Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> Fifth Meeting

of the 2012 Interim


<MeetMDY1> November 9, 2012


Call to Order and Roll Call

The<MeetNo2> fifth meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Friday,<MeetMDY2> November 9, 2012, at<MeetTime> 1:00 p.m., in<Room> Room 129 of the Capitol Annex. Senator Julie Denton, Co-Chair, called the meeting to order at 1:09 p.m., and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Denton, Co-Chair; Representative Tom Burch, Co-Chair; Senators David Givens, Denise Harper Angel, Alice Forgy Kerr, Dennis Parrett, Joey Pendleton, and Jack Westwood; Representatives Julie Raque Adams, Bob M. DeWeese, Jim Glenn, Brent Housman, Mary Lou Marzian, Darryl T. Owens, Ruth Ann Palumbo, David Watkins, Susan Westrom, and Addia Wuchner.


Guest Legislators: Representatives Keith Hall and Jimmie Lee.


Guests: Gabriela Alcalde, Health Policy Director, Foundation for a Healthy Kentucky; Ashley Palmer, Research Associate, and Genevieve M. Kenney, Senior Fellow, Health Policy Center, Urban Institute; Dr. Andy Moore; Dr. Julie Cerel, Principal Investigator, Military Suicide Bereavement Study; Melinda Moore, Ph.D., Clinical Psychology Postdoctoral Fellow, Military Suicide Bereavement Study, College of Social Work, University of Kentucky; G.G. and George Burns, Sandy Decquiv, and Carolyn Colliver, Change Mental Health Laws in Kentucky; Dr. Nat H. Sandler, Correctional Psychiatrist, Lexington-Fayette County Detention Center; Jan Ulrich, Heath Dolen, and Michele Blevins, Department for Behavioral Health, Developmental and Intellectual Disabilities, Cabinet for Health and Family Services; Diona Mullins, Office of Health Policy, Cabinet for Health and Family Services; Andrea Bennett, Kentucky Youth Advocates; Carol Mueller and Pamela McDaniel, Council on Developmental Disabilities; Eric T. Clark, Kentucky Association of Health Care Facilities; Becky Taylor and Don Colliver, National Alliance on Mental Wellness; James Lutz and Julia Costich, University of Kentucky; D.J. Wasson, Department of Insurance; Phyllis Sosa, Department for Aging and Independent Living, Cabinet for Health and Family Services; Carly Dickinson, Eastern State Hospital; Bill Doll and Cory Meadows, Kentucky Medical Association; and Cathy Epperson, NAMI Kentucky.


LRC Staff: DeeAnn Mansfield, Ben Payne, Jonathan Scott, Sarah Kidder, Gina Rigsby, and Cindy Smith.


Approval of Minutes

A motion to approve the minutes of the October 17, 2012 meeting was made by Representative Burch, seconded by Representative Glenn, and approved by voice vote.


Consideration of Referred Administrative Regulations

The following administrative regulations were referred to the committee for consideration: 900 KAR 6:060 - Timetable for submission of certificate of need applications; 900 KAR 6:085 - Implementation of outstanding Certificate of Need when ownership has changed; 900 KAR 6:090 - Certificate of Need filing, hearing, and show cause hearing; 900 KAR 6:130 - Certificate of Need criteria for physician exemption; and 910 KAR 1:240 - Certification of assisted-living communities. A motion to accept the referred administrative regulations was made by Representative Burch, seconded by Representative Marzian, and accepted by voice vote.


Foundation for a Healthy Kentucky

Gabriela Alcalde, Health Policy Director, Foundation for a Healthy Kentucky, stated the foundation is a non-profit, philanthropic organization working to address the unmet health care needs of Kentuckians. The foundationís approach centers in developing and influencing health policy to improve access to care, reduce health risks and disparities, and promote health equity. In a competitive bid process, a review panel consisting of the foundation, the Kentucky Chamber of Commerce, the Kentucky Hospital Association, and the Equal Justice Center, identified the Urban Institute, an independent nonpartisan research and policy institute, as a credible and experienced contractor to conduct a three-year study looking at the implementation of Medicaid managed care in Kentucky. The study can provide objective and reliable information to policymakers, advocates, providers, and communities across the state to help make informed policy decisions to make Kentuckians healthy.


Genevieve M. Kenney, Senior Fellow, Health Policy Center, Urban Institute, stated that the three-year evaluation of Medicaid Managed Care: Implementation in Kentucky was funded by the Foundation for a Health Kentucky and awarded to a team with members from the Urban Institute, the University of Kentucky, and Georgia State University. The team members have expertise in both Medicaid and managed care, deep knowledge of Kentuckyís Medicaid program, and vast experience with Kentucky-specific data. Driven by a number of factors, including costs, access to care, and quality of care, Medicaid programs around the country are increasingly relying on risk-based managed care to deliver service to beneficiaries. Risk-based managed care is not new to Kentucky as the Medicaid program has been delivering care through Passport in Region 3 since the mid-1990s. The focus of the evaluation is the introduction of risk-based managed care throughout the rest of Kentucky with three new managed care plans, Kentucky Spirit, Coventry, and Wellcare. In addition to having different plans than in the Louisville region, the statewide implementation includes behavioral health services. Another important difference is the statewide implementation involved more rural parts of the state. Nationally, rural areas are less commonly enrolled in risk-based Medicaid managed care. From March 2011 to November 2011, the state had to carry out a competitive process for selecting plans, develop the infrastructure to provide oversight for the plans, and provide information to beneficiaries on the changes. The plans had to establish operations in Kentucky.


The evaluation relies on a combination of quantitative and qualitative research methods and aims to provide insights about both the start-up phase and long-term operation. In June 2012, site visits were conducted in Central, Eastern, and Western Kentucky, informants from a wide range of stakeholder groups were interviewed, and relevant documents were reviewed. The next two years the team will conduct focus groups with beneficiaries in several regions of the state, conduct follow-up interviews with key informants, and use different data sources to assess how service use patterns and outcomes have changed under risk-based managed care. Generating long-term savings requires strong care management and achieving efficiencies in the service delivery system. Plans will not stay in the market and providers will not continue to participate if costs cannot be covered. Long-term success will also depend on improvements and efficiencies in the way that care is delivered and changes in beneficiary behaviors that contribute to high costs and poor outcomes.


In response to a question by Senator Denton, Dr. Kenney stated that the evaluation does not focus on Region 3ís timeline.


In response to questions by Representative Burch, Dr. Kenney stated that the team looked at providers who signed up with all the plans and assessed the overlap of the network. It was hard to establish which services were being provided under each of the different plans from information available in the directories. Dr. Alcalde stated that the evaluation tried to distinguish which providers signed up with all three MCO plans verses one or two plans. There is a concern that if the researchers had a difficult time finding information on which providers participated with a specific plan, beneficiaries would also have a hard time finding the information.


In response to questions by Senator Givens, Dr. Kenney and Dr. Alcalde stated that Kentucky Spiritís business model does not permit the company to stay in Kentucky. Kentucky Spiritís departure does not mean managed care will not ultimately be successful in Kentucky. The question is whether the two remaining MCOs have the ability to meet their bottom line and the stateís objectives. One important thing to track is the transition of recipients from Kentucky Spirit to the other two MCOs. The third and fourth quarters should be watched to see if each MCO has a decline in its loss ratio because of the risk adjustment and start-up costs in the state. Ashley Palmer, Research Associate, Health Policy Center, Urban Institute, stated that she was not sure when the information will be available for the third quarter. Dr. Alcalde stated that the Urban Institute will provide the Foundation for a Healthy Kentucky progress reports every six months on both the qualitative and quantitative information. Dr. Kenney stated that if managed care is done correctly, better health outcomes could be achieved. The Medicaid expansion was not part of the evaluation other than how much the Medicaid enrollment would increase if the state took on the expansion. Hospital care will grow more complex under the Affordable Care Act whether or not the state expands Medicaid. It is important to track what happens to funding such as the disproportionate hospital payments (DSH) that providers have historically relied on. Some funding sources may not be there in future years.


In response to questions by Representative Owens, Dr. Kenney stated that in terms of Medicaid expansion there is good solid information about the impacts of insurance coverage. There are estimates of the projected increase in Medicaid enrollment, the coverage impact, and budgetary implications of Medicaid expansion. There will be more signs in the second year that the delivery system is responding to the new incentives under managed care. Dr. Alcalde stated that baseline data on healthcare utilization and outcomes will be provided in the next report that will show changes over time as managed care has been implemented within the Medicaid system. Dr. Kenney stated the information will come from the Medicaid claims encounter data from the cabinet and hospital discharge abstracts.


In response to questions by Senator Parrett, Dr. Kenney stated that provider negotiations occurred after the bidding, so while there were letters of interest with providers, the cabinet had not decided what providers would be reimbursed. Other states have found a way to make managed care work.


Medicaid Managed Care

Senator Denton stated that Passport has 170,000 Medicaid recipients presently but expects to end up with 40 percent of the Medicaid population. The per member per month (PMPM) rate for Humana and Coventry Cares is $473; $457 for Passport; and $445 for Wellcare. If all Medicaid recipients went to Wellcare, $2,287 a month could be saved. Wellcare received 25 percent of the recipients while Care Source who will use the Humana network and Coventry Cares received 48 percent. The auto-assigning of recipients is not working. She questioned why, if Coventry Cares is the most expensive and hardest company to work with, the cabinet would award another expensive contract to the company on the condition that it comply with the first contract. Passport originally negotiated $433 PMPM, but the state ended up raising the rate.


Representative Burch requested the cabinet provide a copy of the letter sent to clients stating they would be able to change MCOs. All clients removed from Region 3 can be reassigned to Passport if requested. In five months Passport will be close to where it was before the reassignments. A lot of clients will feel obligated to stay with the new MCO because they do not know they have the choice to change to a different MCO. If Passportís plan works, why not duplicate it statewide.


Eric Friedlander, Deputy Secretary, Cabinet for Health and Family Services stated that assignment to a MCO was based on the same algorism used throughout the state. The federal government said that Kentucky needed competition; therefore Passport could not be expanded throughout the state or granted exclusive license in Region 3. Passport has more experience with managed care. The letter sent to recipients stated anyone would be allowed to change MCOs for any reason.


Senator Denton stated that if the secretary had requested a one-year extension for the Passport waiver, the federal government would have agreed. Kentucky Spiritís departure will cost the state a lot of money. Some claims have been paid a year late without interest, and there are providers who the cabinet claims to be in the network who are not. Mr. Friedlander stated that other states have had many of the same start-up issues that Kentucky has faced. The cabinet wants and desires good public policy. She questioned why 40 percent of the clients went to the two MCOs with the highest PMPM rate.


Representative Watkins stated that it is a lengthy process for a client to request to get back with a provider. He questioned why assignment of clients had been done by auto assigning without taking continuity of care into consideration. All of the MCOs have a different drug formulary and reimbursement rates.


Christina Helvrin, General Counsel for the Cabinet for Health and Family Services, stated that one reason Kentucky Spirit is leaving Kentucky is it was assigned a lot of members who did not have a primary care physician. Kentucky Spirit continued to be assigned members because the MCOs costs were lower.


In response to a question by Senator Denton, Ms. Helvrin stated when an individual is enrolled in the Medicaid program the cabinet pays providers three months of back health care. The databook had complete data when MCOs were negotiating rates with the cabinet. Members in Region 3 did not receive the three-month past payment benefit because it was not in the waiver.


In response to questions by Senator Givens, Mr. Friedlander stated that in the beginning some providers were paid bridge payments because of cash flow issues to pay claims. Ms. Helvrin stated the enforcement of prompt pay comes from the Department of Insurance.


In response to a question by Senator Denton, Mr. Friedlander stated a call from a recipient who wants to switch MCOs is answered immediately.


Legislative Hearing on Executive Order 2012-783, an Amended Order Relating to the Establishment of the Kentucky Health Benefit Exchange

Carrie Banahan, Executive Director, and Bill Nold, Deputy Executive Director, Office of the Kentucky Health Benefit Exchange, stated that Executive Order 2012-587 created the Kentucky Health Benefit Exchange (KHBE) and was signed by Governor Beshear on July 17, 2012. The KHBE is administratively attached to the Cabinet for Health and Family Services. Executive Order 2012-783 expanded the number of KHBE advisory board members from 11 to 19 to provide additional input. The advisory board reviews programmatic and policy issues and makes recommendations to ensure that Kentucky has an effective health benefit exchange. All appointed advisory members have experience in health benefit administration, finance, health plan purchasing, health care delivery system administration, public health, or health policy issues. The advisory board met September 27, 2012 and October 25, 2012 and formed six subcommittees: Behavioral Health; Dental and Vision, Education and Outreach, Navigator/Agent, Qualified Health Plans, and Small Employer Health Options Program (SHOP). The cabinet has to file a blueprint with the federal Department for Health and Human Services on November 1, 2012 to establish a state-based exchange and submit a five-year budget estimate and sustainability plan.


In response to questions by Senator Givens, Ms. Banahan stated that the cabinet will pursue legislation to ratify the executive order. She would check to see if there was data handling capacity sufficient to expand the Medicaid roles from 800,000 to approximately 1.4 million in the Deloitte information technology contract.


In response to questions by Senator Westwood, Mr. Nold stated that there is a cost associated with expanding services beyond what is mandated by the federal government. States cannot go below the essential health benefits established by the federal government. The ten categories in the federal law are ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, habilitative and rehabilitative services and devices, laboratory services, preventative/wellness/chronic disease management, and pediatric services including oral and vision care. All ten categories have to be present within the essential health benefits. The secretary is directed to expand upon the ten categories and include more details in the determination of essential health benefits. Administrative regulations will be promulgated on services and benefits of the qualified health plans. A motion to accept Executive Order 2012-783 was made by Representative Burch, seconded by Representative Glenn, and accepted by voice vote.


Nonprofit Surgery - ďSurgery on SundayĒ

Dr. Andy Moore stated that Surgery on Sunday (SOS) refers patients to free and reduced price clinics across the state and requires that they obtain a clinic as their primary care home before becoming an SOS patient, provides clients with a pre-operative surgical visit, surgery, and post-operative surgical visit at no cost to the patient, provides required pre-operative imaging due to the generosity of a community partner, and refers patients for post-operative pharmacy needs. The average outpatient procedure costs $7,622 compared to $150 for the same procedure performed by SOS. The average hospital stay is $30,869 and on average Medicaid reimburses 37 percent. The total savings to Medicaid is $53,224,329 and $90,626,211 for hospitals. Since 2005, SOS has served over 4,600 individuals. Over 87,360 hours of volunteer time has been donated and $4 million of in kind donations has been received. SOS is the first of its kind and could be implemented statewide and nationally. Currently, Louisville is in the process of starting a SOS. The United States also has poor people who need help as much as people in foreign countries. Laura Ebert, MSW, Executive Director, Surgery on Sunday, Inc., stated that one-fourth of the SOS patients will no longer need disability benefits due to being able to receive surgery.


In response to questions by Representative Glenn, Dr. Moore stated surgery centers allow the use of the facilities on a rotation basis, but SOS has to pay for the supplies. The volunteer staff comes from all the hospitals all over the state. Currently, there are approximately 900 people on the SOS waiting list. SOS only provides outpatient services. If a patient needs to be admitted to the hospital, hospitals sometimes discount the costs incurred by the patient. The average age of a patient is 40 years.


Military Suicide Bereavement Study

††††††††††† Dr. Julie Cerel, PhD, Principal Investigator, Military Suicide Bereavement Study, and Melinda Moore, Ph.D., Clinical Psychology Postdoctoral Fellow, Military Suicide Bereavement Study, College of Social Work, University of Kentucky, stated that in 2012 the Department of Defense awarded the University of Kentucky $677,000 to investigate the effects of suicide on individuals directly affected by the suicide death of active duty service members. The Military Suicide Bereavement Study is being funded by the Department of Defenseís Military Suicide Research Consortium. The consortium was developed to address the alarming rise in military suicide. During the first 155 days of 2012, there were 154 military suicide deaths which is an 18 percent increase for the same time period in 2011. More troops have died by suicide than in combat since the beginning of the Afghanistan war ten years ago. Suicide is now the leading cause of death among service members. The Department of Veterans Affairs estimates that a veteran dies by suicide every 80 minutes. While only one percent of the American population has served in the current wars in Iraq and Afghanistan, veterans represent 20 percent of the 38,000 Americans who die by suicide annually in the United States. From 2005 to 2011, 51 Soldiers at Ft. Cambell, Kentucky died by suicide. There is still a great deal of confusion about how to manage the problem and aftermath of suicide within the military. Mental health professionals agree that losing a loved one to suicide is a traumatic experience and may have devastating and economic consequences to suicide survivors. Increased contact with suicide, desensitization to death occurs and an ability to fatally harm oneís self increases. Until recently, Kentucky was in the top ten states with the highest suicide rates.


The Military Suicide Bereavement Study at the University of Kentucky is designed to examine bereavement experiences and needs of military family members and veterans, as well as community members who have lost loved ones to suicide. The research is a two-year, four-phase project. Phases one through three involves recruitment of approximately 2,000 Kentucky veterans using random-digit dial telephone interviews and participation in a web-based survey. Approximately 1,000 community members will be recruited in the same way to compare experiences with the veterans. Results from this study will help answer what percent of veterans and community members are exposed to suicide and how suicide impacted their lives. It will also be able to explain how the impact of suicide compares to other forms of traumatic death. Approximately 100 military families who have experienced the loss of a recent veteran or active duty military member to suicide in the last five years will also be recruited. The study has shown there is an enormous stigma within the military and in communities surrounding suicide deaths. The experience of civilian family members with the death of a loved one by suicide is very similar to what military families have experienced. Stigmas surround suicide and the people bereaved by it prevent suicide from being adequately treated as a public health issue.


Recent national surveys of mental health professionals have demonstrated that these individuals feel ill-equipped to work with suicidal patients. Increasing competency among clinicians, as well as first responders, may be appropriate to both preventing suicide as well as addressing the needs of those who have been impacted by suicide. Kentucky is encouraged to find ways to successfully engage professional associations in the effort so all mental health clinicians are prepared to work with people who are suicidal and families who have experienced a suicide loss. Coroners need information and support to be able to report more objectively about suicidal deaths.


In response to questions by Representative Burch, Dr. Cerel stated that because the study has just recently started, not enough data has been collected to compare suicide rates between the different wars. The study is centered on veterans who were exposed to suicide within the past five years.


In response to a question by Senator Parrett, Dr. Cerel stated that funding for the Military Suicide Bereavement Study is provided by Department of Defenseís Military Suicide Research Consortium.


Assisted Outpatient Treatment for Mental Health

††††††††††† G.G. Burns, parent and mental health advocate, stated that KRS 202A.081, Community Based Outpatient Agreed Order (OAO), needs to be strengthened because it is underutilized and ineffective. The statute should be amended to require the OAO be longer than 60 days and support it with mental health courts, outpatient case management, peer mentoring programs, and supportive housing and employment programs. The Department for Behavioral Health, Developmental and Intellectual Disabilities, Cabinet for Health and Family Services does not collect data on frequency or outcomes of outpatient treatment. Recommendations include: 1) follow the patient and redirect funds for behavioral health care from other systems; 2) adopt national policies such as Assertive Community Treatment (ACT), Assisted Outpatient Treatment (AOT), jail diversion programs, and mental health courts and re-entry services; and 3) invest Kentucky state funds in services and supports to develop programs that serve 20 percent of the clients who use 80 percent of the current resources. States that use AOT show that incarceration rates are reduced 87 percent; arrest rates 83 percent; homelessness rates 74 percent; and dangers to self and suicidal rates 55 percent.


In response to questions by Senator Denton, Ms. Burns stated that an Outpatient Agreed Order should be a minimum of 120 days instead of 60 days. Kentucky needs a model Assisted Outpatient Treatment law.


Dr. Nat H. Sandler, Correctional Psychiatrist, Lexington-Fayette County Detention Center, stated that there is a multitude of family members that have to deal with mental health problems. An important symptom of serious psychiatric disorders is the lack of insight where a person feels nothing is wrong, refuses treatment, and sometimes ends up in jail. Approximately one percent of individuals taken to jail are put on a suicide watch in a secure, observed setting. There is no way to predict if someone is going to harm themselves or others. Law enforcement officers can take someone to a mental facility if it is believed that person is threatening or acting erratic. Some people end up in jail that should not be there but in a mental facility. A person should not be treated for a mental illness in a jail setting.


There being no further business, the meeting was adjourned at 4:17 p.m.