Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> 1st Meeting

of the 2004 Interim


<MeetMDY1> June 16, 2004


The<MeetNo2> 1st meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Wednesday,<MeetMDY2> June 16, 2004, at<MeetTime> 1:00 PM, in<Room> Room 129 of the Capitol Annex. Representative Tom Burch, Co-Chair, called the meeting to order at 1:15 PM, 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, Ernesto Scorsone, Katie Stine, Damon Thayer, and Elizabeth Tori; Representatives Robert Damron, 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 Legislator:  Representative Jimmie Lee.


Guests:  James Holsinger, Secretary, Cabinet for Health and Family Services; Shannon Turner, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; Vickie S. Bourne, Executive Director, Office of Transportation Delivery, Transportation Cabinet; Mark Birdwhistell, Undersecretary for Health, Cabinet for Health and Family Services; Dr. Steve Davis, Director, Adult and Child Health Improvement, Department for Public Health, Cabinet for Health and Family Services; Kim Townley, Ph.D., Department for Education; Dr. Rice Leach, Commissioner, and Dr. Bill Hacker, Department for Public Health, Cabinet for Health and Family Services; Diane Lewis and Tom Young, Office of the Ombudsman, Cabinet for Health and Family Services; Prentice Harvey, Norton Healthcare; Joann Nguyen; Sandy Smith; Jason Milligan, Debra Vahle, Cabinet for Health and Family Services; Vikki Partlow; Rachel Duvall-Shaw; John Brazel, Kentucky Pharmacy Association; Diane Lawless, Bluegrass Rape Crisis; Sherri Currens, and Angela Yannelli, Kentucky Domestic Violence Association; Karen Hinkle, Kentucky Home Health; Robin and Ryan Scarbrough, First Steps parents; Mark George, Valley Transportation; Jerry Walters, Medi-Cab; Shawna White, Cindy Holmes, and Fran Woodward, Seven Counties; Sue Daniel, Carriage House; Bill Doll, Lisa Leach, Corporate Director of Operations, Ray Williams, Senior Vice President of Public Affairs, and Jeff Willhite, Director of Kentucky Operations, LogistiCare; Rev. William Curry, Mainstream Transportation; Ruth Clatos, Caroline Fields, and Judy Hurst, PUSH Early Childhood Development Council; Leah Brown, Department for Medicaid Services, Cabinet for Health and Family Services; Jan Gould, Kentucky Retail Federation; Cathy Allgood Murphy and Linda Kuder, American Association of Retired Persons; David Allgood, Center for Accessible Living; and Donna Brown, Kentucky Association of Health Care Facilities and Kentucky Association of Chiropractors.


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


Representative Tom Burch, Co-Chair, and Senator Julie Denton, Co-Chair, welcomed members to the first 2004 interim meeting of the committee.


A motion to adopt 201 KAR 28:130, 922 KAR 1:050, 922 KAR 1:320, 922 KAR 1:350, and 922 KAR 1:480, and pass over 922 KAR 1:330 until later in the meeting, was made by Representative Reinhardt and seconded by Representative Palumbo, and adopted by voice vote.


The next order of business was an update on the Medicaid Transportation Delivery Services in Jefferson County.  Shannon Turner, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services, stated that the Department for Medicaid Services contracts with the Transportation Cabinet who subcontracts to 15 regional transportation brokers who provide services to recipients.  She said that LogistiCare, Region 6 Medicaid transportation broker, implemented an efficiency program of shortest routes with maximum capacity.  There has been a negative reaction from transportation providers because of decreased reimbursement rates.


Vickie Bourne, Executive Director, Office of Transportation Delivery, Transportation Cabinet, said that non-emergency transportation is a recipient-based program.  She said that Region 6 has the largest urban population with the highest number of providers and trips.  Between July 2003 to May 2004, there were 457,873 riders with 37 percent being Type 07 riders and 22 percent being Type 08. Approximately 4,105,000 miles are traveled monthly in Region 6.  The Transportation Cabinet has paid approximately $8,748,000 to LogistiCare who in turn paid approximately $8,855,000 to subcontractors.


Ms. Bourne stated that some areas of review were Medicaid transportation eligibility, utilizing the Peer Review process, multi-loading and coordinating trips, increasing bus passes, and subcontractor rates.  In the report, "Human Service Transportation Delivery: System Faces Quality, Coordination, and Utilization Challenges Research," prepared by the Legislative Research Commission, 41 percent of the riders surveyed indicated there were usually no other passengers in the vehicle.  She said that taxpayers would not want to see more than one vehicle at the same facility at the same time with only one person per vehicle.  Operating fewer vehicles would cause less vehicle liability, less fuel cost, less insurance, and less vehicle maintenance.  She stated that the Office of Transportation Delivery would continue to run analysis subcontractor rates, confer with Medicaid officials, and meet with LogistiCare in regard to provider concerns.  The Kentuckiana Regional Planning and Development Agency (KIPDA) will conduct an analysis of the subcontractor rates in Region 6.


Ray Williams, Senior Vice President of Public Affairs, LogistiCare, stated that LogistiCare has been operating in Louisville since May 2003, and nationwide since 1989.  There are 20 providers in the network and 320 vehicles.  Approximately 46,000 trips are made monthly.  LogistiCare has state-of-the-art proprietary software and technology to capture data and distribute comprehensive reporting.  A 1997 report from the Office of Inspector General of the United States Department of Health and Human Services reported that the broker/management approach is the best independent resource to manage transportation companies.  The report also stated that the broker/manager should be prohibited from owning and performing transportation services in order to retain their objective role in "right-sizing" transportation services.  He said that LogistiCare is committed to working with Kentucky.


Lisa Leach, Corporate Director of Kentucky Operations, said that 603 KAR 7:080, Section 16.4 mandated the broker and transportation provider evaluate routes presently utilized by eligible recipients.  If the broker determines that a route is inefficient, the broker must elect a more efficient route.  She said that restrictions in granting of permits require maximized vehicle usage by multi-loading.  LogistiCare does not and cannot deny anyone transportation.  All denial requests must be submitted to the Transportation Cabinet for review and authorization.  Once the Cabinet has authorized a denial, written notification of the denial is sent to both LogistiCare and the Medicaid recipient.  The reasons for denial are established by the Cabinet.


Jerry Walters, Owner of Medi-Cab, stated that providers have to use the shortest route suggested by Map Point.  The administrative regulation was created for safe and efficient routing.  He said that once a provider has submitted bills, reimbursement is held if any corrections are made by LogistiCare.


Mark George, Owner of Valley Medical Transportation, said that there should be a flat rate for providers.  He stated that a broker is needed to provide oversight, and LogistiCare has done a good job.  Scheduling should be done by providers.


Reverend William Curry, Owner of Mainstream Transportation Authority, said that providers had not been contacted to help coordinate and multi-load recipients.  He agreed that Logisticare is a good fit for Kentucky.  Higher insurance costs, higher cost of fuel, and repair and upkeep on vehicles are major concerns for providers.  He stated that each provider wants to provide quality services.  There needs to fairness for all parties involved.


Ms. Leach said that an in-depth study is being conducted on the shortest and quickest routes.  She said that LogistiCare does not insist providers use the shortest distance, and they are willing to work with providers.  She stated that LogistiCare would take suggestions from providers for better utilization of multi-loading.


Senator Buford asked Ms. Bourne to provide the rates for each different category of trips and a comparison to other cities.  He questioned if providers are allowed to make choices, and Ms. Leach assured him they did.  Senator Buford stated that, in Louisville, the state approves licenses to determine the number of cab companies.


The next order of business was a report on domestic violence and spouse abuse services in Fayette County by Sherri Currens, Executive Director, Kentucky Domestic Violence Association (KDVA).  Ms. Currens said that the KDVA has determined that it will not renew its subcontract with the YWCA of Lexington to provide domestic violence services in the Bluegrass Area Development District beginning July 1, 2004.  The KDVA participated in a community forum on June 15, 2004, to explain the tentative plan, distribute community input survey, and collect information on interested contributors/donors.  The KDVA New Shelter Trust Account has been established for receiving monetary contributions for the new domestic violence program at Fifth Third Bank in Lexington.


Ms. Currens stated that current shelter residents and non-residential clients will be transferred to other regional domestic violence programs or a temporary local facility for services.  Crisis line services will continue using the current crisis line phone number for the Bluegrass ADD.  Victims in emergency shelter and services will still be able to access services by calling the crisis line.  Callers will be referred to either another regional domestic violence program or to a local emergency shelter, depending on individual needs and available space.


Ms. Currens said that all regional law enforcement agencies, the Domestic Violence Prevention Board, Bluegrass Rape Crisis Center, fire departments, and regional partners will be provided with a protocol for securing safe shelter.  Transportation will be coordinated through the crisis line.  The Lexington Sheriff's Department, Kentucky State Police, local police departments in the region, LKLP Transportation, Kentucky River Foothills, and regional domestic violence programs have all volunteered to assist with transportation.  As of July 1, 2004, KDVA will appoint a Steering Committee consisting of two domestic violence program directors and five Bluegrass area community members whose purpose will be to: 1) review and utilize input from the Community forum; 2) become familiar with KDVA's revised Victim Service Standards and the Kentucky administrative regulations relating to state-funded spouse abuse programs; 3) research and locate building options; 4) complete paperwork for forming a nonprofit corporation; 5) establish a charter, vision and mission statements, articles of incorporation, 501(c)(3) status, bylaws; 6) select a new name for the program; 7) advertise for and hire an Executive Director; and 8) Recruit and form a regional Board of Directors for the new program.


Senator Scorsone, Representative Stein, and Representative Palumbo complimented the work being done by the Association to continue providing services.


The next order of business was  a report on the transition of the First Steps Program to the Cabinet for Health and Family Services.  Dr. Steve Davis, Director, Adult and Child Health Improvement, Department for Public Health, Cabinet for Health and Family Services, stated that First Steps is Kentucky's Early Intervention System (KEIS) that serves approximately 5,000 children from birth to age three who have a developmental delay or a particular medical condition that is known to cause a developmental delay.  The program had a deficit of approximately $3.6 million dollars in fiscal year 2003.  He said that effective March 1, 2004, the Cabinet initiated the following three-tiered redesign to address the issues, and eliminate the budget deficit:  1) reorganization with a clinical approach by assigning the program to physicians; 2) creation of a Policy and Provider workgroup that includes parents, providers, and Interagency Coordinating Council members to address administrative and clinical issues; and 3) development of a care/benefit management approach to administer the program.


Senator Denton said that the one and one-half units per week can be increased after a process is completed.


Representative Burch stated that the $35 million allotted for the program should be spent wisely because no child should be left behind.  He said that it is a good program despite past abuses.  Parents have to be a vital part of the process and procedures.  Dr. Holsinger stated that the Cabinet is committed to the First Steps program.


Representative Marzian asked how the appeal process would work, and Dr. Holsinger said that there is an independent review panel.  She asked if there was a timetable on how long it would take to get a decision.  Dr. Davis said there is a 45 day limitation.


Senator Stine stated the Program Review and Investigations Subcommittee completed a Phase I study on the First Steps program and also one on the transportation concerns.  Dr. Holsinger stated that the Cabinet would carry out current legislation.


Representative Lee asked if the Cabinet had promulgated an administrative regulation that would go through the Administrative Regulations Review Subcommittee.  Dr. Holsinger stated that the administrative regulation was in draft form and would be completed by July 1 if it was submitted as an emergency.  He said that the Cabinet would listen to parents' concerns.  The Cabinet wants to make the appeals process user-friendly.


Senator Buford asked if any appeals had been completed yet, and Dr. Davis said no appeal would be completed until after the new process was in place July 1.  Senator Buford asked if there would be a 24-48 hour turn around on appeals.  Dr. Davis stated that the appeals process would be completed as soon as possible.  Dr. Davis stated the he would provide Senator Buford and the committee with the number of appeals that had already been filed to date.


Representative Jenkins asked about a unit of service.  Dr. Davis stated that a unit of service consisted of 15 minutes.  There is no limitation of hours per week that someone can get services as long as they do not exceed 36 hours every six months.  Dr. Davis said that federal legislation requires families and care coordinators to develop a new plan every six months.  Representative Jenkins asked about standardized and individualized plans.  She said that the process should be easy for everyone to understand.  Dr. Holsinger stated that the Cabinet is working on an evidence-based model.


Joann Nguyen stated that her granddaughter had benefited from the services received through the First Steps program.  Representative Lee asked if parents were taught how to work with the child because the family is a vital part of the process.  Ms. Nguyen stated that parents are involved but do not have the same expertise as professionals and, therefore, could not provide the same quality of service.


Robin Scarbrough stated that the First Steps program has been a wonderful program for her two-year old daughter.  She said that parents should be consultants, but even with her educational background in working with children, she did not feel qualified to provide the services her daughter needed.  She also stated that established-risk babies should be exempt.


Representative Burch stated that some cases are medical and not developmental delays, and therefore, not everyone is entitled to services.  He said that the First Steps programs is the last payor.


Sarah Smith, mother of a daughter formally enrolled in the First Steps program, stated that the Cabinet should investigate the new model thoroughly and involve parents and the public in the process.  She said that there should be a transition plan so there would not be any gaps in services.


Representative Burch stated that Kentucky's plan is far more generous than most other states.  He said that he had been working with the best people available, including parents, to improve the First Steps program.


Representative Lee said that an emergency and ordinary administrative regulation would be filed with the Administrative Regulations Review Subcommittee, and the public would have an opportunity to give comments.


The next order of business was an update on children's immunizations and the role of the public health departments.  Dr. Rice Leach, Commissioner of the Department for Public Health, Cabinet for Health and Family Services, stated that fewer primary care providers are providing vaccines in their offices because of the high cost of vaccines and liability issues.  He said that local health departments have always been the longstanding provider of childhood immunizations, especially school-mandated immunizations.  Local health departments receive federal funding for vaccines for children covered by Medicaid or other federal programs, and these funds cannot be used for any other program.  State funds are available in some cases for the under-insured or uninsured.  Local funding may be used to purchase vaccines for additional populations.  He said that insurance companies have two hurdles related to reimbursement of local health departments for vaccines:  1) recognition of local health departments as a valid provider with no on-site physician; and 2) practical contracting methods for all local health departments.  The Cabinet is working with local health departments and insurance companies in an effort to streamline obtaining vaccines at the health department.


Representative Burch read a resolution in honor of Dr. Leach for his service and dedication to the well-being of Kentucky's citizens and prompt, direct testimony to the Kentucky General Assembly.


Representative Burch stated that the Committee would meet July 8, 2004 at 1:00 p.m. at the Capitol Annex and August 27 in Louisville.


The next order of business was an update on Medicaid long-term care level of care regulation.  Shannon Turner, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services, stated that 907 KAR 1:022 defines eligibility criteria for nursing facility or the home and community based waiver.  The prior administration altered the regulation requirements in April 2003 relating to eligibility criteria.  Additional restrictions affected 3,505 people who were either denied initial admission or denied continued care on recertification through a nursing facility or the home and community based waiver.


Ms. Turner said that a lawsuit was initiated in October 2003 by a group of ten individuals who sought eligibility for services and were denied either through the home and community based waiver or a nursing facility.  The Cabinet also discovered that individuals with a primary diagnosis of mental illness, mental retardation, or developmental disability were inadvertently admitted into a nursing facility or the home and community based waiver.  She said that the Department for Medicaid Services is developing a waiver program specifically for individuals with a primary diagnosis of mental illness, mental retardation or developmental delay.  This program will be known as Targeted Services for Community Living.


Senator Roeding asked who represented the individuals in the lawsuit, and Ms. Turner said Anne Marie Regan.  He asked if the Cabinet would be responsible for attorney fees.  Ms. Turner said that it has not been decided.


Representative Jenkins asked about notification of individuals about the new appeal process.  Representative Jenkins asked when the letter would be sent, and Ms. Turner stated by the end of June.


Senator Roeding asked about costs of lawsuits.  Ms. Turner stated that the General Counsel does not handle any appeals cases.


The next order of business was an update on Medicaid modernization.  Undersecretary Birdwhistell stated that the Cabinet's goal is to implement innovative practices that have proven successful in other states and the commercial sector.  The three components are benefit management, care management, and improvements in technology.  The current pharmacy claims payment system is inefficient and continues to be a problem between pharmacy "switch vendors" and the MMIS.  He said that pharmacists still have to continually resubmit claims.  Clinical issues relate to data not being analyzed for drug interactions, and drug abuse patterns and high utilizers of services that are neither identified nor managed.  The prior authorization process is cumbersome and time-consuming for providers.  In March 2004, a state-of-the art Pharmacy Benefit Management System Request For Information was issued.  In April 2004, vendor presentations were made by nine nationally-known companies, and the Centers for Medicare and Medicaid Services approved the Request for Proposal (RFP).  In May 2004, the Finance Cabinet released the RFP.  RFP responses were due by June 22, 2004, and the Cabinet hopes to finalize and award the contract in August 2004.  Undersecretary Birdwhistell stated that on April 5, 2004, 907 KAR 1:019 was filed, bolstering the effectiveness of the Pharmacy and Therapeutics Committee.  The Pharmacy and Therapeutics Committee increased the recognized number of drug classes from 12 to 53, enhanced the ability to negotiate supplemental rebates, and projected an annual savings from supplemental rebates of over $32 million.


Undersecretary Birdwhistell said that the Department for Medicaid Services contracts with National Health Services to provide Peer Review (PRO) services such as prior authorization, pre-admission screening, concurrent review of admitted patients, and utilization review.  In 2003, there were over 29,000 cases with a yearly cost of approximately $25,000.


Representative Burch asked if any other states had implemented the same modernization program.  Undersecretary Birdwhistell said Tennessee has done so.


At this time during Undersecretary Birdwhistell's presentation, the building experienced a loss of power, a motion was made to adjourn at 4:20 Senator Thayer, seconded by Representative Burch, and approved by voice vote.