Interim Joint Committee on Health and Welfare and Family Services


Minutes of the<MeetNo1> Third Meeting

of the 2017 Interim


<MeetMDY1> August 16, 2017


Call to Order and Roll Call

The<MeetNo2> third meeting of the Interim Joint Committee on Health and Welfare and Family Services was held on<Day> Wednesday,<MeetMDY2> August 16, 2017, at<MeetTime> 10:00 a.m., in<Room> Room 129 of the Capitol Annex. Senator Julie Raque Adams, Co-Chair, called the meeting to order at 10:05 a.m., and the secretary called the roll.


Present were:


Members:<Members> Senator Julie Raque Adams, Co-Chair; Representative Addia Wuchner, Co-Chair; Senators Ralph Alvarado, Tom Buford, Danny Carroll, Denise Harper Angel, Alice Forgy Kerr, Stephen Meredith, Reginald Thomas, and Max Wise; Representatives Danny Bentley, Robert Benvenuti III, Larry Brown, George Brown Jr, Jim Gooch Jr., Joni L. Jenkins, Mary Lou Marzian, Chad McCoy, Russ A. Meyer, Kimberly Poore Moser, Darryl T. Owens, Melinda Gibbons Prunty, Steve Riley, and Russell Webber.


Guests: Ben Chandler, President and CEO, Foundation for a Healthy Kentucky; Jeff Key, Vice President of Business Development, Rapid Recovery Centers, Mainstreet Health; Mark Fritz, President, Arizona/Texas Operations, Mainstreet Health; Mark Bochan, MD, PhD, Chief Medical Officer, Mainstreet Health; Darryl Wellinghoff, Executive Vice President, Mainstreet Health; Betsy Johnson, President, Kentucky Association of Health Care Facilities; Terry E. Forcht, Chairman and CEO, Forcht Group of Kentucky; Mary Haynes, Nazareth Home; Tim Veno, President and CEO, LeadingAge Kentucky; Brenda Bowman, COO, Southside Christian Child Care; Richard Morris, Owner of multiple child care centers; Pamela D, Individual with Brain Injury; Jane Stahl, Executive Director, NeuroRestorative Kentucky; Mary Hass, Advocate, Brain Injury Association of America; Jenny Jerdan and Denise Glover, ABI Case Management; Melissa Sparks, Hyden Health and Rehabilitation; Martha Workman and Mark Bowman, Kentucky Department of Veterans Affairs; Morgan Ransdell, Kentucky Board of Nursing; Sarah McIntosh and Gene Hargis, Hargis & Associates; Harold Brown, Sterling Health Solutions; Tom Emberton; Michelle Jarboe, MAI; Lori Gresham, Department for Medicaid Services, Cabinet for Health and Family Services; Janet Justice, Kentucky Association of Health Care Facilities; Kathy Gallin, Signature Healthcare; Mary Lynn Spalding, Christian Care Communities; Melissa Robbins, Monica Johnson, and Maegan Lamont, Middlesboro Nursing and Rehabilitation Facility; Wendy Shepherd, parent of ABI waiver recipient; Tiffany Evans, Woodland Oaks Health Care Facility; Sarah S. Nicholson, Kentucky Hospital Association; Robert E. Robbins, Robbins Enterprises; and Debra Finneran, Masonic Homes of Kentucky.


LRC Staff: DeeAnn Wenk, Ben Payne, Jonathan Scott, Sarah Kidder, and Gina Rigsby.



A motion to approve the minutes of the July 17, 2017 meeting was made by Senator Kerr, seconded by Representative Moser, and approved by voice vote.


Consideration of Referred Administrative Regulations

The following administrative regulations were referred for consideration: 201 KAR 20:070 – establishes the requirements for the licensure of nurses by examination; 201 KAR 20:110 – establishes the requirements for licensure by endorsement and establishes the requirements for a temporary work permit for an applicant to practice nursing while the application for a license is being processed; 201 KAR 20:225 – establishes procedures by the Kentucky Board of Nursing for reinstatement of a license that has lapsed or has been subject to disciplinary action; 201 KAR 20:480 – establishes the requirements for the licensure of graduates of foreign nursing schools; 901 KAR 5:061 – repeals 901 KAR 5:060 to eliminate the discretionary language allowing the Office of Vital Statistics to reissue birth certificates at no charge under specific circumstances; and 901 KAR 5:120 – establishes the reporting criteria for induced termination of pregnancy. A motion to accept the referred administrative regulations was made by Senator Harper Angel and Representative Gooch, seconded by Representative Marzian, and accepted by voice vote. Representatives Jenkins, Marzian, and Owens registered a no vote on 901 KAR 5:120.


State of Health in Kentucky

Ben Chandler, CEO, Foundation for a Healthy Kentucky, stated that Kentucky ranks 45th nationwide in economy. Kentucky ranks 48th in drug overdose, 40th in youth obesity, 46th in adult obesity, 43rd in heart disease deaths, 49th in adult smoking, 36th in youth smoking, and 50th in cancer deaths. In 2017, a Journal of the American Medical Association (JAMA) study showed cancer mortality declined 20 percent nationwide from 1980 to 2014, but rates of increase were observed in Kentucky, especially in eastern Kentucky. Social determinants of health include economic stability, neighborhood and physical environment, education, food, community and social context, and the health care system. In 2015, the U.S. Health Care from a Global Perspective, The Commonwealth Fund, reported that 17.1 percent of the GDP was spent on health care in the United States compared to 11.6 percent in France and 8.8 percent in the United Kingdom. Health outcomes in the U.S. are not good even though more is spent per capita on health care. Kentucky needs to focus more on health to reduce the cost of health care. The Foundation for a Healthy Kentucky’s focus is to change policies that will improve the health of Kentuckians. Ways to reduce obesity include healthy vending and school nutrition options, Complete Street policies, shared use agreements, sidewalks and trails, and farmers’ markets. Ways to help reduce smoking would be to enact smoke-free laws and raise the tobacco tax by $1 per pack. The Campaign for Tobacco-Free Kids reported that health care for smokers cost taxpayers $1.92 billion annually with $590 million of the total spent on Medicaid. Teenagers are affected the most by smoking because their brains are still developing. There are approximately 9,000 deaths per year to smoking related illnesses.


Senator Raque Adams stated that everyone pays for the costs of smoking-related issues.


In response to questions by Representative Benvenuti, Mr. Chandler stated that the revenue generated by a $1 tax increase on cigarettes should be spent on prevention efforts. There is a need for laws that encourage people to make better choices. The General Assembly could allocate funds to influence heathy behaviors and preventions. Currently health care dollars are spent on people after they are sick but should be spent more on prevention. There are grave consequences of not taking care of the health care needs of Kentuckians who receive public assistance, because they could end up costing the state more money in the long run if an individual ends up in jail or becomes acutely ill. Kentucky has laws that require hospitals to take care of these individuals which costs the taxpayers more money.


In response to questions by Representative George Brown, Mr. Chandler stated that because the magnitude of the challenge is overwhelming, funds should be allotted for particular programs to help solve the problems. A statewide smoke-free ban and $1 increase in cigarette tax would show immediate results and would not cost the taxpayer anything. Representative Brown stated that the smoke-free ban has worked in Lexington.


In response to questions by Representative Marzian, Mr. Chandler stated that the current tax on cigarettes is 60 cents. Although the current rate of teen smokers in Kentucky is down to 16.9 percent, it is still 6 percent higher than the national average of 10.8 percent. A huge increase in the tobacco tax is needed to provide better health outcomes and prevent the tobacco industry from adjusting to small incremental tax increases by offering incentives to smokers to help cover the increase.


Senator Alvarado stated that colon cancer rates have improved, but there needs to be better lung cancer screening. More important than measures that restrict calorie intake is improvement in exercise. Kentuckians need to be motived to improve their health.


In response to questions by Senator Meredith, Mr. Chandler stated that it is critical to do something about poverty which causes poorer health outcomes. Kentucky cannot attract companies because of its sicker workforce. Healthier Kentuckians create a better workforce which improves the economy. Economic development in rural communities has to become a priority in the state. The focus needs to be on health and keeping people healthy instead of on just treating people who are ill.


In response to a question by Representative Jenkins, Mr. Chandler stated that a solution needs to be found for the opioid problem, but there are specific things that can be implemented immediately to help with tobacco related illnesses.


In response to questions by Representative Gooch, Mr. Chandler stated that the increased tax on tobacco products has to be significant enough to impact the smoker and generate more revenue at the same time. Incremental taxes will not help, because smokers will be able to adjust to the increase faster.


In response to a question by Representative Riley, Mr. Chandler stated that the foundation supports more exercise and physical activities in school. The tax increase should include dipping products.


In response to a question by Senator Buford, Mr. Chandler stated that smoking rates have dropped in the ten states with the highest tax rate on cigarettes. The states that have the lowest tax rates have higher smoking rates. A pack of cigarettes costs approximately $4.47, and there are some people who will smoke regardless of the price. Senator Buford stated that programs should not be started based on the $1 tax increase, because it is not a sustainable revenue source. Mr. Chandler clarified that it would not increase the tax rate from 60 cents to $1, but would increase the tax rate to $1.60.


Post-Acute Care Facilities

Jeff Key, Vice President of Business Development, Rapid Recovery Centers, Mainstreet Health, stated that Mainstreet is building brand new, short-stay, high acuity, and transitional care buildings across the country. In addition to the benefit this model brings to patients that are transitioning from the hospital to home, it also represents a significant and positive impact through development, jobs, and better health care in the Kentucky. Mainstreet wants to bring a new model of post-acute care to Kentucky that will allow for competition and better outcomes. Current Kentucky providers can operate a similar model. Mainstreet makes a significant investment in each of the properties and does a considerable amount of diligence in selecting markets that will benefit the most. The American Research group was hired by Mainstreet to conduct a survey of Kentuckians on the issue of post-acute care and found that 71 percent of the people polled are in favor of having a local facility built. Some facilities in Kentucky are based on more of a reimbursement model rather than a clinical model.


Mark Fritz, President, Arizona/Texas Operations, Mainstreet Health, stated that its model is patient-centered and physician-led. Mainstreet has full-time medical directors that come to facilities every day and there is an average of 100 hours per week of physician coverage. The facility never exceeded single digit return to hospital rates or a 14-day length of stay. Patients are not completely healed or rehabilitated when they leave the facility. Each patient has an individual personal care plan, and physicians set a patient’s discharge date. All facilities are joint commission accredited. Nurse practitioners who can work with the staff, the patient, and the physicians are provided in each facility. While Registered Nurse supervisors do not see patients, they are on call 24 hours a day 7 days a week to help the nursing staff to make sure patients are taken care of properly. All facilities keep 100 percent electronic medical records to make sure patients have real-time care. Hospital partners help build programs in the facility that would help benefit the patient and the hospital. Mainstreet’s model would be a one-stop shop for patients. In 2013, Mainstreet applied for a Center for Medicare & Medicaid Innovation’s Health Care Innovation Award to show an episodic per diagnosis case rate, known as a DRG in hospitals. All data was certified by Milliman, a nationally recognized actuarial company.


In response to questions by Representative Wuchner, Mr. Fritz stated that Mainstreet does accept managed care, Medicare, and private pay insurance but does not accept Medicaid. A diagnostic tool is used to look at an average length of stay by diagnosis with co-morbidity.


In response to questions by Senator Alvarado, Mr. Fritz stated that a patient can remain at the facility if a doctor determines the patient should stay beyond the 21-day rehabilitation period. An individual cannot be admitted to the facility if long-term care services are required. Each hospital system wants patients discharged as quickly as possible to improve discharge rates. It is more economical for doctors to visit patients at the facility rather than the hospital. Darryl Wellinghoff, Executive Vice President, Mainstreet Health, stated Mainstreet will look at every state to see what is required and available and pursue options. Mainstreet has worked with CON boards in several states and gotten approval for new facilities without buying beds. Mark Bochan, MD, PhD, Chief Medical Officer, Mainstreet Health, stated that Mainstreet provides an interim facility for people who are too sick to go home or not sick enough to go to a another facility. Mr. Fritz stated that the facility is not cherry picking by looking for clientele who need short-term rehabilitation.


In response to questions by Representative Moser, Mr. Fritz stated that the difference between the rapid recovery model and a traditional rehabilitation hospital is the cost. The rate of hospital readmission for Mainstreet is approximately five percent.


In response to questions by Senator Danny Carroll, Mr. Fritz stated that since Mainstreet has opened facilities in different states, no long-term care facility has gone out of business. Medicaid is for long-term care services, and Mainstreet focuses on short-term recovery. Mainstreet accepts Medicaid recipients who need short-term care. The rapid recovery model works best in urban areas with more health systems. Approximately 65 percent to 70 percent are Medicare patients, because Medicaid patients are admitted as a Medicare patient. Each patient can have a different co-pay. Each market is different.


Betsy Johnson, President, Kentucky Association of Health Care Facilities, stated that she opposes the Cabinet for Health and Family Services’ amendment to 902 KAR 5:020 that would amend the current Certificate of Need (CON) criteria for short-term rehabilitation services in the State Health Plan (SHP).


Terry E. Forcht, Chairman and CEO, Forcht Group of Kentucky, stated that his group obtained its first CON in 1972 and still complies with the CON requirements today. The group owns nine health and rehabilitation centers in southeastern Kentucky with 1,109 beds, 1,344 employees, and occupancy rate of 97 percent. If the CON program is amended for additional Medicare rehab beds, it will have a devastating effect on all nursing facilities in Kentucky and will raise the cost to Kentucky and create additional Medicaid problems. The CON program provides duplicate services and is working as it was originally intended. His group and other nursing facilities have spent allot of money to upgrade facilities for residents. Medicare reimbursement is more than Medicaid reimbursement. If Mainstreet only takes Medicare patients, the nursing facilities in Kentucky will have more Medicaid patients.


Mary Haynes, Nazareth Home, stated that current Kentucky providers have invested resources and money into communities. Nazareth Home already operates using the recovery care model. Nazareth Home was founded on excellence, inclusiveness, person-centeredness, and clinical care and has been very successful. The overall trend for sub-acute and post-acute rehabilitation is declining. In 2000 and 2014, the federal government enacted the IMPACT Act, and the government, insurance companies, and MCOs contract with nursing facilities for services. The current mix in her facility is 50 percent Medicare and 50 percent managed care which also includes commercial insurance. The trend is that the length of stay and admissions are both down. With traditional Medicare A, the co-insurance starts on the twenty-first day of stay. She questioned how Mainstreet would be able to accept a Medicaid co-pay for a Medicare-only bed. Orthopedic patients have the shortest length of stay. Mainstreet’s model is not a new model or payment system. If Mainstreet desires to bring a new business to Kentucky, it needs to purchase excess bed capacity.


In response to a question by Representative Jenkins, Ms. Haynes stated that access to rehabilitation centers is not a problem in Kentucky. Representative Jenkins stated that most Kentuckians want to stay at home and have wraparound services if appropriate for their care.


In response to question by Senator Meredith, Ms. Johnson stated that changes to the SHP for nursing facility beds include relicensure as nursing home beds and could never be certified as Medicaid but only as Medicare-only beds, and nursing home beds for the provision of post-acute rehabilitation services would not be included in the calculation of the need criteria. Based on the cabinet’s own data, there is are 18,653 open beds that would not be included in the need criteria. The change to the SHP assumes there is a need for these types of services. All other facilities in Kentucky have had to go through the CON process and prove a need for services that would be provided. Nursing home providers are investing money in facilities to add rehabilitation services. Facilities would lose money if services were provided to Medicaid-only patients, and many facilities would have to close leaving no one to take care of the long-term Medicaid patients. Tim Veno, President and CEO, LeadingAge Kentucky, stated that the only criteria for the new proposal is that there is an average length of stay of 21 days or less. Mainstreet would be exempted from the need calculation and the need methodology.


In response to a question by Senator Alvarado, Ms. Johnson stated that she would provide the committee with information on the percentage of revenue between Medicare and Medicaid. Mr. Veno stated that Mainstreet’s proposal would duplicate existing services. Ms. Haynes stated that Mainstreet’s model of care is not new and there would be no difference in outcomes. Value-based purchasing drives down cost and drives up quality. If a facility wants to conduct business in Kentucky, it needs to buy the excess capacity beds to provide its services.


Robert E. Robbins, M.D., stated that he strongly supports the amendment to 900 KAR 5:020. If he ever needs skilled nursing care after a hospital stay, he wants the stay to be the shortest time possible in a facility that is new and specializes in rehabilitation versus a nursing home that is predominantly long term care with some rehabilitation. The amendment would change the focus to the needs of the patient and away from the business needs of the nursing homes. Having a new facility with state-of-the art rehabilitation will make a big difference in the quality of life for the citizens of Kentucky.


Child Care Assistance Program (CCAP) Providers

Brenda Bowman, COO, Southside Christian Child Care, stated that CCAP helps provide assistance to low-income families. Even though there was a small increase to CCAP to providers, it was not enough to keep some centers from closing. The reimbursement rate to centers is based on daily attendance not enrollment. There is a staffing crisis, because centers cannot recruit and maintain qualified workers. Kentucky’s rate is much lower than Indiana and Tennessee.


Richard Morris, Owner of multiple child care centers, stated that CCAP has not kept up with increased expenses for the past 11 years. The number one concern is to attract and retain qualified staff. A concern is who takes care of the children if parents cannot afford day care.


Senator Raque Adams requested the statistics for Kentucky, Indiana, and Tennessee’s reimbursement rates and recommendations to improve the CCAP.


In response to questions by Representative Benvenuti, Ms. Bowman stated that centers are paid on daily attendance. Representative Benvenuti stated the reimbursement rates should be based on enrollment not daily attendance.


Senator Danny Carroll stated that a facility is allowed to require parents to pay the difference between its daily rate and the rate reimbursed by the state. Mr. Morris stated that he did not want to change his business model and not serve low-income families. Abuse rates go up when a parent and/or guardian cannot get child care assistance.


In response to a question by Senator Wise, Ms. Bowman stated the percentage of CCAP children is between 70 percent and 96 percent depending on the facility, and Mr. Morris said his average is 70 percent to 75 percent in his facilities.


Acquired Brain Injury (ABI) Waivers: Substance Abuse, Residential Eligibility, and High Rate of Denials

Jane Stahl, Executive Director, NeuroRestorative Kentucky, stated that the ABI waiver was established in 1998 to provide intense rehabilitative services to adults with brain injuries with a goal to return to the community. The ABI Long Term Care waiver was created in 2004 for long term supports to allow participants to stay in the community. Services initiated close to the date of injury result in a quicker return to the community; however, progress can still be made when appropriate levels of services are provided at any time post injury. The current process is inconsistent, arbitrary, and delays the initiation of treatment. Clinical experts in brain injury recommend the ABI waiver over the Long Term Care waiver, but individuals, more times than not, are placed on the Long Term Care waiver waiting list. Over 260 Kentuckians are on the ABI Long Term Care waiver waiting list while there 160 ABI waiver slots available. Injured Kentuckians have to jump through hoops at every level which delays necessary care and services and places burden and stress on families and caregivers.


The application process is as follows.

(1) An external case manager makes an application in the Medicaid Waiver Management Application (MWMA) system that includes a MAP 10 form completed by a physician that indicates the need for brain injury services. If approved, capacity is reserved. Since May 22, 2017, applicants can appeal the decision.

(2) A MAP 351 is completed by the external case manager in MWMA to determine level of care.

(3) Once the applicant receives level of care, the external case manager must apply for residential services. A small committee meets once per month to review the applications.

(4) An applicant waits for the prior authorization in the system. There needs to be consistency in the approval and review process with an option for an expert in brain injury to review appeals for level of care. The Residential Committee should meet bi-monthly to review denials. There needs to be an appeals process for residential services.


In response to a question by Senator Raque Adams, Ms. Stahl stated that exclusions for the ABI waiver include progressive dementia or other mentally impairing condition of a chronic degenerative nature such as senile dementia, organic brain disorder, Alzheimer's Disease, and alcoholism or other addiction.


Pamela D, Individual with Brain Injury, stated that she received a brain injury in 2016. Adult protective services was called, and an ABI case manager helped her fill out an ABI waiver application. She just wants a chance to live a normal life. Everyone deserves to get needed services. She slipped into depression while waiting to get ABI waiver services.


Mary Hass, Advocate, Brain Injury Association of America, stated that the waiver slots are not just a number but represent a person. The cabinet gives her inconsistent number of slots that are available. In 2016, additional ABI LTC slots were funded in the budget. People need to be served. Currently, the cabinet is overriding doctor recommendations. There is a need for more doctors with ABI clinical knowledge and expertise. She does not understand why so many individuals are being denied ABI services.


In response to a question by Senator Raque Adams, Ms. Stahl stated there are enough ABI providers. Senator Raque Adams stated that she would help facilitate conversations with Navigant to make the waivers better.


In response to a question by Representative Wuchner, Ms. Stahl stated the waiver application does not explain the exemptions. Carewise Health determines the waiver denials.



There being no further business, the meeting was adjourned at 1:03 p.m.