Medicaid Managed Care Oversight Advisory Committee (HB 785)



<MeetMDY1> September 15, 2003


The<MeetNo2> Medicaid Managed Care Oversight Advisory Committee (HB 785) meeting was held on<Day> Monday,<MeetMDY2> September 15, 2003, at<MeetTime> 10:30 AM, in<Room> Room 131 of the Capitol Annex. Senator Richard Roeding, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Richard Roeding, Co-Chair; Representative Paul Bather, Co-Chair; Senators Tom Buford and Dan Seum; Representatives James Bruce, Tom Burch,† Stephen Nunn, and Dottie Sims.


Guests:† Cathy Allgood Murphy, American Association of Retired Persons; David Allgood, Center for Accessible Living; Tom Young, Cabinet for Health Services Ombudsman; Sean Cutter, and John McCarthy, McBrayer, McGinnis, Leslie and Kirkland; Greg Dykes, and Pam Smith, Health Care Review Organization; Prentice Harvey, Norton Healthcare; John Brazel, Kentucky Pharmacists Association; Ronny Pryor, Kentucky Hospital Association; Karen Hinkle, Kentucky Home Health Association; Gil Blackburn, M.D.; Dennis Brickney, Kentucky Legal Services; Erin McNees, LRC, Program Review; John Cooper and Bill Doll, Kentucky Medical Association; Ann Gordon, House Majority Floor Leaderís Office; Steve Shannon, Kentucky Association of Regional Mental Health/Mental Retardation Programs;† Mike Mayes, Kentucky Prescription Drug Association; Jan Gould, Kentucky Retail Federation; Jim McWilliams, Governorís Office of Policy and Management; Michael Wooden, Eli Lilly and Company; Rich Seckel, Office of Kentucky Legal Services; Bob Babbage; and Darla Bailey, Kaleidoscope, Inc.


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


The minutes of the August 18, 2003 meeting were approved without objection.†


The first item on the agenda was a discussion about adult day care and the impact of 907 KAR 1:022 by Kelly Upchurch, Kentucky Association of Adult Day Centers.† Mr. Upchurch† said adult day health care services covers almost all counties in the state.† Currently there are 118 adult day health care facilities spread out, caring for close to 2000 participants.† The emergency regulation changes the criteria used for qualifying for nursing home placement.† Adult day health care is a home and community based waiver (HCBW) program that serves as a safety net for patients that are considered to be nursing home candidates.† Patients will not be able to access adult day health care if they are denied HCBW services based on this regulation.† There will also be other ineligible services.† These patients have incomes of about $618 per month, and† you can not buy services for that money.† In an adult day setting, families can take care of their loved one in the home with some help from the HCBW services.† In 2001, the HCBW services, including the match, cost the state $17 million.† That same group of people placed in a nursing home would have cost the state $80 million.† This regulation will effectively work on many of the programs already in place, and will make it difficult for them to provide the level of care Kentuckians expect.† Since April this regulation has resulted in 32 percent of patients denied for adult day services, and other HCBW services.


Senator Seum asked what the income level is for meeting the requirements for Medicaid and if it is based on the poverty level.† Senator Roeding asked for staff to follow up on this request and find out about the income level by talking with the Cabinet and Mr. Upchurch.


Senator Buford asked how many of the 32% received termination letters.† Mr. Upchurch said all the 32% received termination letters, and most of them have appealed.† Senator Buford asked if payment is still being received for persons currently in the appeals process.† Mr. Upchurch said that problems have been corrected.† Senator Buford asked if, from the date of denial through the appeals process, if the payment for services has to be returned if a recipient loses and appeal.† Mr. Upchurch said the money has to be returned to the state on the date of the denial letter.


Senator Roeding asked the Cabinet if that was a true statement.† Commissioner Mike Robinson said that if the person appeals within the first ten days their services are continued and if the appeal rules against them, the Cabinet is covering services up to the date the hearing officer makes a decision that they are not eligible.† The only time return of the funds comes into play is if someone goes beyond the ten days and they appeal, and they continue to receive services that are provided by adult day, Medicaid is not at risk for those services.†††


Representative Burch asked how many people have been denied services so far.† Mr. Upchurch said 1800 patients.


Representative Nunn asked if Mr. Upchurch had the resources or people to assist those deemed non-eligible.† Mr. Upchurch said they do have the ability, and they try to access and give information to people that have been denied services.†


Senator Roeding asked what the difference is between adult day care and assisted living.† Mr. Upchurch said assisted living is a 24 hour a day, 7 day a week program.† Assisted living gives only minor assistance, such as reminders to take medicine.† Adult day is a provider of skilled nursing care.†


The next item on the agenda was a presentation by Gill Blackburn, M.D, on Obstetrical Risk Management.† He was also accompanied by Dr. Eric Yoder, Chief Operating Officer, Amerigroup Texas.† Dr. Blackburn said preterm delivery is the number one obstetrical challenge in the United States.† The preterm delivery rate increased 27 percent between 1981 and 2001.† In terms of Kentucky statistics, there are 56,000 deliveries annually, with 25,000 being Medicaid recipients.† There is a 12.7 percent pre term delivery rate, and a 15 percent preterm delivery rate for Medicaid recipients.† Neonatal intensive care costs are between $112 and $114 million dollars per year, with an average of 3,750 pre-term deliveries.† These issues mean long term care costs to Kentucky Medicaid because preterm infants use 2.5 times the amount of pediatric care in the first year of life.† Also, there are ongoing costs for disability, learning impairment, and special needs.† Also, the emotional and financial costs to families are overwhelming.† As a solution, he suggested the following: (1) implementation of a statewide obstetrical risk assessment and mentoring program within Kentucky Medicaid; (2) assimilation/utilization of existing resources into a comprehensive program; and (3) establishment of partnerships with all physicians and hospital providing services in a professional and collegial manner to improve outcomes.† The goals should be a 10 percent reduction in preterm deliveries in Kentucky within 18 months and a return on investment of at least 1:3.† The options are: (1) leave things as is, which would be safe, easy and risk free; (2) expand Managed Medicaid, which is costly to administer, and the savings go to the health plan; and it is not physician or hospital friendly; and (3) comprehensive risk assessment and obstetrical mentoring program run by Kentucky Medicaid, which would improve obstetrical and neonatal outcomes, would be cost effective, and is a better use of Medicaid dollars.† These programs have been successful in other states.


Representative Burch asked if there were any suggestions to make the other seven areas in Kentucky come under managed care.† Dr. Yoder said managed care is a process that works well in urban and suburban environments, but trying to implement managed care in rural and smaller towns is a challenge.† He suggested bypassing the process of managed medicaid and get to the actual programmatic changes that a managed medicaid program would implement for managing the medical care, rather than managing the administrative side for implementing the program.† Representative Burch asked how to engage providers in this approach.† Dr. Blackburn said you have to proactively interface with them and show them the benefits of managing the patients.† This process gives them an opportunity for improving their outcomes by filling in issues that members face when leaving the office.†


Representative Burch asked how much money can be saved in Kentucky by implementing this.† Dr. Blackburn said if preterm deliveries were reduced in the next 18 months, it would save approximately $12 million in Kentucky within a 12 month period.


The next item on the agenda was a discussion on person-centered funding by Marcia Morgan, Secretary, Cabinet for Health Services.† Secretary Morgan referred to House Bill 501 from the 2003 Session, which directed the Cabinet to set up an AdHoc Committee which would come under the Commission on Services and Supports for Individuals with Mental Retardation and Other Developmental Disorders to look at self determination.† She said Kentucky has established the AdHoc committee and an expert panel to help the deliberations.† They are anticipating making recommendations in December, 2003 to the General Assembly and the Commission.† In addition, she referred to the dates of the committee meeting and noted that the workplan was presented to the full committee on September 11, 2003, and the presentation of the initial recommendations will be on December 11, 2003.† Secretary Morgan also spoke about the Cash and Counseling Program.† She said the demonstration projects have been done under and 1115 waiver, which includes control and treatment groups.† The waivers implemented thus far cover personal care services, including vehicle or home modifications and assistive technology or equipment.† They do not include residential or rehabilitative services.†


The next item on the agenda was a discussion regarding level of care assessment by Greg Dykes, President, Health Care Review Corporation, Marcia Morgan, Secretary, Cabinet for Health Services, and Mike Robinson, Commissioner, Department for Medicaid Services.† Mr. Dykes first responded to a letter received by Representative Bather which asked a series of questions about how they conduct their work with respect to the Department for Medicaid Services. He stated their responsibility under their contract with the Department is to make medical necessity determinations, not to make eligibility determinations.† When they receive a request for review, they look only at medical necessity.† Eligibility has already been determined for those patients.† In the case of the processes used in making medical necessity determinations, they rely heavily on section 4 of 907 KAR 1:022E.† In making those determinations, the first level of review is completed by a registered nurse.† That nurse reviews all the information provided on that individual to determine if the criteria are met.† If the criteria are met, the nurse approves medical necessity for that individual.† When a decision is made that the criteria are not met, that case is referred to a physician reviewer, a licensed practicing physician in Kentucky who makes the determination of whether medical necessity exists.† He said the Department for Medicaid Services reviewed the process that they are using to conduct their reviews, and directed them to apply the criteria from the regulation in a uniform and consistent manner when making level of care determinations, for both the initial and continued state reviews.†


Representative Bather asked how many physicians participated in the process when they were invited to review the assessment.† Mr. Dykes said there was approximately 75 percent participation.†


Representative Bather asked if the steps Mr. Dykes office has taken to implement the process has been fair and comprehensive.† Mr. Dykes said as a contractor to the Department for Medicaid Services, they are required to follow a particular process in making their determinations.† They take that job seriously and approach it carefully.† They look at each individual case.†


Secretary Morgan said Representative Batherís question dealt with 25 percent that did not respond.† She said they have learned that they were not getting a high level of cooperation.† Now Mr. Dykes and his group are getting a complete picture.† She said Mr. Dykes has been contracted to take information from the provider, because that is where the burden falls.†


Representative Bather asked if the process included a way for people who didnít understand the notice requirements to get reviewed again. He also asked if care without physician cooperation could be reviewed again. Secretary Morgan said their office of Counsel is going through each individual jacket looking at notice provisions, case by case.† If they find they had vague criteria, they are going to re-institute the action.† If they find there was a lack of documentation, they will rework the case.† Even after that, there will still be people who are not eligible for services.†


Representative Nunn asked how many years Medicaid has used the Peer Review Organization (PRO).† Secretary Morgan said they have had a PRO since the inception of the Medicaid program. In order for Medicaid to get federal fund participation, there has to be an organization dedicated to medical necessity.† Representative Nunn asked if it has always been done by a third party contractor.† Secretary Morgan said yes.† Representative Nunn asked how many years the Health Care Review Organization has been used.† Secretary Morgan said 12 years, and their contract for this current fiscal year is about $12 million.† Representative Nunn asked if the contract had gone up in the past year.† Secretary Morgan said it has not.† It has gone up in some other areas where the PRO wasnít being used.† Representative Nunn said it is very important to have a PRO to determine eligibility.†


Representative Nunn asked about the 400 nurses that perform the reviews for Mr. Dykesí organization and asked if they are employees or independent contractors.† Mr. Dykes said they have 400 employees, about 260 are nurses.† There are also 12 full time physicians on board, and panels of physicians still practicing in the community.† The nurses are full time employees of Health Care Review.


Representative Nunn asked if there was any incentive in the contract that will pay for money based on the number decertified.† Mr. Dykes said there is not.


Next, Secretary Morgan responded to some of the requests made by members at the August meeting.† Secretary Morgan said the Cabinetís Office of General Counsel is working on the readability of the notices.† In addition, Commissioner Robinson and Health Care Review are working together on improving the notices.† She said they approved five new notices last week to go out to the recipients.† In addition, they will be making some individual determinations and re-notice some individuals and start the appeals process again.


As a follow up, Secretary Morgan referred to the 198 nursing facility recipients who have been determined not to meet the level of care.† In the initial reported data, there was a duplicate and five cases were initial reviews, which leaves 192 total.† Of the 192 denied: 1 is deceased and 65 did not appeal.† Of these, 63 were discharged.† Of the 126 recipients who appealed, 70 moved into a lower care standard of these, and 65 of the 78 are still in nursing facilities.† Of the 126 that appealed, 43 would not be eligible for state supplementation or Medicaid.† She also pointed out that if you are eligible for state supplementation, and state supplementation is paying the residential cost, which is about $4,027 per year.† If in a nursing facility, the average cost is $35,000 to the state.†


The meeting was adjourned at 12:40 p.m.