Interim Joint Committee on Health and Welfare


Minutes of the<MeetNo1> First Meeting

of the 2015 Interim


<MeetMDY1> June 17, 2015


Call to Order and Roll Call

The<MeetNo2> first meeting of the Interim Joint Committee on Health and Welfare was held on<Day> Wednesday,<MeetMDY2> June 17, 2015, at<MeetTime> 1:00 p.m., in<Room> Room 129 of the Capitol Annex. Representative Tom Burch, Co-Chair, called the meeting to order at 1:05 p.m., and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Raque Adams, Co-Chair; Representative Tom Burch, Co-Chair; Senators Ralph Alvarado, Tom Buford, Danny Carroll, Julian M. Carroll, David P. Givens, Denise Harper Angel, Jimmy Higdon, and Reginald Thomas; Representatives Robert Benvenuti III, George Brown Jr., Bob M. DeWeese, Phil Moffett, Darryl T. Owens, Ruth Ann Palumbo, David Watkins, and Russell Webber.


Guests: Audrey Tayse Haynes, Secretary, and Emily Parento, Executive Director, Office of Health Policy, Cabinet for Health and Family Services; Anna Whites, Attorney; Rob Jones, Executive Director, Community Action Kentucky; Dr. Praveen Arla; Carole Kaufman, Certified Registered Nurse Anesthesiologist; Elizabeth Caywood, Policy Analyst, Department for Community Based Services, Cabinet for Health and Family Services; Phyllis Sosa and Victoria Elridge, Deputy Commissioner, Department for Aging and Independent Living, Cabinet for Health and Family Services; Eric Clark, Kentucky Association for Health Care Facilities; Judy Taylor, KAPA; Shannon McCracken, KAPP; Darrell Link, Kentucky Council of Area Development Districts; Diona G. Mullins, Office of Health Policy, Cabinet for Health and Family Services; Dave Hoffman, Innovative Ophthalmology; Michele Blevin, Department for Behavioral Health, Developmental and Intellectual Disabilities, Cabinet for Health and Family Services; John Muller, Carespring; Sarah Nicholson and Steve Miller, Kentucky Hospital Association; and Anne Joseph, Covering Kentucky Kids and Families.


LRC Staff: DeeAnn Wenk, Jonathan Scott, Sarah Kidder, Gina Rigsby, Cindy Smith, and Miranda Deaton.


Consideration of Referred Administrative Regulations

The following administrative regulations were referred to the committee for consideration: 900 KAR 2:050 – also establishes the requirements of the Kentucky Nursing Home Reform Act, KRS Chapter 216, as it relates to residents’ transfer and discharge rights; 908 KAR 2:220 & E – establishes the minimum eligibility, training, and supervision requirements for an adult peer support specialist; 908 KAR 2:230 & E – establishes the minimum eligibility, training, and supervision requirements for a Kentucky family peer support specialist; 908 KAR 2:260 & E – establishes the minimum eligibility and training requirements for individuals providing behavioral health targeted case management services to a targeted behavioral health population; 910 KAR 1:140 – establishes the Department for Aging and Independent Living’s appeals procedures; 910 KAR 1:210 – establishes a statewide Long-term Care Ombudsman Program; and 910 KAR 1:220 – establishes the policies and procedures governing the general administration of the aging and disabilities programs and Older Americans Act in Kentucky.


In response to questions by Senator Julian Carroll, Victoria Eldridge, Deputy Commissioner, Department for Aging and Independent Living, Cabinet for Health and Family Services, stated that the department is working with the area development districts (ADDs) about the concerns in 910 KAR 1:170, Older Americans Act supportive services for the elderly. Since the language in 910 KAR 1:220 applies to all contracted agencies, the administrative regulation was changed to replace ADDs with provider agency. Section 9 has the language for a corrective action plan. The department will still contract with the ADDs.


In response to a question by Representative Westrom via telephone, Ms. Elridge stated that the indirect rates are in the contract language not an administrative regulation.


In response to questions by Senator Givens, Mr. Link stated that he heard about the concerns on June 16, 2015 and was not present at the Administrative Regulation Review Subcommittee meeting where 910 KAR 1:220 was discussed. Ms. Elridge stated that conversations about the administrative regulations started in August 2014, and the department did not receive any comments from the ADDs or the Area Agencies on Aging and Independent Living during the public comment process. Phyllis Sosa, Staff Assistant, Department for Behavioral Health, Developmental and Intellectual Disabilities, stated that the ADDs are a quasi government agency, and do not have to compete with other provider agencies to provide services.


In response to a question by Representative Owens, Ms. Elridge stated that the administrative regulations would apply to all contracted provider agencies. There are no other DAIL administrative regulations that are vendor specific.


A motion to approve the administrative regulations was made by Senator Buford, seconded by Senator Julian Carroll, and approved by voice vote.


Overview of Recommended Changes to the State Health Plan

Audrey Tayse Haynes, Secretary, Cabinet for Health and Family Services (SHP), and stated that the proposed changes will affect the 2015-2017 State Health Plan. Secretary Haynes stated that it is critical for Kentucky to update the Certificate of Need (CON) process to allow increased flexibility that would allow access to healthcare in rural settings. The seven core principles identified are (1) support the evolution of care delivery; (2) incentivize development of full continuum of care; (3) incentivize quality; (4) improve access to care; (5) improve value of care; (6) improve technology; and (7) remove components that would allow nonsubstantive reviews.


Director Parento stated that in 2013, the cabinet commissioned Deloitte to conduct a health care facility capacity study to test whether existing healthcare facility supply could sustain the increased demand created as a result of anticipated changes in demographics, the individual coverage mandate, and expansion of the Medicaid program. The study projected that demand for inpatient acute care will decline over the next five years even after accounting for impacts of population growth and coverage expansion due to the Affordable Care Act (ACA). The national trend is to transition patients from hospital-based ambulatory surgery to reduce cost and avoid complications. More home health agencies (HHAs) will be needed in the Commonwealth to meet the increased demand for home health services anticipated through 2017. The report found that the CON process restricted the growth of HHAs, and there is a need for development of more home and community based services to transition care to the community.


Director Parento stated that currently 36 states plus the District of Columbia and Puerto Rico have CON programs that primarily focus on regulating outpatient facilities and long-term care. Having more insured individuals creates a more predictable and stable payer mix creating opportunities for more cost-effective care. Market forces are rapidly shifting the payment for providers creating incentives for outcome-based payment models and a need for more flexible and responsive CON programs. Kentucky’s proposed changes are consistent with trends to change CON programs to exempt certain types of medical services from CON requirements. Secretary Haynes stated that the cabinet does not want to repeal the CON process, because, if repealed, it would open up competition and compromise quality of care. The CON process helps control costs.


Director Parento stated that the components that would be deleted from the SHP would be MRIs, adult day health programs, ambulance service, chemical dependency treatment beds, and outpatient health care centers. With the exception of MRIs, CON applications for the services will qualify for nonsubstantive review. MRIs would not require CON review because of statutory exemption. Exempting these services does not mean the services will not go through the licensure process. New criterion would allow licensed hospitals and HHAs to establish or expand HHA services if select Centers for Medicare and Medicaid Services (CMS) quality indicators are met. All HHA applications shall document that the HHA shall participate in the cabinet’s National Background Check Program. A hospital can establish an ambulatory surgical center (ASC) if it is owned at least 50 percent by a hospital. A private office of a physician or physician group, both solely owned by physicians, could establish an ASC. Applicants proposing to expand an existing service will be required to participate in the Kentucky Health Information Exchange (KHIE) if the applicant has an electronic health record. New health facilities or service providers will be required to participate in KHIE within 12 months of licensure.


In response to questions by Senator Raque Adams, Secretary Haynes stated that deleting ambulance services from the SHP would allow a provider to provide these services where there is a demonstrated need. Changes to the CON process for ambulance service would not impact the licensure or regulatory standards, but would allow for more competition. Each city determines if it wants to contract with a new provider.


In response to questions by Senator Givens, Director Parento stated that the CON process is not geared to address network adequacy currently. It requires how providers will serve medically underserved and uninsured individuals. If a provider applies for a CON application, the entire population of potential patients is used to demonstrate a need. Once the application is approved, an applicant can eliminate a portion of the population that was used to demonstrate a need. Some providers say that the MCOs could not have an adequate provider network. The cabinet runs data of all contracted providers of each MCO monthly to make sure the organization meets requirements. There is a threshold in the MCO contract for each provider area for accepting new Medicaid patients, so the cabinet contracts with an outside organization to make calls to providers in each MCO network. A CON need is based on population not distinguished between payer source. The existing CON utilization-based methodology for ASCs will remain the same. Exceptions to the requirements will be to allow Kentucky physicians to establish an ASC and allow hospitals who meet quality standards. The exceptions are consistent with past practices in the CON program. Everywhere across the country people are trying to evaluate the role of the CON program in a world that looks dramatically different than when the CON program began. Kentucky’s role in the CON process is to determine the utility of the program, ways to support providers to give them needed flexibility without opening competition completely, and to promote quality.


In response to questions by Senator Julian Carroll, Secretary Haynes stated that a CON application can be denied if a need for services cannot be proven. After a hearing officer makes a recommendation, the application would be accepted or denied by the commissioner of the appropriate department. A decision by the department could be appealed with the circuit court. Currently an application for an ASC can only be filed a couple times a year. Director Parento stated the process for the exempted service application would be a more streamlined process because it would receive a nonsubstantive review. Someone could still request a hearing to voice opposition to the application before the final determination.


In response to questions by Representative Benvenuti, Director Parento stated that the changes would allow ASC services to be provided by providers who were already doing the procedures. Director Parento stated that one area that was looked at is if a provider has targeted opportunities for access. Secretary Haynes stated that if an ASC is exempted, the same licensure and regulatory requirements would be the same as an established ASC. The CMS readmission penalties require a provider to use the national standard for Medicare patients. The changes would allow rural providers to lower penalties. Most of the proposed SHP changes were done with rural providers in mind to help give more flexibility. Rural hospitals could partner with other providers to keep down penalties. Director Parento stated that quality standards require hospitals to perform no different than or higher than the U.S. National Benchmark for 30-day outcomes for unplanned readmissions and 30-day death rates for select diagnoses as reported by CMS. Of the 93 hospitals reporting, 59 met the standards. Comments from consumers stated that the top two concerns were access and quality and the top provider concern is flexibility.


In response to a question by Senator Higdon, Secretary Haynes stated that all comments to date were before the SHP administrative regulation was filed with ARRS. A hearing will be held on June 22 giving everyone a chance for comments. The number one problem of stakeholders so far is that they do not understand the new proposed process.


In response to questions by Senator Danny Carroll, Director Parento stated that the reason certain components were chosen for exemption was because of flexibility and access of the services. Secretary Haynes stated that the Office of Inspector General (OIG) will continue to review the regulatory standards, including quality, and update administrative regulations as changes are needed. Director Parento stated that the number of additional ASC providers would include four or five physician practices. Secretary Haynes stated that the changes would allow rural hospitals to have more flexibility with care and business models. Rural hospitals have been actively involved through the process of updating the SHP.


In response to a question by Senator Alvarado, Secretary Haynes stated that the cabinet would have the SHP finalized by August or September. Director Parento stated that goal is more flexibility. The changes would require an ASC to be solely owned by physicians and ASC in a hospital have majority ownership by the hospital.


In response to a question by Representative Watkins, Secretary Haynes stated that the MCOs would have more contract choices.


Legislative Hearing on the 2016-2017 Community Services Block Grant

Elizabeth Caywood, Policy Analyst, Department for Community Based Services, Cabinet for Health and Family Services, was present to answer questions about the 2016-2017 Community Services Block Grant. The cabinet will receive $10,898,946 to administer the Community Services Block Grant. The mission for the block grant is to reduce and eliminate poverty by providing the opportunity for education, training, work, and the opportunity to live with dignity and decency. The mission focuses on self-sufficiency for the client and the reduction of dependency where possible. The community action agencies (CAAs) are required to prepare and submit an annual Plan and Budget Proposal on how the agency plans to ensure coordination and non-duplication of services with other service providers, inclusive of faith-based organizations, fatherhood programs, health marriage programs, and One-Stop partnerships, and a Logic Model for each of the nine National Association for State Community Services Programs (NASCSP) categories. A motion to approve the block grant was made by Representative Palumbo, seconded by Representative Watkins, and approved by voice vote.


Telehealth Services – Behavioral Health

Anna Whites, Attorney, stated that telehealth is one of the fastest advancing fields in healthcare. Across the nation, states have enacted laws permitting Medicare, Medicaid, and private insurers to pay for services provided via Telehealth. Telehealth permits providers to reach more patients most cost effectively. Kentucky established a state telehealth board, pursuant to KRS 194A.125, which reviews and updates the state’s telehealth procedures and oversight. The board promotes administrative regulations on training and protocols, creates a network of providers eligible for reimbursement, and approves technology. In Kentucky, payors currently cover only telehealth services which are provided by a physician in the telehealth network and under contract for telehealth service provisions which severely limits the ability of providers and patients to access the benefits of telehealth. Kentucky has not expanded its definition to include direct to patient reimbursable services provided in the patient’s home or other non-clinic locations. Many of the patients who would be afforded the greatest benefit from telehealth are served under state and federal grants and pass-through funds.


Rob Jones, Executive Director, Community Action Kentucky (CAK), stated that CAK is an association that consists of all 23 community action agencies (CAA) in Kentucky. The CAAs provide wrap-around social services to each county in Kentucky utilizing local, state, and federal grand funding sources. One focus of CAA services is to increase healthy behaviors and support systems across the lifespan of the state’s most vulnerable low income citizens. A primary limitation on the number of low income citizens served by the CAAs is lack of funding and lack of personnel. Telehealth provides a vital channel for delivery of support and wrap-around services to a much larger group of clients. A big barrier to participation in classes and support services by the CAAs clientele is access and babysitting. With telehealth, those barriers are removed and each interested client can access the supports provided.


Dr. Praveen Arla, Primary Care Physician in Bullitt County, stated that the goal is highlighting the ability of technology capabilities, to improve patient outcomes from their homes, to reduce patient expenditures, and to avoid hospitalization. Telemonitoring could be a life saving tool for patients.


In response to questions by Senator Danny Carroll, Dr. Arla stated that currently a fee-for-service model is used for telehealth services using standard billing rates for physicians.


In response to questions by Senator Alvarado, Ms. Whites stated that out-of-state providers have to be qualified to provide services. Dr. Arla stated that equipment for monitoring patients is currently not reimbursed, only a face-to-face encounter with a provider.


In response to Senator Thomas, Ms. Whites stated that to provide effective and efficient telehealth services, a broadband network has to be in place.


Lowering Blood Alcohol Level

Carole Kaufman, retired Certified Registered Nurse Anesthesiologist (CRNA), stated that the National Transportation and Safety Board recommend lowering the alcohol levels from .08 to .05. Alcohol causes devastation and destroys families. Approximately 500 to 800 lives could be saved by lowering the alcohol levels, and could protect children who have to get in an automobile with an impaired driver. In 2013, over 10,000 people were killed due to alcohol with 1,439 of the total being children. Alcohol related accidents cost $199 billion per year. Approximately 300,000 individuals drive while intoxicated, but fewer than 4,000 of them are arrested. The main goal of lowering the alcohol levels is to save lives.


Representative Benvenuti stated that Kentucky laws regarding impaired driving are insufficient and need to be addressed by the General Assembly. Currently, the laws focus more on the perpetrator than the victim. The record of someone convicted of an aggravated DUI should not be expunged.


Representative Palumbo stated that another major problem to be addressed is drivers who drive under the influence of drugs.


There being no further business, the meeting was adjourned at 3:20 p.m.