Call to Order and Roll Call
The 9th meeting of the Task Force on Medicaid Cost Containment was held on Monday, November 15, 2010, at 1:00 PM, 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 Denise Harper Angel, Bob Leeper, and David L. Williams; Representatives Tom Burch, Rick Rand, Greg Stumbo, and David Watkins.
Guest Member: Representative Keith Hall.
Guests: Wes Brewer of Kentucky ACEP; Bill Doll for the Kentucky Medical Association; Jeff Presser for Dean Dorton Ford; Kyle White for Norton Healthcare; Judith Warren and Christina Curtis for Health Care Access Now; Eric Clark and Wayne Johnson for the Kentucky Association of Health Care Facilities; William Crump, M.D., for the University of Louisville; Jan Gould for the Kentucky Retail Federation; Jodi Mitchell for Kentucky Voices for Health; Blair Schroeder for the Cincinnati Children’s Hospital; Charles Mayer for Signature; Bryce McGowan for the Kentuckians for Nursing Home Reform; Ellen Kershaw and Toni Miles for the Alzheimer’s Association; Judy Taylor for Kentucky Ambulance Providers Association; Karen Lentz for EPIC Pharmacies; Anne Joseph for the Kentucky Task Force on Hunger; and Mike Ridenour for Amerigroup.
LRC Staff: Miriam Fordham, Cindy Murray, Mike Clark, Frank Willey, Jonathan Scott, and Cindy Smith.
The minutes from the October 18, 2010, and October, 19, 2010 meetings were approved without objection.
Discussion of Primary Care Physician Training
Boyd R. Buser, D.O., Dean, Pikeville College School of Osteopathic Medicine (PCSOM) said that the mission of PCSOM is to provide men and women with an osteopathic medical education that emphasizes primary care, encourages research, promotes lifelong scholarly activity, and produces graduates who are committed to serving the health care needs of communities in Eastern Kentucky and other Appalachian regions. The first class of 60 students entered in August, 1997. The current class size is 75. Total enrollment is 305 students in 4 classes, and the number of applicants has risen steadily over the past ten years. Over 600 students have graduated since May 10, 2001, and over three-fourths of those graduates have entered primary care specialties. Thirty-two percent of PCSOM graduates practice in Kentucky, with 62 percent of those practicing in the Appalachian region. Currently, 53 percent of the PCSOM students come from Kentucky. Since the Kentucky Osteopathic Medical Scholarship’s inception in 1998, nearly $13 million has been awarded to 461 osteopathic medical students. Pikeville College recently held a groundbreaking ceremony to launch the construction of a new building to house PCSOM. Upon completion in May 2010, the new building will accommodate an increase to 125 students per class.
In response to a question by Senator Stine, Dr. Buser said that there is no evidence students are leaving the state.
In response to a question by Representative Hall, Dr. Buser said that applications to medical schools are cyclical, and applications to D.O. schools are on the increase. PCSOM has shown a marked increase in applications above the national average.
In response to a question by Representative Hall, Dr. Buser said that defaults of students using coal severance money is less than five percent.
In response to a question by President Williams, Dr. Buser said that coal severance funds are funding some tuition to PCSOM and only Kentucky residents are eligible for these monies. In return, these students have a one year service obligation to the state for every year the monies were received. These monies are about $10,000 per year.
In response to a question by President Williams, Dr. Buser said there is an undergraduate arrangement with Midway College in terms of pre-pharmacy.
In response to a question by Representative Watkins, Dr. Buser said that years three and four in college allow for off-campus residencies in hospitals, clinics, and doctors’ offices. The third year is more tightly controlled, and the fourth year has less control.
In response to a question by Representative Burch, Dr. Buser said that 60 percent of first year students are Kentucky residents.
In response to a question by Representative Burch, Dr. Buser said the tuition is $34,950 per year, without housing costs.
In response to a question by Senator Stine, Dr. Buser said special selection is given to those students motivated because of desire to help individuals and also those from rural or underserved areas.
Stephen F. Wheeler, M.D., MChe, Associate Dean of Admissions, Senior Faculty Member, Residency Training Program, Associate Professor, Department of Family and Geriatric Medicine, School of Medicine, University of Louisville, said that the mission statement of the School of Medicine is to meet the medical needs of the Commonwealth. The school seek students who are likely to be “generalists” or to practice in rural areas. Class size is limited to 160, and it cannot be increased unless the seating capacity is expanded. Gender enrollment is about 50 percent men and 50 percent women. The goal is to graduate 40 to 50 percent of the class to be generalists. The school offers Trover rural scholarships. Students are nominated by participating colleges after their freshman year. The school has a summer medical dental education program which is funded by the Robert Wood Johnson Foundation at the University of Louisville and 11 other leading universities.
The University of Louisville also has a G.E.M.S. program, which is a guaranteed entrance to medical school program. Seventy percent of the 177 students who have entered the G.E.M.S program have been successful in going to medical school. There were 2,678 applicants to the medical school class of 2014. Of those, 405 were from Kentucky. There were 135 students from the class of 2010 matched with residencies. The student loan indebtedness for the University of Louisville is less than the average college loan indebtedness in the United States.
William J. Crump, M.D., Associate Dean, Trover Campus, School of Medicine, University of Louisville said that health professionals are important economic engines for small towns. One new primary care doctor that is recruited to practice equals $1.6 million annually for the local hospital. Doctors tend to practice near where they train, and in towns like those where they train. Over 60 percent of Kentucky’s counties are medically underserved. The Trover Campus in Madisonville provides a way for those from small towns to find a comfortable path through medical school. To date, 64 percent of Trover campus graduates from small towns are practicing in small Kentucky towns and 86 percent in primary care. Nationally, about three percent of medical school graduates intend to practice in rural areas, and most medical schools place about 10 percent in family medicine.
Emery Wilson, M.D., Dean, College of Medicine, University of Kentucky, said that there are 13,618 licensed physicians, with 8,981 active in Kentucky. Forty-three percent of Kentucky’s population lives in rural areas, and 28 percent of those physicians practice in rural areas. Forty-eight percent of Kentucky students go into primary care. Debt may influence specialty choice. Factors influencing future demand of physicians include: aging population; chronic disease; education; socio-economic level; and changes in physician demography and interests. By 2020, 48 to 60 percent of the physicians in Kentucky will be in primary care. Recommendations include strategies to increase physicians and strategies to address maldistribution. Rural physician leadership program objectives include taking students from rural areas and training them in rural areas; health promotion and disease prevention; studying of community health systems, services and agencies; role of community leaders in health care; identification of community and public health problems and solutions; and evaluation and economics of a medical practice. Suggestions for reducing Medicaid costs include making more use of lay health workers; educating patients to not use emergency rooms; authorizing more use of TeleHealth Network; and taking care of Kentucky’s own.
In response to a question by Representative Burch, Dr. Wilson said the school is not graduating enough students to meet the physician needs in Kentucky, and noted that Kentucky has a physician shortage of about 2,300.
In response to a question by Representative Burch, Dr. Wilson said there have been no studies that show that doctors would do better or worse if graduation were allowed before residency requirements were completed.
Discussion of Department for Medicaid Services Recommended Cost Containment Measures
Janie Miller, Secretary, Cabinet for Health and Family Services, and Neville Wise, Acting Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services, discussed Medicaid cost savings. Secretary Miller said that Governor Beshear announced a plan to address the Medicaid benefit budget shortfall. There is a newly created hole of $100 million dollars in the state Medicaid budget caused when help from Congress did not meet budget assumptions made by the General Assembly in formulating and passing its FY 2011 and 2012 budget. The new plan will fill that shortfall and rebalance the Medicaid budget, and is based on two principles. It protects critical health services for 815,655 Kentuckians who rely on the Medicaid Program for health care, and while the re-balancing plan addresses a short-term budget problem, it does so in a way that will bring long-term efficiencies to a $6 billion budget, which is a continual financial challenge.
The Medicaid budget as introduced and enacted included cost-containment measures of $125.5 million and $83.6 million General Funds (GF) in 2011 and 2012 respectively. To date, costs have been managed, and there are planned changes that will save $86.5 million this year with a continuing effect of $80.2 million for the next fiscal year. This new hole of $100 million in GF or $470 million in total funding must also be addressed. In addition to addressing the new $100 million gap, the re-balancing plan will build on the cost-containment measures already announced and cost management strategies employed in order to close the remaining budget gap. This plan will not require any additional General Funds over the biennium, and it solves the Medicaid gap within the program itself.
The Cabinet is addressing anti-fraud Initiatives and is preparing for the issuance of Requests for Information for the following: performance-based, capitated managed care programs for all eligibles within a county or grouping of counties; performance-based, capitated managed care dental programs designed to improve access for children and increase preventive dental care; provider incentive performance programs for KenPAC physicians and participating dentists to improve patient health care outcomes; a capitated pharmacy benefit program; a long-term care capitation model designed to improve care coordination for elderly and disabled patients requiring long-term care services and supports; and the imminent release of an RFP for management of high-cost radiology and imaging services. These strategies will give the Commonwealth a number of options and flexibility to implement those that fit the needs of the program in different parts of the state based on the willingness and capacity of organizations to serve certain or all areas of the state, and what might work best in a specific area.
The initiatives announced today are in addition to those cost-containment initiatives announced earlier this year, including: reducing the unnecessary use of medical services, treatments and ER visits; eliminating the ability of some patients to “doctor-shop” in order to obtain unnecessary drugs; increasing efforts to collect payments from liable third parties for Medicaid services provided; stopping payments to hospitals for hospital-acquired infections and errors; partnering with the Department of Revenue to recoup payments to providers; and more aggressively identifying fraud and abuse.
In response to a question by Representative Burch, Secretary Miller said that capitation is the amount paid per member, per month.
In response to a question by Representative Burch, Secretary Miller said that early oral health care is so important to children, and the dental program has improved dental fees over the years.
In response to a question by Representative Lee, Secretary Miller said that an RFP for behavioral health could be proposed, and the cabinet is leaving that option open to gauge capacity.
In response to a question by Representative Lee, Acting Commissioner Wise said that the department would have complete access to data of providers and individuals and the contract would be based on performance.
In response to a question by President Williams, Secretary Miller said that the time frame for the RFI is very broad. It would take 30 days to a couple of months to get it ready and get the RFP on the street.
In response to a question by President Williams, Secretary Miller said that the second year will backfill this year, and this year there is an $86 million dollar savings. She believes a savings of $139 million can be achieved.
In response to a question by President Williams, Secretary Miller said that past Commissioner Johnson did an analysis regarding the cost Passport eligibles versus the regular Medicaid eligibles in the state. Additional work needs to be done on how Passport works and how to save money. The analysis showed the cost in 4 years of Passport providing services is about 20 percent higher than the balance of the state.
In response to a question by President Williams, Secretary Miller said there was no official cost analysis done for the cost efficiencies of the Passport Health Plan.
In response to a question by President Williams, Secretary Miller said that the excess reserves were questioned by the Secretary’s office and the Cabinet was tracing over a number of years what had been spent.
In response to a question by President Williams, Secretary Miller said the Cabinet did not disapprove of the disbursement of the reserve money.
In response to a question by President Williams, Secretary Miller said that to the extent that public entity transparencies are appropriate, the managed care contracts will be transparent. There will be no funding for lobbying, and there will be limits on meals and gifts.
In response to a question by Representative Rand, Acting Commissioner Wise said that there are $3,000 new Medicaid eligibles per month.
In response to a question by Representative Rand, Secretary Miller said the plans do not depend on cutting services or reimbursements.
In response to a question by Speaker Stumbo, Secretary Miller said the General Assembly and the Cabinet must work together and determine what efficient spending is. The Cabinet sees the value in managed care and Passport, depending on how it reacts to the audit. The Cabinet has bigger concerns that the entity built up funds in ways to benefit other organizations. The excess funds should go back to the Commonwealth to help those in need.
In response to a question by Speaker Stumbo, Secretary Miller said the $28,000 a month was spent on lobbying activities.
In response to a question by Speaker Stumbo, Secretary Miller said there were independent audits of the expenditures. The Partnership Council did not know about some of the expenditures. One owner did not even know about the excessive spending patterns by Passport.
Discussion of Emergency Room Use
Judith Warren, Executive Director, Health Care Access Now (HCAN) said that Health Care Access Now was established in 2009 and serves as a system integrator by developing and managing partnerships and programs to improve access to care and improved health outcomes. HCAN works with medical and social service providers to reduce inappropriate emergency room use and improve access to prescriptions. HCAN works with entities at all levels that are aligned with the HCAN vision for sustainable primary care access delivery systems for the uninsured and underserved. In Kentucky, the emergency room utilization is 519 per 1,000 individuals, and estimated visits in 2009 were 2,239,000. Care coordination is a way to reduce the cost of care and ensure that the patient receives the right treatment at the right time and in the right setting. The evidence-based care coordination approach is known as a pathway which enables patients to be guided to appropriate medical and supportive care services, and it connects patients with a consistent medical home relationship. The emergency care coordination pilot project provides a cost-effective solution for reducing avoidable emergency room visits by navigating patients to primary care settings and establishing a medical home. There are currently three pilot program partnerships in Kentucky. There were some very key results from the Northern Kentucky emergency room care coordination pilot projects, which resulted in reduced hospital charges. The care coordination model can be customized for patients with chronic disease and behavioral health disorders.
Currently, a reduction in emergency room utilization provides disincentives to contracted emergency room physicians and hospital management. Hospitals must redesign their emergency room services to capture any direct cost savings from reduced volume. The request was that the task force consider developing a statewide or regional Medicaid pilot that will provide the forum for spreading methods and approaches that eliminate avoidable emergency room visits and stimulate rapid cycle improvement and measure. The goal would be to engage providers from all sectors, consumers, and other key stakeholders to set specific service targets with specific timelines.
Discussion of Polypharmacy
Demetra Antimisiaris, PharmD, GCP, FASCP, Assistant Professor, Department of Family and Geriatric Medicine, University of Louisville, said that polypharmacy is the use of five or more medications at the same time; the use of more medications than are clinically indicated; or the inappropriate use of medication. Over two million patients are hospitalized every year after experiencing serious adverse drug events, and 106,000 die each year from an adverse drug event. Up to 30 percent of older person are admitted to the hospital due to medication related problems. From 2000 to 2008 the percent of Americans who use at least one prescription drug in the past month increased to 48 percent, while the percent of Americans using at least five prescription drugs increased to 11 percent. There are many things that lead to adverse drug events, including: more drugs on the market; poor monitoring and follow up; guidance that does not apply to the particular patient; and very short office visits and consultations. Kentucky ranked fourth in prescriptions per capita in 2009. In an interesting parallel, Kentucky also ranked fourth in body mass index.
In response to a question by Senator Leeper, Dr. Antimisiaris said that the market increase in medications goes along with advertising of medications.
In response to a question by Senator Leeper, Dr. Antimisiaris said that every drug has potential side effects and resistance to the drug is the main reason for the decline in the use of antibiotics.
In response to a question by Representative Lee, Dr. Antimisiaris said that for every dollar spent up front, eight dollars can be saved in the end. Spending up front to save money in the end is the key. Dr. Wheeler commented that patients who identify with certain doctors have better outcomes and pay less.
The meeting was adjourned at 4:40 p.m.