MINUTES SPECIAL COMMITTEE on MEDICAID EXPANSION Members

Kansas Legislative Research Department January 21, 2020 MINUTES SPECIAL COMMITTEE ON MEDICAID EXPANSION November 12-13, 2019 Room 112-N — Statehouse Members Present Representative Brenda Landwehr, Chairperson Senator Gene Suellentrop, Vice-chairperson Senator Molly Baumgardner Senator Ed Berger Senator Barbara Bollier Senator Ty Masterson Representative Will Carpenter Representative Jim Kelly Representative Monica Murnan Representative Troy Waymaster Representative Kathy Wolfe Moore Staff Present Amy Deckard, Kansas Legislative Research Department Iraida Orr, Kansas Legislative Research Department Whitney Howard, Kansas Legislative Research Department Megan Leopold, Kansas Legislative Research Department Eileen Ma, Office of Revisor of Statutes Scott Abbott, Office of Revisor of Statutes Jenna Moyer, Office of Revisor of Statutes David Long, Committee Assistant Conferees—November 12 Chad Austin, Senior Vice President, Government Relations, Kansas Hospital Association Kyle Kessler, Executive Director, Association of Community Mental Health Centers of Kansas Julie Holmes, Director, Health and Life Division, Kansas Insurance Department Linda Sheppard, Senior Analyst, Kansas Health Institute April Holman, Executive Director, Alliance for a Healthy Kansas David Soffer, Legislative Director, Kansas Department of Commerce Conferees—November 13 Roy Lenardson, Government Affairs Director, Foundation for Government Accountability Kathleen Smith, Director of Research and Analysis, Kansas Department of Revenue Larry Campbell, Director of the Budget Adam Proffitt, State Medicaid Director, Kansas Department of Health and Environment Others Attending See Attached Lists for November 12 and November 13. TUESDAY, NOVEMBER 12 Morning Session Welcome and Opening Remarks Chairperson Landwehr called the meeting to order at 10:02 a.m. and welcomed Committee members and staff. Explanation of Resources Amy Deckard, Kansas Legislative Research Department (KLRD), provided a description of supplemental resources provided to the Committee. She noted the information could also be accessed on KLRD’s resource page for this committee [http://www.kslegresearch.org/KLRD- web/Committees/Committees-Spc-MedExp-Resources.html] (Attachment 1). The Chairperson provided information on the direction of the Committee discussion related to Medicaid expansion. She indicated these meetings would focus on the Medicaid expansion bill draft recommended by the Senate Select Committee on Healthcare Access (Senate Select Committee) and how the proposed bill language could be improved. Discussion of Access to Care Considerations Chad Austin, Senior Vice President, Government Relations, Kansas Hospital Association (KHA), provided testimony on the topic of Medicaid expansion. He stated KHA is encouraged the Legislature is moving toward what expansion would look like, rather than whether it would happen. He noted KHA is concerned there are currently Kansans who earn too much to qualify for KanCare, but too little to receive financial assistance to purchase private insurance on the individual Health Insurance Marketplace. He stated KHA believes there are some general principles necessary for any expansion plan: simplicity, timeliness, and maximization of access to health care coverage for low income Kansans. He stated KHA has discussed the following alternatives beyond traditional Medicaid expansion under consideration: ● The multiple waiver approach could affect the timeliness of expansion implementation. The Legislature should consider adding language in any expansion bill considered to ensure implementation of expansion would begin no later than January 1, 2021; ● The Primary Health Center (PHC) model, an alternative rural health model KHA members have been working on for several years, would change the service bundle and the payment mechanism. The PHC is intended to assist rural communities that cannot sustain the current health care delivery model and to fill the gap between a rural health clinic or federally qualified health center and a full- service hospital by focusing on emergency and outpatient needs; Kansas Legislative Research Department 2 Special Committee on Medicaid Expansion – Minutes for November 12-13, 2019 ● Provider taxes to assist with funding the State’s share of Medicaid expansion would place an additional financial burden on medical providers and must be fair and equitable; ● Co-pays often cost more to collect than the value of the co-pays and should be avoided; ● The level of the premiums charged would effect the ability of some Kansans to participate, and it would be difficult for providers to know whether a patient was covered at the time service was rendered; ● Lockouts would create administrative challenges for health care providers by becoming resource intensive; and ● KHA would support provisions in the bill draft recommended by the Senate Select Committee requiring the State to discontinue expansion should the Federal Medical Assistance Percentage (FMAP) fall below 90 percent, frequently referenced as the “poison pill.” KHA testified in support of 2019 SB 2, which would establish the FMAP Stabilization Fund. Mr. Austin noted KHA hopes the Legislature develops the best KanCare expansion possible for Kansas (Attachment 2). Mr. Austin provided the following responses to questions from Committee members and Senator Denning, who is not a Committee member but was asked to participate due to his knowledge of the proposed Senate bill being discussed: ● With regard to studies on the effect of expansion on rural hospital finances, Mr. Austin stated there have been a number of recent reports on the topic. A Navigant report indicated there are 29 at-risk hospitals in Kansas. A report from iVantage Health Analytics noted 85 percent of Kansas hospitals have negative operating budgets. Additional estimates as to the fiscal impact of expansion on critical access, rural, and urban hospitals were provided. The estimated increase in expansion revenue could fund additional staff, local services, or equipment and may reduce the local tax revenue provided to support operations of some hospitals; ● Uncompensated care is a combination of services provided to uninsured patients and the shortcomings in the Medicare and Medicaid payment rates. In some states with Medicaid expansion, the uncompensated care has been reduced by 35 to 45 percent; ● Medicaid expansion may help reduce the amount of unpaid collections for hospitals; ● With regard to any suggestions KHA might have regarding lockouts (preventing Medicaid patients from participating in the program for a period of time after they have been dropped from the program), Mr. Austin stated KHA wishes to provide the most access to health services with the fewest barriers. At issue are the Kansas Legislative Research Department 3 Special Committee on Medicaid Expansion – Minutes for November 12-13, 2019 details of how a lockout would work. KHA would prefer no lockouts, but would be willing to look into possible suggestions if lockouts were part of the plan going forward; ● KHA would have concerns with a permanent lockout as proposed in 2019 HB 2066. With regard to the difficulty that could arise for providers as a result of a lockout, under the proposed Senate bill lockouts would differ from the Children’s Health Insurance Program (CHIP) model and the health insurance exchange, Mr. Austin noted there is currently a 60-day grace period for CHIP participants and those on the health insurance exchange who are locked out; ● Mr. Austin responded it was his understanding the federal Centers for Medicare and Medicaid Services (CMS) would not allow a permanent lockout like the one included in 2019 HB 2066; and ● Mr. Austin deferred to Kansas Department of Health and Environment (KDHE) staff for information on how other states have used lockouts effectively for individuals to participate in Medicaid. A Committee member asked legislative staff to provide the Committee with the specific definitions of “lockout” versus “discontinuation of coverage.” Chris Swartz, Deputy Medicaid Director, KDHE, addressed the Committee to answer questions regarding lockouts. She stated she was unsure whether other states successfully implemented lockouts for beneficiaries, but she provided information on how lockouts work in Kansas for the CHIP population. According to the Patient Protection and Affordable Care Act (ACA), a CHIP participant may not be locked out for longer than 90 days. A reapplication process must be followed for reinstatement when a lockout occurs, and the applicant’s eligibility must be reassessed each time. Upon reapplication, the participant would have to be allowed back into CHIP if they qualify financially, and the participant would not be required to cure the delinquent payment. The lockout and reapplication process is a recurring event if payments are repeatedly not paid. She noted a provider reviews the eligibility system at the time of the initial visit to determine whether a participant is active and typically assumes the participant is qualified for a year until the annual renewal. However, with the occurrence of lockouts, a provider would have to check at each office visit to determine if a patient’s benefits were current, which can be a disruption to the provider’s operation. Ms. Swartz responded to questions by Committee members regarding lockouts. She noted, in Kansas, lockouts apply only to CHIP because premium payments apply only to this population. KDHE collects CHIP payments, but there are many delinquencies and

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