Call to Order and Roll Call
The 8th meeting of the Task Force on Medicaid Cost Containment was held on Tuesday, October 19, 2010, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Jimmie Lee, 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 Julie Denton, Denise Harper Angel, Bob Leeper, and David L. Williams; and Representative Tom Burch.
Guests: Eric Clark for the Kentucky Association of Health Care Facilities; Katie Brown for The Department of Community Based Services; Jim Kimbrough for Kentucky AARP; Dave Croft for Bristol-Myers Squibb; Sarah Nicholson for the Kentucky Hospital Association; Jodi Mitchell for Kentucky Voices for Health; and Charles George for the Kentucky Chamber of Commerce.
LRC Staff: Miriam Fordham, Pam Thomas, Cindy Murray, Mike Clark, DeeAnn Mansfield, Frank Willey, Lashae Kittinger, and Cindy Smith.
Discussion of Medicaid Policy Initiatives
Kathleen Gifford, Principal, Health Management Associates (HMA) discussed Medicaid policy initiatives. She reported that an annual survey of Medicaid directors in all 50 states and the District of Columbia was conducted by HMA on behalf of the Kaiser Commission on Medicaid and the Uninsured in July and August, 2010 which focused on actions implemented in FY 2010 and adopted for FY 2011. The purpose was to track state budget trends, Medicaid spending, enrollment, policy initiatives and issues, and state impacts of federal policies. Federal stimulus funds had a huge impact on state Medicaid programs. The largest percentage of enhanced Medicaid funding in FY 2009 and FY 2010 was used to close or reduce the Medicaid budget shortfall. The survey showed that Kentucky’s rates are not quite as high as other states in projected and actual total Medicaid spending and enrollment growth for FY 2010. On average, budgeting for the overall increase in enrollment growth is 6.1 percent. The most common area of cuts was in the provider payments area. It was shown that 48 states took one cost containment action in 2010 and that 46 states will do so in 2011. In 2010, 39 states cut one provider rate, and 37 states plan a cut in 2011. There was not as much action as anticipated for states to expand or add a higher co-payment between 2003 through 2011. Many states implemented benefit cuts or restrictions.
Ms. Gifford reported that despite the budget environment, the trend still continues to expand community based options. States are still expanding waivers, but at a slower rate than a few years ago. Many states are still reaping the benefits of cost containment efforts from a few years ago. States continue to rely on various types of delivery system models. New or expanded Medicaid disease management or care management continues to be a focus area for states. Kentucky reported an expansion with a program going statewide. All states with managed care use tools to manage and promote quality. Although the recession is technically over, states still feel the impact and will for the next few years. There are few options left for significant Medicaid savings in most states. There are major concerns about the end of ARRA funds in 2012. And, health reform presents new opportunities and challenges.
In response to a question by Representative Burch, Ms. Gifford said that in most cases, cuts are made to adults. There are limited cuts to children. Some types of optional services are delivered in some areas. They may be pushing utilization to a different provider category.
In response to a question by Representative Lee, Ms. Gifford said that some states have had programs above a certain percentage of poverty and then brought it back down to the federally mandated allowance, but she is not sure of which states. Now, because of ARRA, eligibility cannot be reduced.
In response to a question by Representative Lee, Ms. Gifford said that dual eligibles cannot be mandated into certain restrictions.
In response to a question by Senator Stine, Ms. Gifford said she briefly looked at Kentucky compared to other states’ drug policies. She said it looks as if Kentucky didn’t cut provider rates and didn’t cut benefits. Other states have been forced to do this.
In response to a question by President Williams, Ms. Gifford said that a lot of Medicaid directors would agree that in states with small Medicaid populations, there are more people to take the slack. Primary care access seems good, but there is a problem with dental in some states. It is something that people in Kentucky should keep an eye on.
In response to a question by Representative Lee, Ms. Gifford said that many states want to get close to the Medicare payment rate. To ensure access, states will have to increase rates.
In response to a question by Representative Lee, Ms. Gifford said that all states are concerned about eligibility systems being ready and they may not be modified in time.
Discussion of Medicaid Eligibility Determination
Pat Wilson, Commissioner, Department for Community Based Services, Cabinet for Health and Family Services discussed Medicaid eligibility determination. She reported that fraud and abuse prevention begins with the eligibility process. The Kentucky Automated Management and Eligibility System (KAMES) is a single, statewide eligibility system that assigns a unique identifier to each individual to prevent duplicate participation. KAMES also conducts both real-time and routine computer matches with federal and state data sources to ensure program participants meet technical and financial eligibility requirements. Kentucky has long been a leader in fraud prevention. Verification of income, resources, citizenship, and residency are completed by family support eligibility workers at application and recertification. Applicants are requested to provide verification document or to verify information by data base searches. There is a verification process for non-citizens as well. It verifies they are qualified aliens. Verification of resources is required at application and recertification. Family support eligibility workers conduct data matches at application and recertification, or when notification is received that recipient information may have been inaccurate. In addition, the KAMES eligibility system matches against the income and eligibility verification system, a federal data mach system designed to identify cases with income. Pursuant to Section 1940 of the Supplemental Appropriations Act of 2008, all states are required to implement an asset verification system. The asset verification system will match financial institution data to locate and verify resources that may be unreported. The Department for Medicaid Services is currently in the procurement process for a vendor.
In response to a question by President Williams, Katie Brown, Branch Manager, Medicaid Support, said that asset liability will be available. Eligibility is determined per a Medicaid ruling.
In response to a question by President Williams, Ms. Wilson said there are rules that discuss transfer of assets, which is addressed at the state and federal level.
In response to a question by President Williams, Ms. Wilson said the asset look back is five years.
In response to a question by Representative Lee, Ms. Wilson said an eligible is reassessed annually or if there is a change that necessitates a look at their eligibility.
In response to a question by Representative Burch, Ms. Wilson said there were 525 cases referred to the Office of Inspector General last year, but she didn’t know the dollar amount of the cases.
In response to a question by President Williams, Ms. Wilson said the Cabinet is having conversations with counterpart agencies regarding the eligibility side.
President Williams asked if the Cabinet had gotten their list of Medicaid efficiencies to the co-chairs and if not, if that could be done before the next meeting in November. Senator Stine said she and Co-chair Lee will send a letter to the Cabinet inviting them to share their efficiencies with the committee at the November 15th meeting.
The meeting was adjourned at 11:45 a.m.