Call to Order and Roll Call
The Medicaid Oversight and Advisory Committee meeting was held on Wednesday, June 17, 2015, at<MeetTime> 10:00 AM, in Room 131 of the Capitol Annex. Jonathan Scott, Lead Staff, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ralph Alvarado, Co-Chair; Representative David Watkins, Co-Chair; Senators Julie Raque Adams, Tom Buford, Morgan McGarvey, and Dan "Malano" Seum; Representatives Robert Benvenuti III, and Jim Glenn.
Guest Legislators: Senator David Givens, and Representative Jim Gooch.
Guests: Eric Clark for the Kentucky Association of Health Care Facilities; Judy Taylor for the Kentucky Ambulance Providers Association; Bill Doll and Cory Meadows for the Kentucky Medical Association; David Adams for Kentucky Citizens Judicial; Sarah Nicholson and Steve Miller for the Kentucky Hospital Association.
LRC Staff: Jonathan Scott, DeeAnn Wenk, Cindy Smith, and Miranda Deaton.
Election of Committee Co-Chairs
The first order of business was election of committee co-chairs. A motion was made by Representative Glenn and seconded by Representative Benvenuti to nominate Representative Watkins as House co-chair. A motion was made by Representative Glenn, seconded by Representative Benvenuti, and approved by voice vote that nominations cease and Representative Watkins be elected House co-chair by acclamation. A motion was made by Senator Adams and seconded by Senator Seum to nominate Senator Alvarado as Senate co-chair. A motion was made by Senator Adams, seconded by Senator McGarvey, and approved by voice vote that nominations cease and Senator Alvarado be elected Senate co-chair by acclamation.
Medicaid Overview and Update
Audrey Tayse Haynes, Secretary, Cabinet for Health and Family Services, and Lisa Lee, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services presented an overview of Medicaid. Medicaid is a state and federal partnership designed to provide healthcare to qualifying individuals. Medicaid provides healthcare for over 1 million Kentuckians, and continues to evolve to meet the healthcare needs of the population served. In Kentucky, 70 cents on the dollar is federal and approximately 30 cents is state and is for persons that are aged, blind, and disabled. Medicaid expansion is 100 percent federal until 2017, and is for persons based on income, up to 138 percent of the poverty level.
Medicaid enrollment in December 2014 was just around 1.2 million. Over 381,000 were in the expansion category. The largest group is children based. Traditional income based Medicaid covers 412,667 children. These are children, regardless of expansion, that are on Medicaid. There is an average of about 25,000 people per month churn with enrollment.
Secretary Haynes reviewed Medical costs that were paid for in 2014 by Medicaid. She noted specifically 603,000 preventive dental services; 31,000 newborn deliveries, and 734,000 immunizations and vaccinations.
Payments made in CY 2014 paid to providers total $6,691,540,817. These payments include DSH payments and supplemental payments to universities. She also noted that preventive services for the Medicaid expansion population are increasing and she noted that more screenings equal better health. Medicaid expansion payments to providers from January, 2014 through June 10, 2015 total $2,041,679,225.
In regard to uninsured rates by state in 2014, Kentucky was in the second lowest uninsured quintile. Also the uninsured population per capita has dramatically decreased. Many counties populations are at less than 5 percent uninsured.
Next, Secretary Haynes discussed DSH payments. She said that DSH payments are not going away, just being reduced. The reductions are scheduled to begin in 2018. The 2018 reduction is approximately 12 percent. By 2024 the reductions will be 49 percent of current expenditures.
In regard to managed care, Commissioner Lee said the Department for Medicaid Services utilizes managed care organizations to deliver care to approximately 90 percent of the population. Managed care was implemented statewide in November 1, 2011. Prior to that Passport operated managed care in the Jefferson County area. There are five MCOs serving Medicaid members: Anthem; Coventry/Aetna; Humana; Passport; and Wellcare. Managed care provides medically necessary services as outlined in Medicaid regulations with approvals from CMS with flexibility regarding prior authorizations, rates and structure of contracts. Managed care does not serve Medicaid members in long term care facilities or 1915(c) waivers.
In regard to Medicaid MCO oversight, there is a contract with the Department of Insurance to investigate timely payment complaints. There are monthly operational meetings as well. Reporting is done monthly, quarterly, and annually. Actions taken in 2014 and 2015 include 20 inquiry letters, 44 letters of concern, and 84 corrective actions plans.
Medicaid Waiver Program Overview
Audrey Tayse Hanes, Secretary, Cabinet for Health and Family Services, and Lisa Lee, Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services presented an overview of Medicaid. Commissioner Lee explained that waivers provide states with flexibility to deliver and pay for health care services in Medicaid. The four types of waivers include: Section 1115 Research and Demonstration Projects; Section 1915(b) Managed Care Waivers; Section 1915(c) Home and Community-Based Service Waivers; and Concurrent Section 1915(b) and 1915(c) Waivers. Kentucky has six waiver programs which include: Home and Community Based (HCBW); Supports for Community Living (SCL); Michelle P. (MPW); Model Waiver II (MWII); Acquired Brain Injury-Acute Care (ABI); and Acquired Brain Injury/Long Term Care (ABI/LTC). The cost of waiver programs over time has increased. In 2008 the cost was around $300 million dollars. In 2014 the cost for the waiver population was $700 million dollars. Waiver services must be delivered and operated within the scope of CMS purview. There are specific regulations related to waiver programs. In March 2014 CMS issued new regulations in which states must modify some of their waiver programs to come into compliance. The department is amending its waivers with an effective date of January 1, 2016.
In response to a question by Senator Buford, Commissioner Lee said the payment for the state share is phased in over time. The first payment is due in 2017.
In response to a question by Senator Buford, Secretary Haynes said the amount of Kentucky’s share was outlined in the February Deloitte report. The expansion number changes every day and that number is beginning to go down a bit. For the next biennium budget, the report estimates that Kentucky’s portion for expansion will be $74.4 million and $173.2 million respectfully for the biennium.
In response to a question by Senator Alvarado, Secretary Haynes said there is a reason budgets are only looked at two years at a time. There are many factors that change over two years. Currently, Kentucky is seeing the lowest unemployment in the state in many years. The unemployment rate in every county has gone down. There is a bipartisan effort in the Soar region as the Governor looks at creating more jobs. As Kentucky generates more revenue, Medicaid is a bridge program for hard working Kentuckians. This is the best projection that can be made today. Secretary Haynes urged the next Governor to have the entire Deloitte report done again in a couple years.
Senator Alvarado quoted many statements in letters from KNectors expressing concerns for the people they serve explaining that they cannot afford it.
In response to a question by Senator Alvarado, Secretary Haynes said she believes that Senator Alvarado is confusing Medicaid with private insurance plans. With Medicaid there is a co-pay, but it is up to the providers to work with the MCOs on a plan to accept co-pays. The cabinet allows the MCOs to charge the maximum allowable by the federal government. There is no deductible with the Medicaid plan.
In response to a question by Senator Alvarado, Commissioner Lee said there are reports from all MCOs on a monthly basis that tell what percentage of their claims were paid within 30 days or within 90 days. The contract states they are to pay 99 percent of claims in 90 days.
In response to a question by Senator Alvarado, Commissioner Lee said the department keeps track of payments to providers by monitoring self reporting and looking at claims data service dates and payment dates.
Senator Alvarado discussed numerous unpaid claims by one MCO provider to one OBGYN in a four month period.
In response to a question by Senator Alvarado, Commissioner Lee said a clean claim with accurate information is to be paid within 30 days.
In response to a question by Senator Alvarado, Secretary Haynes said in regard to the suboxone issue, the reason there are several doctors looking to drop providing suboxone is that many have been taking cash for a suboxone prescription, then they would have them filled at a pharmacy and that is illegal. If you are a Medicaid provider, you must bill Medicaid for the doctor visit and for the prescription. The cabinet has now worked with the Kentucky Board of Medical Licensure to close the loophole.
In response to a question by Senator Alvarado, Secretary Haynes said the cabinet is in an active procurement process now. A press release was put out in April that outlined many improvements that are being made with the contracts and those will be finished in the coming weeks. Many of the improvements are areas in which the KHA and others have requested. Regarding the cost of care and regarding the decline to some of the hospital and KentuckyOne, it is disingenuous to think that the layoffs at the hospitals in every situation had anything to do with managed care or the Affordable Care Act. When two companies merge, the merger has efficiencies in the business and market place. Companies improve their economic standing by merging several hospitals. As a consumer of healthcare with the rising costs trending upward, the Affordable Care Act was developed to bring down costs and to stabilize the market.
In response to a question by Senator Alvarado, Secretary Haynes said if the legislature would like the cabinet to increase the rates for providers, the cabinet would be delighted to, but the legislature has to appropriate the money. The cabinet can only provide rates with the money that has been allocated.
In response to a question by Senator Alvarado, Secretary Haynes said she does not have the figure with her that shows how much money has been paid to MCOs this year. MCOs are only allowed to make a certain amount of profit. The profit for an MCO is between 3 percent and 5 percent after administrative costs.
In response to a question by Senator Alvarado, Secretary Haynes said MCOs were hired to help manage patients as well as costs. She noted that over $300 million was saved from taxpayers over the last biennium. In the 2012-2014 biennium, $1.3 billion in taxpayer money was saved because the cabinet came in on budget and the budget has been met every year.
In response to a question by Senator Alvarado, Secretary Haynes said the cabinet has an appropriate data bank and it has been working when many others have not. The cabinet has not had a problem with the eligibility system for KNect or Medicaid. Whenever an audit has occurred based on the state based exchange, the cabinet has received glowing reports.
In response to a question by Senator Alvarado, Secretary Haynes said she does not know if there has been a class action lawsuit filed against the Commonwealth by Medicaid providers for lack of payment within Kentucky. Senator Alvarado said there has been and the cabinet may want to look into that. Secretary Haynes said there is a recent suit of hospitals against the MCOs, but the cabinet was not included in the lawsuit regarding the triage fee and is not a party to that suit.
In response to a question by Representative Glenn, Secretary Haynes said the cabinet is screening a lot more, so that is trending upward. The cabinet is hopeful that the disease statistics begin to trend downward.
Representative Benvenuti noted that he is receiving the same letters from providers that Senator Alvarado discussed. He said that some of Kentucky’s best and brightest physicians are no longer interested in practicing medicine in Kentucky. That is a tragedy to the Commonwealth. He said that if Medicaid recipients each paid $100 per year, the income back to the Commonwealth could be used in different programs or could be given back to the taxpayer.
In response to a question by Representative Benvenuti, Secretary Haynes said the cabinet is not resistant to co-pays. Co-pays are in the contracts. It is between the providers and the MCOs. Most providers do not want to try to collect the money.
In response to a question by Representative Benvenuti, Secretary Haynes said Kentucky has the second lowest administrative costs in the country at only 2-3 percent which includes supplemental payments and claw backs.
In response to a question by Representative Benvenuti, Secretary Haynes said the Exchange does cover out-of-network coverage. She added that one insurer chose not to cover out-of-network services. That was a business decision the cabinet could make, but going forward the cabinet will cover those charges.
In response to a question by Representative Benvenuti, Secretary Haynes said there were 31,000 newborn births to mothers on Medicaid. This is over half of the yearly number of newborn births in the state. Commissioner Lee noted that the federal poverty level is 185 percent, so it is a little higher than the traditional Medicaid population.
In response to a question by Senator Adams, Secretary Haynes said she would have to get the cost for institutional care and get back to the committee. The federal match was not included for that population.
In response to a question by Senator Adams, Commissioner Lee said the department amended the state plan in January 2014 and included behavioral health services and other services in the plan. Historically the therapies were provided in other settings such as the waiver programs. When the State Plan was amended the therapy services were listed in the Plan. Because those services were listed in the State Plan and they had specific provider types, the cabinet was trying to mold the service delivery system to comply with the State Plan. The cabinet has heard from providers about some concerns about the delivery of services through the State Plan. The cabinet is working with CMS to devise a plan to allow the services to continue as they are now.
Representative Watkins recommended that the MCOs be at a future meeting to answer questions. He noted that MCOs need to be more responsive and accountable.
In response to a question by Senator McGarvey, Secretary Haynes said there are no cuts in the ABI program. Speech, physical, and occupational therapy are in the state health plans, which means they could be billed under a Medicaid card. The department has acknowledged that for all waivers, including brain injury, there are complex cases and the rate is less on the State Health Plan side than on the waiver side. The Commissioner is working with the federal government to correct that.
The meeting was adjourned at 12:07 p.m.