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October 18,2002
Oil & Gas Conservation Commission Building
Casper, Wyoming
Senator Charles K. Scott, Cochairman;
Representative Mike Baker, Cochairman;
Senators Jim Anderson, Tex Boggs and Rich Cathcart;
Representatives George B. McMurtrey, Carolyn Paseneaux and Harry Tipton
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.
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.
Cochairman Baker called the meeting to order at 8:35 a.m.. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
Approval of Minutes
Minutes of the May 14, 2002, meeting were approved with no corrections.
Dr. Gardner provided a Power Point presentation (see Appendix 3) explaining how health care costs could be reduced and worker productivity enhanced if market forces were allowed to prevail. A key component is to treat health benefits as investments, not costs. It is important to convert information into useful data for appropriate risk analysis. Government should get out of insurance because public insurance programs reduce payments to health care providers, resulting in cost-shifting. He didn't know of any incentives that could improve the functioning of the public health insurance programs. Youth are a better investment than the elderly, but even though the birth rate exceeds the death rate in Wyoming, the state continues to lose population. The high maternal/obstetrics caseload in the Medicaid program should be a red flag that bears further study. He believes Wyoming should build a relational database to understand how to create efficiencies in the Medicaid program.
Dr. Brent Sherard, M.D., Director, Department of Health, reminded the Subcommittee that the Department had been charged with providing specifics to the Subcommittee with respect to how the Department would get Medicaid spending under control. He introduced Ms. Iris Oleske and Ms. Roxanne Homar who would explain the specifics of the Department's plan.
Ms. Oleske, Office of Medicaid, distributed Report 2.1, Medicaid Cost Containment Program, October 2002 Update (Appendix 4). She explained the efforts the Department has taken to contain costs since the meeting with the Subcommittee in May. Under a federal grant, the Department has created an Uninsured Task Force to come up with solutions to the problem of the uninsured in the state. The Department has also assembled a Medicaid Physician Advisory Council to assist it in determining when requested services are medically indicated. That Council is not intended to supplant the Medicaid Advisory Council which serves a different purpose. The Medicaid Program still has much to do in the area of pregnancy complications because Wyoming has a high incidence of alcohol and substance abuse by pregnant women, as well as other complicating factors. Various divisions within the Department are involved in a project to share data in a human services database through links in a manner to protect confidentiality as much as possible.
Ms. Homar, Department Pharmacist, explained the strategies the Department is employing to reduce costs in the pharmaceutical program. Senator Scott asked Ms. Homar to provide the assumptions used to determine the savings that would be realized.
Because of his schedule, Dr. Crowder was allowed to testify. Cochairman Baker explained that the Subcommittee would return to the Department's Report at the conclusion of Dr. Crowder's testimony.
Dr. Crowder provided the Subcommittee with information on the costs of pharmaceuticals. He compared the costs of various drugs used to treat a variety of commonly occurring ailments and the amounts spent by pharmaceutical companies in advertising in comparison to other manufacture and service industries (Appendix 5). The drug companies spend an average of $10,000.00/year/physician on academic detailing, much of which was actually spent on gadgets and treats to gain access to the physician. Evidence showed that only a 5% impact on drug costs was obtained through academic detailing, because the states can't compete with the pharmaceutical companies in advising physicians about drug therapies.
He stated the Oregon formulary is being sold for $100,000.00, but is available on an Oregon website. Oregon also has a ballot initiative to become a single payor state for health insurance.
Dr. Sherard added that Wyoming has no background with respect to a formulary or a preferred drug list, so the Department would have to do some background work in that area.
Department of Health Medicaid Report (continued)
Ms. Oleske and Ms. Homar then presented the Department strategies described in the report to contain cost in the Medicaid Program. After considering those strategies, the meeting was opened for public comment.
Ms. Oleske advised Representative McMurtrey that she would look into whether a broad based diabetes education program, as exists in Campbell County, is reimbursable under Medicaid.
Ms. Bernice Strand, M.S.W., stated she was in private practice as a licensed clinical counselor, but could only be reimbursed by Medicaid if the client she treated was referred first by a physician. She requested the Legislature consider authorizing direct reimbursement to providers. Ms. Oleske responded that the authorized services listed in W.S. 42-4-103 are inconsistent as to whether or not a practitioner needs a referral before reimbursement can be authorized. She stated the Mental Health Division certifies who can provide the services. Mental health centers attempt to limit who may be certified.
Senator Schiffer testified that the Select Committee on Mental Health Services had considered the issue previously and a unique situation in Natrona County should not be a reason to revise a certification program that otherwise works well in the rest of the state.
Mr. Dan Perdue, Wyoming Hospital Association, advised that 4 or 5 hospitals in the state are critical access hospitals and another 3 or 4 are seeking status as such for reimbursement purposes. That is why the WHA is proposing an intergovernmental transfer program to the Joint Labor, Health and Social Services Interim Committee.
Mr. Tom Jones, National Federation of Independent Businesses, stated the impact on independent pharmacies by the Department's strategies is indirect, but important to keep in mind because the Medicaid reimbursement to small pharmacies is the same as for Wal-Mart, even though the purchasing power of each is very different
Mr. Bill Thomson, Pharmaceutical Research & Manufacturers of America (PhRMA), expressed concerns with the preferred drug list because it could place barriers between the physician and the patient. He recommended keeping due process in mind if the physician and the Department disagree on a drug regimen for a particular patient since not all patients react similarly to the same drug.
Ms. Susie Wacker, Wyoming Medical Society, expressed support for the Department's efforts at cost containment, but wants to ensure that the integrity of the medical decision-making process is not affected by the preferred drug list.
Mr. Bill Sexton, Wyoming Behavioral Institute, proposed consideration of last year's mental health parity bill. Since most private insurance policies don't cover extensive mental health services, some cost-shifting to the Medicaid Program occurs.
Senator Scott moved, seconded by Representative McMurtrey, to approve the Department of Health's report and the strategies proposed therein. The motion carried unanimously. Senator Scott asked the Department to keep the Subcommittee informed of updates on the progress of the strategies.
Preferred Drug List, 03LSO-0155.W1
Senator Scott advised the Department had requested the Joint Labor, Health and Social Services Interim Committee provide some direction to the Department with respect to the establishment of a preferred drug list. As Cochairman of the Joint Labor, Health and Social Services Interim Committee, Senator Scott asked that the proposed draft legislation be provided to the Medicaid Subcommittee for review. He asked the Department to explain the bill and whether the bill is actually necessary, since the request for the bill came from the Department.
Ms. Homar stated she didn't know if the bill is actually necessary, but the Department wanted direction from the Legislature before proceeding with the establishment of a preferred drug list, particularly in light of lawsuits PhRMA has instituted in other states with preferred drug lists.
Ms. Oleske added that the Department's authority to administer the state Medicaid plan is sufficient authority, but the fact that PhRMA is oppositional to the establishment of preferred drug lists makes it necessary for the Department to seek legislative direction before proceeding on the issue.
After discussion of the proposed draft legislation, Senator Scott stated that since the Subcommittee had just approved the Department's proposed strategies, including strategy No. 7 to establish a preferred drug list, that approval should be a sufficient show of support for the Department to proceed, depending on the outcomes of pending lawsuits by PhRMA.
Representative Paseneaux questioned why not place a pharmaceutical representative on the Drug Utilization Review (DUR)Board. Mr. Thomson reiterated his request for an open process, citing a Wyoming Tribune Eagle editorial about secrecy in the process used by the DUR Board. Ms. Homar responded that the process has always been open, but neither PhRMA nor the media was interested in attending until the prior authorization issue arose. Representative Paseneaux asked if there would be a problem with putting the DUR process in statute and making it subject to the Open Meeting law. Ms. Homar replied that the DUR is already federally required and DUR Board is only advisory, so it is not currently subject to the Open Meeting law.
Pharmacy Plus Option
Ms. Homar distributed Appendix 6, consisting of graphs describing Wyoming's and various surrounding states' current Medicaid enrollments and a memorandum explaining the potential effect on enrollment in Wyoming if a pharmacy plus option were to be authorized.
Medicaid Budget –- Cost-shifting
Ms. Oleske distributed Appendix 7, a Department of Health report on Medicaid reimbursement. Ms. Oleske advised that the information in paragraph II. contained an error. In the last sentence of that paragraph, "60 percent" should be "70 percent". She explained the data contained in the report included waiver services that are price-based and mental health services that are set by the Mental Health Division. Other services are often cost-based. Also, since prescription drug are often subject to rebates and market forces outside the control of the state, full cost coverage of prescription drugs is excluded from the report. After an explanation of the assumptions made in the report, she advised that for FY2003, if the Department is to pay 100% of costs, it would require an additional $19,918,977. To pay 70% of billed costs would require an additional $58,693,957.
Limitation on Changes to Medicaid State Plan
Senator Scott explained his proposal for draft legislation to limit the authority of the Department of Health to amend the state Medicaid plan (Appendix 8). He suggested the bill may be more appropriately considered by the Joint Appropriations Interim Committee, since the purpose of the proposed legislation would be to control potential increases in the Department's budget as a result of changes that could be made to the state plan.
Ms. Oleske distributed Appendix 9, the Department's proposed statutory changes that would accomplish the same goal. After hearing an explanation of the proposal and concerns expressed by LSO staff, Senator Scott indicated his support for the Department's alternative proposal and suggested LSO staff draft a bill consistent with the Department's proposal and staff's concerns for consideration by the Joint Appropriations Interim Committee.
There being no further business, Cochairman Baker adjourned the meeting at 5:45p.m., Friday, October 18, 2002.
Respectfully submitted,
Representative Mike Baker, Cochairman Senator Charles K. Scott, Cochairman