Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> 5th Meeting

of the 2003 Interim


<MeetMDY1> October 15, 2003


The<MeetNo2> 5th meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Wednesday,<MeetMDY2> October 15, 2003, at<MeetTime> 1:00 PM, in<Room> Room 129 of the Capitol Annex. Representative Tom Burch, Co-Chair, called the meeting to order at 1:13 PM, and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators Charlie Borders, Bob Jackson, Richard Roeding, Katie Stine, and Johnny Ray Turner; Representatives Brian Crall, Bob DeWeese, Mike Harmon, Jimmy Higdon, Joni Jenkins, Mary Lou Marzian, Stephen Nunn, Ruth Ann Palumbo, Jon David Reinhardt, Ancel Smith, Kathy Stein, and Susan Westrom.


Guest Legislators:  Senator Daniel Mongiardo and Representative Jimmie Lee.


Guests:  Rita Moya and Sue Speed, Foundation for a Health Kentucky; Jeanne Robertson, advocate, Bowling Green; Floyd Parrish, Inspector General; Anne Joseph, Kentucky Task Force on Hunger; Wayne Johnson, Kentucky Association of Health Care Facilities; Sarah S. Nicholson, Kentucky Hospital Association; Mike Wooden, Eli Lily; Jim Carloss, Pfizer; John Brazel and Mike Mayes, Kentucky Pharmacists Association; Gay Dwyer, Kentucky Retail Federation; Nancy Horn, American Pharmacy Services Corporation; Jim Grawe, Kentucky Board of Occupational Therapy; George Parsons and David Allgood, Center for Accessible Living; Brenda Wilburn, Cabinet for Health Services; James West, Hazelwood; Rhonda Chasser, Lincoln Trail Area Development District; Irene Centers and Tricia McLendon, Department for Public Health, Cabinet for Health Services; Debbie Fleming, Franklin County Health Department; Dr. Tom Young; Pediatrician, Family Care Center, Lexington; Dudley J. Conner; Argene Jones, District Ombudsman, Kentucky River Area Development District; Tom Young and Diane Lewis, Cabinet for Health Services Ombudsman Office; Karen Hinkle, Kentucky Home Health Association; Nancy L. Black, Division of Occupations and Professions, Finance and Administration Cabinet/Board of Occupational Therapy; Marty White and John Cooper, Kentucky Medical Association; Clyde Caudill, American Cancer Society; Janice Jackson, Kentucky PTA; Emery Wilson, M.D., Dean of the University of Kentucky College of Medicine; Sherrie Newcomb and Gregory Johnson, Jenkins Community Hospital; Jessie Hogg, United Way of Northern Kentucky; Bart Baldwin, Child Welfare League of America; Chris Goddard, Health Point Family Care Community Health Center; Kathryn Kelm, student, Assumption High School; Donald M. Miller, M.D., Ph.D., James Graham Brown Cancer Center, University of Louisville; Paul Kiser, Kentucky Action; and Vivian Decker, parent, Grayson County.


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


A motion to approve the minutes of the September 17, 2003 meeting was made by Senator Burch, seconded by Representative Roeding, and approved by voice vote.


Senator Stine, Co-Chair, reported that the Families and Children Subcommittee met that morning and heard testimony from the Cabinet for Families and Children about the current status of claims collection for the Temporary Assistance for Needy Families (TANF) and Food Stamp Program, and child care assistance program.  The subcommittee also heard testimony regarding the relationship between autism and mercury contained in childhood vaccines.


The next order of business was the review of referred administrative regulations.  The first regulation to be discussed was 201 KAR 28:010.  Nancy Black, Executive Director, Kentucky Board of Occupational Therapy explained an amendment that defined “ACOTE” as the Accreditation Council for Occupational Therapy Education.  A motion to amend 201 KAR 28:010 was made by Representative Burch, seconded by Representative Stein, and approved by voice vote.  A motion to approve the following regulations was made by Senator Roeding, seconded by Representative Reinhardt, and approved by voice vote: 201 KAR 28:010 as amended was made by Representative Burch, seconded by Senator Roeding, and approved by voice vote.  A motion to approve 40 KAR 3:011E – repeals 40 KAR 3:010, relating to the payment schedule for the Sexual Assault Examination Program, as administered by the Office of Attorney General (Office of Attorney General); 201 KAR 20:070 – deletes the section related to graduates of foreign nursing schools who apply for licensure in Kentucky (Board of Nursing); 201 KAR 20:095 – establishes the requirements for obtaining and maintaining inactive licensure status and establishes requirements for changing licensure status from inactive to active for a registered nurse or a licensed practice nurse (Board of Nursing); 201 KAR 20:110- establishes the requirements for licensure by endorsement and establishes the requirements for a temporary work permit for an applicant to practice nursing while the application for licensure is being processed (Board of Nursing); 201 KAR 20:225 – establishes procedures for reinstatement of a nursing license that has lapsed or has been subject to disciplinary action, (Board of Nursing); 201 KAR 20:370 – requires nurses who are non-United States citizens to maintain proof of legal residency (permanent or temporary) in order to apply for licensure or registration (Board of Nursing); 201 KAR 20:390 – requires the board to be responsible for awarding nursing incentive scholarships instead of the Kentucky Nursing Incentive Scholarship Fund Committee (Board of Nursing); 201 KAR 20:480 – establishes the requirements for licensure of graduates of foreign nursing schools (Board of Nursing); 201 KAR 28:020 – establishes information requirements for an Occupational Therapy license application (Board of Licensure for Occupational Therapy); 201 KAR 28:030 – establishes requirements for temporary practice of Occupational Therapy (Board of Licensure for Occupational Therapy); 201 KAR 28:051 – repeals 201 KAR 28:050 relating to Special Occupational Therapy licensure requirements (Board of Licensure for Occupational Therapy); 201 KAR 28:060 – establishes procedures necessary to apply for a license to practice Occupational Therapy (Board of Licensure for Occupational Therapy); 201 KAR 28:070 – establishes the requirements for the examination for licensure as an Occupational Therapist (Board of Licensure for Occupational Therapy); 201 KAR 28:121 – repeals 201 KAR 28:120 relating to applications by foreign-trained OTR’s and OTA’s (Board of Licensure for Occupational Therapy); 201 KAR 28:130 – establishes the requirements for the supervision of occupational therapy assistants, aides, students, and temporary permit holders (Board of Licensure for Occupational Therapy), 201 KAR 28:140 – establishes a professional code of ethics for unprofessional conduct for occupational therapists (Board of Licensure for Occupational Therapy); 201 KAR 28:180 – establishes the requirements for obtaining and practicing occupational therapy with a temporary permit (Board of Licensure for Occupational Therapy); 201 KAR 28:200 – establishes the requirements for occupational therapy licensees to demonstrate continuing competence (Board of Licensure for Occupational Therapy); 201 KAR 29:050 – delineates the requirements for continuing education and prescribes methods and standards for the accreditation of Respiratory Care continuing education courses (Board of Respiratory Care); 902 KAR 20:008 – establishes the fee schedule and requirements for obtaining a license to operate a health facility and establishes the procedure for obtaining variance (Cabinet for Health Services, Office of Inspector General); 906 KAR 1:140 – implements the licensing validation process and establishes a procedure for investigating complaints at deemed hospitals by the Office of Inspector General of the Cabinet for Health Services (Cabinet for Health Services, Office of Inspector General); 921 KAR 2:491 – repeals 921 KAR 2:490 relating to the Welfare to Work Grant Program (Cabinet for Families and Children, Department for Community Based Services); and 921 KAR 3:045 – establishes procedures for the administration of the Food Stamp Program (Cabinet for Families and Children, Department for Community Based Services) was made by Senator Roeding, seconded by Representative Reinhardt, and approved by voice vote.


A motion to prepare a resolution from the Committee to Secretary Morgan expressing sympathy in the loss of her mother, Ola Mae McCoy, was made by Representative Burch, seconded by Senator Roeding, and approved by voice vote.


The next order of business was a discussion on Durable Medical Equipment and supplies, volume purchasing, and preferred vendors for Medicaid by Jim and Cindy Hertle Muncie, Quinn and Company Medical.  Ms. Muncie said that the benefits of purchasing versus renting medical equipment would be a cost reduction and higher quality products for Medicaid recipients.  Upon implementing a preferred vendor program, the program would generate savings of $4.6 million to $19.5 million annually for diapers, and $635,700 for pulse oximeters.  Based upon Medicaid figures of 9,524 patients annually, the Medicaid program could save $52 millions every three years, and experience savings for suction machines, nebulizers, CPAP, infusion pumps, and enteral feeding pumps and nutrients.  She suggested that the state conduct a one-year pilot program, which would not require legislation.


Ms. Muncie reported that the statutes currently require that any services provided must be under the “any willing provider” law.  The law requires that any provider must be given the opportunity to provide services if the provider agrees to meet the pricing guidelines under the program.  Research shows that this law was primarily targeting pharmacies, doctors, and chiropractors.  Although a majority of the states have a similar any willing provider law, Kentucky’s any willing provider law is considered the most restrictive within the United States.


Ms. Muncie reported that when the any willing provider requirement is mandated to equipment suppliers, the savings from competition between durable medical equipment is no longer an issue.  This process negates the original purpose of the any willing provider mandate, which was to eliminate the possibility of collusion and inside dealing between supplier and buyer.  She said that a move toward volume purchasing would fall within the realm of the “any willing provider” mandate and would not require legislative action if the “any willing provider” requirement were lifted as to Medicaid.


Representative Burch asked if the Cabinet had been contacted about the possible savings to the Medicaid program, and Ms. Muncie stated that a letter had already been sent to Commissioner Robinson, who identified the “any willing provider” law as the obstacle.  Mr. Muncie stated that the estimates provided were based on Passport figures.  Representative Burch asked if Ms. Muncie’s company had conducted business in any other state, and Ms. Muncie said that they are in the process of establishing a business in Florida.  Senator Roeding asked the Cabinet to address this issue at the November meeting.


Representative Marzian asked how the number of diapers used by recipients was determined.  Mr. Muncie stated that projections from Passport were used, adjusted for population, and divided by 120 counties to get an average.  Representative Marzian said that figures should be based on each county.  Representative Marzian stated that all factors needed to be looked at to determine reimbursement.  Ms. Muncie said that better quality products are available for the same price or lower if purchased from non-home health providers.


The next order of business was a presentation on community health centers and the health care safety net by Chris Goddard, CEO, HealthPoint Family Care.  Mr. Goddard reported that HealthPoint Family Care serves 24,000 patients and has an $8 million budget, our medical offices, a homeless medical clinic, and five school-based health centers.  HealthPoint’s vital role is to be a safety net for special needs populations (Medicaid, Medicare, Hispanic, homeless, oral health, and children), have equal or greater quality of service, contribute to the overall wellness of the community, and be a low cost alternative.  He said that HealthPoint serves 8,000 Medicaid recipients, 650 homeless individuals, and 1,200 persons of Hispanic decent.  Approximately 80 percent of low-income children in Northern Kentucky do not receive dental care, 1,600 mothers do not receive early prenatal care, and 15,000 school children qualify for free or reduced lunches.


Mr. Goddard stated that community health centers have lower costs compared to HMOs, hospital outpatient units, and private providers.  Community health centers account for one percent of Medicaid’s state budget and saves approximately $10.5 million annually in Medicaid expenditures.  He said that 48.3 percent of Kentuckians live in medically underserved areas, and sixty-nine counties have inadequate primary care access.  He recommended support for community health centers in each district, legislative efforts to control healthcare costs, more avenues to secure funding for expanding community health centers, and more support and equitable reimbursement for efficient and effective centers.


Senator Roeding asked about the average reimbursement per Medicaid patient.  Mr. Goddard stated that it was $85 per visit.  Senator Roeding asked if anyone else treated Medicaid patients for less, and Mr. Goddard stated that some private practices limit the number of Medicaid patients and receive less reimbursement.  Senator Roeding said that his concern was who could serve Medicaid recipients for less.


Next, Dr. Tom Young, Pediatrician, Family Care Center, stated that one Medicaid cost-containing initiative to be implemented in November by the Cabinet for Health Services is premiums for KCHIP.  He stated that because there are different federal allocations and different state allocations for the KCHIP and the Medicaid programs, cost containment for KCHIP would not effect Medicaid. KCHIP premiums would generate very little revenue for the state.  If premiums are charged, the net expenditure claimable for Title XXI against the state’s allotment would decrease.  As a result, funds from beneficiary cost-sharing are distributed proportionately to offset state and federal contributions in the same proportion as for other KCHIP expenses.  The federal match is approximately 79 percent, which means the state would only receive 21 percent of the premium revenue.


Dr. Young said other states that have imposed or raised premiums have seen enrollment declines of 16 percent or more.  Based on these experiences, approximately 3,200 Kentucky children would lose health care coverage due to disenrollment.  Cost containment through premiums can only be achieved when eligible children lose their KCHIP coverage.  He said that when children lose coverage, their access to necessary health care services suffer.  When KCHIP enrollment drops, Kentucky loses financially as well because every dollar of KCHIP funds include 79 cents of federal matching funds.


Representative Stein made a motion to urge the Cabinet for Health Services to suspend implementation of KCHIP co-pays and invite them to the next meeting to explain how it would be a cost-saving measure for Medicaid.  Senator Denton said that the Cabinet would be invited to the November meeting to explain why the co-pays are necessary.  No action was taken on the motion.


The next order of business was a discussion on cigarette tax revenues and a funding proposal for human services programs by Donald M. Miller, M.D., Ph.D., James Graham Brown Cancer Center, University of Louisville, Emery A. Wilson, M.D., Dean of the University of Kentucky College of Medicine, Kathryn Klem, student at Assumption High School in Louisville, and Paul Kiser, Kentucky Action.  Dr. Wilson reported the following statistics for Kentucky smokers: 1) 32.6 percent of adults smoke; 2) 34.6 percent of high schools students smoke; 3) 15 percent of middle school students smoke; 4) 13,400 kids become new daily smokers each year; 5) 7,700 adults die each year from their own smoking; 6) 114,000 kids today will die prematurely from smoking; and 7) 730 to 1,300 adults, kids, and babies die each year from secondhand smoke.  He stated that 12-17 year olds who smoke daily are: 1) 14 times more likely to have binged on alcohol; 2) 32 times more likely to have repeatedly used cocaine; and 3) 100 times more likely to have repeatedly used marijuana.


Dr. Wilson stated the annual health care costs in Kentucky related to smoking total $1.17 billion, and $380 million of that total is paid by Medicaid.  He said that smoking-caused productivity losses in Kentucky equal $1.84 billion.  Increasing the price of cigarettes is the single most effective way to reduce youth smoking.  For every ten percent increase in the price of cigarettes, there is a seven percent decrease in smoking among youth and pregnant women and in adult smoking rates.  He stated that an increase in Kentucky’s cigarette tax of 75 cents per pack would result in a 17 percent decline in youth smoking, prevent nearly 30,000 future smoking-related deaths, result in more than 60,000 fewer future youth smokers, save $30 million over the next five years in health costs from heart attack, stroke, and low-birth weight babies, and produce overall long-term health savings of more than $1.1 billion.  Dr. Wilson said that several cigarette companies admit that price has a pronounced effect on the smoking prevalence of teenagers.  The goals of reducing youth smoking and balancing the budget would both be served by increasing the federal excise tax on cigarettes.  It is no coincidence that Kentucky’s cigarette tax is the second lowest in the country while its citizens suffer the highest rates of smoking addiction and in lung cancer and heart disease death rates.  He said that not increasing the cigarette tax in Kentucky is endangering the health of its citizens, particularly the children.


Ms. Klem stated that according to the most recent Kentucky Youth Tobacco Survey, three out of four high school smokers in the state have purchased cigarettes from a store in the past.  More expensive tobacco products would mean that fewer teens would be willing or able to pay for this deadly addiction.  She said that since youth who use tobacco products are more likely to smoke marijuana, drink alcohol, and use other drugs, raising the excise tax on tobacco products can also lower rtes of other drug usage.  She urged legislators to make the lives and health of young people a top priority in the 2004 legislative session.


Dr. Miller stated that there are 3,400 new cases of lung cancer every year in Kentucky, with a 20 percent survival rate.  Lung cancer is a public health problem and there is an obligation to protect the public health by developing more effective prevention, detection, and treatments.  He said that the Kentucky Lung Cancer Research Fund was established by the General Assembly in July 2000 and has funded 54 scientists to investigate lung cancer treatment, causation, and prevention.  Continued smoking means that lung cancer rates will remain high for the next two decades.


Dr. Miller stated that an increase in excise tax would acknowledge that smoking and lung cancer rates are a significant problem, serve to reduce teenage smoking and provide funding support for alternative uses of tobacco and the development of two NCI-designated cancer centers in Kentucky.


Representative Crall asked if all tobacco has equal potential harm.  Dr. Miller said that a lot of epidemiologic evidence shows that not all tobacco is even.  Representative Crall stated that consideration should be given to the fact that since all tobacco is not equal, the tax should be based on the type of tobacco.  Dr. Miller stated that the goal is to get everyone in the state to stop smoking.  Representative Crall stated that public policy should be driven in the direction of harm reduction.  Representative Stein stated that smokeless tobacco is not currently taxed.


Representative Smith asked about the percentage of imported tobacco.  Mr. Kiser stated that 60 percent of American-blend cigarettes are imported.  Representative Smith asked if other countries had chemical laws.  Mr. Kiser said that he guessed they had less regulation than the United States.  Representative Smith said the problem is addiction, not the price.  Mr. Kiser said that the goal is prevention.  Representative Marzian said that people’s tobacco addiction is paid for in healthcare costs.


The Committee next heard from Senator Mongiardo, who said that the healthcare system is on the verge of a catastrophic collapse, and Kentucky must have a comprehensive solution before raising taxes.  He said that 42 percent of Americans have either personally experienced or had a family member experience a medical error.  When hospitals are inadequately funded, medical errors occur.  Medicaid currently pays 79 percent of what it takes to take care of a patient in the hospital, Medicare pays 98 percent, and private insurance pays 125 percent.  If Medicaid and Medicare are cut, private insurance must increase premiums.  He said that healthcare is the most information intensive industry.  For each dollar spent on prescription drugs in a hospital, another dollar is spent taking care of adverse drug events.  For each dollar spent on prescription drugs in a nursing home, $1.30 is spent on adverse drug events.  Preventable errors constitutes the seventh largest cause of death.  Kentucky should implement information technology in hospital to research errors that have been made.  Currently, only 5 percent of medical errors are reported.  In ten years, 70 percent of healthcare will be “on-line.”  The electronic network can be the foundation for a bioterrorism defense network for Kentucky and the nation, and Kentucky would benefit if it were the first to develop the system.


Representative DeWeese said confidentiality protection is important for an electronic health network, and may require an amendment to the state Constitution.


David Allgood, Center for Accessible Living, said that the federal government offered $33 million in grants with eight different categories but Kentucky did not apply, along with only two other states.  He said that the state would not need matching funds to receive the grants.  The disabled and elderly community would like for the Department to listen to its concerns and recommendations.


Vivian Decker, parent of a handicapped son in Grayson County, said that the poorest citizens of Kentucky are being effected by the Medicaid cuts.  She urged legislators to listen to concerns from their constituents.  Representative Lee said that if the primary diagnosis on decertification is because of mental retardation, someone may not be eligible for services under the Home and Community Based waiver but might be eligible for Supports for Community Living waiver services.  He said that the Supports for Community Living waiver has more services than the Home and Community Based Services waiver.


There being no further business, a motion to adjourn at 3:30 p.m. was made by Senator Roeding, seconded Representative Crall, and approved by voice vote.