Medicaid Oversight and Advisory Committee (HB 90)



<MeetMDY1> September 25, 2006


The<MeetNo2> Medicaid Oversight and Advisory Committee (HB 90) meeting was held on<Day> Monday,<MeetMDY2> September 25, 2006, at<MeetTime> 1:00 PM, in<Room> Room 171 of the Capitol Annex. Representative Derrick Graham, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Richard "Dick" Roeding, Co-Chair; Representative Derrick Graham, Co-Chair; Senators Walter Blevins, Tom Buford, Julie Denton, and Dan Seum; Representatives James Bruce, Joni Jenkins, and Jimmie Lee.


Guest Legislator:      Representative Tom Burch.


Guests:  Paul Andis for Andis-Simmons Consulting, Inc., Mike Porter for the Kentucky Dental Association; Donna Chapman and William Riele for Kentucky Medicaid; Jerry Luscher for the Auditor's Office; Chase Forrester for the KATS Network; Glenn Jennings for the Department of Medicaid Services; Charles (Larry) Smith for the Office of the long-term care ombudsman; Rich Seckel for the Office of Kentucky Legal Services; Bill Doll for the Kentucky Medical Association; Sheila Schuster for the Kentucky Mental Health Coalition; Ellen Kershaw for the Alzheimer's Association; Patrick Jennings and Hunter Bates for Bates Capitol Group; Sarah Nicholson for the Kentucky Hospital Association; and Maureen Fitzgerald for Protection and Advocacy.


LRC Staff:  Barbara Baker, Ben Payne, and Cindy Smith. 


The minutes of the August 28, 2006 meeting were approved without objection.


The first item on the agenda was an update on KASPER by Zach Ramsey, Director, Division of Fraud, Waste and Abuse/Identification and Prevention, Cabinet for Health and Family Services, and Dave Sallengs, R.Ph., Branch Manager, Drug Enforcement and Professional Practices, Office of the Inspector General, Cabinet for Health and Family Services.  Mr. Sallengs reported that in 2004 the responsibility for KASPER was transferred to the Office of the Inspector General from the Department of Public Health in 2004.  After health care providers and law enforcement continued to demand real time access to the data, the legislature appropriated $1.4 million to develop a web-based version of the system, enhanced KASPER (eKASPER), which was launched in March, 2005.  The eKASPER reports are available within 15-20 seconds, resulting in a significant increase in usage by health care professionals.  The eKASPER program is considered the leader among prescription monitoring programs (PMPs) in the United States.  PMPs help prevent the abuse and diversion of controlled pharmaceutical substances.  Currently, 23 states have PMPs and additional states are considering legislation to implement monitoring programs.  From 1992 to 2003, the 15.1 million Americans abusing controlled prescription drugs exceeded the combined number abusing cocaine, hallucinogens, inhalants, and heroin.   Mr. Sallengs also identified a rapidly increasing problem with teens and young adults, called "Pharm Parties".  Young adults collect pills from the family medicine cabinet, and combine these to make a drug "trail mix" that the young adults share at the parties. Mr. Sallengs said that KASPER report recipients include law enforcement officers, Medicaid, grand juries, practitioners, the Kentucky Board of Medical Licensure, the Kentucky Board of Nursing, a judge and  probation or parole officers.  Currently there are over 2,700 established KASPER user accounts, with 60 percent being prescriber accounts.  There is an average 6 percent growth per month in the number of accounts.  In 2005,  92 percent of KASPER report requests were made by physicians.  Current enhancements to the system include: (1) providing accounts for authorized judges and advanced registered nurse practitioners;   (2) making regulatory changes to reduce the reporting time by the dispenser; (3) working with federal government to support efforts to develop a standard for sharing PMP data among states; (4) implementing trend reporting capabilities and publishing trend reports ; and (5) utilizing Hal Rogers Grant funding to continue educational outreach to health care and law enforcement professionals.  Planned enhancements include: (1) issuing a Request for Proposal (RFP) to contract with a vendor to collect and report most controlled substance prescription data within 24 hours of it being dispensed; and (2) using the Hal Rogers Grant funding to participate in a Cabinet ePrescribing pilot program, further develop KASPER trend data reporting and analysis capabilities, sponsor a prescription drug prevention program targeted toward students in grades 6-12, and complete a business process improvement project for the Drug Enforcement and Professional Practices Branch.


Representative Burch asked if there will be a trend analysis from the data on all doctors prescribing drugs.  Mr. Sallengs said that reports will be done as requests are made by the Kentucky Board of Medical Licensure, or if a trend is seen.


Representative Burch asked if random samples are run occasionally.  Mr. Sallengs said that by statute, there must be probably cause to check on certain doctors. 


Senator Roeding asked if law enforcement should be given more access to the reports.  Mr. Sallengs said that there have not been any requests by law enforcement to allow more access.  He noted the importance of maintaining the integrity of the system.


Representative Graham asked about the prescription drug program that is available to children in grades 6-12, and whether a curriculum is being developed for use in high schools over a long period of time.   Mr. Sallengs said that program is funded through the Hal Rogers Grant.  The program, which is currently being completed, is an interactive video program which can be used in schools, along with a traditional curriculum. It takes about one week to implement the program.  Senator Roeding suggested that the video be shown at the first meeting of the committee in 2007.


Next, Zach Ramsey reported that prescription data reported by KASPER is 30-45 days old.  There is a plan to shorten that time to three to eight days, and eventually for reporting to be in real time.  Mr. Ramsey reported on efforts to build an interface between KASPER and Medicaid.  Authorized users within the Medicaid program's enforcement branch obtain quarterly Surveillance Utilization Review Subsystem (SURS) reports identifying the top 200 potential pharmacy benefit abusers, review reports to identify recipients that warrant further review, identify recipients to be reviewed based upon referrals from other sources, manually request KASPER reports for those recipients; and consult with Special Investigation or Drug Enforcement to determine if potential abuse or diversion problems exist and whether administrative and/or law enforcement actions are warranted.  Currently a project is underway to develop an automated interface between the Medicaid and KASPER systems.  Medicaid data will be combined with KASPER data to see where the abuse may be occurring. 


Representative Bruce asked how many individuals have been prosecuted.  Mr. Ramsey said they do not prosecute, but they make referrals. 


Senator Roeding suggested that the Cabinet look at out-of-state orders of controlled substances.  Mr. Ramsey said it would be looked into.


Senator Seum asked what the outcomes are if doctors are found to be abusing the system.  Mr. Sallengs said they do have the authorization to file warrants, but usually  they make a report to the Kentucky Board of Medical Licensure or other entity.    Senator Seum added that there are currently 365,000 outstanding warrants in Kentucky.  Mr. Sallengs reported  that in 2004, forty-two physicians lost their ability to write controlled substances prescriptions.


Representative Bruce asked if the Medicaid and KASPER interface is helping with Medicaid abuse.  Mr. Ramsey stated that the planned improvements will provide a better picture.


The last item on the agenda was an update on Medicaid by Glenn Jennings, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services.  Commissioner Jennings was asked to update the committee on the following topics: (1) intravenous medications administered in a physician office ("brown bagging"); (2) prescription exemptions to a 4-brand limit; (3) cost sharing; and (4) clinical appropriateness.  In regard to brown bagging, Commissioner Jennings said there have been no policy changes, technology just bypassed the system.  Medicaid is moving on tract to record changes.  An ordinary regulation will be filed that will set the threshold.   He said it is his intention to make the drugs available to both the physician's office and the pharmacy because some doctors may not want to stockpile the drugs in their offices. He plans to consult with the Kentucky Medical Association regarding pricing and procedures to make sure the Cabinet can get the rebate for prescriptions purchased in physician's offices.  He said that brown bagging was an inadvertent problem, and they are working on a solution.


Senator Denton asked if all ingestible and infusible will be included.  Commissioner Jennings said that evidence based criteria will be used to measure all the drugs and they will not be limited to a short list.  Both will be available in the doctors office as well as the pharmacy.  Criteria will be developed regarding which drugs may be purchased in a physician's office, which take special handling requirements and proper administration of the drug into consideration.  Senator Denton asked if it would make sense to include all injectables. Commissioner Jennings said that he did not know.


Senator Denton asked how the Cabinet plans to handle the steep $20 co-pay situation.  Commissioner Jennings said that issue will be taken into consideration when the regulations are drafted. 


In regard to the prescription exemptions to the 4-brand limit, Commissioner Jennings reported that on March 1, 2006, the Department for Medicaid Services implemented a 4-prescription, per month policy that applies to all Medicaid recipients except children from birth to the date of their 19th birthday and nursing facility residents that aren't Medicare Part D eligible.  If a Medicaid recipient has already filled 4 prescriptions in a month, a pharmacist may dispense additional medications using the
"07" override code at the point of sale if the prescription is being dispenses to treat one of conditions identified by the Cabinet.  On August 31, the Department for Medicaid Services created a list of drug classes that are always exempt from counting toward the 4-prescription limit and do not require the "07" override code.  For example, if a recipient is taking 4 drugs from the list and needs to fill a prescription for another drug not listed, then the member can fill that prescription by paying the appropriate co-payment, hence only using 1 of their limit of 4 drugs.


In regard to cost sharing, Commissioner Jennings said the communications with the provider community were not very effective, but they have done a good job making the information available.  He noted there is a possibility of a delay in claims on the medical side.  When a claim is filed, there could be a prior one that had not been processed. 


Senator Denton expressed concern over the $20 cap on the tier 3 drugs.  She believes it is a barrier to access and may create more problems .  She urged the Cabinet to strongly reconsider the $20 cap.  Commissioner Jennings said that her concerns were noted and the issue would continue to be discussed.


In regard to clinical appropriateness, Commissioner Jennings noted a need to combine "clinical appropriateness" and "medical necessity".  Commissioner Jennings also provided an explanation of InterQual, a software tool founded on the belief that medical evidence is the foundation for good medical care.  InterQual solutions work in an array of provider, payer and third-party settings, including Medicare and Medicaid.  They work for everyone with a role in healthcare management, from utilization management nurses and case managers to medical directors and physician advisors.  InterQual has a filter or screen on prior authorization requests.  He said there has been mixed signals on medical necessity and clinical appropriateness, as some people think they are the same.  Medical necessity is if there is a phone call, and then a prior authorization and it is determined that the delivery of service is medically necessary.  Clinical appropriateness is determined through best practices, such as step therapy.   He said that regulations will be altered to combine the terms "medically necessary" and "clinically appropriate".


Representative Graham asked how service denials or appeals will be tracked.  Commissioner Jennings said the system is highly automated and captures all phone calls.  Those statistics can be provided if needed. 


Representative Graham asked what company will be determining "clinical appropriateness" and upon what national guidelines will the decisions be based.  Commissioner Jennings said that SAIRS is the subcontractor under EDS. SHIPS is a national company located in Pennsylvania that provides prior authorization and utilization review.  Representative Graham asked what criteria are used in making decisions.  Commissioner Jennings reported that InterQual is used as well as criteria that was in place before InterQual.  InterQual has blank templates, and all information just has to be loaded into the InterQual system.


The meeting was adjourned at 2:25 p.m.  The net meeting will be at 1:00 p.m. on October 30, 2005.