Call to Order and Roll Call
Thesixth meeting of the Interim Joint Committee on Health and Welfare was held on Wednesday, November 2, 2016, at 1:00 p.m. at the Galt House, Rivue Tower, Archibald Room, Third Floor, 140 North 4th Street, Louisville, Kentucky. Senator Julie Raque Adams, Co-Chair, called the meeting to order at 1:12 p.m., and the secretary called the roll.
Members:Senator Julie Raque Adams, Co-Chair; Representative Tom Burch, Co-Chair; Senators Ralph Alvarado, Tom Buford, Danny Carroll, Julian M. Carroll, Jimmy Higdon, Alice Forgy Kerr, and Reginald Thomas; Representatives George Brown Jr., Joni L. Jenkins, Mary Lou Marzian, Reginald Meeks, Darryl T. Owens, David Watkins, Russell Webber, and Susan Westrom.
Guests: Betsy Johnson, President, Kentucky Association of Health Care Facilities; Terry Skaggs, Chief Financial Officer, Wells Health Systems; Eugene Hargis, Melodie Bingham and Rhonda Houchens, Hargis & Associates; Debra Finneran, Masonic Homes Kentucky; Sheila Schuster, Kentucky Mental Health Coalition; Gail McGibbs, Hillcrest Health & Rehabilitation; Melissa Bentley and Jill Raymen, Preferred Care; Rebecca Cooley, Windsor Care Center; Rick Hendrickson, Redbanks Colonial Terrace; Kathy Meadows, Emily Jones-Gray, and Mary Akins, Mountain Manor of Paintsville; Teresa Barnett, Friendship Health & Rehabilitation; Cory Meadows, Kentucky Medical Association; Maribeth Shelton and Vickie Dyer, Cumberland Valley Manor; Kathy Hall and Michelle Jarboe, Management Advisors; Melissa Sparks, Hyden Health and Rehabilitation; Brad Woods, Crystal Hamilton, and Billie Brewer, Bardstown Health and Rehabilitation; Jackie Carlin, Rivers Edge Nursing and Rehabilitation; Stephen Raines and Tracie Branham, Preferred Care Partners; Laura Greekmore, Williamsburg Health & Rehabilitation; Kem Delaney-Ellis, Norton Healthcare; Chris Chirumbero, Amanda Jackson, and John Muller, Carespring; Gwen Cooper, Centerstone; Sam Hutchinson, Life Care; Susan Arnold, Management Advisor; Brian Jaggers, Somerwoods; Todd Lacksourn, OTSUKA; Joe Mashni, Med Care; Karen King, Lee Specialty Clinic; Yvonne W. Cook and Tammy London, Glenview Health Care; Thomas Davis, Golden Living; Rebecca Eubanks, Genesis; Dorothy (Lisa) Biddle-Riffer, Scared Heart Home; Benita Dickenson, Preferred Care Management; Lainie Brinkley, Brighton Cornerstone, Sarah S. Nicholson, Kentucky Hospital Association; Truly Pennington, Grand Haven; Lisa Johnson and Melinda Calaway, Kentucky Partners Management Group; Crystal Janes, Green Acres Health Care; Kim Nay, Woodland Oaks; Sherri Craig, KentuckyOne Health; Janine Lehman and Greg Wells, Wells Health Systems; David McKenzie, McKenzie Healthcare; Mark Bowman and Martha Workman, Kentucky Department of Veterans Affairs; Amelia Prater, Wolfe County Health & Rehabilitation; Michelle Essex, Loretto Mother House; Janie Cunningham, Bradford Square; Cathy Hamblen, Carespring Health Care; Rebecca Hamblin, Corbin Health & Rehabilitation; JoAnne Tinsley, MedCare Pharmacy; Steve Bruin, citizen; Sally Baxter, Simpson Lane; Terri Myers and Sherri Likens, Glenview Health Care’ Shannon Spencer, Bridgepoint Center; and Steve McKinley, Crestview Center.
Presentation by the Kentucky Association of Health Care Facilities
Betsy Johnson, President, Kentucky Association of Health Care Facilities, stated that the Kentucky Association of Health Care Facilities (KAHCF) was established in 1954 and is the primary association that represents propriety and nonproprietary nursing facilities and personal care homes across the Commonwealth. KAHCF provides a wide variety of services to member facilities including legislative and regulatory activities, professional development, statewide recognition programs, media relations, research, and advocacy initiatives. There are 281 nursing facilities and 88 personal care homes currently serving over 36,000 residents. Nursing facilities and personal care homes provide over 30,000 Kentucky jobs. There is at least one nursing facility located in all 120 counties. Nursing facilities provide $200 million in state and local taxes. Kentucky has the highest level of acuity of all 50 states in long-term care settings. Long-term care is a now a major provider of in-patient and out-patient rehabilitative services. Today, the long-term care population is younger and stays for a shorter period of time due to the availability of short-term rehabilitation services in long-term care. Many individuals receiving services from long-term care facilities return to their own home after a rehabilitative stay. Kentucky is required to administer the Medicaid program in compliance with the Federal Medicaid Act. Federal law requires Medicaid applications for the disabled to be determined within 90 days and 45 days for all other applicants.
Terry Skaggs, Chief Financial Officer, Wells Health Systems, and Vice-Chair of the Board of Directors of the KAHCF, stated that according to the 2016 KAHCF Medicaid pending survey, the projected Medicaid pending balance for the participating nursing facilities that accept Medicaid was $3,741,554 in February 2015 and $20,751,294 in September 2016. Families and responsible parties have returned to the model of using the local DCBS offices to process eligibility. Recertifications for residents already in nursing facilities as a result of system issues have been extended through 2016. As long as billing efforts are made, providers will be allowed to bill past the one-year timely filing deadline. KAHCF asked for Medicaid approval to provide a Medicaid Payment Advance for those facilities who qualify to alleviate the adverse effect of the Medicaid pending issue. To qualify for a Payment Advance, a provider must have Medicaid pending claims over 60 days equal to at least $250 per nursing facility bed. Repayments for all providers would begin six months following the receipt of the last payment advance due in six equal monthly installments.
Ms. Johnson stated that all of Kentucky’s bordering states have enacted some form of medical liability reform legislation even though Kentucky has not enacted the same legislation. A 2015 Long Term Care General Liability and Professional Liability Actuarial Analysis showed that Kentucky‘s loss rate has increased from $2,150 in 2007 to a projected $9,350 in 2015. Since 2008, claim severity in Kentucky has been above $340,000 per claim. In 2014, the loss rate as a percentage of the per diem Medicaid reimbursement rate was 14.66 percent. Kentucky’s high cost of liability may be related to its lack of restrictions on tort actions. The state Constitution prohibits limits on non-economic damages and there are no statutes concerning qualifications of expert witnesses, certificates of merit, pre-trial alternative dispute resolution, or limits on attorney fees. Legislation introduced in the 2016 Regular Session included Senate Bill 6 relating to medical review panels, Senate Bill 2015 relating to truth in advertisement, and House Bill 554 relating to medical malpractice.
Mr. Skaggs stated that long-term care facilities are reimbursed by Kentucky’s Medicaid program through a price-based system designed to accurately assess each resident’s care needs and allow the state to accurately predict nursing facility costs. Nursing providers have been paid one-tenth of one percent for inflation for the past three years. As a result, the KAHCF proposed a provider tax increase to fund an inflationary adjustment that was shared with the Department for Medicaid Services. The proposal assumes that the entire tax increase and federal match are used to pay for the proposed inflationary increase and reimburse the Medicaid share of the tax. The annual impact of the provider tax proposal would increase taxes by 62 cents per non-Medicare day, providing a total of $4.4 million in taxes. With a federal match, it would generate $14.9 million in funding annually, allowing for an inflationary increase of 1.1 percent for providers in addition to the reimbursement of the Medicaid share of the tax. The KAHCF provider tax proposal would be implemented on November 1, 2016 and end on June 30, 2017.
In response to a question by Senator Adams, Mr. Skaggs stated that the provider tax proposal would help with costs.
In response to questions by Senator Danny Carroll, Mr. Skaggs stated that the provider tax would increase the Medicaid rate for nursing facilities by 1.1 percent, but the state would not be out any money.
In response to questions by Senator Thomas, Mr. Skaggs stated that KAHCF is proposing to increase the provider tax imposed on healthcare facilities up to the maximum allowed to help increase the federal Medicaid match. The tax revenues would go into the general fund to pay for the state Medicaid reimbursement match and then would be reimbursed to healthcare facilities.
In response to a question by Representative Marzian, Mr. Skaggs stated that profits vary by facility. He will obtain the information and provide it to the committee.
In response to questions by Representative Burch, Mr. Skaggs stated that in a 100-bed facility, the salary of the lowest paid worker and the CEO would vary by facility. Ms. Johnson stated that healthcare facilities, for the most part, are dependent upon Medicaid funding, and Medicaid reimbursement has not kept up with inflation costs and has made it difficult to attract and keep qualified workers. The Certificate of Need (CON) has been a huge issue.
In response to questions by Senator Alvarado, Mr. Skaggs stated that the average number of beds per facility is approximately 100. Ms. Johnson stated that KAHCF has not collected information on the amount of lawsuits filed against nursing facilities. Nursing facilities are the most regulated healthcare provider. Kentucky needs to enact truth in advertising laws. Senator Alvarado requested that the KAHCF provide information on the number of lawsuits and the amounts paid out by nursing home providers.
In response to questions by Senator Thomas, Mr. Skaggs stated that if one facility is closed one facility can be built with the same number of beds. The price-based system was designed to be updated periodically and require an annual inflationary adjustment. Ms. Johnson stated that there is a difference between an assisted living facility and a nursing facility.
In response to a question by Representative Westrom, Mr. Skaggs stated that it varies between facilities, but 10 percent to 15 percent of residents have private pay insurance.
A motion to approve the minutes of the October 19, 2016 meeting was made by Senator D. Carroll, seconded by Senator Higdon, and approved by voice vote.
There being no further business, the meeting was adjourned at 2:02 p.m.