Kansas Legislative Research Department January 6, 2020

MINUTES

SENATE SELECT COMMITTEE ON HEALTHCARE ACCESS

October 22-23, 2019 Room 112-N — Statehouse

Members Present Senator , Chairperson Senator , Vice-chairperson Senator , Ranking Minority Member Senator Senator Senator Senator Bud Estes Senator Senator Senator Senator Mary Pilcher-Cook Senator Mary Taylor

Members Absent Senator – Excused

Staff Present Reed Holwegner, Legislative Research Department David Fye, Kansas Legislative Research Department Iraida Orr, Kansas Legislative Research Department Scott Abbott, Office of Revisor of Statutes Eileen Ma, Office of Revisor of Statutes Jenna Moyer, Office of Revisor of Statutes Debbie Bartuccio, Committee Assistant

Conferees—October 22 Adam Proffitt, State Director, Kansas Department of Health and Environment Linda Sheppard, Senior Analyst, Kansas Health Institute Kari Bruffett, Vice President for Policy, Kansas Health Institute Julie Holmes, Director, Health and Life Division, Kansas Insurance Department Sam Huenergardt, President and Chief Executive Officer (CEO), AdventHealth Mid-America Region Dr. Bob Moser, Population Health Consultant, The University of Kansas Health System Eddie Herman, President and CEO, The University of Kansas Health System HaysMed Tom Bell, President and CEO, Kansas Hospital Association, and Dennis Franks, CEO, Neosho Memorial Regional Medical Center Kenny Wilk, Vice President, Governmental and Community Affairs, The University of Kansas Health System Jon Hamdorf, Director, Healthcare, Navigant Consulting, Inc.

Conferees—October 23 Christopher Priest, Vice President, Medicaid Solutions, Centene Corp. Mike Beene, Director, Workforce Development, Kansas Department of Commerce Kathleen Smith, Director, Office of Research and Analysis, Kansas Department of Revenue Amy Kramer, Financial Economist, Kansas Department of Revenue Adam Proffitt, State Medicaid Director, Kansas Department of Health and Environment Chad Austin, Kansas Hospital Association Dr. Lee Norman, Secretary, Kansas Department of Health and Environment

Others Attending See attached lists for October 22 and October 23.

TUESDAY, OCTOBER 22 ALL DAY SESSION

Meeting Called to Order, Committee Introductions, and Opening Remarks

Chairperson Suellentrop opened the meeting at 9:00 a.m. He requested respect for the committee process with no speaking from the gallery and no signage. He indicated additional seating was available outside the committee room, if needed, and thanked everyone for their cooperation.

Overview of Current Medicaid Program; Populations Covered; Numbers Served; and Expenditures, including Inmate Coverage both During and After Incarceration

Chairperson Suellentrop recognized Adam Proffitt, State Medicaid Director, Kansas Department of Health and Environment (KDHE), who provided an overview of the current Medicaid program, financial estimates on Medicaid expansion, and Medicaid waivers (Attachment 1).

KDHE maintains the State Plan and has accountability for the Section 1115 waiver. Within federal guidelines and as authorized by state law, KDHE sets the guidelines and eligibility policy for people to apply for Medicaid. KDHE contracts for the Medicaid Management Information System and the Kansas Eligibility and Enforcement System. Three managed care organizations (MCOs) oversee the delivery and payment of healthcare services. KDHE is the primary contact with the federal Centers for Medicare and Medicaid Services (CMS).

Generally, a Medicaid application must be filed, an applicant must be able to act on his or her own behalf (at least 18 years old or a guardian or conservator has to apply), be either a U.S. citizen or eligible non-citizen, and be a resident of Kansas. The applicant must provide all needed information and cooperate with the application process. All persons residing in the

Kansas Legislative Research Department 2 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 household must be included on the application. Financial requirements may vary, depending on which population category one is classified.

Senator Baumgardner asked whether an applicant must re-apply if there is missing documents or information. Mr. Proffitt said KDHE attempts to reach the applicant to acquire the documents or to clarify missing information. If the information has not been received within the statutory guideline of 45 days, the process starts over. However, he indicated this is the exception and not the rule.

In Kansas, the applicant must be a resident of the state. Kansas does not provide a Medicaid option for childless adults, regardless of income. Non-pregnant parents and caretakers are eligible for KanCare (the Medicaid managed care program in Kansas) when their income is at or below 38.0 percent of the federal poverty level (FPL). Since the Federal Health Insurance Exchange does not provide subsidies until an individual’s income is at 100.0 percent of FPL, there is a coverage gap in Kansas for those between 38.0 percent and 100.0 percent of FPL. Eligibility is granted on an annual basis.

The State Medicaid Director provided testimony including charts illustrating eligibility guidelines by state as of January 2018 and income limits by state in non-expansion states. Information was included listing the populations served for fiscal year (FY) 2012 through FY 2018 for the categories of family, disabled, Children’s Health Insurance Program (CHIP), aged, foster care and adoption, other populations, and MediKan. Parents and children account for 73 percent of the population, but only 34 percent of the expenditures.

A listing of mandatory and optional Medicaid coverage requirements was provided. A state Medicaid expansion plan must include coverage for the following essential health benefits: ambulatory patient services; emergency services; hospitalization; pregnancy, maternity, and newborn care; mental health and substance abuse disorder services; prescription drugs; rehabilitative and habilitative services; laboratory services; preventive services; and pediatric services.

Mr. Proffitt reviewed the current process for covering inmates both during and after release. This included releases from prison, releases from state hospitals, discharges from mental health institutions, and releases from county jails.

Mr. Proffitt next discussed the fiscal impact of a Medicaid expansion bill (2019 HB 2066), which assumes:

● 150,000 newly eligible members would equate to a 36 percent increase in the total population, which would be in line with the national average (35 percent), but more than states that have most recently expanded (22 percent). KDHE estimates approximately 80,000 potential members;

● $625 per member per month (PMPM) capitation payment;

● Offsets, including privilege fees and incremental drug rebates, to reduce the total cost. Also, the Department of Corrections (DOC) would be able to access additional federal funds for the individuals newly covered under expansion, resulting in savings; and

Kansas Legislative Research Department 3 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 ● Straight Medicaid expansion, with no additional layers placed on top of the program.

Senator Baumgardner questioned in which category childless adults would be placed in the population types. Mr. Proffitt said KDHE does not have a reference point in Kansas since childless adults are not currently covered. An estimate would need to be based on information from other states.

Responding to a question from Senator Masterson, Mr. Proffitt said many of the estimated 150,000 of newly eligible participants could likely be uninsured currently.

Mr. Proffitt said the initial cost for expansion would be approximately $1.1 billion. After all offsets, the net cost to the State would be approximately $34.0 million to $35.0 million. The estimate does not account for savings that could be realized by DOC. Since July 1, 2012, KDHE and DOC have used Medicaid funding to pay for inpatient services when an inmate is in a hospital for more than 24 hours. The inmate must meet all required eligibility criteria and have a qualifying event. Many cases today require presumptive disability determination, but that need would diminish under expansion. Both agencies have dedicated staff to work on these cases.

There is no estimate for secondary economic effects. If premiums are assessed to the expansion population, states are required to transfer 90 percent of the premiums to the federal government.

Senator Denning indicated there has been an assumption that currently less than 5.0 percent of the inmate population would be eligible for the 24-hour rule, but this would change to more than 80.0 percent eligible with expansion. Mr. Proffitt replied he would need to confirm with DOC to see what its forecast would be on this topic.

Senator Denning asked if local jails would be participating in this program. Mr. Proffitt responded the local jails do not currently participate, but there has been some discussion about the possibility.

Senator Baumgardner noted the need for clarification on jurisdiction for county jail inmates.

Guardrails from CMS

Mr. Proffitt said several states have had their waiver proposals denied by CMS, including (lifetime enrollment limits), New Hampshire (asset test), Utah (partial expansion for less than 138.0 percent of FPL), and Wisconsin (drug testing as a condition for eligibility). As a matter of general guidance, work requirements have been disallowed.

Senator Bollier asked whether a state’s attempt at expansion is either delayed or allowed to move forward if a proposal has been denied. Mr. Proffitt replied it depends on the situation and how the waiver was submitted.

Senator Berger asked about the time frame for waivers to be approved. Mr. Proffitt said it can take 12 months to receive approval.

Kansas Legislative Research Department 4 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Mr. Proffitt’s testimony illustrated examples of full versus partial expansion, as well as information concerning Utah’s plans and timelines. If, hypothetically, Kansas were to expand to 100.0 percent of FPL and not receive enhanced funding at a 90/10 match between CMS and the State, respetively, this would cost the State $221.0 million more than full expansion, while covering approximately 50,000 fewer individuals.

Senator Pilcher-Cook questioned whether an analysis had been done to evaluate the effect Medicaid expansion would have on private insurance coverage and the premiums paid for that coverage. Mr. Proffitt responded KDHE has not conducted this analysis. Senator Pilcher- Cook recommended this be done, suggesting Medicaid expansion could result in higher premiums for those utilizing private coverage.

Senator Bollier commented KDHE should provide an analysis on the impact on healthcare expenses resulting from the Farm Bureau healthcare bill that was passed in 2019.

Responding to a question from Senator Pettey, Mr. Proffitt said no state has been approved for providing Medicaid expansion solely for those people at 100.0 percent of FPL and less.

Medicaid Waivers: Types, Populations, and Services Covered; Submission and Approval Process; and Length of Time to Institute

Mr. Proffitt reviewed Medicaid and other waivers. Section 1115 waivers, he said, must demonstrate budget neutrality. Federal spending cannot exceed what would have been spent in the absence of the waiver. In KanCare, the waiver is used to mandate most populations enroll in a managed care plan. Section 1915(c) or Home Community Based Services (HCBS) waivers must be cost neutral—per capita costs do not exceed average cost of institutional settings. The waivers are used to target services to specific populations. Section 1332 waivers are not considered Medicaid waivers, as they are in a different section of the Patient Protection and Affordable Care Act (ACA), and have different approval/authority paths than Medicaid waivers. This section of the ACA grants no authority to waive anything in Title XIX (Medicaid).

Section 1115 Waiver: Timelines and Costs

Mr. Proffitt said KanCare operates under a comprehensive Section 1115 waiver, which is approved through December 31, 2023. Each of the Section 1915(c) waivers is under the Section 1115 umbrella. These are the HCBS waivers administered by the Kansas Department for Aging and Disability Services (KDADS). Most beneficiaries are required under the waiver to receive all their services through managed care plans. MCOs manage HCBS waiver services, along with physical and behavioral health services. More than 100 special terms and conditions must be monitored, and quarterly reporting for financial performance and other measures is required.

Straight expansion could be implemented under an amendment to the State’s current waiver, which would include the expansion population and updated calculations showing budget neutrality. Additional layers added to the expansion plan would be handled one of two ways, with the path to approval ultimately determined by CMS. Amendment to the current waiver, including updating budget neutrality, does not require the assistance of a consultant, other than KDHE’s current actuarial vendor. If CMS deems changes to be substantial, they could deem this

Kansas Legislative Research Department 5 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 a new demonstration, which would require a new waiver application and the assistance of a consultant, as well as adding time to the process.

A Medicaid Section 1115 wavier application or amendment cannot assume any potential impact from a Section 1332 waiver submission.

Senator Bollier asked if SB 54 would pass, whether it could be implemented under the current waiver. Mr. Proffitt answered affirmatively. Senator Bollier further asked if the submission of items that were referenced in HB 2066 would be outside of the current parameters. Mr. Proffitt replied it would depend on the dialogue with CMS. If it was determined a new waiver was necessary, public hearings would be held.

Senator Baumgardner asked whether the public hearings would occur after legislation had been signed into law and the application has been submitted. Mr. Proffitt stated the public hearings must occur before the application is submitted.

Details on Current Section 1115 Waiver Timeline for Approval

A state intending to amend the provisions of a current waiver must give 120 days’ notice to CMS. If a waiver is amended, a state would likely not be required to hold multiple public meetings, though the waiver and corresponding State Plan Amendment would be posted for public comment. The current actuarial vendor for KDHE would recalculate budget neutrality, incorporating new eligibility groups.

New waiver applications have additional CMS requirements, which would likely involve hiring a consultant to assist with the process. For reference, Mr. Proffitt said the current KanCare waiver renewal application took approximately 22 months to complete. New waiver applications come with a lengthier list of requirements than that of a waiver renewal.

Senator Pettey requested Mr. Proffitt provide a list of the states that have passed Medicaid expansion and the date implementation occurred.

Senator Masterson noted doing something that is easier is not necessarily better, and it would seem prudent to customize Kansas’ submission to meet the population’s requirements.

State Innovation (Section 1332) Waivers

According to Mr. Proffitt, most states have used Section 1332 waivers for reinsurance on the insurance exchange. Nearly every state grants authority to a state insurance agency to file and administer the waiver. Generally, when granted, this waiver leverages federal savings, which are then passed through to fund the program. There are four guardrails to be met in order for the waiver to be deemed complete: coverage must be as comprehensive as coverage would be absent the waiver, coverage must be affordable, the scope of coverage must be provided to a comparable number of residents, and there cannot be an increase in the federal deficit.

When calculating budget neutrality for either waiver, the assumptions of the base and waiver must be separate and distinct.

Kansas Legislative Research Department 6 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Overview of State Innovation (Section 1332) Waivers

Chairperson Suellentrop recognized Linda Sheppard, Senior Analyst, Kansas Health Institute (KHI), who provided an overview of State Innovation (Section 1332) Waivers (Attachment 2).

Section 1332 of the ACA allows states to apply to the Secretary of the U.S. Department of Health and Human Services (HHS) for a waiver to develop and implement state-specific approaches and strategies to health reform and coverage to provide citizens with access to affordable healthcare. States can either use existing statutory authority to enforce the ACA and issue a regulation or executive order, or enact a new state law to apply for and implement a waiver. However, states can simultaneously pursue legislative authority to pursue a waiver while developing and drafting a waiver application and actuarial analysis. Section 1332 waivers may remain in effect for five years and can be extended. States that receive waivers may become eligible for federal pass-through funding to help implement waiver plans.

A state’s application must demonstrate its proposed waiver plan will:

● Provide comprehensive coverage that is comparable to the coverage offered through the ACA;

● Ensure affordability by providing coverage and cost-sharing protection against excessive out-of-pocket spending;

● Provide coverage to at least a comparable number of residents as the ACA; and

● Ensure the waiver plan will not increase the federal deficit.

Through a waiver, certain provisions of the ACA and the Internal Revenue Code can be waived, such as establishing qualified health plans (QHPs), consumer choices and insurance competition through health insurance, premium tax credits and cost-sharing reductions for QHPs offered within the marketplace, and employer shared responsibility. Other provisions— such as pre-existing condition protections; allowable premium rating factors, including age bands; guaranteed availability and renewability of health coverage; risk adjustment; and eligibility determinations under certain premium tax credits, cost sharing reductions, Medicaid, and CHIP—cannot be waived.

Concerning federal guidance to states, in March 2017, HHS issued a letter to all governors encouraging them to submit Section 1332 waiver applications to address cost and coverage issues in their individual health insurance markets. HHS specifically encouraged states to consider implementing a high-risk pool or state-operated reinsurance program to lower marketplace premiums. In October and November 2018, HHS issued new guidance to states designed to give more flexibility in the design of Section 1332 waivers and now refers to them as State Relief and Empowerment waivers. States are encouraged to reach out to HHS for assistance in formulating an approach that meets the requirements of Section 1332. HHS also identified five principals for a high-performing healthcare system that will be considered when reviewing waiver applications and expressed states should aim to provide increased access to affordable private-market coverage, encourage sustainable spending growth, foster state innovation, support and empower those in need, and promote consumer-driven healthcare.

Kansas Legislative Research Department 7 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 States can direct public subsidies into a defined-contribution, consumer-directed account that individuals may use to pay health insurance premiums or other healthcare expenses. States can create a new, state-administered subsidy program to meet the needs of its population. States could provide financial assistance for different types of health insurance plans, including non-QHPs, to potentially increase consumer choice of more affordable options. To give more flexibility to implement reinsurance or high-risk pool programs, states may waive the single-risk pool requirement.

If a state’s waiver is approved and results in savings to the federal government for advance premium tax credits (APTCs) or small business tax credits, the state can receive those savings as pass-through funding and use them to help fund the cost of implementing the state waiver program.

APTCs are refundable tax credits designed to help eligible individuals and families with annual household incomes of at least 100 percent—but no more than 400 percent—of FPL ($25,100 to $100,400 for a family of four in 2019) to purchase insurance through health insurance marketplaces created under the ACA. When individuals and families enroll through the marketplace, they can choose to have the marketplace compute the estimated APTC that is paid to the insurance company to lower their monthly premiums. The amount of the APTC is generally equal to the premium for the second-lowest-cost silver plan available through the marketplace that applies to individuals enrolled in the plan, minus a certain percentage of their household income.

Federal regulations also authorize states to submit a single coordinated waiver application to the Secretary of HHS for a waiver under Section 1332 and under other existing waiver processes (e.g., Section 1115), which will be evaluated independently according to the applicable federal law.

Senator Bollier inquired whether there was a benefit to submitting waivers together. Ms. Sheppard did not know of any specific advantage. Senator Bollier asked whether one waiver can be made dependent upon the other waiver Ms. Sheppard responded the waivers stand alone and cannot be reliant upon the other waiver.

To date, HHS has approved Section 1332 waivers for 13 states. Of the approved waivers, 12 were to establish state-based reinsurance programs. States that will be implementing reinsurance programs for plan year 2020 include Colorado, Delaware, Montana, North Dakota, and Rhode Island. States with approved waivers projected reductions in premiums ranging from 5.9 percent to 30.0 percent.

The testimony included information concerning the premium impact in the first waiver effective year that has been experienced by some states.

Chairperson Suellentrop expressed appreciation to Ms. Sheppard for her presentation and said Section 1332 waivers are an important component when looking for additional health coverage for persons.

Senator Denning asked if the Kansas Insurance Department (KID) could proceed with the actuarial analysis necessary of a Section 1332 waiver prior to the enactment of legislation. Ms. Sheppard responded affirmatively.

Kansas Legislative Research Department 8 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Denning asked whether Utah and Idaho demonstrated their waiver plans would not increase the federal deficit. Ms. Sheppard referred the question to Kari Bruffett, Vice President, KHI, who confirmed in order to have a Section 1332 waiver application approved, the states must attempt to demonstrate deficit neutrality.

Senator Denning asked whether a plan to promote consumer-driven healthcare might include first-dollar coverage on primary care and pharmaceuticals before the deductible is utilized. Ms. Sheppard responded it could be; there have been some states that have taken this approach.

Responding to a question from Senator Denning, Ms. Sheppard said she did not know whether Georgia was planning to submit a waiver involving both Section 1115 and Section 1332 waivers, also called a super waiver, in June 2020.

Senator Berger asked on whose authority KDHE would pursue a waiver. Ms. Sheppard responded the Section 1332 waiver applications have generally been submitted jointly with the signatures of the Governor and the Insurance Commissioner.

Chairperson Suellentrop said Committee members would be receiving proposed bill language, which should help clarify the process for pursuing waivers.

Senator Pilcher-Cook noted a law passed several years ago that did not allow the expansion of Medicaid without legislative approval. Scott Abbott, Assistant Revisor, Office of Revisor of Statutes, confirmed legislation was signed into law in 2014 that prohibited the State from expanding eligibility under Medicaid without express legislative consent. In the case of the Section 1115 waiver for Medicaid expansion, there is a clear legislative prohibition in statute that requires legislative action to move forward. In the case of applying for a Section 1332 waiver, there is a different agency involved, and there is not a statutory prohibition that would prevent the agency from doing it on their own.

Senator Pettey requested a copy of the proposed bill be distributed to the Committee on the current date, rather than waiting to receive it at the meeting on October 23, 2019, allowing more time for review. Chairperson Suellentrop replied the bill draft was not completely finished, but he would take the request under consideration.

Chairperson Suellentrop recessed the meeting from 12:43 p.m. to 1:55 p.m.

Overview of Individual Healthcare Insurance Market

Chairperson Suellentrop recognized Julie Holmes, Director of the Health and Life Division, KID, who said her presentation was for informational purposes and it was not an attempt to weigh in on what actions the Committee should take, and that Insurance Commissioner Vicki Schmidt has been clear KID’s job is to regulate and not weigh in on policy (Attachment 3 and Attachment 4).

Ms. Holmes provided an overview of the individual health insurance marketplace in Kansas, covering the demographics and statistics of the insured and uninsured. The Director described the several ways persons can apply through the federally facilitated marketplace (FFM). In 2020, consumers shopping on the FFM in Kansas will have the opportunity to choose from 82 individual policies offered by 5 health insurance companies, depending upon where

Kansas Legislative Research Department 9 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 they live. This is an increase of 59 plans above the 2019 number. Concerning categories of insurance plans, catastrophic plans must have actuarial values below 60 percent, meaning the plans will cover less than 60 percent of the expected cost. Bronze plans and expanded bronze plans have actuarial values of at least 60 percent. Silver plans have an actuarial value of at least 70 percent. Gold plans have an actuarial value of at least 80 percent, and platinum plans have an actuarial value of at least 90 percent.

The Director explained the APTCs, which is the tax credit based on the household information and income estimate included in a FFM application. The premium tax credit is only available through the FFM. If income or household information changes, the premium tax credit will likely change as well. Of the 89,993 individuals who made plan selections as most recently reported, the average premium is $661 and the average premium after the APTC is $149. Of the 77,446 individuals receiving the APTC, the average credit received is $596 and the average premium among consumers after the APTC is $76.

The Cost Sharing Reduction (CSR), the Director explained, is a discount that lowers what an enrollee pays for their deductibles, coinsurance, and co-payments. The enrollee must purchase a Silver plan to receive the extra savings. Eligibility is determined during completion of a Marketplace application. If the enrollee qualifies for CSR, they also have a lower out-of-pocket maximum. People with incomes between 100 percent and 150 percent of FPL can enroll in a plan where the actuarial value is increased to 94 percent. People with incomes between 150 percent and 200 percent FPL can enroll in a plan where the actuarial value is increased to 87 percent. People with incomes between 200 percent and 250 percent FPL can enroll in a plan where the actuarial value is increased to 73 percent. A fourth variant is a zero cost-sharing plan that is available to certain Native Americans.

Open enrollment for plan year 2020 begins November 1, 2019, and ends December 15, 2019. Kansans may enroll in coverage, stay on their current policy (if available), or enroll in a different policy from the same company or a different company. Consumers currently enrolled in a QHP through the FFM may be eligible for automatic re-enrollment. Anyone wishing to have coverage effective January 1, 2020, must complete the application process by December 15, 2019. After December 15, 2019, the only way to obtain coverage is via a special enrollment period due to a qualifying event.

Ms. Holmes’ testimony also included copies of a presentation by Randy Pate, Director, The Center for Consumer Information and Insurance Oversight. The presentation was made at the August 4, 2019, meeting of the National Association of Insurance Commissioners and provided a national overview of the individual market (Attachment 5).

Senator Bollier asked Ms. Holmes to explain the terminology “actuarial value.” Ms. Holmes responded with the example of a Silver plan with a 70 percent actuarial value. This means the plan will cover 70 percent of the expected costs.

Senator Bollier asked whether, instead of averages, information was available to determine how many people were paying at what rate. Ms. Holmes responded the data in the presentation was received from the federal government; she would check if the information requested was available.

Kansas Legislative Research Department 10 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Medicaid Expansion Experience in Other States

Chairperson Suellentrop recognized Sam Huenergardt, President and Chief Executive Officer (CEO), AdventHealth Mid-America Region, who reviewed Medicaid expansion experience in other states (Attachment 6).

Mr. Huenergardt reviewed statistics about AdventHealth operations in Johnson County and in nine states. A map illustrated the uninsured rate and number by county in Kansas in 2017 for Kansas adults ages 19 to 64. He reviewed data for Colorado, Illinois, and Kentucky, showing the number of people covered by Medicaid and CHIP as of July 2018, the increase in the number of people covered by Medicaid and CHIP from Fall 2013 to July 2018, and the reduction in the uninsured rate from 2013 to 2017. These three states have accepted federal Medicaid expansion.

Senator Bollier asked Mr. Huenergardt to share information about the plan that was being considered based on meetings with Senator Denning. Mr. Huenergardt deferred to Tom Bell, President and CEO, Kansas Hospital Association, who indicated Senator Denning had requested the scheduling of a couple meetings with hospital CEOs to discuss the ideas in Senator Denning’s proposed bill draft. From his perspective, Mr. Bell said, the basic elements of it were the idea of a super waiver.

Senator Denning explained he would be walking through the white paper at tomorrow’s Committee meeting.

Senator Bollier asked if the Committee could receive a copy of the proposal today. Chairperson Suellentrop replied the Committee needed to follow the agenda as the testimony would provide background information for the proposal.

Senator Hensley stated the Committee should be cognizant of the Republican argument when the ACA was being formulated. Congressional Republicans were upset they did not see the bill, and this Committee should avoid the lack of communication. If the bill draft is ready to be distributed, Committee members should have the opportunity to read it. Otherwise, the Committee would be making decisions tomorrow without enough time to consider it.

Chairperson Suellentrop noted the difference between an introduced bill and a bill draft. Either the Select Committee or the Senate Committee on Public Health and Welfare would be considering a bill in January 2020. Committee members will have the two months prior to January 2020 to review the bill draft, ask questions, and make additional proposals. Chairperson Suellentrop indicated the bill draft may be released at the conclusion of the meeting today.

Rural Hospitals

Chairperson Suellentrop recognized Dr. Bob Moser, Physician Advisor, The University of Kansas Health Systems (UKHS), who testified concerning rural hospitals (Attachment 7).

Dr. Moser’s testimony included data on rural quality performance measures, chronic care management, and the impact on total cost of care. Kansans who need care generally have lower socioeconomic status, high rates of health risk behaviors, limited access to healthcare

Kansas Legislative Research Department 11 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 specialists and subspecialists, and limited job opportunities. These Kansans are isolated and less likely to have employer-provided health insurance coverage.

Rural health issues include an increasing gap in age-adjusted mortality, disability, and chronic diseases. These issues started in the 1990s and the gaps continue to widen. This is due to greater prevalence of obesity; greater rates of cancer, heart disease, and diabetes; greater injury-related deaths; greater prevalence of chronic conditions; and greater rates of uninsured children and non-elderly adults.

Access to healthcare is defined as having timely use of personal health services to achieve the best possible health outcome. Measuring access is a complex task when trying to include dimensions besides availability of services, such as quality, effectiveness, and efficiency.

Studies demonstrate insurance coverage impacts health and mortality outcomes, as well as reducing disparities. Providers need to consider “upstream” issues, such as reducing risk factors that lead to illness and chronic conditions, including social determinants of health. The “downstream” consequences of the lack of access can lead to advanced stages of disease, which incur higher costs and result in poorer outcomes.

There are more than 170 rural health clinics, 100 safety-net clinics, and 57 federally qualified health centers that are required to provide care regardless of insurance coverage or ability to pay. Like critical access hospitals, the reimbursement models for some are cost-based. Additional payments are possible based on modeling that includes utilizing sliding-fee scales; certain services required, which are not likely to offset reduced payments from volume; and rural population characteristics.

Senator Bollier asked whether there has been any impact with the utilization of health savings accounts. Dr. Moser responded this topic has not been reviewed. She also asked if other providers besides hospitals would be affected by Medicaid expansion. Dr. Moser responded all providers would benefit from the expansion.

Chairperson Suellentrop recognized Eddie Herman, President and CEO, HaysMed, UKHS, who discussed how Medicaid expansion will impact rural Kansas (Attachment 8) and how healthcare in Kansas is changing. As rural communities change, reimbursement models evolve and the ways healthcare is delivered expand. Mr. Herman stated it is necessary to find a solution that allows all Kansans access to the care they need, when they need it. Expanding Medicaid in Kansas is not the single solution to all the challenges healthcare faces today, especially in rural communities.

He further stated Medicaid expansion is a critical part of the solution; the federal funding would support hospitals across the state, most critically those in rural areas. This funding would provide one of the short-term solutions while longer-term options are developed. It would also be a big step in providing access and an affordable healthcare solution for more than 130,000 Kansans, as well as an investment in the State’s overall ability to deliver care to patients.

The impact of this funding to critical access hospitals cannot be understated. Mr. Herman stated even $50,000 in additional funding to many facilities struggling today could be the difference between eliminating services or closing their doors. These funding amounts do not solve the long-term problem, but provide the resources that allow these hospitals to continue to operate while determining longer-term solutions.

Kansas Legislative Research Department 12 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 While it is easy to be distracted by high dollar figures, the impact on people who do not have access to affordable insurance and cannot afford it on the open market should not be forgotten. When people have access to affordable routine care, they are healthier. When they do not have access, they wait, and this often leads to personal health and financial crisis.

In rural parts of the state, a high percentage of patients could be covered by Medicaid expansion. People who could benefit are often working multiple part-time jobs. Healthy people are productive people. Productive people are critical to healthy communities.

Senator Masterson asked whether HaysMed had calculated what a Medicaid expansion would mean to the hospital from a dollars perspective. Mr. Herman responded the expansion would be approximately a $500,000 impact annually. In addition, there would be an estimated $4.1 million economic development impact on the county and there would be a $400,000 impact for the federally qualified health center in Hays.

Senator Bollier asked whether the city or county was subsidizing HaysMed. Mr. Herman replied the hospital was not being subsidized by either entity; however, he noted it was rare for a county that has a critical care hospital not to be supported by some type of tax.

Chairperson Suellentrop recognized Dennis Franks, CEO, Neosho Memorial Regional Medical Center, who shared comments concerning what it is like to live in Southeast Kansas. Neosho County is one of the poorest regions in Kansas. Many of the residents work multiple part-time jobs and do not have access to affordable health insurance. If people had Medicaid, they would have access to healthcare at an earlier and more treatable time. The economic margins in rural hospitals in Kansas are thin. Additional funding would allow the hospital to increase wages, purchase needed equipment, and address population health issues and increase community outreach.

Senator Masterson asked what Medicaid expansion would do for the Neosho Memorial Regional Medical Center. Mr. Franks responded it would provide $2.6 million. The hospital currently loses about $6.0 million annually for charity care and bad debt.

Chairperson Suellentrop asked whether the hospital was having difficulty retaining staff. Mr. Franks replied that because of the location, the hospital sometimes must pay more in order to attain and retain physicians and specialized staff.

Senator Baumgardner, noting the migration map contained in other testimony that about half of the residents receiving inpatient care are staying in the county, asked how migration would impact Medicaid expansion. Mr. Franks responded his community is growing, and he did not see migration as an issue.

Chairperson Suellentrop recognized Tom Bell, President and CEO, Kansas Hospital Association (KHA) (Attachment 9). Mr. Bell indicated a study by Navigant indicates Kansas has the highest number of at-risk hospitals in the country. For many reasons, rural healthcare in Kansas is challenged. Because of these challenges, there is discussion about the possible creation of another model that will allow some flexibility for these very challenged facilities. In some cases, the hospitals average less than one person staying in the hospital per day, which questions the need for so many inpatients beds in a facility. He raised the question of whether a different model with emergency care, outpatient care, and transportation options for long-term care would be more effective. To do this, the congressional delegation should be worked with to change Medicare law to create flexibility for community health facilities. There have been

Kansas Legislative Research Department 13 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 discussions with Senator Moran and the Governor, both of whom have shown support for this concept. From the Legislature, support would be needed with rules and regulations concerning the definition of what it means to be a hospital. Because of the factors of low volume, geographic isolation, and the demographics of the state, rural healthcare is better able to make changes in its model, rather than hospitals in an urban area.

Mr. Bell closed by stating when discussing a potential Medicaid expansion, KHA members ask about the certainty of the expansion happening, the extent to which it would be complicated, the time for implementation, and the impact on patients.

Chairperson Suellentrop asked whether the Committee should send correspondence to the Kansas congressional delegation in support of legislation at the federal level concerning healthcare models.

Senator Denning asked Mr. Bell if he would be in a position by January 2020 to assist with the proposed legislation to include a demonstration project request. Mr. Bell responded affirmatively.

Senator Billinger asked Mr. Bell if he had looked into enhanced reimbursement for the hospitals. Mr. Bell responded it is an area worth exploring, but care must be taken as to how it might be targeted. Senator Billinger asked about swing bed programs. Mr. Bell said swing beds are not inpatient beds and have tremendously helped a number of small hospitals over the years. Flexibility in models of care is similar to the discussion that preceded the creation of the swing bed concept years ago. It was an idea for inpatient beds to be used for outpatients as needed.

Senator Bollier asked how Medicaid expansion might affect local taxes collected to subsidize hospitals. Mr. Bell said Medicaid expansion could shift taxes from the local level.

Senator Baumgardner, noting the 29 hospitals at risk of closing in Kansas, asked whether some of those hospitals are experiencing labor and delivery shortages. That was the general case, Mr. Bell responded. The Senator asked how many hospitals in Kansas have an average of one inpatient per day. Mr. Bell said the latest available figures show there to be 19 hospitals; there are another dozen or so that have between 1 and 2 inpatients per day.

Senator Baumgardner questioned whether expansion would save those hospitals without changes in healthcare delivery. Mr. Bell said communities need to determine what is the best kind of healthcare to provide.

Chairperson Suellentrop asked Mr. Bell if KHA members are looking at whether hospitals with low volumes need to align themselves with a larger facility and collaborate with personnel. Mr. Bell replied there have been many such discussions, but it is difficult to go into a community and help without making it feel like they are being told what is best for them. Many things have changed in the last 10 or 15 years, and communities are now requesting assistance in evaluating their healthcare capabilities.

Senator Bollier requested KHA put together a list of all hospitals in the state and the services they provide.

Chairperson Suellentrop recognized Kenny Wilk, Vice President, Governmental and Community Affairs, UKHS, who presented comments concerning Medicaid expansion in Kansas

Kansas Legislative Research Department 14 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 (Attachment 10). Healthcare is bigger than numbers, he said. It is about individual patients, their physicians and care providers, and the facilities that serve them. It is about the transformative impact high-quality care has on the lives of people who have access to it and the challenges faced by those who do not. Mr. Wilk offered three themes for consideration:

● The consideration and passage of Medicaid expansion in Kansas will allow the Legislature and administration to have one of the largest impacts on state healthcare policy since the passage of the original Medicaid policy in 1965;

● Passage of Medicaid expansion will make a positive difference in tens of thousands of lives and will allow those who deliver healthcare to do more for patients; and

● Passage of Medicaid expansion will have a positive overall economic impact on the state.

Mr. Wilk stated Medicaid is not healthcare, but rather it is insurance to help offset the cost of delivering care to the uninsured. Given the country’s legal commitment to providing healthcare to all, Medicaid is the public’s largest contribution to “help” meet this obligation and offset costs. Passage and implementation of Medicaid expansion brings nearly $1 billion back to the state. He said Kansans have been paying ACA taxes since 2010. It is not often the Legislature can bring back $1 billion to Kansas. Implementation of this policy will clearly have a positive economic impact.

Many Kansans would have coverage for the first time in their lives, he stated. With that coverage comes the potential to add some stability to their lives and their families. And with that stability comes the opportunity to improve their lives and the lives of their respective families as well.

Senator Masterson said Medicaid expansion is complicated, and he did not not agree it would help everyone. With due respect for his opinion, Mr. Wilk did not agree with Senator Masterson’s perspective on the issue.

Senator Pilcher-Cook provided an example of bed taxes in nursing homes and the effect on the private sector. She concluded it was important to consider the long-term consequences of Medicaid expansion.

Senator Bollier asked if there are any public health benefits to people having access to healthcare. Dr. Moser responded studies confirm this to be true; having insurance improves access to healthcare, resulting in healthier, more productive lives.

Chairperson Suellentrop recognized Jon Hamdorf, Director, Healthcare, Navigant, who testified concerning the work that Navigant is completing regarding sustainability and transformation of rural hospitals. Navigant’s integrated team of healthcare professionals brings a well-rounded perspective to assess opportunities from a government, provider, payer, and community perspective to engage the appropriate stakeholders in transforming care (Attachment 11, Attachment 12, and Attachment 13).

Kansas Legislative Research Department 15 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Navigant suggests a multi-step approach to assess community health needs, including strategic and operational transformation opportunities in rural health. According to Mr. Hamdorf, their approach includes the following:

● Assess community health needs by analyzing patient access and utilization patterns, as well as broader social determinants of health (e.g., transportation, housing, and food security) that impact health outcomes;

● Understand the landscape of rural healthcare, including hospital-based and outpatient services;

● Develop hospital-specific strategic and operational transformation plans tailored to the facility and community to improve viability;

● Assist the facility implement the plan or make recommendations for partners to assist; and

● Engage with local healthcare and other community leaders and residents to develop a holistic understanding of promising practices, opportunities, and barriers to care.

Mr. Hamdorf further stated the factors that contribute to rural hospital success encompass more than just clinical services and reimbursement. Community-specific issues, such as out-migration, workforce availability, and employment are critical to identifying effective approaches. The Navigant team of experts help clients develop comprehensive, tailored solutions that address specific community needs. He shared information concerning Navigant’s work in Tennessee to assist with its Rural Hospital Transformation Program (Attachment 14).

Chairperson Suellentrop announced the proposed bill draft language would be distributed to the Committee members the evening of this meeting date.

Senator Hensley brought to the Committee’s attention the written-only testimony provided by the Alliance for a Healthy Kansas supporting the expansion of KanCare (Attachment 15).

Adjourn

Chairperson Suellentrop adjourned the meeting at 4:24 p.m.

WEDNESDAY, OCTOBER 23 ALL DAY SESSION

Meeting Called to Order

Chairperson Suellentrop called the meeting to order at 9:03 a.m.

Kansas Legislative Research Department 16 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Health Insurance Exchange Experience, Lock-out Period, Social Determinants of Health, and Medicaid Plan Tiers

Chairperson Suellentrop recognized Christopher Priest, Vice President, Medicaid Solutions, Centene, who provided testimony on state innovation and his company’s experience with Medicaid expansion as experienced by Centene Corporation (Attachment 16).

Mr. Priest indicated the expansion population may have different healthcare needs than the traditional Medicaid population, such as behavioral health needs. There may be unique opportunities for addressing social determinants of health (SDoH). Research shows enrollees may have complex needs, such as homelessness, mental illness, and substance abuse. Enrollees reported improved health, ability to work, and employment prospects after receiving coverage. However, some enrollees faced persistent barriers to employment, such as poor health, disability, caregiving responsibilities, and older age. There is “pent-up” demand in the first year of expansion with an increase in hospitalizations, which in the second year can return to comparable utilization rates as found in non-expansion states. There may be an opportunity to increase supply for primary care to improve access. Additionally, federally qualified health centers have greater financial stability in expansion states and they can promote access.

Mr. Priest discussed four areas of consideration with Medicaid expansion: eligibility, delivery system, program design, and implementation.

The testimony included information concerning best practice programs being used across the country and pilot programs that achieve demonstrable results in identifying SDoH risk and improving healthcare outcomes. He discussed enabling healthcare companies to work with community organizations to mitigate SDoH.

Mr. Priest addressed high premiums through reinsurance. Affordability is a concern for many Kansans in the marketplace. Most who are impacted are those ineligible for federal subsidies; they often are rural residents and older adults. Reinsurance can stabilize an insurance market, making premiums more affordable to consumers.

Senator Bollier asked whether the states that implemented Section 1332 waivers with a traditional reinsurance program were on Medicaid. Mr. Priest responded Section 1332 waivers are for marketplace plans. Senator Bollier asked how states determine the cost of the Section 1332 waiver. Mr. Priest said actuarial firms perform the detailed cost analysis. Senator Bollier inquired whether Centene has the same SDoH programming in its marketplace plans as what is done for Medicaid plans. His company’s program design is based on local needs. In some cases, the marketplace and Medicaid programs mirror each other. Mr. Priest responded affirmatively to Chairperson Suellentrop’s observation that while a Section 1332 waiver application can be lengthy and detailed, the analytics necessary to complete the application are readily available.

Senator Denning inquired about the pent-up demand in the first year of implementation, asking whether a 5.0 percent medical inflation rate would be appropriate for year two of implementation. Mr. Priest responded there would be an increase in year one and would like to review data and provide follow-up on that question. There was discussion about standardizing SDoH across the state, but Mr. Priest said the needs vary by communities and it depends on what the State wants to accomplish.

Kansas Legislative Research Department 17 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Bollier inquired where actuaries obtain the data required for a Section 1332 waiver. Mr. Priest responded KID would be one source for the information.

Senator Baumgardner asked for an SDoH example of a pilot program regarding mental health. Mr. Priest explained in Arizona, housing was provided to the homeless, reducing the demand for behavioral health services.

Overview of KANSASWORKS, Workforce System

Chairperson Suellentrop recognized Mike Beene, Director of Workforce Development, Kansas Department of Commerce (Department), who provided an overview of Kansas workforce services. Kansas combines economic development and workforce services in its Department of Commerce. This combination creates a seamless experience for employers as they seek assistance in addressing their employment needs. It helps to assure workforce services programs are employer demand-driven and focused on providing the skilled workforce sought by Kansas employers (Attachment 17 and Attachment 18).

KANSASWORKS links businesses, job candidates, and educational institutions to ensure employers can find skilled workers. It is an integrated, statewide network in which workers receive job-specific training, and Kansas businesses can find the employees they need. Employment services are provided to employers and job candidates through the State’s 27 workforce centers, online or virtual services, and the mobile workforce center. The federally funded workforce development programs are delivered in part through workforce centers. These employer-driven services include recruiting skilled workers, screening and assessing job candidates, and identifying individuals needing skill enhancement.

Universal access is granted to all employers and Kansans for labor exchange, labor recruitment, assessment, testing, and screening services. Qualified access to intensive training and related services is provided to eligible Kansans under the guidance and direction of the Local Workforce Development Board (LWDB). Specialized placement and job location assistance is available to targeted populations, such as veterans, those displaced from work because of foreign competition, and migrant and seasonal farm workers. Mr. Beene explained the purposes of the following programs:

● Workforce Innovation and Opportunity Act (WIOA). For in-school and out-of- school youth and young adults ages 14 to 24, and for adult and dislocated workers age 18 and over, to provide training and other assistance to individuals who are experiencing job loss or lay off, disability, poverty, lack of in-demand job skills, or other significant barriers to employment;

● Rapid Response. A proactive business-focused and flexible strategy designed to respond to layoffs and plant closings by quickly coordinating services and providing immediate aid to companies and their affected workers;

● Registered Apprenticeship. Combines full-time employment, through on-the-job learning under the supervision of experienced journey-level workers, and related technical instruction;

Kansas Legislative Research Department 18 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 ● Trade Adjustment Assistance Program (TAA). Provides reemployment services to U.S. workers who have lost their jobs because of foreign trade as identified within TAA petitions;

● Work Opportunity Tax Credit Program. Encourages the hiring of targeted employees so they move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers;

● Jobs for Veterans Grant. To hire dedicated staff to provide individualized career and training-related services to veterans and eligible persons with significant barriers to employment and to assist employers to fill their workforce needs with job-seeking veterans;

● Older Kansans Employment Program. Provides specialized training, career assessment, job matching, and job search assistance to Kansans age 55 and older regardless of their income, and facilitates the development of job opportunities for older Kansans in private industry;

● Senior Community Service Employment Program. Provides a four-year skills training program through subsidized part-time employment to older Kansans who live at or below the poverty level;

● Kansas Health Profession Opportunity Project. Provides education, training, and employment in the healthcare sector to Temporary Assistance for Needy Families recipients, Supplemental Nutrition Assistance Program recipients, and other low-income individuals;

● My (Re)employment. Provides enhanced reemployment services to Kansans who are unemployed and looking for work; and

● Reemployment Services and Eligibility Assessment. Studies have shown a claimant’s efforts to find new employment and awareness of their reemployment service needs result in shorter claim durations. Provides reemployment services to unemployment insurance claimants.

Responding to questions from Senator Pettey concerning the number of participants served and the delivery method for providing services, Mr. Beene indicated participants can meet with staff in person, by phone, or via virtual platforms. Senator Pettey asked how long the participants are tracked and he responded five years.

Senator Bollier questioned whether people are available where jobs need to be filled. He acknowledged transportation can be a barrier to employment in rural communities. She asked how the potential legalization of marijuana in Kansas would affect hiring practices. Mr. Beene responded the Department has been visiting with employers concerning what changes might be necessary in their hiring practices and drug testing should legalization of marijuana occur in Kansas. Senator Bollier asked whether the Department has made any recommendations concerning child care and other social determinant issues in the state budget process to assist with the employment of Kansans. Mr. Beene replied he was not aware of any such recommendations.

Kansas Legislative Research Department 19 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Taylor asked for an example of how the Department encourages those seeking employment to actively look for work. Mr. Beene provided the examples of requiring a resume by a certain date, requiring a certain level of job search activity in a given time, or meeting in person with a staff member.

Responding to a question from Senator Denning, Mr. Beene said the Department could store data from a workforce questionnaire in a separate database.

Status and Stability of Tobacco Tax Collection, Impact of Increase in Tobacco Tax

Chairperson Suellentrop recognized Kathleen Smith, Director of Research and Analysis, Kansas Department of Revenue (DOR), who provided testimony concerning the status and stability of tobacco tax collection and the impact of an increase in the tobacco tax. Amy Kramer, Financial Economist, DOR, also provided information (Attachment 19).

Kansas has three different excise taxes on tobacco or smoking products (i.e., cigarettes, other tobacco products, and consumable materials). The tax on cigarettes (KSA 79-3310) was enacted in 1927 and most recently increased in 2015. As of July 1, 2015, the tax on cigarettes is $1.29 for a pack of 20 cigarettes and $1.61 for a pack of 25 cigarettes. The tax on the privilege of selling tobacco products was enacted in 1972, and is 10.0 percent of the wholesale price of the product. Tobacco products are defined to include a variety of smoking and chewing tobaccos, but the category does not include cigarettes. The tax on the privilege of selling electronic cigarettes was enacted in 2015 with the tax of $0.05 per milliliter of consumable material imposed on July 1, 2017. Consumable material is defined to mean any liquid solution or other material that is depleted as an electronic cigarette is used.

Written testimony outlined the cigarette and tobacco tax rates from 1927 to the present, recent tax receipts, and estimated revenues that could be realized depending upon the rate increases.

Senator Suellentrop asked about the range of sizes for the cartridges. Ms. Kramer responded a person can purchase a cartridge that will hold 0.7 milliliters or a vial that can hold from 30 to 120 milliliters.

Senator Berger, noting some cities and counties are discussing raising the age to purchase tobacco products to 21, inquired what impact this would have on revenue. Ms. Smith responded there would likely be a decline, but further research would need to be done to provide an estimate.

Senator Taylor asked whether the law specifies the liquid solution or other material depleted in an electronic cigarette must contain nicotine. Mr. Smith responded it does not require the presence of nicotine.

Senator Baumgardner asked if DOR has any historical information on revenues received via online sales. Ms. Smith replied she would follow up on it.

Chairperson Suellentrop asked if Ms. Smith has had any discussions concerning the level of black market tobacco product entering the state. Ms. Smith responded the DOR has worked with other agencies and has included data on this subject in their cigarette and tobacco

Kansas Legislative Research Department 20 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 model. A 5.0 percent decrease of revenue has been added into the model for every 10.0 percent increase in the tax rate.

Chairperson Suellentrop asked if Kansas retailers are at a disadvantage with tax rates on tobacco products in border states. Ms. Smith responded the Kansas cigarette tax is $1.29 per pack. In Missouri, the rate is $0.17 per pack and in the rate is $2.03. Colorado is $0.84 and Nebraska is $0.64.

Senator Berger asked if Native American smoke shops are tax free. Ms. Smith replied she believed that to be so, but she would check.

Chairperson Suellentrop asked whether there was a revenue stream from online purchases of tobacco products from out of state. Ms. Smith replied there should be some revenue; however, the data is not available in a form to allow for the information to be split out from other online sales at this time.

Senator Taylor asked if the current tobacco tax includes cigars. Ms. Smith said yes.

Chairperson Suellentrop asked if there were any other questions from the topics covered either at the previous meeting or from this meeting’s conferees.

Senator Masterson asked Mr. Proffitt, State Medicaid Director, KDHE, whether expansion of Medicaid would provide coverage for controversial family planning procedures such as . Mr. Proffitt replied Medicaid policies in force today should carry forward with any expansion. There are federal regulations concerning the use of federal money for . The Committee discussed the applicability of the Hyde Amendment and the recent ruling on the constitutional right to abortion in Kansas.

After the conclusion of the meeting, personnel with the DOR provided responses to several questions posed by Committee members (Attachment 20).

Chairperson Suellentrop recessed the meeting for a short break.

Committee Discussion, Action, and Recommendations

Chairperson Suellentrop recognized Senator Denning, who gave a presentation on a Medicaid expansion proposal involving innovative solutions for affordable healthcare. (Attachment 21 and Attachment 22).

Senator Denning said the points covered in the presentation are included in bill draft 20rs1873, which was distributed to Committee on October 22, 2019 (Attachment 23). Senator Denning said there was an error in draft 20rs1873. A reference to 5.0 percent of income should read as 5.0 percent of household income.

Lunch

Chairperson Suellentrop recessed the meeting at 11:47 a.m. and called the Committee back to order at 1:30 p.m.

Kansas Legislative Research Department 21 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Chairperson Suellentrop recognized Scott Abbot, Assistant Revisor of Statutes, Office of Revisor of Statutes, who reviewed a comparison of bill draft 20rs1873 to 2019 HB 2066 (HB 2066), as amended by the House Committee of the Whole (Attachment 24). The following provisions exist in substantially the same form in both 20rs1873 and HB 2066:

● Authority for KDHE to submit to the federal government any approval request necessary to implement the respective program;

● Exclusion from the work referral for full-time students enrolled in a postsecondary education institution or technical school;

● Redirection of revenues from privilege fees assessed on health maintenance organizations associated with expansion beneficiaries to a new special revenue fund to be used for medical assistance payments for expansion beneficiaries; and

● Requirements imposed on KDHE and the Secretary of Corrections to make annual reports to the Legislature identifying costs and cost savings.

In response to a question from Senator Pettey concerning Section 12 of the draft 20rs1873, Mr. Abbott said it was his understanding the Department of Corrections would make resources available to the county authorities to facilitate Medicaid coverage.

Concerning legislative oversight in Section 2, Senator Hensley asked what happens after the waiver to be submitted to the federal government is submitted at least ten days prior to this submission to the House and Senate budget and health committees and the Legislative Coordinating Council. Mr. Abbot replied the purpose is to inform these committees the waiver is being submitted to the federal government. Senator Hensley replied the provision appears to not be one of legislative oversight and lacks impact since it is not requesting feedback from the committees.

Chairperson Suellentrop commented it is likely this bill draft will have additional revisions prior to introduction. Noting a concern about notification, he said the goal at this point is to provide information to the appropriate parties for review.

Senator Hensley stated he appreciated Section 14 of the bill draft, which requires the Legislative Division of Post Audit to conduct an audit of the direct economic impact of the program on the State General Fund during the first two fiscal years of the program.

Senator Taylor asked whether other states are imposing a surcharge on hospitals. Mr. Abbott responded he could not speak to whether or not this was a common practice. Senator Denning indicated this was a fairly common practice, with Virginia being the most aggressive. Senator Taylor asked about the flexibility of the $31.0 million noted in the bill. Senator Denning responded the language in the bill is placeholder language to be revised as necessary prior to final draft of the bill.

Senator Berger asked how hospitals would be assessed the surcharge. Senator Denning responded it was possible the surcharge would be based on a hospital’s Medicaid revenue stream, rather than on the hospital’s entire revenue stream.

Kansas Legislative Research Department 22 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Bollier asked whether there would be a separate surcharge from what is charged already. Senator Denning responded there is a match on the current surcharge and the task now is to structure the surcharge to get to the 90.0 percent match. This is a common approach being used by other states.

Senator Masterson asked about the use of the term “non-disabled” in Section 3. Mr. Abbott responded the language was copied from HB 2066.

Senator Berger asked whether there would be a timeline on the waiver processes. Senator Denning responded there are no deadlines in the draft. However, from the earlier testimony presented, he assumed Kansas would be given the same timeline as other states working through the respective waivers.

Senator Masterson asked if any consideration had been given to enrollment greatly exceeding what has been anticipated. Senator Denning responded only the information on the preliminary fiscal note was utilized. The estimate was 150,000 participants.

Senator Berger referred to the 35 percent increase that was mentioned in the prior meeting’s testimony. Mr. Proffitt noted the 150,000 participant figure would be roughly a 35 percent to 36 percent increase in the program. He said the national average of states that have expanded is around a 35 percent increase, but this includes all states that expanded from 2014 forward. The most recent states that expanded after 2014 have averaged a 22 percent increase. The 150,000 figure is conservative and should be on the high side.

Senator Pilcher-Cook expressed concern about the increase in number of abortions being publicly funded. Senator Bollier said it was illegal for Medicaid funds to be use for abortions and requested staff to clarify the issue. Mr. Proffitt said current Kansas policy for Medicaid programs is to follow the Hyde Amendment.

Senator Bollier asked Senator Denning if he has had discussions with the Kansas Insurance Commissioner about the high deductible health plan concept. He said he had discussions with both insurance companies that sell policies on the health insurance exchange (Exchange) and KID. He said the concept would be for the individual market, both on and off the Exchange.

Senator Bollier asked how the emergency room visit co-pays would be billed. Senator Denning said the billing would be dictated by the insurance companies. Allowable expenses would be paid by Medicaid, and nonallowable expenses would be billed to the individual.

Senator Bollier asked whether there would be any exceptions, such as someone who becomes ill and cannot work to earn an income. Senator Denning noted 2019 HB 2066 has a provision to lock out a person from Medicaid for life for unpaid premiums. Other states’ lock-out provisions were used to arrive at the language in the draft bill.

Senator Denning explained if the federal match rate were to decrease to less than 90.0 percent, Kansas would stop enrolling new patients in Medicaid, and at the end of 12 months the expansion program would end.

Senator Denning reviewed the Federal Medical Assistance Percentages (FMAP) stabilization fund concept.

Kansas Legislative Research Department 23 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Bollier asked Chad Austin, KHA, about the proposed hospital surcharge. He responded KHA is currently reviewing options on how to structure the surcharge.

Senator Hensley asked for more details concerning how the proposed $50 million tobacco tax would be broken out. Senator Denning responded this was yet to be determined in working with the DOR. Senator Hensley asked if there would be an amendment to the bill or if there would be a separate bill. Senator Denning said the options needed to be reviewed.

Senator Hensley asked Mr. Proffitt what he would consider to be the difficulties in trying to implement the proposal, particularly as it relates to the cascade approach with the three options. Mr. Proffitt responded KDHE needs to review the proposal and determine any concerns. He said he was not certain CMS would be willing to review all three options at once. It may be necessary to submit one option at a time.

Senator Berger asked Senator Denning what he estimated the revenue generated would be from 5 percent of household income. Senator Denning responded approximately $500,000 to the State.

Senator Masterson asked Mr. Proffitt whether CMS has consistently approved work requirements and Mr. Proffitt responded affirmatively.

Senator Pettey asked Senator Denning if he had stated the number of uninsured Kansans has been increasing. Senator Denning responded he had not, but the number of participants in the individual market had been increasing.

Senator Pettey asked Mr. Proffitt if it was correct each waiver would need to be submitted separately. Mr. Proffitt said each waiver would take several months of work for the actuaries to make their calculations.

Senator Pettey requested Mr. Proffitt to review the timeline for a Section 1115 waiver to be considered after submission. He indicated a new waiver application would take longer than an amendment to the current process.

Senator Pettey asked Senator Denning about the premium equal to 5.0 percent of the individual’s modified adjusted gross income, saying it appeared it might be around $79 per month. Senator Denning said this amount would be similar to what would be paid for healthcare on the Exchange for those in the 100.0 percent to 138.0 percent of FPL.

Chairperson Suellentrop asked Mr. Abbott to review information concerning the Hyde Amendment. Mr. Abbott said the amendment started in 1976 and was amended in 1997. The current version of the amendment is included in the federal budget every budget cycle. The amendment language provides that none of the funds appropriated and none of the funds in any trust fund to which funds are appropriated shall be expended for any abortions. None of the funds appropriated and none of the funds in any trust fund to which funds are appropriated can be expended for health benefit coverage that includes coverage of abortions. There is the exception the limitations established in the preceding section will not apply to an abortion if the pregnancy is the result of an act of rape, incest, or in the case where a woman suffered from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself that would, as certified by a physician, place the woman in danger of death unless an abortion is performed. Mr. Abbot indicated this

Kansas Legislative Research Department 24 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 language applies to all federal appropriations to every federal agency and anything to which federal funds are expended.

Mr. Abbott said, on a related note, state law (KSA 65-6733) limits certain funding for abortions. It was enacted in 2013 and provides that no money appropriated from the State General Fund or from any special revenue fund shall be expended for any abortions. It includes some provisions about treating tax status of earnings in accounts that are run through the State, and prohibits abortions being included in health services provided by any employee of state agencies, while the employee is acting within the scope of state employment.

Senator Pilcher-Cook asked about the potential impact of the recent Kansas Supreme Court ruling concerning abortion rights in Kansas. Mr. Abbott responded he was not in a position to speculate about how the decision could apply to the use of state funds for abortions.

Senator Bollier asked Dr. Lee Norman, Secretary of Health and Environment, whether health outcomes have improved because the State has moved to the KanCare model and how it compares with the fee-for-service model or the Exchange. Secretary Norman said there are pros and cons for each alternative. He said managed care format lends itself to improving health outcomes.

Senator Bollier asked about the 5.0 percent surcharge on hospitals and how the hospitals might react to this surcharge. Secretary Norman stated, in his opinion, taxing hospitals providing Medicaid services is counterproductive and backwards.

Senator Bollier asked Mr. Proffitt whether other states have a 5.0 percent surcharge. Mr. Proffitt said he would need to research the question.

Chairperson Suellentrop opened the meeting for Committee discussion and action.

Senator Masterson moved, seconded by Senator Baumgardner, to recommend the Kansas Department of Commerce initiate a rural healthcare task force to address the rural healthcare issue. The motion passed.

Senator Masterson moved, seconded by Senator Baumgardner, to recommend the Kansas Hospital Association provide data concerning the potential cost shift to commercial healthcare plans resulting from an expansion of Medicaid in Kansas. The motion passed.

Senator Baumgardner moved, seconded by Senator Denning, bill draft 20rs1873 be revised, changing the reference of 5.0 percent of income to 5.0 percent of household income. The motion passed.

Senator Baumgardner moved, seconded by Senator Pilcher-Cook, to recommend the Kansas Hospital Association work with The University of Kansas Health System to evaluate applying for a demonstration project for a modified rural health delivery system. The motion passed.

Senator Baumgardner moved, seconded by Senator Denning, to recommend a letter be drafted to the Kansas congressional delegation requesting support of efforts to modify the Kansas rural healthcare delivery system, pending the approval of the Legislative Coordinating Council. The motion passed.

Kansas Legislative Research Department 25 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Billinger moved, seconded by Senator Baumgardner, bill draft 20rs1873, as revised, be introduced by and recommend the bill be referred to the the Senate Select Committee on Healthcare Access.

Chairperson Suellentrop stated it was his understanding the Committee has the flexibility of functioning through 2020. Mr. Abbott said he was not aware of that authority based upon the wording of the Committee’s charge. Chairperson Suellentrop replied it was his understanding the Committee would be charged with heath care access through the 2020 Session to address this particular issue. He said if that was not correct, it would be clarified.

Senator Billinger withdrew his motion.

Senator Billinger moved, seconded by Senator Estes, bill draft 20rs1873, as revised, be introduced on the first day possible during the 2020 Session and recommend the bill be referred to either the Senate Select Committee on Healthcare Access, pending that Committee’s re- authorization to meet, or in the alternative, to the Senator Committee on Public Health and Welfare. The motion passed.

Senator Hensley gave notice a minority report would be written and sent to the Special Committee on Medicaid Expansion concerning bill draft 20rs1873.

Senator Baumgardner asked Senator Hensley to share what he planned to include in the minority report. Senator Hensley said he has a list of concerns and would be willing to send the minority report to each member of the Committee. The minority report will outline concerns about each section of bill draft 20rs1983. Senator Baumgardner said she respected the committee process and preferred open discussion from all sides of an issue in order to arrive at solutions. She said she felt it was a disservice to the committee process and to those listening to the meeting not to have open discussion about Senator Hensley’s concerns. She requested Senator Hensley to read his list of concerns.

Senator Hensley replied the process of submitting a minority report has been utilized in the past, particularly for interim studies. Senator Baumgardner responded she thought it would be appropriate for Senator Hensley to provide a list of his concerns at this point in the Committee meeting.

Senator Hensley replied he had concerns about the following issues: multiple alternate waivers, including a super waiver; the verification of cost savings; premium proposals; the six- month lockout; the emergency room co-pay; premium assistance; the likelihood of increased premiums; the cost of administering the bill draft’s provisions; and the tobacco tax revenue. These concerns will be addressed in the minority report.

Senator Pettey expressed concern about there being no date certain for waiver applications to be submitted to CMS.

Senator Bollier expressed a concern that Committee members had only received the bill draft 20rs1873 on the evening of October 22, 2019, and there had not been much time to thoroughly review the draft. Chairperson Suellentrop noted there is a meeting scheduled two weeks after this meeting by the Special Committee on Medicaid Expansion and work will continue on the issue during the 2020 Session.

Kansas Legislative Research Department 26 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019 Senator Billinger moved, seconded by Senator Denning, the bill draft 20rs1873, as revised, be reported to the Special Committee on Medicaid Expansion (Special Committee). The motion passed.

Senator Billinger moved, seconded by Senator Baumgardner, a comparison of bill draft 20rs1873, as revised, to HB 2066, as prepared by the Revisor, be reported to the Special Committee. The motion passed.

Senator Bollier moved, seconded by Senator Pettey, a comparison of bill draft 20rs1873, as revised, to 2019 SB 54, as prepared by the Revisor, be reported to the Special Committee. The motion passed.

Senator Denning moved, seconded by Senator Pilcher-Cook, to recommend for the Kansas Department for Aging and Disability Services to provide testimony for bill draft 20rs1873, as revised, to that Senate committee which hears this bill; and to apply for a waiver via statute on the Institutions for Mental Disease (IMD) exclusion recommended by the Task Force on Mental Health and also the guidelines CMS published in its November 1, 2017, letter to state Medicaid directors that references the integration of crisis stabilization centers into the IMD exclusion. T he motion passed .

Senator Denning moved, seconded by Senator Berger, to request the Kansas Insurance Department to begin work on a Section 1332 waiver and contract with an actuarial expert on Section 1332 waivers, without requiring approval from the Kansas Department of Administration to enter into a contract for the services. The motion passed.

Adjourn

The meeting adjourned at 3:40 p.m.

Prepared by Debbie Bartuccio Edited by Reed Holwegner

Approved by the Committee on:

December 23, 2019 (Date)

Kansas Legislative Research Department 27 Senate Select Committee on Healthcare Access – Minutes for October 22-23, 2019