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The House Committee on Human Services met on December 13 to take up interim charges related to HHSC’s implementation of Rider 219 and regulation of nursing facilities. The Committee also heard an update from the Department of Family and Protective Services on Child Protective Services developments.

 

Update on Child Protective Services

Hank Whitman, Department of Family and Protective Services

  • Big issues for CPS were timeliness in seeing children & assuring safety
  • Funding influx allowed for CPS to hire new staff and provide a $1,000 pay increase; Have been moving very fast with hiring and staffing capable individuals, training and testing included
  • Caseload and speed of placement statistics have been greatly improved; Still more work to do
  • Raymond – Asks after the death in the Fort Worth area
    • Cannot speak in detail in a public forum as it is a criminal investigation, but willing to meet individually
  • Wu – How is the HB 4 funding for relative performing, was the budget sufficient?
    • Funds went out on time, good with funding, but too soon to tell progress and successes of this, but it has been well-received
  • Wu – Has made our county attorneys a lot happier as they can provide assistance
  • Frank – How many custodial caseworkers do we have?
    • I think around 6,000 including family-based, several thousand
  • Frank – How many kids does each caseworker handle then?
    • 1 per, average daily caseload
  • Frank – Important to discuss these numbers solidly
    • Can report multiple aspects of the caseload moving forward

 

Monitor the HHSC’s implementation of Rider 219 in Article II of the General Appropriations Act related to prescription drug benefit administration in Medicaid. Analyze the role of pharmacy benefit managers in Texas Medicaid.

Stephanie Muth, Health and Human Services Commission

  • Chair Raymond reads Rider 219 for the committee
  • HHSC is commissioning an independent study for Riders 219 and 220, RFPs have been released, expecting response by the end of the month, with contract by March, report to be released by November 2018
  • Raymond – When do you expect the Rider 220 study back?
    • Rider has a deadline of September 1
  • Raymond – Is Rider 220 less involved? Why are there different expected dates?
    • Rider 220 has a deadline built in, HHSC is working to ensure there is adequate time to address both Riders
  • Raymond – We will have a hearing when these are ready
  • Frank – What are the vendors looking like? How much will it cost, etc.?
    • HHSC has a multi-consultant pool that is pre-screened, cost will be evaluated with the RFP

 

KJ Scheib, Health and Human Services Commission

  • Gives an overview of HHSC drug benefit management
    • HHSC maintains the outpatient drug policy, also holds the policy for PAs and pharmacy enrollment, etc.; PDL is constructed from drugs with rebates
    • HHSC ensures that PA requirements are maintained by PBMs, other involved entities
    • HHSC provides the formulary used by MCOs and PBMs, provides contract oversight
  • Raymond – Would like you for you to take these comments back to the agency and for the report to include info on cost savings or increased cost, do you have flexibility to do this?
    • Muth, HHSC – Will need to go back and talk to attorneys to amend the existing scope of work, will look for how to accomplish this
  • Raymond – Expecting next session to be a more difficult budget session, this topic will receive a lot of attention on cost impacts

 

Jamie Dudensing, Texas Association of Health Plans

  • Managed care was developed to make health care service more efficient, have seen improved outcomes versus fee-for-service
  • Raymond – Asks after quality of care
  • One of the virtues of managed care was packaging everything in one premium & having an engaged billpayer looking at many different aspects; Medicaid has quality measures stemming from this built in
  • Regarding prescription drugs, have seen huge strides in improved medication adherence, effective care
  • Pharmacy is a large part of dollars spent and a large part of client care, partnerships with PBMs and real-time data let providers leverage these benefits effectively
  • Without having components like this built-in, cannot take the next step regarding value-based payments/build value into the programs
  • Plans have been engaged in different pilot programs across the country focused on adherence and lowering opioid use; Cites examples like program working to identify pregnant women immediately that would not work without coordinated care and data
  • Have any-willing-provider with drug benefits; Any pharmacy willing must be enrolled into the program
  • Pharmacy benefits are the only area that gets paid with rates close to Medicare/private market
  • Some areas would be especially costly; Increasing dispensing fee would increase cost drastically
  • Should look at entire landscape for cost impacts, administrative changes could have wide ranging effects on things like care coordination or data availability, which could drive costs up in unforeseen ways
  • HHSC study on the Rider should look at these aspects

 

Jay Bueche, Texas Federation of Drug Stores

  • With the formulary being controlled by HHSC, there are very few levers left that pharmacies can pull to affect costs
  • Average pharmacy in Texas is losing money by serving Medicaid clients, appreciates attempts to look at 219 and true costs in the system
  • PBM is essentially acting as a claims adjudicator, therefore there is little value and redundant effort
  • Capitation based model doesn’t make sense given the large amount of drug benefit cost being the actual drug price, unless intent is to subsidize the program
  • Wu – Asks after increasing drug prices
    • Drug prices have increased over reimbursement drastically over the last 5 years
  • Wu – So the differential has widened, trying to figure out why; Is it because drug prices increase or reimbursement is changing?
    • See both, drug cost is increasing faster
  • Frank – How does this compare to private market, etc.?
    • Medicaid reimbursement is overall 5-10% worse
  • Frank – Is the state paying more or less than commercial market overall?
    • Less
    • Dudensing – I’ve been informed that we pay rates that are comparable, MAC lists that a given PBM uses are similar across the board
    • Cost is supposed to be covered on the dispensing fee and ingredient cost, no one pays just $10 for the dispensing fee

 

Duane Galligher, Texas Independent Pharmacy Association

  • Entire industry is united behind looking at costs and Rider 219
  • Pharmacies are losing about $5 per prescription, due to the lack of transparency and how the state has outsourced payment processing to PBMs/MCOs
  • Should not look just at NADAC, there are many other components that need to be looked at like control of PDL and PAs, should also look at audits to inform cost drivers
  • Given that the state sets the PDL, negotiates rebates, etc., do we really need a middleman in-between MCOs and providers?

 

Jon Vecchiet, Texas Children’s Health Plan

  • Rider 219 will study impact of moving state away from current model, could fracture the drug benefit industry
  • Shares personal experience in responding to opioid epidemic, worked with PBM to deploy program to identify dangerous combinations of opioid drugs & inform providers when patients are potentially receiving these combinations from other providers
  • Frank – Asks after population receiving these combinations
    • Would like to be able to block combo, but cannot be more restrictive than state guidelines
  • VDP is fantastic, partnership works well
  • Regarding NADAC pricing, data shows that pharmacies are adequately compensated
  • 6 PBMs across the state is not administratively burdensome, within normal scope of work for pharmacies to manage multiple payers

 

Melodie Shrader, Pharmaceutical Care Management Association

  • PBMs are effective at lowering cost by encouraging generic drugs, managing costs, drug and disease management programs, medication adherence, etc.
  • Raymond – Are the MCOs your client or are we your client?
    • With regard to the Rider, the MCOs are
  • Raymond – Are there any states where the state is your client?
    • In fee-for-service, yes, not sure for managed care

 

Roxann Dominguez, ReCept Pharmacy

  • Need to focus on the efficiencies and right solutions, should look at ratio of PBMs/MCOs/pharmacies to find the right balance; Should look at different programs being run in other states and tap professionals who have worked in these types of industries in multiple sectors
  • Between NADAC and dispensing fee, ingredient cost does not leave a lot of room

 

Barry Lachman, Parkland Community Health Plan

  • Managed care improves care and saves money
  • Vendor drug program has been more collaborative with managed care program in the last year than previously
  • Discussed issues with the Vendor Drug Program and specific examples of preferred products
  • Integration of clinical data between pharmacy and medical benefits data improves care outcomes – specifically mentions asthma care
    • Decreased ER use and admissions by $6.4 million in the first year of implementation
    • Relied on real-time data
  • Newly approved drugs do not have a pipeline strategy – gets blindsided regularly by new drug on the market even though required under Medicaid to provide it

 

Kay Ghahremani, Texas Association of Community Health Plans

  • Serve 1.7 million Texans in the Medicaid and CHIP programs – mostly children
  • All member companies serve moderate to low income families at the core of their mission
  • Most member companies were operating before legislative carve-in for pharmacy services in 2012 – allowed for a comprehensive ‘before and after’ of why it did not work very well in the past and why partnerships between the medical side and pharmacy side are essential
  • All payers use PBMs as the essential standard of care in the industry
  • HHSC requires all MCOs have a contracted PBM – has been a good thing
  • Pharmacy is specialized and complex – beneficial to have pharmacy expertise from PBM
  • All 12 companies’ contract with same PBM (Navitus) through group purchasing rate to allow for more competitive pricing but each has their own distinct contract
  • It is possible for the state to contract with PBMs – some states are doing that but that would also be a huge step backwards in the financial and clinical management in the Medicaid program
  • Disconnecting pharmacy from medical would be a huge mistake
  • State is appropriating over $3 billion per year for pharmacy – believes current model is the best for managing pharmacy benefits
  • Rider 219 – asks HHSC to look into NADAC pricing and using fee for service dispensing fee
    • MCOs would be happy to pay pharmacies more for dispensing fee
  • Noted that PBMs are required to updates MAP pricing weekly and to make that available to all pharmacies
    • Navitus stated that MAP pricing is the same for all product lines and that they pay the same for the dispensing fee for commercial and Medicaid
  • Discussed SAO Audit and missing administrative funds – there was not a finding of that in the audit report
  • Raymond – have formally asked the State Auditor’s Office (SAO) to look into this and are waiting for more thorough investigative results
  • OIG report that came out recently – regarding prior authorizations, prior authorization is required if the drug is not on the preferred list; those are not approved if there is a drug on the approved list that is comparable in its clinical efficacy

 

Dennis Borel, Coalition of Texans with Disabilities

  • Healthcare costs are not siloed – need to look at all costs per person
  • Considers prior authorizations as a barrier

 

Terry Carriker, Mother of Medically Fragile Child

  • Shared personal story of trouble getting needed medication approved, letter of medical necessity did not spur appropriate response

 

Examine the survey process for nursing facilities to determine any duplication of government regulations. Consider recommendations to reduce duplication while ensuring patient safety is preserved.

Amanda Fredriksen, AARP

  • Appreciates consideration of this charge
  • AARP performed a study on state licensing violations over the last 2 years, about 1 in 4 nursing homes have severe violations
  • Last session, HB 2025 was a particularly good quality bill tightening up the Right to Correct and adding additional training for direct care staff
  • Texas has a unique regulatory environment, when there is an action triggering state and federal violations only 1 fine is paid
  • Texas has a large number of violations that do not result in paid fines due to Right to Correct, coupled with dual-violation issue, wondering where concern is over duplication of violations without result
  • Raymond – And you want these fines?
    • We want safe facilities, question is how to do that
  • Raymond – And where are we with safety
    • 1 in 4 facilities having serious violations is not something to be proud of
  • Frank – Given the low stats of fines, would seem like we are not fining facilities at all, duplication may be part of it, but more basically we are not fining
  • There are a few aspects that might need more regulations, Nurse Aide Registry could be looked at, some convicted felons are filling these positions through a loophole
  • Frank – Not sure regulation is the focus, need both regulation and enforcement, perhaps should focus on enforcement of existing provisions
  • Also concerned about situations like the nursing home which did not evacuate during Harvey, lack of understanding meant residents were not evacuated
  • Klick – Do you think the enormity of the storm may have caused some evacuation plans to be not workable?
    • Could be possible, in the Port Arthur case the owner did not properly follow or understand procedure
  • Rose – Could you give me an update on implementation of HB 2025?
    • Bill took effect on Sept 1, but has been no progress on rulemaking; Past-time to get moving on this

 

Julie Sulik, THCA

  • Worked in nursing homes during Harvey, helped evacuate 3 facilities, received criticism on evacuation procedures, flooding massively complicated evacuation
  • Would like to see dual enforcement with federal and state licensure tags, penalties for both
  • Klick – Different regions will interpret regulations differently; In some circumstances a particular patient might need separate or specialized evacuation procedures
    • Absolutely agrees, not just surrounding dialysis patients

 

Janella Williams, Self

  • Shares personal story of mother’s mistreatment in a nursing home

 

Patty Ducayet, State Long-Term Care Ombudsman

  • Providers are concerned about being cited for both state and federal tag; These tags are largely separated on reimbursement and licensure
  • Frank – Can you speak to the accuracy of only 22 fines compared to 1,800 violations?
    • Cannot speak for HHSC, shares some concerns on this front
  • Also heard that one bad event could mean facilities are cited for multiple different violations; Citing multiple violations is sometimes necessary because the problem is complex, without citations we cannot show the root cause and do not put facility on the hook
  • Rose – How does the dual enforcement model work to track state and federal violation?
    • Dual enforcement is being used to refer to federal violations stemming in certification and receipt of federal funds
    • Oftentimes state violations mirror these, but focus more on licensure and ability to do business

 

George Linial, LeadingAge Texas

  • Current system is a leading source of frustration among providers and surveyors
  • Survey process is constantly changing with unclear expectations
  • Punitive nature is furthered by regulatory guidelines that are over-complex with no standard qualifications or training requirements
  • Survey staff is frustrated by process changed by federal regulators; Need increased flexibility to leverage survey resources in troubled facilities requiring close oversight
  • Regulatory burden coupled with workforce shortage is a huge problem for industry in Texas
  • Frank – Can you touch on how hospitals are regulated differently and privatization of regulation?
    • Hospitals are surveyed by a time focused on process and quality improvement, CMS regulations prevent this for nursing homes

 

Allsion Spruill, Self

  • Very familiar with regulations and enforcement actions surrounding nursing homes through legal work
  • State and federal regulations are not as separable as might be believed, survey teams working for the state also survey for federal requirements
  • 95% of monetary enforcement action is kicked over to CMS by HHSC
  • Shares personal experience of surveyors misinterpreting or misapplying survey standards, difficult to appeal surveyor decisions
  • Surveying should be a collaborative process that improves quality of care, adversarial nature makes this difficult

 

Calvin Green, Health and Human Services Commission

  • Rose – Asks after status of HB 2025
    • Have been working on language for implementation, expect stakeholder meetings early next year
    • Involved changes in multiple different programs and no fiscal impact, which is part of the complication in implementation
  • Explains survey and enforcement process, surveyors examine licensure aspects and CMS requirements; CMS makes decisions for moving forward with violations resulting in penalties
  • Frank – So are the vast majority of penalties waived?
    • No, in the majority of instances with a severe violation the penalty is on the federal side, but it means states cannot pursue state penalties
  • Frank – What about consistency of training?
    • Texas training is much more strict than CMS requires
    • Application of training has been a focus for 2 sessions, we do monitor for consistency and focus on this given concerns
  • Frank – Hypothetically, what can we do to make it easier on good operators and hard on bad operators?
    • Consistency of application, adequate tracking of violations/strikes, limiti9ng right to correct on severe violations, consistency of training
    • CMS is working on additional guidance relating to immediate jeopardy
    • Many initiatives are moving forward promoting an efficient and accurate survey process
  • Frank – If good nursing homes got together and came up with some sort of self-regulation, would there be a way for the state to go after those not self-regulating?
    • Process is dictated by CMS for a lot of this, vast majority would need to work within process and this guides Texas action
  • Can get data on number of enforcement actions pursued at federal and state level

 

Hannah Mehta, Protect Texas Fragile Kids

  • Noted problems accessing medically necessary medications since Star Kids Programs was implemented under Managed Care
  • Described specific example of medically fragile child and difficulty with access to medically necessary medications
  • Issues prior to Harvey with obtaining medication after forecasts were created

 

Closing Remarks

  • Raymond will be asking HHSC for a status meeting – not a hearing – for next week and will provide information to member offices