Call to Order and Roll Call
The second meeting of the Interim Joint Committee on Health and Welfare was held on Wednesday, August 15, 2012, at 1:00 PM, at the Sullivan University, College of Pharmacy in Louisville. Representative Tom Burch, Co-Chair, called the meeting to order at 1:00 p.m., and the secretary called the roll.
Present were:
Members: Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators Joe Bowen, Tom Buford, Perry B. Clark, David Givens, Dennis Parrett, Joey Pendleton, and Jack Westwood; Representatives Julie Raque Adams, Bob M. DeWeese, Joni L. Jenkins, Mary Lou Marzian, Darryl T. Owens, Ruth Ann Palumbo, Ben Waide, and Addia Wuchner.
Guest Legislators: Representatives Dennis Horlander and Jimmie Lee.
Guests: Hieu T. Tran, Pharm.D., Vice-President, College of Health Sciences, Founding Dean and Professor, Sullivan University, College of Pharmacy; Allen D. Rose, Vice President for Business and Governmental Relations, The Sullivan University System; Tonya Chang, Kentucky Director of Government Relations, American Heart Association, Great Rivers Affiliate, and Don Battcher, Parent of a Child with a Congenital Heart Defect; Mark and Tina Hamm, Phoenix Preferred Care; Carrie Banahan, Executive Director, Office of Health Policy, Cabinet for Health and Family Services, and Bill Nold, Director, Health and Life Division, Department of Insurance; Dana Cox Nickles, Policy Advisor to the Secretary, Cabinet for Health and Family Services; Dr. Terry I. Brooks, Executive Director, Andrea Bennett, Kentucky Youth Advocates; Nathan Goldman, Kentucky Board of Nursing; Steve Barger; Lindy Lady, Kentucky Medical Association; Drew Jenkins, Office of the Attorney General; Jim Grace, Department for Community Based Services, Cabinet for Health and Family Services; Joel Griffith; Heidi Schissler, Protection and Advocacy; Holly Curry, Cull & Hayden, PSC; Jordan Wildermuth, National Association of Social Workers; David Allgood; Talley Cockerel, Norton Healthcare; Erin Klarer, KHEAA; Gary Black, GlaxoSmith Kline; Erv Kelin, KAPHCC; Jane Gould, Kentucky Retail Federation; Rachel Bledsoe, Run Switch PR; Clyde Caudill, Jefferson County Public Schools; Beth Musgrave, Lexington Herald-Leader; Jill Bell, Passport Health Plan; Michele Blevins and Betsy Dunnigan, Department for Behavioral Health, Development and Intellectual Disabilities, Cabinet for Health and Family Services; Murray Wood, Morgan Pierstorff and Allison Lile, Cabinet for Health and Family Services; John Weeks, Delta Dental; Dana Mayton, University of Louisville; Carol Mueller and Pamela McDaniel, Council on Developmental Disabilities; Kasie Moore, National Association of Social Work; Tihisha Rawlins; Libby Mulligan; Guihru L. Lacey; and Sheila Hardy, House Minority Office, Legislative Research Commission.
LRC Staff: DeeAnn Mansfield, Miriam Fordham, Ben Payne, Jonathan Scott, Gina Rigsby, and Cindy Smith.
Welcome and Presentation
Allen D. Rose, Vice President for Business and Governmental Relations, The Sullivan University System, stated that Sullivan University has the largest MBA program in the Louisville area. Paul Coomes at the University of Louisville estimated that the College of Pharmacy has a $50,000,000 annual economic impact on the local and regional economy. The university has campuses in Louisville, Lexington, and Ft. Knox. Over 4,000 students take online classes each term, and there are over 200 international graduate students pursuing Master’s and PhD degrees. The Sullivan College of Technology and Design (SCTD) started its first program in the Skilled Trades area three years ago with a HVAC-R program at the commercial level. Approximately 8,700 students are expected to enroll in the fall of 2012.
Hieu T. Tran, Pharm.D., Vice-President, College of Health Sciences, Founding Dean and Professor, Sullivan University, College of Pharmacy, stated that in 2011, 74 students were admitted and 67 of the 74 graduated. In 2012, 96 students were admitted and 88 of the 96 graduated. In 2011, 11 graduates had residencies, and 13 graduates had residencies in 2012. The graduates practice in the community at pharmacy chains and independent pharmacies, hospitals, long-term care settings, nuclear fields, and residency training. The College of Pharmacy provides services and support for the wounded warriors at Fort Knox, and two faculty members have practice sites at the Ireland Army Community Hospital at Fort Knox. The College of Pharmacy is a member of Kentucky NanoNet, a coalition of research on micro/nano technology also consisting of the University of Louisville and Western Kentucky University. The College of Health Sciences was established in December 2011 and will allow all health-related professions and majors under one roof (College of Pharmacy, College of Nursing, InterNational Center for Advanced Pharmacy Services, Office of Lifelong Professional Development, Drug Information Center, and others to be developed).
In response to questions asked by Representative Marzian, Dr. Tran stated that the College of Pharmacy tuition for a three-year program is $41,000, which is $29,000 less than any other college in Kentucky with the four-year programs.
Approval of the Minutes of the June 20, 2012 Meeting
A motion to approve the minutes of the June 20, 2012 meeting was made by Representative Owens, seconded by Senator Clark, and approved by voice vote.
Consideration of Referred Administrative Regulations
201 KAR 8:562 – establishes requirements and procedures for the licensure of dental hygienists; 201 KAR 20:450 – provides procedures for the implementation of the Kentucky Alternative Recovery Effort for Nurses; 201 KAR 20:510 – establishes the procedures for a nurse or a dialysis technician who wishes to relinquish a license or credential prior to its expiration; and 900 KAR 7:030 – establishes the required data elements, forms, and timetables for submission to the Cabinet for Health and Family Services and fines for noncompliance. A motion to accept the referred administrative regulations was made by Representative Owens, seconded by Senator Clark, and approved by voice vote.
Legislative Hearing on Executive Order 2012-587 relating to the establishment of the Kentucky Health Benefit Exchange
In response to a question by Senator Givens, Representative Burch stated that the committee can either accept or not accept the executive order, but it goes into effect with or without the committee’s approval or disapproval.
Carrie Banahan, Executive Director, Office of Health Policy, Cabinet for Health and Family Services, stated that on July 17, 2012, Governor Beshear signed an executive order that created the Kentucky Health Benefit Exchange within the Cabinet for Health and Family Services and established the administrative structure to operate the exchange. The Office of the Kentucky Health Benefit Exchange will have four divisions: Health Care Policy Administration; Information Systems; Financial and Operations Administration; and Communication and Outreach. The Exchange Advisory Board will be appointed by the Governor and composed of eleven members who have relevant experience in health benefits administration, health care finance, health plan purchasing, health care delivery system administration, public health, or health policy issues related to the small group and individual markets and the uninsured. The board will send recommendations to the Office of the Kentucky Health Benefit Exchange.
In response to a question by Representative Burch, Bill Nold, Director, Health and Life Division, Department of Insurance, stated that the role of the department is to review plans, applications, riders, and approval of rates. Many roles placed upon the exchange through the Affordable Care Act are types of roles traditionally performed by the Department for Insurance. The certification of qualified health plans will be offered through the exchange. The law establishes certain criteria including essential health benefits that have to be offered through the health plans and other requirements that go beyond what the state would require a health benefit plan to meet.
In response to questions by Representative Owens, Ms. Banahan stated that the exchange will be a marketplace or venue where individuals will be able to purchase health insurance coverage. In order to qualify for the tax credit, small employer groups have to direct its employees to purchase health insurance coverage through the exchange. To qualify for premium assistance, individuals between 133 to 400 percent of the federal poverty level will have to purchase insurance through the exchange. Mr. Nold stated that the exchange will not offer insurance but will be a marketplace that will allow current and other insurers to market their plans. There is a requirement for a shopping tool that will show comparisons between the plans. The Affordable Care Act allows exchanges to offer multistate plans. The law requires, within a certain period of time, that the federal Office of Personnel Management contract with national insurers to provide benefits and plans to all states. While there would be large national plans involved, the benefits being provided in each state could vary substantially. It will provide opportunities for insurers to provide coverage across state lines. They may include Consumer Oriented and Operated Plans (co-ops), which are plans developed by qualified nonprofit health insurers. The co-ops are required to be licensed insurers in each state in which they operate. The exchange will either be set up by the state or federal government.
In response to questions by Senator Givens, Ms. Banahan stated that, to obtain a tax credit, an employer will have to direct its employees to purchase insurance inside the exchange. To qualify for the tax credit, small employers will need 50 or fewer employees, with 20 full-time equivalent employees with an average annual salary of $50,000 or less, pay 50 percent of the insurance premium cost, and purchase insurance inside the exchange. Large employers with over 50 employees and that do not offer health insurance to its employees by January 2014, will be assessed a $2,000 penalty per employee. Before a penalty can be assessed against an employer, 30 employees will have to apply for insurance through the exchange and receive a premium subsidy. Large employers will be assessed a $3,000 penalty per employee who has to pay more than 9.5 percent of their income for health insurance offered through the company but elect to get coverage through the exchange and then qualify for premium assistance in the exchange. The $3,000 penalty will be assessed whether Kentucky has its own exchange or a federally operated exchange. She will check with the federal Department for Health and Human Services to make sure the Affordable Care Act requires the $3,000 penalty on large employers whether it is a state or federally operated exchange. The exchange will be 100 percent federally funded through 2014, but will have to be self-sustaining by 2015. Kentucky has received a $67 million federal grant and will apply for another Level II grant for from the federal government for system costs. Mr. Nold stated that a requirement of the new law is a sustainability plan has to be developed on how Kentucky is going to finance the exchange after 2014 and be sent to the Department for Health and Human Services. The plan will include the financing of the continued operations through user fees and other types of assessments and not through general dollar funds. Kentucky Access, Kentucky’s high risk pool, will be phased out after 2015.
In response to questions by Representative Marzian, Ms. Banahan stated that standardized plans will be offered in the exchange and there will be an understandable description of rates and benefits given to individuals. Any plan issued in Kentucky beginning September 23, 2012, will require disclosures that are easily understood. There will be additional costs above the $67 million to fully develop the exchange.
In response to a question by Representative DeWeese, Mr. Nold stated that 25 percent of the tobacco settlement funds help fund Kentucky Access. Those funds could be appropriated by the General Assembly to offset the costs of the exchange after Kentucky Access has been phased out.
In response to questions by Senator Denton, Mr. Nold stated that he has no idea what the federal government would charge to run the exchange instead of the Commonwealth, but Kentucky would be responsible for the some of the costs. He said that the federal government wants to fund the state exchanges because it does not want to be responsible for running the exchanges. Individuals will be able to compare charts of the different plans available in the exchange in order to make an informative decision on which plan is best for them.
Ms. Banahan stated that the first set of emergency administrative regulations that would define the requirements of the qualified health plans would be filed in October or November. In January or February, insurers will have to file plans and rates with DOI for approval. The administrative regulations will be posted on the Cabinet for Health and Family Services and Department of Insurance web sites for comments before filing them as emergency administrative regulations. Individuals were not given the opportunity to make comments on the executive order before it was filed. Mr. Nold stated that the federal government has to develop ten different categories to be used for health benefits, and DOI would use the categories to determine health plans for 2013-2014 and then send the information to the Secretary of the Department for Health and Human Services.
Representative Burch stated that many uninsured Kentuckians overutilize the emergency room when they could instead visit a doctor’s office, resulting in higher costs to the state. An 18 percent increase in healthcare every year cannot be sustained.
In response to questions by Senator Bowen, Mr. Nold stated that there will be ten categories of benefits that insurance companies would have to provide, but abortion would not be one of the requirements of the health plans.
In response to a question by Senator Parrett, Ms. Banahan stated that small business employers with 20 full-time employees whose average yearly wage is $50,000 or less and who pay 50 percent of the premium will be eligible for the tax credit.
In response to questions by Representative Wuchner, Ms. Banahan stated that the state has received $67 million from the federal government for planning money and start-up costs of the exchange. Thirty employees will be hired to oversee the exchange within the Office of the Kentucky Health Benefit Exchange.
In response to questions by Representative Jenkins, Mr. Nold stated that Massachusetts and Utah created an exchange before the passage of the Affordable Care Act. The law gives states flexibility on how to set up the exchange. The duties to be performed by navigators are to get the word out about the exchange and the availability of health insurance coverage for individuals. Currently, only an insurance agent can solicit, negotiate, and sell insurance, and that will not change under the new law.
A motion for the chairs to call a special meeting of the interim joint committee prior to the implementation of the executive order for further discussion was made by Representative Wuchner, seconded by Representative DeWeese, and approved by voice vote. Representative Owens objected to the motion because the exchange would not be further along and little further information would be available by the meeting date.
Pulse Oximetry Requirement for Newborn Screenings
Don Battcher, parent of a child with a congenital heart defect (CHD), stated that a CHD is a structural abnormality of the heart that is present at birth and affects one in one hundred babies. Pulse oximetry is a simple, non-invasive test that measures the percentage oxygen saturation of hemoglobin in the blood by putting a clip on a toe or finger of the newborn. CHD can be simple or complex, and can be undetected at birth. Every day, parents leave a hospital unaware that their newborn child has a CHD. New evidence indicates performing pulse oximetry screening on newborns prior to hospital discharge can help detect a CHD that may otherwise go undetected. The goal is to ensure all newborns are screened for CHF prior to hospital discharge. Estimates indicate that only 25 percent of hospitals are performing the screening on all newborns, and the goal is 100 percent. The benefits of pulse oximetry are that it is a simple test that reduces costs, reduces disability, saves lives, and avoids tragic trauma to families. The current newborn screening protocol includes cyanosis, which is visual and unreliable, and auscultation, which uses a stethoscope and has many false positives and false negatives. Approximately 40,000 infants a year have a CHD and 4,000 infants have chronic CHD. Approximately 2,000 infants a year die or have been missed diagnosed. Maryland was the first state to pass CCHD screening legislation. New Jersey was the first to mandate universal CCHD screening. Indiana, West Virginia, and Virginia have passed legislation.
In response to a question by Representative Wuchner, Tonya Chang, Kentucky Director of Government Relations, American Heart Association, Great Rivers Affiliate, stated that the American Academy of Pediatric has a protocol that hospitals could adopt.
In response to questions by Senator Denton, Ms. Chang stated that the pulse oximetry test takes ten minutes, and the only cost to the hospital is staff time. The test should be performed 24 hours after birth and before being discharged from the hospital. Murray Wood, Legislative Liaison for the Cabinet for Health and Family Services, stated that the cabinet is in the process of requiring all hospitals to perform the pulse oximetry test. In June 2012, a survey was conducted by the Department of Public Health that showed approximately 80 percent of the hospitals are currently performing the test. The cabinet is piloting with the University of Kentucky to obtain the data collection. The full state roll-out of the program will be on January 1, 2013.
IMPACT Plus
Mark Hamm, CEO, Phoenix Preferred Care, stated that his goal is to make legislators aware of an alarming trend surrounding outpatient mental health services for Medicaid eligible children. Medicaid-eligible children across the Commonwealth are being denied entrance into IMPACT Plus services, and ongoing services for children who had been approved for services are being denied the same services. Schools, DCBS, the court system, and families are begging providers for help, but providers are being forced to turn clients away due to arbitrary or artificial barriers that can be eliminated.
On January 1, 1998, Kentucky implemented IMPACT Plus, a behavioral health program for Medicaid-eligible children who have complex behavioral healthcare needs. The program was developed to increase the variety and availability of community-based service options and to decrease the needs for inpatient care. The goal of IMPACT Plus is for parents and caregivers to be able to understand both their child’s needs and the systems involved, so they will have the knowledge in the future to weave in and out of service systems as their child’s needs indicate. Tradition barriers for families include transportation, financial issues, and being overwhelmed due to involvement in multiple governmental, state, and court-related systems. The inability of IMPACT Plus providers to provide services outside of the program to any Medicaid-eligible child severely limits the outpatient behavioral health options for children and families. IMPACT Plus providers want to be a significant part of the solution to the problems. The cabinet and Managed Care Organizations (MCOs) need to interpret the IMPACT Plus regulation, 907 KAR 3:030, utilizing broad language that clearly recognizes the fact that there are societal issues that place children at risk and that issues may arise that extend a child’s need to remain in the program longer than a finite six months. This will increase access to the program and reduce very costly stays in hospitals and residential placements.
In response to a question by Senator Bowen, Mr. Hamm stated that once the state transitioned to managed care, providers have no way to track payments. The problem in back payments is the cabinet will reject a claim that has any problems before a payment is made to providers.
In response to Senator Clark, Mr. Hamm stated that providers contracted with and billed by the state before the managed care organizations were implemented.
In response to questions by Senator Denton, Mr. Hamm stated that Phoenix Preferred Care does not serve Passport patients. CoventryCares’ patients consist of 67 percent of Phoenix Preferred Care clients and the rest is split between Kentucky Spirit and Wellcare. Providers and recipients are satisfied with the services provided by Kentucky Spirit. Betsy Dunnigan, Deputy Commissioner, Department for Behavioral Health, Developmental & Intellectual Disabilities, stated that staff from the department have contacted and working with Mr. Hamm on issues of claims denial. As of August 14, 2012, all the claims that have been sent to the department by Phoenix have been paid. The intent of IMPACT Plus program was to be a coordinated, higher, intensive level of service and not a routine level of service with a duration of six months unless there is an prior approval for more needed intensive services. Transitioning to a lesser intensive level of care is the goal of IMPACT Plus. Files are received from the MCOs on Tuesdays and Thursdays and the claims are paid the next day. If IMPACT Plus providers can talk to the MCOs about providing lower level of services also, but those services would be paid under a different payment structure.
In response to a question by Senator Denton, Deputy Commissioner Dunnigan stated that the Certificate of Need (CON) laws must be considered before allowing providers to offer lower levels of care outside their expertise.
In response to a question by Representative Wuchner, Mr. Hamm stated that all IMPACT Plus providers are located in Kentucky.
There being no further business, the meeting was adjourned at 3:46 p.m.