Medicaid Managed Care Oversight Advisory Committee (HB 785)



<MeetMDY1> December 3, 2002


The<MeetNo2> Medicaid Managed Care Oversight Advisory Committee (HB 785) meeting was held on<Day> Tuesday,<MeetMDY2> December 3, 2002, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Senator Vernie McGaha, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Vernie McGaha, Co-Chair; Representative Paul Bather, Co-Chair; Senators Julie Denton, Dan Seum, and Johnny Ray Turner; Representatives James Bruce, Jack Coleman, Stephen Nunn, and Dottie Sims.


Guests:† Steve Shannon for the Kentucky Association of Regional Mental Health/Mental Retardation Programs; Donovan Fornwalt for the Council on Mental Retardation; Darla Bailey for Kaleidoscope, Inc.; Ann Skinner for Behavioral Support, Inc.; John McCarthy for the Kentucky Society of Anesthesiologists; Sheila Schuster for the Kentucky Mental Health Coalition; and Phil Huddleston for the Kentucky League of Cities.


LRC Staff:† Barbara Baker, Eric Clark, and Cindy Smith.


The minutes of the September 24, 2002 meeting were approved without objection.

The first item on the agenda was a discussion of the Supports for Community Living (SCL) Performance Audit Report Ė Kentucky Can Better Serve Mentally Retarded/Developmentally Disabled Persons, by Marcia Morgan, Secretary, Cabinet for Health Services, Ralph Gronefeld, President, Division of Persons with Disabilities, ResCare, Inc., Kevin Payton, Director, Government Relations, ResCare, Inc., Jim Richardson, President and CEO, Cedar Lake Lodge, and Gerald W. Hoppmann, MPA, Director, Performance Audit Division, Office of the Auditor of Public Accounts.


Secretary Morgan cited current statistics.† She said currently, there are 2,180 people in the SCL Medicaid Waiver Program.† As of December 2, 2002, there were 2,329 individuals on the waiting list for the SCL waiver services.† Over 500 individuals on the waiting list are under the age of 18.† The SCL waiver program is only one of several programs that provide community services to individuals with MR/DD.† Over half of the individuals on the waiting list receive some level of Medicaid services through other programs.†


Secretary Morgan mentioned other services to support people with MR/DD, including: (1) Medicaid home and community based waiver program; (2) state funded supported living program; (3) Medicaid EPSDT for individuals under 21; (4) Medicaid Impact Plus for individuals under 21; (5) home health and other Medicaid state plan services; and (6) intermediate care facilities for the mentally retarded.


Next, she commented on the auditorís report.† She said that the audit began approximately three years ago.† Most of the audit work was completed by July, 2001.† The auditorís office released the report on May 23, 2002.† The recommendations focused on the need for (1) cost containment; (2) reporting of abuse and neglect; and (3) the need to serve additional people.


The audit report recommended: (1) reimbursing providers of community habilitation at a daily rate for services lasting more than four hours; (2) capping costs per person to an amount equivalent to the per person cost in an ICF/MR; (3) training for area administrators related to fraud detection.† The cabinet is reviewing the rate structure.† As of July 1, 2002, rates have been frozen at the current levels and the differential rate for new providers was abolished.† The cabinet is also: (1) reviewing the current mix of services; (2) reviewing the implication of limiting the total per person cost; and (3) providing additional fraud detection training to area administrators.† She reported that the cabinet has established an emergency plan in the event that provider closures occur.


In response to the abuse and neglect in community based settings, the cabinet responded with the following: (1) The Auditorís office did not understand the current process; (2) Providers are required to report all incidents of alleged abuse, neglect or exploitations to the Department of Community Based Services (DCBS); (3) DCBS determines if the incident warrants an investigation; (4) DCBS determines if the incident needs to be reported to law enforcement; (5) DMR checks to ensure incidents are properly reported to DCBS and follows-up to insure proper action was taken and that regulatory requirements were met; (6) The Cabinet for Health Services and the Cabinet for Families and Children have drafted an agreement pertaining to information sharing regarding investigations of abuse and neglect and misappropriation of property or exploitation; and (6) CHS does not agree that a fines/penalties process is advisable.† The cabinet plans to continue its policy of terminating providers when abuse and neglect are confirmed and the providers has not taken corrective action.


Secretary Morgan reported that the following program improvements were made before and during the audit process: (1) In August 2000, two quality specialists were hired to focus solely on incidents and investigations; (2) In September, 2000, the emergency waiting list criteria was clarified, and pre-vocational services to the SCL program were added; (3) In February 2001, a regulation was filed to require pre-hire and annual TB testing, require implementation of pre-hire and annual state police records checks of provider employees; and implementing revised incidents reporting requirements; (4) In April, 2001, the HB 144 Commission on Services and Supports for Individuals with Mental Retardation and Developmental Disabilities set forth a 10-year plan for building the appropriate capacity within the Commonwealth to reduce the SCL waiver waiting list; (5) For State FY 01-02 biennium, 500 additional individual were funded in the SCL waiver program; and (6) In the current biennium, 500 additional individuals are funded in the Governorís spending plan.


Secretary Morgan reported that the following program improvements made during the audit process include: (1) In July 2001, the Department of Mental Health/Mental Retardation assumed direct responsibility for development of the Core Training Modules for provider training; (2) Additional training was developed and delivered on abuse and abuse prevention, individual rights, self-determination and support coordination; (3) In October, 2001, an enhanced utilization review process was implemented with a specialized focus on high cost support plans; and (4) January 2002, the incident and investigation database was revised to incorporate additional data elements for improved tracking of allegations and reporting of abuse and neglect.


Secretary Morgan said the November, 2002 administrative regulation modifications strengthened requirements for providers, tightened reporting requirements for incidents where abuse or neglect is suspected, and placed limits on certain services.


She reported that the November 2002 amendments to the administrative regulation would continue to allocate funding based on the region of residence.† She explained that the waiting list will be further divided into three categories: emergency, urgent and future planning to reflect category of need. Each individual on the waiting list will be contacted by phone or in person prior to moving into the future planning category.† Amendments to the administrative regulation phases out the policy of using the date of admission to an ICF/MR as the effective date for the waiting list purposes.†


Representative Bather asked if providers in the community have had an opportunity to have input and comment on these amendments to the administrative regulation before it was are implemented.† Secretary Morgan said the regulation was filed as an emergency regulation.† With every emergency regulation, an ordinary† must follow.† This will provide an opportunity once an ordinary administrative regulation is filed. There is a good chance that another emergency regulation will be filed in this program within the next nine months.


Representative Bather asked how the funding is determined.† Secretary Morgan said that is based upon the clusters of the population and how many individuals will need services.


Next, James Richardson, President of Cedar Lake Lodge spoke about the SCL waiver.† He said waivers differ from state to state, and that Kentuckyís SCL waiver was uniquely created as a lower cost, community-based alternative to intermediate care facilities placement for persons with MR/DD.† Kentuckyís SCL program provides vitally needed services, and serves more people, at a much lower cost than could otherwise be achieved from ICF/MR facilities.† Cedar Lake is just one of three providers in Kentucky that is providing both ICF/MR and SCL services.† In Kentucky and nationally, the average annual cost for services in an ICF/MR facility is approximately $100,000, compared to the average annual cost for services in Kentuckyís SCL program is about $56,000.† Kentucky can serve 9 individuals in the SCL program for the cost of serving just 5 persons in ICF/MRís.† SCL permits Kentucky to serve more people for less.† The Legislature created and passed HB 144 in 2000, which established the Kentucky Commission on services and supports for individuals with mental retardation and other developmental disorders. †House Bill 144 was designed to address a need of crisis proportions in Kentucky. There arenít enough funds or services to meet the growing needs.† The system was failing people, with no prospects in sight.† Something positive had to be done, and HB 144 did that by expanding the SCL program.† The Commission was charged with the development of a ten year plan for serving persons with MR/DD in the most appropriate settings.† It has done that, and again last year the General Assembly and Governor responded by further significantly expanding funding for the SCL program.† Mr. Richardson referenced slides that indicated a continuum of services available to Kentucky citizens with developmental disabilities.† Kentucky now serves 970 people in large state and privately operated facilities.† It also offers services to 1,932 people in SCL.† Kentuckyís SCL program did exactly what is was designed to do, serve more people for less money.


Comparing other statesí rates, waiver programs, or a service to Kentuckyís program is an impossible task.† Perhaps the only provider in the entire country who can even begin to address that complex matrix of services is ResCare.† For over twenty years, Cedar Lake and ResCare, have worked together on many solutions to help address Kentuckyís service crisis.


Next, Ralph Gronefeld, President of ResCareís Division for Persons with Disabilities testified about ResCare.† ResCare serves 27,000 people in 32 states.†† ResCare serves 750 Kentucky citizens with disabilities.† Of these, 514 citizens are served through the SCL program. Kentucky has consumer choice.† People receiving SCL supports can choose the agency from which they wish to receive services.† People new to the system have a choice about who provides their services.† There are over 120 certified providers in the state.† Most of these providers are receiving higher rates than ResCare.† ResCare provides services to people with disabilities in 28 states, Washington, D.C., and Canada.† ResCare operations are required to immediately report an incident to the state and to the company so they can provide any resources that may be needed to address the incident.† The operation also conducts its own investigation of an incident.† As for the stateís incident reporting procedures that were questioned by the audit, the state has already addressed those issues with revised reporting and investigation procedures.† The stateís revisions occurred prior to the auditís publication.†


Next, Donovan Fornwalt proposed that the cabinet for Health Services apply for a low cost waiver to provide services to additional individuals with MR/DD.† He explained that through an intergovernmental transfer, state general funds that are currently allocated to the Regional mental Retardation Boards could be used to leverage federal funds.† He stated that this would not disrupt current services provided to the Medicaid recipients served by regional mental health boards.


Secretary Morgan stated that a low cost waiver had been considered in the past.† She express that the centers for Medicare and Medicaid Services had some concerns with the waiver.†


Senator Denton asked for clarification on how this would work economically.†


Mr. Fornwaldt said there are many Medicaid eligibles in the comprehensive care system.† In 1999, the state spent about $14.8 for services for individuals with MR/DD.† These are general funds that arenít leveraged with federal funds, so we donít get the federal match.††† His contention is the individuals need to be Medicaid eligible, and the comprehensive care centers need to be supportive of this approach. He said this is not a perfect option, but in times of a shortfall, this may be a low cost option to generate more revenue.


Senator Denton states that she liked the idea of giving more people access to the services they need, especially if it is a low cost waiver situation.† Senator Denton said she doesnít understand how the $4 million is not going to be missed somewhere else when it gets transferred over.


Steve Shannon of the Association of Mental Health/Mental Retardation Centers spoke about the proposal for the low cost waivers for individuals with MR/DD.† He proposed using the $4 million available for care through the comprehensive centers, matching those dollars with federal dollars. The concern was that the $4 million would disappear.† Their goal was to use an organized health care delivery system for the billing source and the provision of case management services.† Other services would be available through other providers.† Therefore, the dollars would not be lost, but would still be available to the local community.† This is what was proposed.† They want to maintain the $4 million for individuals currently served.


Senator McGaha said the conversation is way off topic, and he would be glad to entertain this conversation at a later time.


Next, Ms. Skinner expressed her concerns with reducing the community habilitation hours for people down to four hours per day as a method of cost containment. Many of the people may live with people who work and are not at home.† Therefore, if they are not at community habilitation.† These individuals will need other services, whether it is community living support, or respite hours.†


The next item on the agenda was an update on Medicaid Transportation in Jefferson County by Kevin Flanery, Secretary, Finance and Administration Cabinet.† Vicky Bourne, Executive Director, Office of† Transportation Delivery, and Mike Robinson, Commissioner, Department for Medicaid Services, Cabinet for Health Services were present to answer questions about the transportation issue.† Secretary Flanery said the transportation broker for the Medicaid program in Region 6 began July 1.† For about four months that broker was operating, and they received numerous complaints about that service.† An involuntary bankruptcy petition was filed against the broker in federal bankruptcy court.† Since then, the broker, Coordinated Transportation Group, has asked the court to turn that into a voluntary bankruptcy.† They have said they want out of the contract as a broker for Region 6.† Before that, the state informed the bankruptcy court that they were going to seek termination of the contract based upon the service that was being provided in Region 6.† Before that decision was made, the broker elected to go into voluntary bankruptcy, and elected to repudiate that contract.† As of December 1, they are operating under their contingency emergency claim processing.† The Medicaid recipients call directly to a transportation provider to receive services, and the transportation providers directly bill Medicaid.† This in an interim solution.† The Finance Cabinet, Transportation, and Medicaid Services are all working together to get a request for proposals to obtain a broker for the long term service to Region 6.


The meeting was adjourned at 1:30 p.m.