will escalate to 70 percent. He said that childcare is a workforce issue, quality issue, and school issue.


Judy VanGinkle, President of Every Child Succeeds, stated that child care should be a public and private collaborative partnership. She said that programs need to be evidence-based to get documented outcomes. Sheena Bohannon, with her son, Keshawn, stated that the HANDS Program has helped her and her son. Representative Burch stated that adequate funding should be maintained for the early childhood initiatives. Jennifer Briola, Brighton Center, shared several success stories from her Centerís HANDS Program.


The next agenda item was a discussion on Mental Health Planning and Northern Kentucky Perspectives by Ed Muntel, President and CEO of NorthKey Community Care, and Elaine Chisholm, Consumer Advocate of Regional Planning Council. Mr. Muntel said that the Northern Kentucky Regional Planning Council cooperates with the Mental Health-Mental Retardation Regional Board and the state-level Mental Health and Substance Abuse Services planning; fosters collaboration and advocacy, and improves community-based care. The following are primary regional needs: 1) increase state general fund dollars for Northern Kentucky to more adequately support mental health and substance abuse services; 2) appropriate funding of Medicaid program to allow appropriate reimbursement across a continuum of services and enable broader eligibility; and 3) have flexibility to match usage of dollars to local identified needs.


Ms. Chisholm stated the following specific regional needs: 1) increased availability of psychiatrists for assessment and medication management; 2) early assessment and treatment for children and adolescents; 3) increased coverage for substance abuse treatment (Medicaid eligibility); 4) increased support for consumer-run support and education services; 5) medium and long-term residential services for youth with mental health and substance abuse problems; 6) expanded school-based mental health and substance abuse services for youth; 7) increased coverage for substance abuse treatment (Medicaid eligibility); 8) increased awareness of mental health and substance abuse issues for older adults; 9) increased availability of consultation and treatment services to law enforcement and legal system for individuals who have mental health and substance abuse needs; and 10) transportation needs, especially in rural areas, to facilitate access to necessary services.


Senator Stine asked what explanation had been given for the lack of sufficient funding for Northern Kentuckyís needs. Mr. Muntel said that Northern Kentucky was one of the first regions to form a regional board and received federal funds early, and then state funding. When the state funding started to taper off, most areas were just getting started. He said that Northern Kentucky does not have the number of indigents on a percentage basis. The formula for funding has not changed in relationship to the population growth experienced in Northern Kentucky.


Representative Reinhardt asked if Northern Kentucky was meeting the basic needs like other areas. Mr. Muntel said that, considering the population that is being served, his answer would have to be no. Representative Reinhardt asked what increase in funding would be needed to meet the basic needs. Mr. Muntel said that there would have to be a more complicated process to make the proper adjustments.


Senator Roeding stated that anytime a formula is put together there should be consideration given to growth. Ms. Chisholm responded to Senator Roeding by saying a clubhouse setting is a place where consumers can go to learn how to take responsibility and interact with people. The idea of a clubhouse is to move people from one setting to another if they are willing to move. Mr. Muntel said that in Kentucky the clubhouse model has also been developed into a therapeutic rehabilitation program.


Representative Marzian said that Kentucky is 44th in per capita spending on mental health issues. She stated that there was legislation enacted during the 2003 Regular Session to continue the Commission on Services and Supports for Individuals with Mental Illness, Alcohol and Other Drug Abuse Disorders, and Dual Diagnoses.


The next agenda item was a discussion on the Medical Malpractice Insurance Crisis by Bill Doll on behalf of the Kentucky Medical Association and Dave Ellington, pastor and victim of a medical negligence. Mr. Doll said that some doctors have stopped offering high-risk services due to the increase in malpractice insurance rates. He said that in 1976 Kentucky enacted the patientís compensation fund, but the Kentucky Supreme Court found it unconstitutional. Kentucky has a jural rights doctrine predicated on the Kentucky Supreme Courtís reading of three sections of the constitution. Mr. Doll stated that a discussion about caps on jury awards is premature because there is an absolute prohibition in the Kentucky Constitution to establish caps of any sorts. He said that the legislature has a challenge not to establish a cap but to give the electorate the opportunity to decide on passing a constitutional amendment that would enable the legislature to enact law that would address reforms that have proven relatively effective in other states.


Senator Borders stated that, during the 2003 Regular Session, the legislature was not trying to determine everything that would need to be enacted with a constitutional amendment. Senate Bill 1 was an opportunity to put on the ballot a constitutional amendment that would allow the legislature to come back and address whatever needs to be done.


Representative Burch said that the number of doctors that have left Kentucky has stayed relatively the same over the past four years. Mr. Doll said that the number of doctors may have stayed the same, but they may not be willing to deliver needed services.


Senator Roeding said that the problem is getting physicians in high specialty areas to come to Kentucky.


Representative Damron said that the solution to the problem is more than being able to cap the amount of economic and non-economic damages. He said that the citizens of Kentucky cannot vote on a constitutional amendment until 2004. During the 2004 Regular Session, this issue should be a bipartisan effort.


Representative Harmon said that medical malpractice has become a major problem in rural areas. He stated that the legislature wants to improve health insurance to make rates more affordable for everyone, but lower rates will not make a difference if there are no doctors to perform the services because of high medical malpractice insurance rates. The citizens of Kentucky should have the right to decide if they want to allow the legislature to make these types of decisions.


Mr. Ellington stated that he was a victim of medical negligence. He said that his experience with insurance companies, hospitals, and doctors has convinced him that he has not been fairly treated, especially by the insurance companies. Most of his damages have not been economic, but the medical malpractice impacted his life greatly. He stated that the problem is when hospitals and doctors take measures to cut costs, they do not want to be responsible for mistakes that are made because of these cost-cutting measures. He asked that the rights of citizens not be taken away.


Senator Denton said that she hoped this would be a bipartisan issue.


The next agenda item was discussion on SARS and the response of the Cincinnati/Northern Kentucky International Airport by Steve Englender, M.D., Department for Public Health, Chief John Horton and Captain Mark Bailey, Cincinnati Airport Fire Department, Dr. Gary Crum, Director of the Northern Kentucky Independent Health District, and Evie VanHerpe, Northern Kentucky Independent Health Department. Dr. Englender said that SARS is the current problem but the broader theme is infectious disease. Captain Bailey stated that the infectious disease control procedures are reviewed by the Centers for Disease Control. Through the Respiratory Protection Plan Program, all Kenton County Airport Board employees are trained on respiratory protection. Also, airport fire department and emergency first responders, police, housekeeping, and building maintenance are trained on the procedures of handling infectious diseases.


The next agenda item was a Medicaid update given by Marcia Morgan, Secretary of the Cabinet for Health Services, and Mike Robinson, Commissioner for the Department for Medicaid Services, Cabinet for Health Services Secretary Morgan said that the Medicaid budget will balance in fiscal year 2003 due to thirteen cost containment initiatives introduced in January, 2003. She said that in fiscal year 2003, the cabinet will raise approximately $250 million in additional federal revenues. Of this amount, $161 million will be available to help offset the expenditure shortfall and the remainder will be paid to Medicaid providers. In fiscal year 2004, the cabinet anticipates to have $185 million to help offset the expenditure shortfall and return approximately $100 million back to Medicaid providers.


Secretary Morgan stated that in fiscal year 2002, fourteen cost-containment initiatives were implemented that netted the cabinet $160 million in cost savings for fiscal year 2003. In fiscal year 2003, the cabinet implemented 43 cost-containment initiatives, with a recurring annual savings into fiscal year 2004 totaling $281 million. The recurring savings going into fiscal year 2004 is $419 million. She said that the per member per year cost for a Medicaid recipient in fiscal year 2003 only grew by four-tenths of one percent. The average weekly cycle cost of Medicaid benefits in 2001 was $54,272,277, serving approximately 602,932 eligibles. In fiscal year 2002, the average weekly cycle was $59.7 million serving 626,000 eligibles, and in fiscal year 2003, the average weekly cycle was $70.2 million serving 652,000. She said that the annual expenditures for fiscal year 2003 will be $3.9 billion. From February to March, the total of Medicaid eligibles increased by 5,000; 3,000 from March to April; and held flat during May.


Secretary Morgan stated that on May 28, 2003 the Jobs and Growth Tax Relief Reconciliation Act of 2003 was signed by President Bush. Kentuckyís share of the fiscal relief package will be approximately $138 million by way of an enhanced federal match, instead of the traditional 70 percent match. In fiscal year 2003, the Medicaid program will still have a $169 million shortfall.


Senator Roeding asked if the Governor had requested the $138 million dollars in fiscal relief from the federal government. Secretary Morgan said that the cabinet had already received the FMAP provision increase.


Representative Damron asked what kind of policy was in place to look at autism cases. Secretary Morgan said that a lot of children were being served through IMPACT Plus, which was designed for children with serious emotional disabilities on a short-term basis. Legislation was enacted during the 2002 Regular Session that directed the Department for Medicaid Services to submit a waiver to treat children with autism and other pervasive developmental disabilities. The waiver was submitted in October, 2002, and the cabinet is still responding to questions from the Centers for Medicare and Medicaid Services. Changes in the eligibility criteria in the Home and Community Based waiver will result in decertification for some autistic children. She said that, because the autism waiver has a cap, funds from IMPACT Plus had to be reallocated for this program.


Representative Damron asked about the medical expertise for the Peer Review Organizations (PROs) that determine eligibility for the waivers. Secretary Morgan said that the PROs have credentialed professionals who represent a broad array of services. To qualify for the enhanced funding from the Centers for Medicare and Medicaid Services, the cabinet must have broad-based credentials, and these individuals must be available to consult with providers to see if someone meets the level of care and is eligible for services. Representative Damron asked about the appeals process. Secretary Morgan stated that during this fiscal year, the cabinet has received approximately 433 appeals on the home and community based waiver. There is a 90 to 120 day period before the appeal is heard, the decision is written, and the decision is issued. The system was not geared for the decertification process and the cabinet has worked very hard to make sure that coverage stays in place and payments to providers are made during the appeal. Because appeal hearings are conducted locally, the cabinet will need attorneys statewide to expedite the appeals process. Senator Denton said that the cabinet has responded to the problem of non-payment of providers during the appeals process. Secretary Morgan said that communication between the provider community and the Peer Review Organization has improved.


Secretary Morgan said that the Governor has announced that there would be changes in the nursing facility level of care as part of a $250 million cost containment action necessary to address the Medicaid shortfall. She stated that 907 KAR 1:022E addressed these changes and became effective April 4, 2003. The administrative regulation required nursing facility level of care for eligibility into a nursing facility and also for the Home and Community Based (HCB) Waiver program. She said that it would ensure that the most acutely ill or medically needy individuals qualify for care in a nursing facility or the HCB Waiver Program. In 2002, 25,285 recipients were served in nursing facilities and 16,263 received HCB Waiver program services.


Secretary Morgan said that the new administrative regulation: 1) eliminates the confusion of terms such as high intensity and low intensity and replaces them with specific medical-need parameters to deter nursing facility level of care; 2) removes references to personal care; and 3) defines ďbaseĒ for nursing facility level of care. She said that three of the following nine medical care parameters used to determine nursing facility level of care must be needed daily: 1) assistance with mobility; 2) physical or environmental management for confusion and mild agitation; 3) feeding; 4) toileting assistance; 5) medication administration; 6) restorative and supportive nursing care; 7) administration of injections; 8) total self-care limitations; and 9) cognitive and communication functioning. Secretary Morgan said that the Department for Medicaid Services contracts with a Peer Review Organization (PRO), currently Healthcare Review, Inc., to make these medical decisions. The determination is made at the time of the initial eligibility and during re-certifications. She said that the provider supplies documentation to the PRO about the individualís medical condition and needs, which are reviewed by a PRO nurse. If documentation meets nursing facility level of care criteria, the individual is approved immediately. If the PRO nurse has questions, the case is sent to a PRO medical doctor to investigate further. Only a PRO medical doctor can determine that an individual does not meet nursing facility level of care. If the individual has been notified and disagrees with the assessment, the individual has ten days to appeal the PROís decision and request an administrative hearing to be conducted by the Cabinet for Health Servicesí Administrative Hearings Branch.


Mr. Robinson said that the Department for Medicaid Services has taken steps to correct problems in transportation services in Region 6. After a competitive bid process, the Cabinet selected Logisticare to provide services in Region 6 beginning May 1, 2003.


Jim Farrell, M.D., a physician from Northern Kentucky, said that cost-shifting and access are problems that need to be addressed. In 1997, the Federal Boren Amendment, which required Medicaid to reimburse at rates that would cover the cost of doing business, was repealed. Language not repealed required states to use payment rates and utilization review methodologies to assure that payments are sufficient to enlist enough providers so that Medicaid beneficiaries have access to care and services at least to the extent that such care and services are available to the general public. For Medicare patients who are also Medicaid patients, Medicare pays 80 percent and the patient pays 20 percent. For Medicaid patients, the Medicaid methodology payment would only pay the 20 percent. States were allowed to take the Medicaid reimbursement rate and compare it with the 80 percent Medicare rate, and if the 80 percent covered the Medicaid rate for the same service, the state owed nothing. Depending on the state Medicaid rate schedule, it could have a big impact on physicians. For the typical office visit or hospital visit codes used, the Medicaid rate is lower or right at the 80 percent Medicare rate in most cases. If a physician has a large elderly indigent population, the reimbursement rate will be cut by 20 percent immediately with the implementation of this system in Kentucky. Medicaid will not allow code-modifiers, recognized by Medicare, that would allow doctors to bill for different services on the same day.


If doctors close their practices, if young doctors cannot be recruited to replace them, if patients cannot see specialists, and if doctors cannot provide preventive care, Medicaid patients will receive substandard care.


Pat Dressman, Director of Human Services, Campbell County Fiscal Court, expressed concern about what happens to patients who do not meet the financial criteria and do not have the resources to remain in a nursing home. Secretary Morgan stated that the SSI standard on exceptional spend-down of 375 percent has not been implemented by the Cabinet.


Senator Denton announced that the next meeting will be Wednesday, July 16, 2003.


There being no further business, a motion to adjourn at 12:00 p.m. was made by Representative Damron, seconded by Representative Burch, and approved by voice vote.