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August 29 and 30, 2002
Room 302, State Capitol
Cheyenne, Wyoming
Senator Charles K. Scott, Cochairman;
Representative Carolyn Paseneaux, Cochairman;
Senators Tex Boggs, Cale Case and Mike Massie;
Representatives Jerry Iekel, George B. McMurtrey, Larry Meuli, Ann Robinson, Tony Ross and Jane Wostenberg.
John H. Rivera, Senior Staff Attorney
Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.
Representative Doug Osborn
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Chairman Paseneaux called the meeting to order at 9:05 a.m. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
Dr. Davis Crowder, M.D., provided a PowerPoint presentation entitled "Help me Doctor! I've been billed and I can't get up" (Appendix 3). The presentation included information about what companies are attempting to do to control health insurance and health care costs for employees by addressing unnecessary medical procedures. The fringe benefits, including health care costs, now constitute a significant part of employees' compensation package. Among the ways he proposed to control health care costs is to address medical malpractice liability costs, provide financial incentives for prudent use of insurance and allow the employee to participate in the decision-making process with respect to the purchase of insurance.
Mr. John McBride, Insurance Commissioner, explained the information he had sent to the Committee earlier (appendix 4) contained old data from last year and more recent data obtained with respect to health care insurance in Wyoming. He explained much of the data follow national trends with some unique factors related to Wyoming's low population density, including the lack of managed care organizations, with a single exception in Cheyenne. Insurance companies are leaving the marketplace and a lack of competition is not good for the consumer. In a noncompetitive marketplace, i.e., fewer than 5 insurers, the Insurance Commissioner can regulate rates. If the Department is to get into extensive rate regulation, the Department would need a professional actuary on staff.
Ms. Lynn Birleffi, Wyoming Lodging and Restaurant Association (WLRA), presented materials (Appendix 5) from Mr. Scott Kipper, National Insurance Association of America, explaining why premiums for small employer health insurance continue to rise. In addition, the WLRA is working on developing cafeteria plans to allow for more choices by employees with respect to the level and types of coverage they want.
Ms. Patricia Guzman, KidCare Program Manager, provided an update of the KidCare program in Wyoming and the estimated number of uninsured children in the state (Appendix 6). The Urban Institute estimates that 13.4% of the children in Wyoming are uninsured. The number of children covered by the KidCare Program have remained consistently at about 3,000. Another estimated 7,100 uninsured children are Medicaid/KidCare eligible. She described the program and the problems implementing the voucher portion of the program. She provided costs for the program if the eligibility for the Medicaid look-alike program were to be increased from 135% of the federal poverty level (FPL) to 150%, 185% and 200% of the FPL. Senator Scott predicted the KidCare federal match rate (72.9% as of October 1, 2002) would eventually drop to the Medicaid federal match rate. Mr. Rich Schum, Blue Cross/Blue Shield of Wyoming, stated the Montana program privatized its KidCare program through Blue Cross/Blue Shield and is paying providers between the Medicaid reimbursement rate and the Blue Cross reimbursement rate.
Ronda Eagleson, Wyoming Nursing Association, distributed Appendix 7, an analysis of the nursing supply in Wyoming by Tony Glover, Senior Analyst with the Wyoming Department of Employment. She stated that nursing education programs are necessary because nurses educated in the state are more likely to remain in the state than nurses recruited from out-of-state.
Mr. Bob Kidd, Wyoming Hospital Association (WHA), stated Medicaid has never paid actual costs incurred by hospitals. He distributed Appendix 8, Wyoming Hospital Uncompensated Care Study. Short term solutions to Medicaid only create problems elsewhere in the system. About 64.7% of total patient care days are paid by Medicaid. An average cost for a stay in a Wyoming hospital is $10,682,92. The Wyoming Medical Center in Casper gets $.58 reimbursement for $each 1.00 of actual costs for treating trauma patients, which is quite low because patients in motor vehicle accidents seldom have adequate insurance coverage. He stated another cause of increasing health care costs is a workforce shortage, which is why the hospital in Lusk closed. He recommended raising the minimum insurance coverage required under Wyoming motor vehicle statutes, enacting some tort reform that the WHA is developing with the Wyoming Medical Society (WMS), reintroducing the nursing education bill that failed last session, and creating an intergovernmental transfer program similar to Montana's to leverage federal Medicaid funds by using funds provided by hospital governing boards to increase Medicaid reimbursement rates to something closer to actual costs incurred.
Mr. Kenneth McBain, Community Health Center of Central Wyoming, distributed Appendix 9 which contained his presentation to the Committee. To address the health care crisis in the state, he recommended expanding KidCare to 180% of the FPL, creating a program to educate and train medical professionals locally, address the basic reimbursement structure of state funded programs, review state licensing standards to see if barriers exist to attracting medical providers to the state, and a universal health care system that provides care for all.
Ms. Wendy Curran, WMS, distributed Appendix 10, consisting of her PowerPoint presentation, a proposal from the American Medical Association (AMA) and an article from the U.S. Department of Health and Human Services entitled Improving Health Care Quality and Lowering Costs by Fixing Our Medical Liability System. She stated that hospital costs have superceded pharmaceutical costs as the number one driver of health care costs. The AMA is promoting a shift to individual ownership of health insurance to get the consumer involved in the insurance equation. She suggested that even a single claim against a medical provider can make it difficult for the provider to obtain affordable insurance and recommended placing a cap on noneconomic damages. In response to a question how a cap on damages would improve the situation if insurers are leery once a provider had had a claim filed against him, she state caps on damages have improved the situation in California because it limits exposure and provides the predictability insurers want.
Mr. John Arross, Wyoming Medical Center pharmacist, introduced Mr. Ralph Bartholomew, who has provided pharmaceutical consultations to residents in Worland which has resulted in substantial savings for those individuals who presented his suggested alternatives to their treating physicians. He distributed Appendix 11 to illustrate his efforts. Because physicians often prescribe medications based on samples they have received from drug company representatives, they often are ignorant of the costs to the patient. With the help of a pharmacist, patients can find lower cost alternative drugs that may result in significant savings for the patient. He believes patients should take charge of their medications and communicate with both their pharmacist and physician.
Mr. James Carder, Wyoming Board of Pharmacy, distributed Appendix 12, consisting of proposed statutory changes to provide a controlled substance prescription tracking program, a statement of the misuse, abuse and diversion of prescription drugs and a copy of the preliminary study developed by the Department of Health in support of a substance abuse plan. He requested support for the proposed legislation which would require all pharmacists to send monthly reports to the Board listing all controlled substance dispensed during that month.
Ms. Cheryl McVay, AARP, distributed Appendix 13 containing fact sheets on the AARP in Wyoming and the health status of Wyoming senior citizens and State Profiles 2001, an AARP Public Policy Institute document. She recommended increasing the tobacco tax and dedicating the increased revenues to health care program, including Medicaid, developing prescription drug discount legislation, and addressing innovative cost-containment measures that do not create incentives to shift costs inappropriately. the drug prescription program could be modeled after the Oregon plan. The Committee was advised that Oregon is willing to sell its formulary to other states for $100,000.00.
The Committee recessed at 5:35 p.m.
Chairman Paseneaux called the meeting to order at 8:35 a.m.
Chairman Paseneaux stated that others who had not had opportunity to the previous day would be allowed to speak before proceeding with the current day's agenda.
Dr. Harold Gardner, OCI Inc., provided a PowerPoint presentation of the impact of rising healthcare costs. He promoted treating health benefits as investments to obtain information symmetry where data and information are equally available. He used the Pareto Analysis process to illustrate various points with respect to demand risk analysis and a maldistribution analysis. Recommendations included having good information and managing that information, having good employer/employee relationships and avoiding managed care.
Mr. Tom Jones, National Federation of Independent Businesses, distributed Appendix 14 consisting of his testimony before the Committee and a Washington Policy Brief. He stated government regulation is responsible in part for the increasing cost of health insurance, including cost shifting, taxation, administrative burdens and mandates. This has resulted in an increasing number of uninsured. The best short term solution is to authorize simple basic health insurance without mandates. Wyoming is close to a monopoly situation in the area of health insurance because so few insurers are involved in the state. Our experience with competition shows no lower prices for the consumer, but a larger infrastructure. He suggested that possibly health care should be treated as a regulated utility.
HIV/AIDS Funding
Ms. Sharon Renter, Department of Health HIV/AIDS Program Manager, distributed Appendix 15, describing the funding sources for the program. She explained that some federal funding is based on where the individual was first diagnosed as HIV positive. Thus, someone who was diagnosed in another state and later moves to Wyoming would count as a funding statistic for the state where diagnosed rather than the current state of residence.
Mr. Kenneth Galbraith, Department of Health, advised that there are currently 72 program clients in Wyoming who are uninsured, of the approximately 170 HIV/AIDS infected individuals living in the state. The state is purchasing the medications for those uninsured. As a result the program is expecting a budget deficit of $80,000.00 for the fiscal year. To address the short fall, the Department is proposing a 90 day waiting period to eliminate persons who may be just visiting relatives for the Summer. Also the Department is seeking state funds to leverage some federal funding that has become available. This federal funding would be only used for drug purchases and would help alleviate the state's burden of providing services to individuals diagnosed in other states who are now living in Wyoming.
Ms. Tonya Kain, Wyoming AIDS Project, advised that there are 28-30 HIV/AIDS infected individuals living in Natrona County. The individuals affected are not limited to males, thus, the needs vary by individual. There has been an increasing incidence of emergency room visits and hospitalizations. She stated funding is needed for early intervention and for addressing wrap-around services.
Mr. Bob Hooker introduced himself as a third generation Wyomingite who is infected with HIV. He probably contracted the virus in Wyoming, but was not diagnosed until after he moved to Maryland. After diagnosis, he returned to Wyoming to be close to his family and support network. He stated that HIV/AIDS infected individuals who don't get services become disenfranchised and, thereby, more infectious. With good care, the same individuals feel better, have higher self-esteem, and become more productive and less infectious.
Medicaid – Federal Initiatives
Ms. Iris Oleske, Department of Health Office of Medicaid, distributed Appendix 16, published by Tucker Alan. Inc. She stated Medicaid is the part of the big picture that the Legislature can affect to control health care costs. Low provider reimbursement is part of the problem, resulting in a cost-shifting to private pay patients. Because Medicaid recipients have to pay little or nothing for the services, there is no incentive to limit usage of the program. The original intent of the program was to provide some reimbursement to providers for what had been charity cases. The program has since grown with some expensive programs and waivers. To solve a part of the problem with respect to cost-shifting, it would be necessary to increase the Medicaid budget to allow an increase in the reimbursement to providers. The intergovernmental program proposed by the WHA could also help address cost-shifting. Another solution could be to allow the Medicaid buy-in program to increase to 200% of the FPL with a sliding premium scale to address the problem of the uninsured in Wyoming.
Ms. Oleske stated the Medicaid program is a federal program that uses the states as the workshop where innovations are occurring. The federal government is protective of the very low income, elderly and handicapped, but beyond those populations states are given much flexibility through the waiver process. Some states are allowing a Medicaid buy-in for small employers to pay the premiums. Senator Scott stated that U.S. Secretary of Health and Human Services Tommy Thompson is very receptive to waiver proposals.
Ms. Roxanne Homar, Department of Health Pharmacist, distributed Appendix 17, describing cost drivers in Medicaid Prescription Drugs and containing some federal initiatives with respect to prescription drugs. She stated Medicaid is the largest public payor of prescription drugs and is still paying retail, unlike some other federal programs, e.g., the Veterans' Administration. Consumers who don't pay for the drugs will not chose a generic drug over the expensive, well-advertised, patented drug. Some federal initiatives include cost containment and creating a drug benefit for seniors. Due to a lack of federal action, many states have created their own prescription drug programs for seniors. Illinois and Wisconsin both have a "Pharmacy Plus" Medicaid waiver for seniors up to 200% of the FPL. The Department would like legislative authority to create a preferred drug list to allow use of lower cost drugs when the drugs are being paid for by a publicly funded program.
In response to a question from Representative Ross, Ms. Homar explained that the Drug Utilization Review (DUR) Board is federally required. Complaints about the DUR Board came from the drug companies because the latter were opposed to the prior authorization process that was being proposed.
Medicare – Federal Initiatives
Mr. Lloyd Wilder, Insurance Department, distributed Appendix 18, containing his testimony before the Committee and a pamphlet about the Wyoming Senior Health Insurance Information Program. The federal initiatives in Medicare include increasing in-patient care payment increase to hospitals of 2.95% and out-patient care payment increase of 3.5%. Medicare is also attempting to expand telehealth medicine in the nation.
Mr. Wilder described the Wyoming Senior Health Insurance Information Program. It is a volunteer program that provides one-to-one counseling on Medicare to recipients, not all of whom are seniors. Not all volunteers are seniors either. The program is federally funds under OBRA '90 to help Medicare recipients avoid the purchase of unnecessary or expensive Medicare supplemental insurance policies.
Committee Discussion
After asking Committee members to each present what they believed were the most important issues the Committee should consider in addressing the dramatic increase in health care costs, Chairman Scott assigned duties to members, staff and agencies to develop proposed legislation to be considered by the Committee at the next meeting. Those assignments include:
Chairman Scott also called for volunteers to serve on a subcommittee that would work with the Department of Health Task Force on the Uninsured. He advised the Committee has no funding to pay the volunteers, but the Department would pay their travel expenses out of the federal grant under which the Task Force will operate.
Chairman Scott advised the Committee would probably meet two more times, once to look at the proposed draft legislation that will be drafted, and another time to finalize its work on the legislation it may sponsor.
There being no further business, Chairman Scott adjourned the meeting at 4:15 p.m.
Respectfully submitted,
Senator Charles K. Scott, Representative Carolyn Paseneaux,
Cochairman Cochairman