Medicaid Oversight and Advisory Committee (HB 90)



<MeetMDY1> November 15, 2004


The<MeetNo2> meeting of the Medicaid Oversight and Advisory Committee (HB 90) was held on<Day> Monday,<MeetMDY2> November 15, 2004, at<MeetTime> 1:00 PM, 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; Senators Walter Blevins, Tom Buford, and Julie Denton; Representatives James Bruce, and Dottie Sims.


Guest Legislators:†††† Representatives Tom Burch and Jimmie Lee.


Guests:† Ellen Kershaw for the Alzheimer's Association; Karen Hinkle for the Kentucky Home Health Association; Jean Cox for National Health Services; Jim McWilliams for the Governor's Office of Policy and Management; Sarah Nicholson for the Kentucky Hospital Association; John Brazel for the Kentucky Pharmacist's Association; Cathy Allgood Murphy for AARP; Mike Porter for the Kentucky Dental Association; John Cooper for Capital Link; Jim Carloss for Pfizer; Prentice Harvey for Norton Healthcare; Bob Kelley for Merck & Co; Katie Brown and Patti Silvers for the Department for Community Based Services; and Marybeth Crouch for Doral Dental.


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


The first item on the agenda was a Medicaid update by Dr. James Holsinger, Secretary, Cabinet for Health and Family Services, Mark Birdwhistell, Undersecretary for Health, Cabinet for Health and Family Services; and Shannon Turner, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services. Secretary Holsinger said they plan to bring Medicaid into the 21st century by implementing approaches and practices that have proven to be successful in other states and the commercial sector.† The components include (1) benefit management (2) care management and (3) improvements in technology.


Secretary Holsinger reported that the Cabinetís initial analysis and Medicaid data revealed the following: (1) 59 of 227 nursing homes with 50 or more patients have inappropriate drug use among patients;† (2) 50-60 percent of the individuals in long-term care facilities are on anti-psychotics, significantly higher than other states; (3) Approximately 27,000 Medicaid members take atypical anti-psychotics per month with 10 percent of this groups taking dosages far in excess of the recommended dosage; (4) 95 percent of long-term care facilities with 50 or more patients have 5% of patients on 20 or more prescriptions at one time, which is more than three other large states combined; (5) Approximately 33,000 Medicaid recipients receive 20 or more different prescriptions in 180 day period at a cost of $300 million; (6) Approximately 35-50 Medicaid physicians/providers have identified unusual prescribing patterns for drugs; and (7) The top 200 non-institutionalized Medicaid recipients averaged $227,739 each, with the total cost to Medicaid of $55.5 million.

Secretary Holsinger reported that the Cabinet awarded the Pharmacy Benefit Administrators (PBA) contract to First Health Services, which provides pharmacy benefit management in 22 state Medicaid programs.† First Health has supplied a dedicated project team for the implementation and two on-site pharmacists for the duration of the contract.† The anticipated full-implementation date for the point-of-sale system is December 4, 2004.


Next, Deputy Commissioner Turner talked about benefits management.† She said First Health Services' dedicated project team is working with Medicaid to ensure a smooth transition.† They will support the Pharmacy and Therapeutics Committee activities, perform clinical review, and process point of sale claims.† First Health Services will also perform supplemental rebate negotiations.† She said the contract was awarded to First Health on August 31, 2004.† Pre-implementation is from September 1, 2004 to December 4, 2004, with full implementation of point of sale on December 4, 2004.† The Medicaid modernization pharmacy benefits administrator will assist providers with claim processing, by having an 800 number, 24 hour per day help desk and 7 day a week service.† The help desk will address reimbursement issues and will immediately address prior authorization. Implementation will begin on a Saturday due to reduced volume.


Senator Roeding asked if prior authorization would be available more than five days per week.†† Deputy Commissioner said that yes it would.† Senator Roeding said that would make a big difference.†

††††††††††† Senator Roeding asked if they will perform prospective and retrospective utilization review.† Deputy Commissioner said they would.


Secretary Holsinger noted that they are crendentialing members and other providers, which is a strong plus to the state.† They are also looking at provider and member education.†


Deputy Commissioner Turner responded that 30 days post implementation, First Health will review the rebate management program and also review edit criteria.† In regard to care management, she said that Medicaid currently has an active procurement for an administrative agent to provide the following services: (1) perform utilization review; (2) provider enrollment; (3) provider and member education; (4) call center operations for both member and providers; and (5) disease and case management. Next, she provided an update on the plans to improve technology.† She said that Medicaid currently has an active procurement for an Medicaid Management Information System (MMIS) system.† The Request for Proposal (RFP) emphasizes flexibility and the opportunity for system enhancement.† It aligns the Commonwealth with the Centers for Medicaid and Medicaid (CMS) director and promotes enterprise architecture.†


Representative Lee asked if the cards are maintained and held by eligibles until another enrollment period, and if so, what are the per month savings.†† Deputy Commissioner said the savings if over $1 million on an annual basis.


Senator Blevins asked if the cards are date specific. Deputy Commissioner said no.† Senator Blevins asked if each child has a card.† Deputy Commissioner said yes.


Representative Burch asked about the 35-50 Medicaid physicians/providers identified with unusual drug prescribing patterns, and if there is a related penalty.† Secretary Holsinger said they show doctors normal prescribing patterns compared with their high prescribing patterns and help them understand how to change their prescribing patterns.† Denial of Medicaid provider status was noted as one potential penalty.† Also a referral can be made to the Kentucky Board of Medical Licensure.


Next, Secretary Holsinger reviewed short-term initiatives of the Cabinet.† These initiatives include: (1) Reducing inappropriate use of prescription drugs in the ambulatory patient population; (2) Launching a targeted physician education program; (3) Reducing inappropriate use of prescription drugs in the long-term care population; (4) Reinventing the fraud and abuse hotline; (5) Strengthening program integrity; (6) Strengthening pharmacy administration; and (7) Targeting case management for high cost recipients.


Representative Burch asked if the modernization would have any impact on Passport.† Secretary Holsinger said it will not, and Passport will continue to function as it has in the past.† Representative Burch asked how much it would cost to implement the plan.† Undersecretary Birdwhistell said they could not put a cost on it because the MMIS and the administrative agent portion are still out for bid.† Deputy Commissioner Turner explained that technological improvements will make Medicaid more efficient.


Representative Bruce asked if they might try to implement Passport in Lexington or another region of the state.† Secretary Holsinger said if it were possible, it would be great to have something like Passport statewide.†


Senator Blevins asked about KCHIP covering state employee children.†† Deputy Commissioner said there are currently state employee children enrolled in the KCHIP program.† They employees need to apply at the local office.


Senator Buford asked about liabilities with insurance companies on nursing homes.† Deputy Commissioner said they are only able to take action on the most severe referrals.†


Senator Roeding asked what is currently happening with dual eligibles.† Deputy
Commissioner Turner explained that with the passage of the federal Medicaid Modernization Act, dual eligibles will enroll into a pharmacy plan (Medicaid Part D).† All states are currently trying to figure out who falls under the dual eligible program.


The meeting was adjourned at 2:25 p.m.