Call to Order and Roll Call
The 3rd meeting of the Task Force on Medicaid Cost Containment was held on Tuesday, August 17, 2010, at 10:00 AM, in Room 131 of the Capitol Annex. Senator Katie Kratz Stine, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Katie Kratz Stine, Co-Chair; Representative Jimmie Lee, Co-Chair; Senators Tom Buford, Julie Denton, Denise Harper Angel, Bob Leeper, and David L. Williams; Representatives Tom Burch, Rick Rand, Greg Stumbo, David Watkins, and Jill York.
Guests: Toni Miles and Ellen Kershaw for the Alzheimer’s Association; Tinisha Rawlins for AARP; Eric Clark for the Kentucky Association of Health Care Facilities; Charlie Mayer for Signature; Murray Wood for the Cabinet for Health and Family Services; Jodi Mitchell for Kentucky Voices for Health; Nancy Galvagni for the Kentucky Hospital Association; Andrea Plummer for Kentucky Youth Advocates; Jeff Presser and Mark Carter for Dean Dorton Ford; Seth Hall for First Sources; Mike Porter for the Kentucky Dental Association; Stephanie Aldridge for the Kentucky School Boards Association; Robert Castagna for the Catholic Conference of Kentucky; Charles George for the Kentucky Chamber; Donovan Fornwalt for the Council on Developmental Disabilities; and Walter Gose for Sanofi-Aventis.
LRC Staff: Miriam Fordham, Pam Thomas, Cindy Murray, Mike Clark, DeeAnn Mansfield, Frank Willey, Lashae Kittinger, and Cindy Smith.
Approval of Minutes
The minutes of the July 19, 2010 and July 20, 2010 meetings were approved without objection.
Overview of Medicaid Cost Containment Strategies
Donna Folkemer, Group Director, Forum for State Health Policy Leadership Program, National Conference of State Legislatures, Washington, D.C., presented information on Medicaid cost containment strategies. She said the Patient Protection and Affordable Care Act (PPACA) expands and modifies Medicaid in 2014. Eligibility is revamped, and in most cases, is based on income, not income and assets. It also adds new mandatory categories of eligibles. The temporary maintenance of effort and eligibility portion prohibits more restrictive eligibility changes and expires in 2014 when the health care exchanges become effective. There are implications for states. There is a lot of work to do that requires time and money, and both are in short supply in most states. There is also a lot of attention to quality, prevention, and delivery system changes in PPACA. These provide some opportunities. Currently, states are grappling with historically difficult budget conditions due to the recession. Monthly Medicaid enrollment growth has been accelerating in each six-month period since the recession began. State revenues are unlikely to return to pre-recession levels for several years. States are exploring new strategies for improving care and containing costs. For this presentation, Ms. Folkemer reviewed analytical work done by Medicaid study groups, committees, or analysts in several different states during the last five years, identified common themes in state approaches, and identified examples of recommendations on issues. Some basic findings based on state analyses include: the recommendations were derived from data and trend analysis from the particular state; many approaches to institute cost-effective care and the approaches are multi-year in nature; different issue areas required different approaches; there are no magic bullets; and an adequate information system is essential to track change. Themes across states include: eliminating inefficiencies to reduce costs and improve quality; tying pay to performance; and creating more unity in Medicaid budgeting and management. State recommendations include: more care management to promote appropriate use of services; better pharmacy purchasers and assurance of access; new approaches to setting rates and to assure appropriate use of Medicaid funds; moving toward a broader mix of community choices; and promoting stronger preventive efforts.
In response to a question by Senator Stine, Ms. Folkemer said she did not know the number of states using a KASPER type system for drug monitoring, but she could get that information for the committee. President Williams noted that there is an interstate compact effort for prescription drug monitoring for states.
In response to a question by Senator Leeper, Ms. Folkemer said that Medicaid agencies will be required to increase primary care rates to promote greater use of primary care providers. There are many demonstration projects that have to do with providing incentives to providers for groups to organize in different ways.
In response to a question by Senator Leeper, Ms. Folkemer said there is a major push for providers to organize themselves and agree to take on responsibility of patient care in clinical intervention. They received bundled payment for that care. No one provider can do everything, so the providers join together and provide care and get bundled pay for all the provided services.
In response to a question by Senator Leeper, Ms. Folkemer said there are only maintenance of effort restrictions for certain populations.
In response to a question by Senator Stine, Ms. Folkemer said medical homes are focused on primary care, where providers can serve as a “home” for individuals; accessible care organizations are bigger groups of providers focused across a whole range of services and gatekeepers have a more narrow concept.
In response to a question by Senator Stine, Ms. Folkemer said that all states have school health centers of some sort. Some states classify them as providers and they can be set up as part of that state’s network.
In response to a question by Senator Denton, Ms. Folkemer said she would have to do some research to find out if there is any money for marketing and outreach, and if there are any restrictions. She noted that it is mandatory for states to simplify the eligibility process.
In response to a question by Senator Denton, Ms. Folkemer said that federal law does not legislate on most aspects of Medicaid. It is traditionally the responsibility of most states, with the major area of focus in eligibility. Day-to-day management activities are not covered by federal law.
In response to a question by Senator Denton, Ms. Folkemer said she did not know if co-pays and incentives are addressed in the new health care law.
In response to a question by Senator Denton, Ms. Folkemer said in order to cut down on emergency room usage, it is a push of medical homes to have additional options for people to use other than emergency rooms. She noted that many frequent users of emergency rooms have chronic conditions that are not being managed properly.
In response to questions by Speaker Stumbo, Ms. Folkemer said all but two states have a third party management system form of managed care. The structure of managed care from state-to-state is very different. States are required to present certain information to the federal government. There could not be a study done for all states because the state systems are so different, but there could be a study done between states that have similar systems of managed care.
In response to questions by Representative Burch, Ms. Folkemer said states’ roles are changing in order to provider broader health care coverage. If the recession continues, it will be tough for states to continue to meet the needs.
In response to a question by Representative York, Ms. Folkemer said that all states think about pay-for-performance differently. Many states link payment to known quality measures. Many states use national recommendations for clinical standards.
In response to questions by President Williams, Ms. Folkemer said that everyone that falls below 133 percent of the federal poverty level will be mandatorily covered under the new health care act. There will be directives to employers to maintain certain coverages. In 2014, mandatory eligibles will be covered at 100 percent for six years. As far as exchanges, very little has been decided about that. The new law calls for exchanges and states would operate those. There is an assumption that individuals under 133 percent of the federal poverty level will be covered under the exchanges.
In response to a question by Representative Lee, Ms. Folkemer said that some regulations have been written on the new health care act, but no regulations on exchanges have been written. There are still a whole range of decisions to be made at the state level. More information will be coming out over time and will be sent to states when it becomes available.
In response to a question by Senator Harper Angel, Ms. Folkemer said that Money Follows the Person has been expanded, and there has been increased match rates for some states. There is a clear objective to encourage states to strengthen their community portion of their long-term-care delivery system.
In response to a question by Senator Harper Angel, Ms. Folkemer said there is a list of all incentives for states that show regulatory match rates and the application time line on the NCSL website.
The meeting was adjourned at 12:15 p.m.