The Idaho Department of Health and Welfare (IDHW) Director Karl Kurtz
introduced his management staff, Deputy Director Joseph Brunson,
Deputy Director Joyce McRobert, Deputy Director Gary Broker, Division of
Health Administrator Richard Schultz, Division of Welfare Administrator
Scott Cunningham, Division of Family and Community Services (FACS)
Administrator Kenneth Deibert, and Division of Medicaid Deputy
Administrator Kathleen Allyn. Other management staff introduced included
Region I Director Michelle Britton from Coeur d’Alene, Region IV Director
Randy Woods from Boise, Region VII Director Joan Gridney from Idaho
Falls, and Acting Administrator Division of Medicaid Randy May.

Director Kurtz distributed a chart outlining the overall IDHW statistics, and
the 2003 appropriations. The Department serves a total of 338,926 Idaho
residents.

1. General Funds – $359.6 million
2. Total IDHW funds $1.2 billion
3. Year 2003 authorized full-time staff positions of 2,999
4. Appropriation by Divisions: Medicaid 70.5 percent, Welfare 10.1
   percent, Councils 0.3 percent, Indirect Support 2.6 percent, Health
   4.3 percent, and Family and Community Services 12.2 percent.

1. Medicaid’s spending by program – Basic Medicaid is 97.5
   percent, CHIP (Children’s Health Insurance Program) 2.2 percent,
   Facility Standards 0.3 percent and has 196 positions. The
   Medicaid expenditure categories are benefits at 95.7 percent,
   operating 2.9 percent, and personnel 1.4 percent. Medicaid has
   196 full-time staff positions.





2. FACS (Family and Community Services) spending by program
   – Child Welfare 28.6 percent, state hospitals 28.4 percent,
   Children’s Mental Health 8.8 percent, Adult Mental Health 12.6
   percent, Substance Abuse 9.2 percent, Developmental Disabilities
   12.4, FACS expenditure categories are personnel 56.1 percent,
   benefits 26.9 percent, and operating 17.0 percent. FACS has
   1,683 full-time staff positions.





3. Welfare’s spending by program – eligibility 28.7 percent,
   community action 12.9 percent, child care 29.7 percent, cash
   payment 12.3 percent, and child support 16.4 percent. Welfare
   expenditure categories include benefits of 58.3 percent, personnel
   23.6 percent, and operating 18.1 percent. This division has 657full-time staff positions.





4. Public Health’s spending by program – women, infants and
   children 34.1 percent, environmental health 2.3 percent, emergency
   medical services (EMS) 6.8 percent, immunization 8.9 percent,
   health promotion 9.7 percent, labs 10.0 percent, vital stats 11.3
   percent, and physical health 16.9 percent. This division has 178
   full-time staff positions.

Senator Stegner asked Mr. Schultz to explain what children are served
by the programs, who is eligible for services, who is targeted for services,
and what is the focus of programs. Mr. Schultz explained that each
program has different eligibility criteria. He briefly outlined the following
programs.

Children’s Special Health Program – Any child in the state can access
the program. The program contracts for clinics around the state that are
staffed by physician specialists, who diagnose and provide consultation for
children with special health needs, such as cardiac, neurologic, orthopedic,
craniofacial, cleft lip and palate, and cystic fibrosis. The program assists in
paying, on a sliding fee scale, for treatment of uninsured children with
these diagnoses. If a child is insured, the insurance company is billed. This
program is not a benefit’s program. This is a public health program and
serves about 2,400 children each year.

Immunization – This program provides about 500,000 doses of childhood
vaccine for all children in the state. No eligibility is required for
immunizations. Vaccines are provided free to physicians throughout the
state. More than 700 physicians in Idaho administer the vaccine. The
program tracks adverse reactions (about 0.1 percent), the immunization
rate at two years of age (75 percent), and schools’ entry (95 percent),
monitors physicians’ use of the vaccine to assure quality and efficiency,
and promotes vaccination of children.

Newborn Screening/Genetics Clinics – Every child in Idaho is required to
have newborn screening on birth. This program provides physicians with
access to laboratory analysis of blood samples collected on all newborns
(about 21,000/year) for metabolic abnormalities. If diagnosed early and
with proper intervention, the impact the abnormalities have on decreased
mental capacity or potential death can be averted.

There are no geneticists in the state, the program contracts with geneticists
from the medical schools in surrounding states to staff clinics in Idaho,
where they provide consultative services to patients referred from
physicians throughout the state. Approximately 210 families, to individuals
are seen annually. The cost for newborn screening previously had been
paid by the State, but is now paid by the parents.

Reproductive Health – This is a program that provides services to mostly
low-income women. Payments are based on a sliding fee scale. The
majority of services provided through the Bureau of Clinical Preventive
Services are contracted through the District Health Departments, so the
site for the delivery of services is at the local Health District clinic. The
District Health Departments provide family planning services to women
throughout Idaho. The program serves approximately 30,000 women per
year, the majority of whom are low incomes.

STD/AIDS – No eligibility requirement for services. The program contracts
with District Health Departments to hold clinics for the diagnosis and
treatment of people with sexually transmitted diseases (STD’s) and their
partners. Additionally, the clinics provide diagnostic services for human
immunodeficiency viruses (HIV) and acquired immunodeficiency syndrome
(AIDS), approximately 30 new HIV/year and 25 new AIDS/year. If a HIV-positive patient is less than 300 percent of the poverty level, they may
qualify for the federal-funded AIDS Drug Assistance Program,
(approximately 90 patients). The drugs are meant to reduce the patient’s
viral load, making them less infectious and maintaining their health status
longer.

Women, Infants and Children (WIC) – This is the largest program within
the division, both monetarily and in the number of people served. The
program contracts with District Health Departments and some tribes to
provide clinical assessment of the nutritional status of pregnant or breast-feeding women and children under the age of five (5) years, who are below
185 percent of the poverty level. If the patient is found to be nutritionally
compromised, prescription food checks (worth approximately $38/monthly)
are provided for specific food items to meet the nutritional risk.
Approximately 33,000 patients are served annually.

Bureau of Health Promotion – This is a non clinical bureau and the
majority of programs in the bureau are population-based health promotion
programs. The Bureau provides preventive health programs and services
to local Health Departments, schools, businesses, hospitals and other
community-based organizations to improve the health of Idahoans. The
Bureau has programs in adolescent pregnancy prevention, arthritis,
asthma, breast and cervical cancer early detection, injury prevention, oral
health and tobacco prevention and control, diabetes control, and rape
prevention and education.

Bureau of Environmental Health and Safety – Provides environmental
health education, food protection, indoor environment and worker health
and safety services. The Bureau works closely with the Department of
Environmental Quality, and with the seven District Health Departments in
Idaho.

The focus is on providing the public with information on how to reduce their
risk of harm from exposure to various environmental contaminants. The
work is done primarily at sites that are or being considered as potential
Superfund sites (lead at Bunker Hill and the Coeur d’Alene Basin, selenium
around Soda Springs, arsenic at Blackbird Mine, (approximately 10 sites
around the state are actively being worked). Health consultations are also
provided to communities that request assistance in evaluating health
concerns surrounding an environmental contaminant, such as cancer
concerns at Oldtown. Fish advisories are issued when contaminants in fish
reach levels of concern, most recently mercury at Brownlee, C.J. Strike,
and Salmon Falls Creek reservoirs, and selenium in East Mill Creek.

Bureau of Health Policy and Vital Statistics – This group converts health
data into information. It is responsible for producing the annual vital
statistics report for Idaho, which contains all the information on births,
deaths, and divorces in Idaho. It also performs surveys of the population to
determine health risks, such as the Behavior Risk Factor Survey (BRFS),
and the Pregnancy Risk Assessment Tracking Survey. The surveys
provide the most time-sensitive information on which to develop or revise
health program efforts. The survey data reflect changing attitudes and,
more important, behaviors, which are good predictors of mortality. This
group identifies our health problems and how too most effectively address
them.

Emergency Medical Services (EMS) – This program is responsible for
identifying emergency medical system weaknesses and developing
proposals to improve its performance. Two of the most recent initiatives
have focused on improving training and guidelines for treating children and
development of a Trauma Registry that, when implemented, will link pre-hospital with hospital emergency room data to assess the quality of patient
care in both settings. The program is also responsible for staffing the State
Child Mortality Review Committee, which is responsible for reviewing all
child deaths occurring in the state to determine if there are system
changes that should be made to reduce childhood deaths.

The EMS program is also responsible for the licensure of all EMS units in
Idaho (approximately 200) and certification of EMS personnel,
approximately 4,500 staffs, 68 percent of whom are volunteers.

The EMS is responsible for the Communications Center which operates 24
hours a day, 365 days a year. It dispatches rural EMS units without 911
systems and air ambulances, offers flight-following monitor flight progress;
provides communication links between any EMS unit and the hospital to
which they’re transporting a patient.

The EMS program administers grants to primarily rural EMS units, EMS
consultants, and provide local units with information and assistance in
maintaining viable EMS services.

Public Health Laboratory – Laboratory sites are located in Coeur d’Alene,
Pocatello, and Boise. This group performs analysis of environmental
samples (about 12,000 yearly), primarily for the Department of
Environmental Quality. They are responsible for licensing all clinical
laboratories in Idaho (approximately 800) and inspecting all clinical X-ray
equipment in the state, approximately 1,250 sites.

The Microbiology Laboratory receives about 16,000 samples annually from
Idaho clinical laboratories to confirm test results, and from District Health
Department clinics and disease investigations. It also performs other tests
such as tuberculosis and environmental specimens for biological agents.

The Virology/Serology Laboratory deals with some of the nastiest critters –
viruses. It is the only lab in Idaho that tests for rabies, about 20 exposures
yearly. This group would more than likely be the lab to identify smallpox, if
it is introduced in Idaho.

The Microbiology and the Virology/Serology labs receive samples from
hospital and physician laboratories for confirmation. Both laboratories are
key labs in investigating disease outbreaks.

Office of Epidemiology – This office is the focal point for medical
consultation regarding communicable diseases. It is also the coordination
point with District Health Departments for investigation of and development
of strategies to interrupt disease transmission throughout Idaho.

Office of Rural Health and Primary Care – This office provides
consultation to rural communities on ways to improve or maintain access to
health care locally. The office administers the $250,000 Rural Access
Grant program as well as other federal grant programs to improve rural
hospital viability, such as the Critical Access Hospital Program.

Mr. Schultz briefly discussed two proposed pieces of legislation. One
pertains to the authority to quarantine and isolation of individuals with
infectious disease. The second relates to housekeeping issues created
when the Division of Environmental Quality (DEQ) was separated from
IDHW. The enforcement authorities were transferred to DEQ; therefore,
the food enforcement statutes were also transferred, and those statutes
need to be under the public health laws.

The Division administers various self-reliant programs such as child
support collections, Food Stamps, child care and cash assistance, while
requiring people to strive to become employed and self-reliant. Other
programs include food commodities, energy assistance, telephone
assistance, weatherization assistance and other services funded through
the federal Community Services Block Grant Program. The Division
reviews the needs of individuals and families, designing and integrating
health care, child support services, temporary cash support and
employment training.

The total number of applications for services during fiscal year 2002 was
more than 154,000. The Division has 657 authorized full-time positions of
which 525 are self-reliant employees. The balance of positions are located
in the Central office or other statewide sites. We have found about a 60
percent increase in the application for services, which is about 58,000
more applications for services over the last five (5) years.

Mr. Cunningham explained TAFI (Temporary Assistance for Families in
Idaho). TAFI provides cash assistance to needy families with children.
The Department partners with families, community programs, employers,
and other agencies such as the Department of Labor, Vocation
Rehabilitation, area learning centers for adults, to help participants obtain
jobs and achieve self-reliance. There is a 24-month lifetime limit for adults
to receive cash assistance. To receive TAFI, most adult participants must
seek education, training or employment opportunities. People leaving
TAFI often continue receiving benefits in other programs such as Food
Stamps, Medicaid and child care. The average number of participants who
received TAFI in year 2002 was approximately 2,300, and about $5.3
million was paid in benefits.

Aid to the Aged, Blind and Disabled (AABD) – AABD provides cash
assistance to certain low-income participants who are blind, disabled or
age 65 or older. In SFY 2002, a monthly average of about 11,000 people
received cash payments under this program. This program connects with
Medicaid for a more comprehensive service.

Another direct benefit program is the Food Stamp Program. This program
helps low-income families maintain good health and nutrition. This is a
federally funded, mandated program managed by the State. Idaho
determines the eligibility for families to receive the benefits. The average
number of families in Idaho in SFY 2002 who received food stamps is
about 67,000 with a cost of about $58 million.

Idaho Child Care Program (ICCP) – This is another benefit program.
ICCP subsidizes child care costs for low-income families while parents
work or attend educational or training programs. ICCP helps families
become self-reliant and gainfully employed. In SFY 2002, we served more
than 10,000 children per month with a total cost of about $27.7 million.

Benefit Delivery – Benefit delivery in the self-reliance program has
undergone significant change in recent years. Beginning in 1998, the
Electronic Benefit Transfer (EBT) System was implemented statewide to
increase efficiency and reduce the cost of benefit payments for the self-reliance program. The Department implemented the Quest card to be
used for payments of Child Support, Food Stamps, TAFI, and AABD.
Payments are made electronically.

Self-Reliance – Employment-related Services – The Department
provides employment-related services to qualified individuals. Adult
participants in the TAFI Program and certain adults in the Food Stamp
program are required to take part in these employment services to receive
benefits. The Department contracts with agencies and vendors to help
families search for, gain and keep employment.

The Food Stamp Program includes the Job Search and Assistance
Program (JSAP) which was expanded throughout the state in 1998, part of
the Welfare Reform Act. The goal is to provide Food Stamp recipients with
employment tools, which they can use to become self-reliant. JSAP can
help in a job search and referrals, unpaid work-experience opportunities,
job skills training and education. Last year, approximately 5,900 food
stamp participants received assistance from JSAP.

Child Support Services – The Idaho Child Support Program (ICSP)
promotes physical and economic health of families by ensuring parents are
financially responsible for their children. The program helps locate non-custodial (absent) parents and enforces their obligations to provide
financial and medical support for their children.

In SFY 2002, Child Support Services administered a monthly average of
76,425 non-county child support cases, collecting and distributing more
than $102.4 million. Services include establishing paternity, locating non-custodial parents, establishing court orders for child support, and collecting
and distributing child support payments through the Electronic Payment
System (EPS).

In 1999, the federal government determined all child support cases should
be administered by a single agency in each state. Health and Welfare was
chosen by the State Legislature to assume this responsibility. The
Department had handled most child support cases in the state and now
has assumed collection and distribution of more than 16,000 additional
child support cases that were previously administered by county courts. In
SFY 2002, the Department administered more than 92,000 child support
cases, and collected $140.3 million. ICSP uses a variety of methods to
enforce child support orders. The primary tool for enforcing payments is
wage withholding. Other tools include new hire reporting through electronic
data matching, license suspension, and direct collection methods. In SFY
2002, there were 1,120 licenses suspended, but very few professional
licenses have been suspended. Most license suspensions are driver
license.

Self-Reliance: Community Services – The Division of Welfare
administers federal grant programs to improve living conditions for low-income households and encourage self-reliance. These programs are
available to qualifying communities and residents.

Community Services Block Grant – The federal anti poverty block grant
is distributed throughout all 44 counties of Idaho by Community Action
Agencies and the Idaho Migrant Council. The goals are to revitalize low-income communities, reduce poverty and empower families and individuals
to become self-reliant. The grants can be used to provide emergency and
supportive services, employment readiness, food, housing, and
transportation assistance. A total of $3.1 million was distributed during
SFY 2002, serving more than 19,200 people quarterly.

Emergency Food Assistance Program (TEFAP) – The TEFAP distributes
USDA purchased commodities through Community Action Agencies to
help supplement the diets of Idaho’s low-income population. Commodities
valued at $1.7 million were distributed in SFY 2002 to an average of
31,000 households per quarter. Cost of administering the program was
$222,241. The administrative portion of this program is 98 percent federally
funded.

Community Food and Nutrition Program – This program provides
education about food distribution and nutrition through Community Action
Agencies and the Idaho Migrant Council to low-income people. The
program helps coordinate private and public food assistance programs to
better serve low-income populations. Funding comes through the
Community Service Block Grant and totaled $17,402 in SFY 2002.

Low-Income Home Energy Assistance Program – This program helps
Idaho’s low-income population pay a portion of their home heating cost and
provides energy conservation education through Community Action
Agencies. Payment is made to heating suppliers and vendors. A federal
grant from the U.S. Department of Health and Human Services funds this
program, spending $12.3 million and serving more than 29,000 Idaho
households in SFY 2002.

Telephone Service Assistance Program – This is a small program
costing $342,163 in benefits in SFY 2002 while helping more than 32,000
households. The program provides assistance with telephone installation,
and/or monthly service to low-income residents. Benefits are provided by
the telephone companies through charges included on their customers’
phone bills.

Weatherization Assistance Program – Reimburses community action
and nonprofit agencies that install energy conservation measures for low-income people, particularly the elderly, disabled and families with small
children. This federally funded program served more than 1,400
households, spending $1.8 million in SFY 2002.

Mr. Cunningham discussed the faith-based initiatives generated by
President Bush. The goal is to help more faith and community-based
organizations to learn how to partner in community-based services. The
Department sees this as a wonderful opportunity to establish partnerships
within communities, and to work and establish a richer network of services.
Religious organizations must serve all individuals, and federal funds
cannot be used for religious activities.

Healthy Families in Nampa Collation – This is a partnership in
cooperation with Region X (Seattle) Administration of Family and Children
Services. It is a group of people who have gotten together who want to do
something to help support healthy marriages and responsible fatherhood.
They have applied for a grant and, if approved, they will provide services
such as marriage counseling, skill development, parenting skills training, to
help parents in Nampa. The application has been submitted.

Senator Darrington asked about the error-rate for Idaho, and how is the
Department currently doing with its error rate. Mr. Cunningham stated the
Department continues to receive incentive awards from the federal
government in the TAFI program for performance. Idaho’s participation
rate is very good. During the last two years, Idaho has dropped a
percentage point in the Food Stamp error rate. Idaho is at or below
national norms on error rates. This is considered an indicator of how well
the Department’s staffs are doing their jobs.

Within the Department, FACS is designated as the lead agency for the
operation of the system of care for adult and children’s mental health, adult
and children’s developmental disabilities services, infant and toddler
program, substance abuse, child welfare, which includes child protection,
adoption and foster care. The Division is also responsible for the
operations of the State’s three hospitals. Idaho State School and Hospital
in Nampa provides intensive residential services for persons with severe
developmental disabilities. State Hospital South in Blackfoot provides
inpatient and skilled nursing services to adults and adolescents with
serious and persistent mental illness. State Hospital North in Orofino
provides intensive inpatient treatment to adults also affected by serious
and persistent mental illness.

In SFY 2002, more than 100,000 citizens had some contact with the
various services and programs offered by the division. That is
approximately a 9 percent increase in the number of individuals who
accessed our services and programs compared to SFY 2001. Our current
budget for SFY 2003 is about $148 million which is $11 million less than
the appropriation we received in SFY 2002. The Division has eliminated
69 positions during the past 18 months. Staffing reductions occurred
primarily through the elimination of administrative staff and positions that
supported Regional Mental Health Authority and disability services. Staff
reductions occurred in all programs except Child Protective Services.

We have been faced with many difficult decisions related to how best to
manage the reductions in funding, decisions we have had to make.
Balancing resources with needs is a constant challenge. As we
considered how best to manage our current resources, we based our
decisions on the following priorities:

1. We worked to avoid major impacts in the programs that the
   Department has statutory responsibility to provide.
2. We made every effort to avoid staffing and service reductions that
   would impact community, staff and consumer safety.
3. We were mindful of the need to provide federally required
   maintenance of effort funding for our mental health, substance
   abuse, and infant and toddler programs. Had we not maintained a
   federally prescribed level of state participation in these programs,
   we would have risked losing significant amounts of federal funding.

As we approached the decision-making process over the past 18 months
to address the required holdbacks in State General Funds, careful
consideration of the entire continuum of services that the Division is
responsible for was made prior to reaching the final budget reductions. No
one likes to see reductions in services for the people we serve. The staffs
of this Division are committed to working with you and the people whom we
serve to find the best solutions to the challenging task of balancing
resources and needs.

Since this presentation is intended to provide an orientation of the work of
the Division, I will give you a brief description of each of the programs we
manage.

Idaho CareLine – This is a bilingual, toll-free telephone information and
referral service (1-800-926-2588). This past year, CareLine has joined
forces with private nonprofit groups to expand information and referral
services across the state, and to include health and human service
programs’ information in addition to the IDHW information. In SFY 2002,
more than 38,000 calls for information about health and human service
providers in the State were received.

Children and Family Services – This is one of the most significant
programs managed by the Division. This program is responsible for child
protection service, foster care, adoption, children’s mental health, Indian
child welfare, and licensing of children’s residential treatment facilities.

Staff who work in the child protective services are responsible for
screening and assess each report or referral of child abuse or neglect that
is brought to our attention. Our Child Protection Services focuses on
safety, permanence, and the well-being of children. We work cooperatively
with the police, prosecutors and the courts to address the safety needs of
children who are abused or neglected. In 2002, we had 783 substantiated
cases of abuse and neglected in Idaho.

One common misconception about the Department’s role in Child
Protective Services, our staff do not remove children who are abused or
neglected from their parents. A child can only be removed from their
parents by the action of law enforcement or a judge once the child is
determined to be in imminent danger, and cannot be safely cared for within
the current family structure. When this determination is made, our staff are
then responsible for providing a safe and nurturing environment for the
child to live, until they can safely be reunited with their family, or in some
cases adopted by other caring families.

Foster Care Program – The cornerstone of our child’s welfare system is
the Foster Care Program. Foster families provide for a supportive
temporary home for children placed in state custody, Last year we placed
2,260 children in foster care in Idaho. In most cases we are successful in
reuniting the children with their natural families. For those children where
this is not possible, we seek to find adoptive families. In FY 2002, 92
children found new families to care for them through our adoption
programs.

Children’s Mental Health Program – Children who experience serious
emotional disturbances can receive services through this program.
Services are provided through a system of public and private partnerships
that offer outpatient, inpatient and residential care. The state has been
working to develop a broad system of care to meet the needs of children
and their families with serious emotional disorders based upon a monitored
agreement with the federal courts. The state entered into this agreement
as a result of a suit filed against Idaho known as the Jeff D. case. The
Idaho Council on Children’s Mental Health, which is a partnership of the
Governor’s office, Legislature, Department of Health and Welfare,
Department of Education, Department of Juvenile Corrections, concerned
citizens, providers, and advocates, is leading the effort to assure the
state’s compliance with the court settlement.

This past fiscal year, we were able to provide assessments for 3,766
children, which is almost 1,200 more than the previous fiscal year, and to
provide outpatient treatment to more than 9,000 children, either through
the resources of departmental staff or through contracts with private
providers. Staffs provide crisis services, assessments, service
authorization, provider enrollment, training, and quality assurance.
Approximately 85 percent of the children who qualify for children’s mental
health services are eligible for Medicaid reimbursed services.

Another vital service provided by the Division is our programs for adults
who are mentally ill. Our services are focused primarily on providing care
to people with serious and persistent mental illness such as schizophrenia
or major depression. Services include crisis response, evaluation, case
management, treatment, including psychiatric evaluations, medication
management and counseling. We also provide court-related support
services and placement coordination with the hospital or residential care as
required. Staff of the seven regional mental health programs, act as the
regional mental health authorities to evaluate, determine eligibility and
authorize care for individuals eligible for Medicaid-funded psychosocial
rehabilitation services.

The majority of treatment services for Medicaid eligible clients is provided
through a network of private providers. Individuals, who meet the program
eligibility requirements but lack the financial resources to purchase
services or to receive them through the Medicaid program, receive their
care directly from our staff. In SFY 2002, more than 6,000 individuals
received services from our mental health programs. This is about an 8
percent increase from SFY 2001. Since July 2001, our staffing in the
regional mental health programs has decreased by 23 staffs. We have
accomplished cost savings by reducing administrative staff and shifting the
assessment functions of the regional mental health authority to the private
sector. These changes have not been accomplished without creating
additional challenges for a program that has been ranked 47^th lowest in per
capita funding in the United States. We have less staff to respond to crisis
calls, work with courts, support resource development and to manage and
evaluate program effectiveness.

Substance Abuse – This is a unique program within the Division given all
of the treatment services for this clients’ population is contracted out to
private providers. The 6.5 divisional staffs who work in this program area
are responsible for the overall management of prevention services,
program planning, staff development, contract management and DUI
evaluator licensing and program evaluation. We work closely with
providers, concerned citizens, law enforcement, courts and advocates to
set priorities for treatment and prevention activities in each of the seven
regions.

We contract with all of the State universities and colleges to provide
certified alcohol and drug counselor training. We also partner with the
Supreme Court to fund many of the drug court programs currently
operating throughout Idaho. Through our collaborative efforts with the
courts, schools, Department of Correction, Juvenile Corrections and our
communities, we feel that a system of care based on best practice models
is being established in Idaho. In SFY 2002, we served 6,153 clients by this
program. This is an 8 percent increase in utilization over the previous fiscal
year.

Substance abuse staffs in partnership with the Idaho State Police also
have the lead agency responsibility for the Tobacco Project. This program
is designed to reduce the sale of tobacco to minors by education of
merchants, retail permitting and inspections. The State’s rate of tobacco
sales to minors is 12 percent lower than when the program began in 1999.

Developmental Disabilities (DD) – This program provides services to
people who are developmentally disabled. These programs are designed
to provide care and support of individuals and their families with
developmental disabilities. The programs are designed to provide services
for infants to the elderly. The major components of the developmental
disabilities services are family support, which is designed to help families
maintain children and adults in their homes rather than in institutions.

Idaho Infant Toddler Program – This program serves children from birth
to age three (3), coordinates early intervention and treatment services for
children and their families. The Division partners with families to plan and
provide comprehensive services including speech, occupational,
developmental, medical and social work services to enhance each child’s
developmental potential. We served 2,424 children, and a 4 percent
increase from last year.

Because of the increase in the number of children and families served and
the reductions in funds, we have needed to reduce the level of services
provided to many of the families involved in this program.

As the lead agency for the developmental disabilities services, the Division
provides intake, eligibility determination, service authorization, provider
enrollment, training and quality assurance functions for both the children
and adult developmental disabilities program. Regional offices contract
with private providers for therapy, housing, employment and personal
assistance services as well as case management activities. Of the adults
receiving services through the DD program, 93 percent of them qualify for
the Medicaid program. We determined 79 percent of the children and 63
percent of the individuals served in the Infant and Toddler Program are
eligible to receive Medicaid-funded services through Medicaid
reimbursement. We have 11,857 people or 8.8 percent more individuals
with developmental disabilities received services funded by the Medicaid
program this past fiscal year than in FY 2001.

Even with the growth in people served, state staff available to screen,
assess, determine eligibility, treat and manage care has decreased by 17
staffs or 9 percent less staff than in FY 2001. Along with the three
institutions that were mentioned earlier, these are the programs and
services that the Division of Family and Community Services functions as
the lead agency.

As the lead agency for these programs, we are responsible for assuring a
system of care is available to individuals and their families who meet
service and financial eligibility criteria. A system of care provides both for
clinical services and program management.

Mr. Deibert had previously distributed a chart listing the 19 core services
provided or contracted out, listing key functions that must be in place to
assure the efficient operation of the various programs and services that the
Division manages. The list identifies the types of direct service functions
that need to be provided to deliver treatment for individuals or families.
The Division is not only responsible for assuring that the care is available
when and how it is needed, they are also charged with the responsibility to
provide oversight of the various management and support functions the
staff must perform to assure compliance with numerous state and federal
statues and regulations. They also enroll and license providers, provide
training and technical assistance and quality assurance reviews for
hundreds of private providers in each of the program areas.

He explained the Division interacts with 80-plus Councils, Advisory Boards,
Interagency Committees, Consumer and Advocacy Groups to gain input on
current service systems performance and the development of services to
meet additional needs. The responsibilities are numerous. The work that
we perform is complex and challenging. The individuals that we serve have
multiple and complex needs that we strive to find effective interventions
that will assist them in developing life skills so they may function as
independently as possible.

As we look to the future, the work of the Division must be focused on
providing leadership for the development and implementation of a
sustainable and integrated service delivery system. We must support
models of care that reflect best practice and rules that foster responsibility
and effective use of resources. Most important, we must assure through
our system of care, the safety of our most vulnerable citizens, the children,
the mentally ill and the developmentally disabled. We will need to continue
to foster more partnerships with public and private organizations. As our
population grows in Idaho, we can anticipate continued growth in the
demand for services. We have many challenges, but we can also point to
many positive outcomes.

As time allows, the committee would like for administrators to return later
during the legislative session and discuss health issues such as Smallpox,
community action agencies, and programs. An updated version of the
IDHW’s acronyms was requested and will be sent to committee members.

Mr. Deibert reported he is very confident that assessments done when a
child ‘s case is assigned, it is correct. The Division each month randomly
selects at least ten (10) percent of child protective cases managed by
FACS, and conducts a complete risk assessment to ensure the
assessment completed is the correct assessment and appropriate for the
needs of the child. The Quality Protective Services conducts a followup
and quality assurance assessment ensures the New Jersey situation does
not happen in Idaho. In June 2003, FACS will involved in a Family and
Children review which is a federal review conducted in every state in the
United States. The federal government will review six criteria of
performance. At this time, Idaho is in compliance with three (3) of the
criteria and is close to being in compliance with the others. No state in the
U.S. has passed the federal review. Of the 32 states reviewed so far, none
have passed the review. Idaho has improvements to make in the system,
and plans to have a will not pass, but we intend to have a comprehensive
plan that will address those issues.

Senator Ingram asked about the number of cases investigated for abuse
or neglect, and the number of cases investigated by a fraud investigator.
[The information about the number of cases investigated by a fraud
investigator will be sent to him by the IDHW.]

Senator Burkett asked about the FACS criteria for placing children with
extended family members as opposed to non family members and how
that is determined, and if the criteria or protocol is different in drug related
child protective cases as opposed to child sexual abuse cases. Does it
take a period of time to qualify an extended family member for the child to
be placed with them?

Mr. Deibert explained the application process to become a foster home. A
review of the family home and criminal history background checks must be
conducted prior to placing a child in a home. The same certification
process is used to certify family or non-family foster homes. The priority
preference for placing children who come into the custody of IDHW, is to
place the child in an extended family member’s home, if at all possible. If
an extended family related home is unavailable, the child will be place in a
certified foster home. A risk assessment must be conducted. There is a
specific process that must be followed.

Senator Darrington asked who makes the immediate decision about the
placing of a child. Is it a decision of law enforcement or the Department of
Health and Welfare? If it is a department decision, why can’t a child be
placed with a family member who knows and has a relationship with the
child, as this would cause less stress and trauma in the life of the child. He
prefers a child be placed with a family member, particularly with a
grandparent, rather than foster care. Mr. Deibert explained, when a child
is declared in imminent danger by law enforcement, and they contact child
protection, our normal response, in the vast majority of cases, is to place
the child outside the family environment until a risk assessment is
completed, review the circumstances of the abuse or neglected complaint,
and evaluate the support system that the child might have available.
(NOTE: Refer to minutes, Thursday, January 16, 2003, page 4, motion)

Senator Ingram expressed his concerns about the placement of children.
If the Department must go through the evaluation process prior to a
placement, why is the court system requiring an outside evaluation? Why
can’t FACS use the same evaluation report done by the courts? Mr.
Deibert reported the Department very seldom is involved in custody issues
such as in a divorce or family separation. Courts often order an
assessment of a parent or family environment to make a determination for
the placement of a child as a result of the divorce. That is not a role for the
Department’s child protection unit.

Department of Health and Welfare Director Karl Kurtz outlined the
presentation for today.

The Division is comprised of two organizational units, Information
Services, and Technology Services. These two units provide program
support, administration, customer services issues; and internet and
intranet application development, mainframe support, wide and local area
network support, operations, resource security and database and
warehousing support.

He explained e-government is becoming an increasingly important
component in the Department’s efforts to improve customer services and
save money through more efficient and creative use of computer
technology. ITSD provides the technical support for the coordination and
leverage of resources, skills, knowledge and methodologies for these key
electronic government projects.

the Division of Medicaid administers the state’s Medicaid program. This
includes developing and implementing program policy consistent with
federal requirements, managing the quality and utilization of services, and
overseeing the payment process for services. As the prior presentations
indicated, a few of these functions are shared with other Divisions. The
Division of Welfare works with the Division of Medicaid in developing
eligibility policy but Division of Welfare staff in the field make most of the
Medicaid financial eligibility determinations. The Division of Family and
Community Services (or FACS) works with Medicaid to develop policy for
services for people with mental retardation or developmental disabilities
and, to a limited extent, is a direct care provider of some Medicaid
services, for example, at Idaho State School and Hospital.

Within the Division of Medicaid, we also carry out the statutory state
licensing of health care facilities through the Bureau of Facility Standards.
This entails initial and periodic inspections of any state-licensed facility,
whether or not it cares for Medicaid clients, as well as investigations of
complaints about the facilities. Such facilities include hospitals, nursing
homes, intermediate care facilities for persons with mental retardation,
residential or assisted living facilities, and ambulatory surgical centers.

In addition, the federal government contracts with the Department for the
Bureau of Facility Standards to certify health care facilities as Medicare
providers. Because the Medicare certification process requires
inspections similar to those needed for state licensure, the Department is
able to combine these activities to prevent duplication of effort and obtain
federal matching funds for these activities.

Because of the complexity of the Medicaid program and its significance to
the state budget, I plan to spend the remainder of my time discussing the
Medicaid program and how it works.

Historical overview and purpose of medicaid

The enactment of Social Security in 1934 with its focus on health care
services for mothers and children started a national debate about the
need for some form of health insurance to provide protection against
unpredictable and potentially catastrophic medical costs. That debate
ultimately led Congress in 1965 to enact the Medicare and Medicaid
programs as Title XVIII and Title XIX, respectively, of the Social Security
Act.

Medicare or Title XVIII was established to cover the specific medical care
needs of the elderly and is available to most people over age 65
regardless of income. Coverage was added in 1973 for certain disabled
persons and certain persons with kidney disease. Medicare is
administered by the federal government.

Medicaid or Title XIX is the nation’s health insurance program for many
low-income Americans. Medicaid is a jointly-funded federal/state
entitlement program, administered by the states, that pays for medical
assistance for certain individuals and families with low incomes and
resources.

In Medicaid, each state, within federal guidelines, (1) establishes
eligibility standards; (2) determines the type, amount, duration, and scope
of services; (3) sets the rate of payment for services; and (4) administers
the state’s program. Medicaid policies for eligibility, services, and
payment are complex and vary considerably, even among states of
similar size or geographic proximity.

In Idaho, we have a fairly basic program. There currently is, on average,
about 150,000 people on Medicaid, which includes about 105,000
children. The state has chosen not to cover all of the groups or services
that would be matched by federal dollars. Even so, Idaho is projected to
spend about $849 million on Medicaid in fiscal year 2003 — about $234
million of that in state general funds.

In some ways, Medicaid fills a role that private insurance can’t. Most
people who use Medicaid can’t afford private insurance or need services
that are not available from private insurers such as services for persons
with developmental disabilities or traumatic brain injury. Even, coverage
of mental illness by the private sector is only minimal.

The Department of Health and Welfare provides few direct healthcare
services; there is already a private healthcare system in place to do that.
Through Medicaid, we support the existing health care structure ­ the
physicians, nurses, hospitals, and nursing homes — critical to maintaining
a healthy population. In fact, Idaho Medicaid pays more in benefits in
Idaho than Blue Cross and Blue Shield combined. The $849 million that
Medicaid spends goes directly or indirectly into the private sector, creating
a viable health care industry that serves all the citizens of Idaho.

Because of the escalating costs of the program, Medicaid has intensified
its focus on the development of quality improvement processes and care
management tools that can create a healthier public and result in a more
efficient use of tax dollars.

Who gets medicaid? In order to participate in the Medicaid program,
states are required to provide Medicaid coverage for certain groups of
individuals who receive federally assisted income-maintenance payments,
as well as for related groups not receiving cash payments. These
mandatory Medicaid “categorically needy” eligibility groups basically fall
into three low-income groups: parents and children, the elderly, persons
with disabilities.

Parents and children – Historically, most women and children were
eligible for Medicaid because they were eligible for cash assistance
through the Aid to Families with Dependent Children (AFDC) program.
The repeal of the AFDC program by the 1996 welfare reform law broke
the automatic link between cash assistance and Medicaid. Even so,
similar poverty guidelines are used to identify low income families with
children who must be covered by Medicaid. Also, pregnant women and
children in families with incomes below 134 percent of the federal poverty
limit (2002: $24,000 for family of 4) must be covered.

Elderly – Now you might think that Medicare (the federal program for the
elderly) would take care of most health care costs of the poor elderly.
However, Medicare primarily covers hospital and physician care. It does
not cover most nursing home or other long term care costs or most
outpatient prescription drugs. But Medicaid pays for these and other
services not covered by Medicare when someone is covered by both
Medicare and Medicaid.

Whether or not they have Medicare, many elderly people must be covered
by Medicaid because they receive cash assistance through the
Supplemental Security Income (SSI) program ­ basically they are poor.
Others have too much income to qualify for SSI but “spend down” to
mandatory Medicaid eligibility by incurring high medical or long-term care
expenses ­ in other words, they become poor.

Disabled – Many people with disabilities also must be covered by
Medicaid because they receive cash assistance through the SSI program
or because they incur large medical expenses and meet their “spend
down” obligation.

Optional categories that Idaho has chosen to cover consist primarily of
low income children, persons with disabilities, or the elderly.

Note that it is not enough just to be poor to qualify for Medicaid; an
individual must also fit into a covered eligibility category (e.g., pregnant
woman, child, etc.). Many people with low incomes, including childless
couples and single, childless adults who are not aged or disabled cannot
receive Medicaid even though they are poor.

Additionally, in 1997, Congress enacted Title XXI of the Social Security
Act which allowed states to provide health insurance for children in
families with incomes over the Medicaid eligibility level. This is the State
Children’s Health Insurance Program or S-CHIP. Rather than developing
a separate insurance program for CHIP kids, Idaho insures them through
the Medicaid program. Children from families with household incomes
from 134 percent to 150 percent of the federal poverty limit (2002:
$24,000 to $27,000, family of 4) qualify for S-CHIP. At the end of state
fiscal year 2002, there were over 12,000 children enrolled in S-CHIP.

WHAT DOES MEDICAID COVER? – By choosing to participate in
Medicaid, Idaho must cover a minimum set of benefits. These federally
mandated benefits include:

hospital care (inpatient and outpatient)

nursing home care

physician services

laboratory and x-ray services

Idaho has also chosen the option of covering additional services and
receiving federal matching funds for those services. These optional
services include:

prescription drugs

home- and community-based services

Services for people with developmental disabilities

Mental health services

States have discretion to vary the amount, duration, or scope of the
services that they cover, including the mandatory services, but in all cases
the service must be “sufficient in amount, duration, and scope to
reasonably achieve its purpose.”

PAYMENT FOR MEDICAID – Medicaid pays medical care providers
directly for services provided to Medicaid clients. The payment rates must
be sufficient to allow Medicaid recipients to receive services comparable
to services available to the general population in that area. Providers
participating in Medicaid must accept Medicaid payment rates as payment
in full.

The Federal Government pays a share of the medical assistance
expenditures under each State’s Medicaid program. That share, known as
the Federal Medical Assistance Percentage (FMAP), is determined
annually by a formula that compares the State’s average per capita
income with the national income average. States with higher per capita
income are reimbursed a smaller share of their costs. Idaho receives
about a 70 percent federal/ 30 percent state match. For S-CHIP the
federal match rate is higher, with 80 percent of the program paid for with
federal dollars and 20 percent with state general funds.

The Federal Government also shares in each State’s expenditures for the
administration of the Medicaid program. Most administrative costs are
matched at 50 percent, although higher percentages are paid for certain
activities and functions, such as development of mechanized claims
processing systems.

MEDICAID TRENDS – Over the years Medicaid eligibility has been
expanded beyond its original ties with eligibility for cash programs.

Federal legislation in the late 1980s mandated Medicaid coverage to an
expanded number of low-income pregnant women, poor children, and to
some Medicare beneficiaries who are not eligible for any cash assistance
program. Other federal legislative requirements have increased the
scope of the program to the point that about 45 percent of the Idaho
Medicaid budget goes toward meeting federal mandates.

In addition to federal mandates, Idaho has enacted certain mandates into
law. These state mandated Medicaid services include prescription drugs,
developmental disability services, breast and cervical cancer treatment,
and adult vision and hearing. Approximately 43 percent of the Idaho
Medicaid budget is governed by state law. In all, 88 percent of the Idaho
Medicaid budget is driven by either federal or state law.

In most years since their inception, state Medicaid programs have had
very rapid growth in expenditures. In Idaho, this rapid growth in Medicaid
expenditures as been due primarily to the following factors:

The increase in size of the Medicaid-covered populations as a result of
federal and state mandates, population growth, and economic
recession.

The expanded coverage and utilization of services.

The increase in the number of people requiring acute and/or long-term
health care services.

The results of technological advances to keep a greater number of
critically ill or severely injured persons alive.

The increase in payment rates to providers of health care services,
when compared to general inflation.

As with all health insurance programs, most Medicaid recipients require
relatively small average expenditures per person each year, and a
relatively small proportion incurs very large costs. In Idaho, the aged and
people, including children, with disabilities make up 23 percent of the
Medicaid population but account for approximately 70 percent of the
costs. By comparison, children without disabilities, including S-CHIP kids,
make up 67 percent of the insured population but 22 percent of the costs.

MANAGING THE COST OF MEDICAID – Even in good economic times,
budgeting for Medicaid is difficult. Because Medicaid is an entitlement
program, the state is required to pay for all medically necessary covered
services that are provided to persons enrolled in the program.

There are three basic ways to affect the amount spent in Medicaid:

By the number of people on the program;

By the number and duration of covered services; and

By the amount paid for services.

A fourth tool — managing health care services to eliminate unnecessary or
ineffective care ­ can achieve some dramatic cost avoidances in the short
term by providing cost and utilization controls that have been missing.
Once these management tools are place, however, further cost control
from care management is achieved in the long term through better care
and the management of chronic illnesses.

As you are aware, the Governor implemented several holdbacks to help
keep the state budget in line. The Department has seen four budget cuts
since 2001. In Medicaid alone, this has meant $115 million in cost
avoidance.

These reductions were met by tightening administrative spending, taking
advantage of federal matching dollars where possible, and using care
management tools. In the end, that was still not enough and Idaho
Medicaid had to reduce services for some clients and reimbursement to
some providers to be able to reach the $115 million target we needed to
hit by the end of state fiscal year 2003.

The Medicaid program is now undertaking more intensive review of
programs and services primarily focused on the high cost areas of the
program. The top six spending areas in the program are hospitals,
nursing facilities, prescription drugs, developmental disability services,
physician services, and mental health services.

Medicaid is working to increase enrollment in Healthy Connections ­ a
program that links Medicaid clients with primary care providers who
manage their care. Through this program, Medicaid avoids spending
about $31 per month for each Healthy Connections enrollee. The target
is to enroll 68 percent of Medicaid clients in Healthy Connections by the
end of state fiscal year 2003 and, so far, the Department is ahead of
schedule to reach that target. Through Healthy Connections, Medicaid
also can implement disease management programs for clients with
chronic diseases like diabetes and asthma. Such programs will improve
the health of these clients and slow the growth of Medicaid expenses.

Management steps are being developed for the prescription drug program
that could reduce the Medicaid pharmacy budget by $42 million. There
steps include denying early refill of prescriptions, requiring prior approval
of certain therapeutic drug classes, reviewing high prescription volume
clients, and implementation of a preferred drug list

In addition, the Medicaid program has developed lower cost alternatives
to institutional care such as nursing home care or intermediate care
facilities for persons with mental retardation. Known as home and
community based services waivers (or HCBS waivers), these four
programs allow eligible elderly and disabled individuals to receive the
services they need without having to be placed in an institution. The
costs for supplying the waiver services must be no greater than the cost
of the institution and, in fact, average significantly less than the cost of
institutional care.

The current economy brings the sustainability of Medicaid’s present
scope into question and has prompted considerable debate about the
future design of the program. The economic predictions for fiscal year
2004 show the need to maintain the current reductions and find more
ways of managing costs. However, unless current projected revenues
increase, the state may also need to make significant reductions in the
people or services that are covered or the amount that is paid for
services.

SUMMARY – As the Governor and Department work with the Legislature
to define the future of Idaho Medicaid, it is important to keep the following
in mind:

As the National Conference of State Legislatures puts it: “There are no
easy answers to the problem of health care financing for the poor.
Every proposed solution raises difficult issues of fairness, equity,
access, and quality of care. No answer to the question of Medicaid cost
containment is free of controversy and political risk.”

Other considerations —

For every state dollar taken out of Idaho Medicaid, the state loses an
additional $2.3 dollars in federal funds.

The Idaho Medicaid program channels a significant amount of money
into the overall health care infrastructure. Significant reductions in the
Medicaid program can adversely affect the entire state health care
delivery system.

Preventive medicine, including care and disease state management, is a
proven way of controlling health care costs. Studies confirm that early
intervention and prevention programs are more effective in avoiding
health care costs than waiting for people to become more ill and
consequently, more costly to treat.

We look forward to working with you in determining the future direction of
this most important program.

He discussed the budget recommends submitted to the Governor for the
2004 budget. He will have three (3) supplement requests, but none for
Medicaid. The requested supplements will total approximately $3 million.

The Governor has not approved the budget for SFY 2004.

The Department has reduced spending about $140 million during the past
holdbacks. Cumulatively, about 168 positions were eliminated. The
majority of the Department’s money, about 80 percent, goes to benefits
for programs such as child care, Medicaid, but some reductions in
programs has been necessary due to budget holdbacks.

Director Kurtz expressed concerns to be consider, such as future long-term care budget impacts, baby-boomers’ impact on the Medicaid
program and the funds needed to support Medicaid. As nursing home
expenditures increase, (currently we provide about 70 – 75 percent of all
funding for nursing homes in Idaho, how can we manage this need? As
the population ages, and the successes in extending the life expectancy,
(historically those expenses fall to Medicaid) how are we going to sustain
the Medicaid Program? Medical and insurance costs are increasing
about 8 to 12 percent, how can this be sustained with the State’s revenue
system?

Quality

1. The Air Quality Permitting Program completed the issuing of Title
   V operating permits; eliminated permits to construct application
   backlog, and Office of Performance Evaluation review.
2. TMDLs completed on schedule and settled the lawsuit.
3. Improved water quality in Cascade Reservoir and Middle Snake
   River.
4. Moving forward on Pit 9 at INEEL – retrieval of buried plutonium-contaminated waste.
5. Coeur d’Alene Basin Environmental Improvement Project
   Commission – local control over superfund implementation.
6. Air Quality Consent Order with Monsanto – good for environment,
   industry, and economy.
7. Development of environmental priorities for the Amalgamated
   Sugar facilities – good for environment, the company and the
   economy.
8. Grants and Loans – aid economy while meeting infrastructure
   needs.

Mr. Allred described some of the challenges for the Department in fiscal
year 2004. Such as:

1. Relations with EPA – maintaining state decision making.
2. Air quality in the Treasure Valley – ozone and PM.
3. Smoke management.
4. NPDES program for customers.
5. Groundwater – nitrate priority areas
6. Increasing public challenges to permit issuance.
7. Drinking water – aiding small water systems meet new federal
   standards.

1. Maintain matching funds for federal grants – Water Pollution
   Control Account.

Grants and Loans – There have been 63 grants for water and
wastewater improvements made primarily to Idaho rural communities and
totaling approximately $1 million. These grants are used to plan and
design facilities to improve drinking water and wastewater systems that
serve the citizens of Idaho. Grants allow communities to utilize scarce
resources on other community needs and prevent the need for raising
additional revenue to cover costs.

Loans totaling $49,600,000 have been made in Idaho to 14 communities
to construct needed improvements in water and wastewater systems.
This also brings needed resources into the community and aid in their
financial stability. Funds have increased economic activities in
communities as well as provided the infrastructure for continued economic
growth.

Water Pollution Control Fund Statute – The ratio for every $1 Idaho
spends brings in $5 in federal funds. The Drinking Water Loan Account is
$51,830,000, Wastewater Loan Account is $131,854,000, totaling
$183,684,000 for loans.

Remediation Reductions – As a result of past budget cuts, DEQ
suspended remediation work on the former MK-Rail site in Boise, and the
PCE contaminated site in Garden City. We eliminated work on all above
ground storage tank sites except for emergencies which resulted in a 25
percent reduction in the amount of time spent on AST sites. DEQ
postponed a planned $50,000 contract to evaluate the use of logyard
residual materials in mine remediation in the Coeur d’Alene Basin for two
years. Additional remediation projects were also delayed.

DEQ has eliminated the AST budget. In cases where we had to respond
to AST emergencies (such as ASTs which caused the flash fire in Malad),
we sought outside assistance, e.g., EPA did initial site characterization
under emergency response), but we still needed to pay for time DEQ staff
put into responding to emergencies which in many cases is significant.
That time is charged to regions’ general remediation budget, and
decreases the time and money available to work on other state
remediation projects.

Lawsuits – Mr. Alfred discussed contested cases initiated before the
Board of Environmental Quality, and not administrative enforcement or
other administrative actions. A total of 34 lawsuits was handled during
the past year. These included active cases, some of which are still
ongoing. DEQ had 19 contested cases in the last year, and some are still
ongoing.

19.0101.0201

The two anesthesia permits available are the General Anesthesia/Deep
Sedation permit and the Conscious Sedation permit. The administration
of general anesthesia/deep sedation entails putting a patient in an
induced state of unconsciousness or depressed consciousness in order to
provide treatment. The administration of conscious sedation entails
putting a patient in a minimally depressed state of consciousness in order
to provide treatment.

There are currently 63 anesthesia permit holders in Idaho. Of that
number, 36 are conscious sedation permits and 27 are general
anesthesia/deep sedation permits. On average, there are approximately
five (5) new applications for an anesthesia permit each calendar year.

23.0101.0201

23.0101.0202

The Board of Medicine wishes to express to the Legislature its concern
with an expanding scope of practice for health care providers.

The issues addressed by the committee members regarding gaps in
health care providers availability are at the heart of the concerns of the
Board, that scopes of practice are sometimes expanded in an attempt to
fill gaps beyond the usual scope of practice of the profession.

The Board of Medicine wishes to make the Legislature aware of its
concerns of expanding scope of practice and offers no opposition to the
rules presented by the Board of Nursing.

27.0101.0201

27.0101.0202

27.0101.0203

27.0101.0204

27.0101.0205

24.0301.0201

24.0501.0201

24.0901.0201

SENATE HEALTH AND WELFARE

Wednesday, January 15, 2003 – Minutes – Page 2
home administrators. This rule deletes the reference under nursing home
administrator-in-training requirement to the facility administrator not being
the preceptor.

24.1101.0201

24.1201.0201

Roger Hales, attorney for the Bureau of Occupational Licenses, testified
about the fee requirement of IDAPA 24.1201.0201.

24.1201.0202

24.1401.0201

Gregory Dickerson, a licensed Master Social Worker in Idaho President

SENATE HEALTH AND WELFARE

Wednesday, January 15, 2003 – Minutes – Page 3

of the Mental Health Provider Association, testified in opposition to IDAPA
24.1401.0201.

Bill Benkula, a licensed social worker, presented testimony in opposition
to IDAPA 24.1401.0201.

Roger Hales, attorney for the Bureau of Occupational Licenses,
requested the Senate Health and Welfare Committee to hold IDAPA
24.1401.0201to allow additional time in order to resolve issues pertaining
to the rule changes.

After a lengthy discussion and review of IDAPA 24.1401.0201, and at the
request of the Bureau of Occupational License, Vice Chairman Compton
determined to hold IDAPA 24.1401.0201, relating to social workers, until a
meeting can be held to try and resolve the issues presented in opposition
to the rule changes.

24.1501.0201

24.1601.0201

24.1701.0201

the qualification for licensure to be that they have received certification

SENATE HEALTH AND WELFARE

Wednesday, January 15, 2003 – Minutes – Page 4

from NCAAOM (National Certification for Acupuncture and Oriental

Medicine); changes renewal of license to be in accordance with Section
67-2614, Idaho Code; establishes continuing education requirements; and
establishes waiver of continuing education requirements for an inactive
license.

24.1901.0201
and IDAPA

24.1901.0202

facility administrators. The rule further defines courses approved for
continuing education; changes the requirement for renewal of a license to
be in accordance with Section 67-2614, Idaho Code; increases the
license application fee with Section 67-2614, Idaho Code; increases the
license application fee to $50 and deletes reference to recertification in
annual renewal fee.

IDAPA 24.1901.0202, a pending rule, relating to residential care facility
administrators. This rule establishes that an applicant for examination
shall be required to register with and pay the examination fee to NAB;
deletes contents of examination; establishes passing score to be
determined by NAB; deletes requirement for retakes; adds approved
courses of study for licensure.

The NAB (National Association of Board of Examiners of Long Term Care
Administrators) provides all testing services to this Board. This rule
establishes the testing provisions.

15.0101.0201

Seconded by Senator Bailey. Motion carried by voice vote.

15.0102.0201

Motion carried by voice vote.

Discussions about IDAPA 15.0102.0201included areas pertaining to adult
protection cases, closure of cases and followup of those closures,
reviewing cases, adult abuse or neglect and body bruising on clients,
investigating cases not referred to Law Enforcement, mandates and
requirements, household incomes and sliding fee scale, person(s) unable
to provide care for themself, guardianship of adult, lack of support staff,
and case management. The ICOA does not determine cases by gross
income.

15.0121.0201

22.0101.0101

The rule provides an opportunity for physicians who have graduated from
an unapproved medical school, but have demonstrated competency
through board certification, education evaluation, and postgraduate
training in the U.S. or Canada the opportunity to work in Idaho and fill
urgent physician vacancies in rural areas of the state. Applicants,
legislators on the behalf of applicants, hospitals and health care agencies
have supplicated the Board in the past to make the rules for foreign
graduates more flexible and allow them to employ these otherwise
qualified individuals.

22.0101.0201

22.0103.0201

22.0105.0201

22.0109.0201

The changes in the text of the pending rule that differ from the proposed
rule are: to remove the Code of Ethics as incorporated by reference and
add it as Appendix A; to add text to accurately identify the Accreditation
Council for Occupational Therapy Education as the American
Occupational Therapy Association’s Accreditation Council for
Occupational Therapy Education pursuant to a comment made by the
American Occupational Therapy Association; to add the specific date for
qualification for licensur by endorsement as noted by a comment by an
Occupational Therapy Licensure Board member; and to add text to
require in rule that an applicant must report any licenses issued as well as
any denied.

22.0113.0201

EXCUSED:

After a lengthy discussion and review of IDAPA 58.0101.0201, it was
determined to hold IDAPA 58.0101.0201, for further review and can be
rescheduled at a later date.

The air quality rules establish requirements for three (3) types of air
quality permits: permits to construct for new or modified sources, Tier II
operating permits, and Tier I operating permits for major sources
regulated by Title V of the Clean Air Act. The rule proposes revision to
several specific provisions, i.e., the update of the citations to the federal
regulations incorporated by reference; adjustment of the permit to
construct application requirements for toxic air pollutants to ensure
consideration of the cumulative effect of multiple air pollution sources and
incremental increases in emissions; removal of the grain-loading
standard; correction to a cross-reference section number regarding the
pre-permit to construct process; revision of time frames for filing appeals
to make them consistent with provisions of the Rules of Administrative
Procedure before the Board of Environmental Quality; clarification of Tier I
permit application submission by owners or operators of deferred Tier I
sources; clarification of current policies used in interpreting and applying
the rules for Tier I operating permit insignificant activities; clarification of
the process for handling the expiration and renewal of Tier operating
permits; correction of errors in spelling and capitalization in the toxic air
pollutant increment tables and updating of compound values; and,
addition of new abbreviations.

The proposed fee structure continues to use a combination of service-
and emissions-based calculations to allow for an equitable allocation of
fee payments among the facilities and to comply with a requirement of
state statute that the fee has an incentive for emissions reductions. To
better interface with the availability of information and state fiscal year
cycles, it is proposed that the dates for submission of registration
information and fee payments be changed. Removal of provisions
imposing radionuclide emissions registration and fee and fee payments
be changed. Removal of provisions imposing radionuclide emissions
registration and fee requirements on the U.S. Department of Energy
facilities is also proposed. The rule contains language stating when and if
deferred sources are required to submit a Tier I permit application, the
DEQ will reconsider the registration and fee requirements to determine
whether an alternative basis to regulate those types of sources should be
developed.

58. 0103.0201

The Department of Environmental Quality (DEQ) is evaluating the various
conditions and circumstances that are used for making determinations of
when public or central wastewater treatment facilities are reasonably
accessible to undeveloped property. DEQ conducts reviews of proposed
subdivisions at the request of city and county governmental agencies.

The purpose of this rule making is to provide greater detail to DEQ and
the Health Districts in making decisions as to when central wastewater
treatment facilities are reasonably accessible for new development and
for issuing subsurface sewage disposal permits. The rule is needed to
protect public health from ground water degradation due to nitrate
contributions from septic systems in areas where subdivisions may be
better served by central wastewater facilities. The rule establishes the
conditions in which septic systems are an acceptable alternative to central
wastewater treatment facilities.

The rule revises the list of systems installed by complex septic system
installers; deletes the exemption from licensure requirement for public
works’ contractors and specified that homeowners and residents may
install their own systems; revises the separation distance to surface
waters by adding additional categories for watertight pipe (irrigation) and
tiled ditches; and adopts additional siting criteria.

The rule allows local jurisdictions to adopt rules, standards, or ordinances
that are more stringent than these rules. The rule title is changed from
Individual/Subsurface Sewage Disposal rules to Individual/Subsurface
Sewage Treatment and Distribution rules. The rule also sets down the
procedures to revoke permits and to issue failing permits.

DEQ received public comments concerning the proposed rule and has
revised the initial proposal as allowed under Section 67-5227, Idaho
Code.

If the rule is adopted, the DEQ will have specific factors to evaluate when
determining if a property has reasonable access to a central wastewater
treatment facility. The factors to use in determining when a permit should
or should not be issued are clearly identified. The rule provides
consistency, certainty and specificity as to when property is considered to
have reasonable access to a central wastewater treatment facility, thus
minimizing the director’s discretionary authority.

John Eaton, a representative for the Building Contractors Association of
Idaho, testified in opposition IDAPA 58.0103.0201.

He reported the Idaho Building Contractors Association (IBCA) opposes
passage of the DEQ proposed rule increasing regulations on septic tank
installation in Idaho. If passed, the rule would significantly limit
construction practices throughout the state, and would have an adverse
effect on the cost of affordable housing. Although IBCA was not originally
included as one of the organizations invited to participate in the
negotiated rule making process with DEQ, we did attempt to work with
DEQ throughout the fall of 2002 to develop language to address the
Department’s stated concerns. Unfortunately, we were not able to
negotiate any change in language on several key provisions, and some
new provisions were added that increased the stringency of the proposed
rule. A major concern is the rule does not include a grandfather clause.

Dave Mabe, administrator, State Water Quality Division, DEQ, explained
how the DEQ pursued IDAPA 58.0103.0201. In summary, he believes
that generally this is a good set of guidelines for the director to consider
as he looks at whether or not something should be hooked up to a septic
system. If the Senate Health and Welfare Committee decides to not put
this rule in place at this time, Mr. Mabe requested the committee help
DEQ discern, in that process, what is the legislative intent, and how does
the committee want the DEQ to act differently in the next proposal they
bring to the committee next year?

After a lengthy review and discussion of IDAPA 58.0103.0201, the
following action was taken.

58.0106.0201
and
58.0106.0202

Mr. Ehler explained the rule was reviewed by the Environmental Common
Sense Committee, and the State Board of Environmental Quality.
Negotiated rule making was held.

IDAPA 58.0106.0202 repeals the previous solid waste management rules
(chapter repeal), and rewritten as IDAPA 58.0106.0201.

Richard Rush, Vice President of the Idaho Commerce and Industry
Association (IACA), testified and recommended approval of IDAPA
58.0106.0202.

At the discretion of Vice Chairman Compton, IDAPA 58.0106.0201 and
58.0106.0202 will be held in Committee and will be rescheduled later, this
postponement is to allow committee members additional time to review
this rule making docket.

58.0108.0102

Additionally, a number of housekeeping changes are included in this rule.
The engineering standards apply to newly designed public water systems
and to significant modifications proposed for existing public water
systems. As such, they affect consulting engineers, developers of new
systems, and owners of new and existing systems. The housekeeping
changes are for the benefit of all users of the rules and also serve to meet
standards established by the Legislature and the Department of
Administration.

The engineering standards for design, construction, and operation of
public water systems regulate activities that are not regulated by the
federal government. These standards were promulgated to fulfill the
requirements, Idaho Code 39-118,and predate the Safe Drinking Water
Act.

Negotiated rule making was held and groups involved included the Idaho
Rural Water Association, Idaho Ground Water Users Association, JUB
Engineering, Carollo Engineering, American Water Works Association,
Idaho Professional Geologists, Idaho Department of Water Resources,
DEQ Water Quality Engineers, Cities of American Falls, Blackfoot, and
Lewiston.

If adopted, the regulated community will benefit from rules that reflect
current industry standards and are generally easier to use. Certain
practices that have proven to be ineffective will be eliminated.

Filter Backwash Recycling Rule – requires public water systems that use
surface water or ground water under the direct influence of surface water
to notify the State if they recycle and waste fluids from their treatment
process. Systems must provide the State with descriptions of their
recycling practices and identify the point at which these recycled streams
enter the treatment train.

Long Term 1 Enhanced Surface Water Treatment Rule – requires public
water systems that use surface water or ground water under the direct
influence of surface water and serve less than 10,000 persons to meet
tighter standards for turbidity, to monitor individual filter bed turbidity
continuously, and to undertake corrective actions if turbidity excursions
occur. Systems must prepare a disinfection profile of their treatment plant
unless they can demonstrate to the State that they have disinfection by-product levels that are less than 80 percent of the maximum contaminant
levels set forth in the Stage 1 Disinfection By-products Rule.

DEQ received no public comments. If adopted, this rule will maintain
Idaho’s primacy agreement for administration of the Safe Drinking Water
Act.

16.0505.0201
and

58.0114.0201

This rule making allows local government and the health districts to adopt
equivalent or more stringent fees to cover the services provided. Some
units of local government have adopted environmental fee ordinances and
some health districts have revised fee rules that were adopted under their
boards’ rule making authority. The environmental fee structure needs to
be flexible, across the state, to reflect the costs of providing
environmental services rather than using a flat fee. Some health district
environmental service costs are greater than other districts and the fees
need to be reflective of the costs so that services can continue to be
provided to the public. The districts with higher costs need the flexibility
to revise fee structures to cover costs of providing services. DEQ
received no public comments.

16.0205.0201

Mr. Duke discussed the eligibility requirements to obtain services, the
200 percent poverty level, substance abuse, and the Ryan White Care
Act.

16.0210-0201

Isolation – The separation of infected persons, persons who may have
been exposed to a highly contagious infectious agent, or of persons
suspected to be infected, from other persons to such places, under such
conditions, and for such time as will prevent transmission of the infectious
agent. The place of isolation shall be designated by the Department or
the District Board of Health.

16.0212.0201
and

16.0212.0202

This rule rewrites the entire chapter of rules governing procedures and
testing to be performed on newborn infants. The testing of newborn
infants for phenylketonuria and other preventable diseases and the
instillation of an opthalmic preparation in the eyes of the newborn to
prevent Opthalmia Neonatorum. The rules specify the time and manner
of testing as directed in Section 39-909, Idaho Code.

Negotiated rule making was held and groups involved included the Idaho
Hospital Association, Idaho Perinatal Project, Division of Medicaid, Idaho
Medical Association, and Idaho Chapter of the March of Dimes. The
Department of Health and Welfare is directed by Idaho Statute to
prescribe what tests shall be made for preventable diseases and the time
and manner of such testing.

There were 20,000 registered births in Idaho last year. A test kit, covering
the newborn testing costs the parent(s) $18.00.

Senator Burkett requested a copy of the old rule to be repealed. No
copy was available; therefore, at the discretion of Chairman Brandt the
rules will be held until Wednesday, January 23, 2003, so a review of the
chapter proposed to be repealed is available.

16.0000.0201

During 2002, the Legislature passed HB 406 and signed into law
amending Title 54, Chapter 32, of the Social Work Licensing Act to
change the titles and designations of social workers. To make rules
consistent with the new professional titles adopted in law. The rule
changes the titles of Certified Social Worker, Certified Social Worker-Private Practice to Licensed Master’s Social Worker, Licensed Clinical
Social Worker, and Licensed Clinical Professional Counselor respectively.
The impact of the rules is that providers and consumers will see a non
substantive name change in three professional titles.

16.0307.0101

These rules were developed to bring time lines for completion of plans of
care into congruence with federal requirements and to refine the definition
of a home health agency. The change in time lines reflects a change in
federal requirements from 62 to 60 days. Another change was initiated in
partnership with the Idaho Association of Home Health Agencies. The
definition clarifies who must be licensed as a home health agency. To be
a licensed home health agency, the agency must be primarily engaged in
providing skilled nursing and at least one other health care service (home
health aide, physical therapy, occupational therapy, speech therapy,
nutritional services, respiratory therapy) in a patient’s home.

16.0212.0201
and

16.0212.0202

16.0309.0201

This pending rule affects the way some payments are processed for care
received in residential care facilities and certified family homes. Cash
payments were previously paid to residents through the Division of
Welfare. Because of legislation in 2001, SCR 110, Medicaid now pays
providers directly. Generally, this change in payment methodology
created an opportunity to leverage Medicaid funds and improve the
reimbursement for personal care services. The net savings to the state
general fund in 2002 was approximately $1 million. For the most part, the
change was invisible to the recipient.

The Division of Medicaid successfully negotiated reimbursement rates
with industry representatives in 2001. These rules were presented as
temporary rules during last legislative session and were approved by both
Houses. The resulting change has been in effect since January 2002.
The only barrier in implementation was the unwillingness of several
facilities to enroll as Medicaid providers. The Department decided to
allow recipients in these non-Medicaid facilities to remain in these homes
and continue to receive cash payments rather than force residents from
these homes. The Department continues to work with these providers to
encourage Medicaid provider enrollment. For the majority of the
stakeholders, this rule change was welcome and positive reflecting the
right price for the right care.

16.0309.0202

Provider rates for commercial, non commercial, and individual
transportation providers will be reimbursed on a per mile basis, at a rate
established by the Department after a study of costs has been conducted.
These studies will be conducted no less than every three (3) years.

Meal reimbursement for Medicaid clients will also be reimbursed at a rate
established by the Department. The Department has implemented rate
changes for transportation providers effective January 1, 2002, in
response to the budget holdback. For FY2002, the savings reached was
$910,000, and the estimated savings for FY2003 is $3.7 million.

There were three (3) positive comments received.

16.0309.0204

This rule change would allow the Division of Medicaid to pursue medical
support costs from absent parents who have been court ordered to pay
medical support for his/her child. The text of the pending rule has been
amended in accordance with Section 67-5227, Idaho Code.

16.0309.0206

This rule involves changes to the way the Medicaid program pays for
Medicare Part B crossover claims. This rule was developed to reduce
Medicaid expenditures to meet the funds available following the budget
shortfall, and to provide services at the right price. No hearings were
held, and three (3) comments were received during the comment period.
Two (2) comments were positive and one (1) negative.

Before this rule change, Medicaid automatically paid the total amount of
the Medicare Part B coinsurance and deductible amount on all Medicare
and Medicaid, which “crossed over” to Medicaid. Following this change,
Medicaid will cover the difference between the Medicare payment amount
and either the Medicare allowable amount, or the medicaid-allowed
amount for the service, whichever is less. As Medicaid generally pays
less than Medicare, the amount paid is generally reduced, resulting in
savings to the Medicaid program. These rules specifically address
physicians, hospital outpatient, and ambulance providers. However, other
Part B service providers such as durable medical equipment, physical
therapy, psychology and other medical service providers are also
impacted. This change in payment methodology is projected to save $2.3
million during the current fiscal year.

16.0309.0207

No public hearings were held, and two (2) comments were received, both
were positive. Before this rule change, individuals were paid for
residential habilitation services in the home of the participant under both
of the Department’s Developmental Disability waivers. Because this
arrangement was allowed, the Department was found to be responsible
for the withholding of FICA, FUTA, and SUTA payments. As pointed out
by the Legislative Auditors, this practice was time consuming and costly to
the Department. In addition, the Department was considered to be the
Common Law employer of such individuals, creating a potential liability
risk.

All other independent providers such as Personal Care Service and Aged
and Disabled Waiver providers have been required to be employees of an
agency for some time. This rule change treats all providers of similar
services consistently by the Department. These rules also clarify that
RESHAB providers who provide services in their own homes as Certified
Family Homes must be affiliated with an RESHAB Agency for training and
oversight.

16.0309.0208

This change is required by a change in federal law. These are negotiated
rules, no public hearings were held, and during the comment period two
(2) comments were received, both positive.

Section 702 of the Benefits Improvement and Protection Act (BIPA) of
year 2000 required that states pay encounter rates to FQHCs and RHCs
using a prospective payment system with a federally specified base year,
and then inflating their payments using a national index.

Previously, providers were paid on a retrospective, cost settlement basis.
These rules were negotiated with the affected industries. They clarify the
types of encounters which can be reimbursed by Medicaid, including the
addition of a dental encounter for FQHCs. The description of what
service constitutes an encounter is updated to conform the federal
requirements and actual industry practice.

16.0309.0210

This rule primarily deals with clarifying the language and consistently
using the term “participant” throughout the affected sections of rule. In
these sections, Medicaid currently refers to the same person as a client,
patient, and eligible individual. No public hearings were held. Three (3)
positive comments were received during the comment period.

In Section 146, which covers Personal Care Services, the requirements
for a supervising RN (registered nurse) visit at least every 90 days was
eliminated, and it is left up to the participant and the Department’s Nurse
Reviewer to determine the frequency of the RN visits, or if any such visits
are necessary for the particular individual.

Change in Section 149 which covers “client contribution for waiver
services” essentially condenses a page of verbiage on how to calculate
the participant’s personal needs allowance into a single chart. This is
designed to make this section of rule much more understandable for both
the Department and the public. Except for the addition of how an over or
underpayment is handled in Subsection .11, no actual change in current
practice is made based on this clarification.

16.0309.0212

The rule changes are basically technical in nature and clarify provider
qualifications, and updates terminology to make these rules more
consistent with the terminology found in the Department’s other Home
and Community-based waivers. The term “participant” is used throughout
to identify a person using services to standardize the language.
Diagnosis codes for “concussion” and “intercranial injury of other and
unspecified nature” are added to the list of qualifying diagnoses. The
term “Individual support plan” is replaced by the term “Plan of Care.”

No hearings were held about this rule, and two (2) positive comments
were received.

16.0309.0211

The purpose of these rules is to establish clear standards for
professionals rendering Medicaid services. These rules refer to
Developmental Disability Agency rules found in IDAPA 16.0411.0201 that
specifies the details of these requirements.

This pending rule points to the requirements in the Developmental
Disability Agency rules that clarify the professional requirements for
individuals providing intensive behavioral intervention to children in
children, ages 0-21 years old that has self-injurious, aggressive or
severely maladaptive behavior and severe deficits in areas of verbal and
nonverbal communication. These services require prior authorization,
periodic and annual review. Provider qualifications include specific
degree requirements and experience. The existing rules allowed for
various interpretation and these pending rules help clarify professional
experience, educational, and training requirements.

Negotiated rule making was not formally conducted. However, notification
was sent to affected stakeholders with a draft copy of these rules asking
for input. Three (3) hearings were held to provide an opportunity for
individuals to testify. Twenty-seven comments were received, most
opposed the original proposed language. However, individuals expressed
the need to ensure that quality services are provided by competent
professionals. Although amendments were made to the original rules, the
department maintains that these rules sufficiently define the qualifications
necessary to assure its recipients are receiving the appropriate care.
Legislative Services reviewed these rules and had no substantive or
procedural concerns.

16.0309.0215

These temporary rules relax some of the provider requirements for
targeted service coordinators and targeted case managers because of
reduced reimbursement and benefit limitations. The Governor asked the
Division of Medicaid, like other state agencies, to reduce its expenditures
by 3.5 percent. Medicaid reviewed various benefit reduction options.
There are three (3) primary ways to reduce expenditures beyond
improving management techniques. These include:

1. Changing Medicaid eligibility to make it more difficult to qualify for
   benefits;
2. Reducing or eliminating optional benefits, and
3. Reducing provider reimbursement.

Additionally, Medicaid is limited in its ability to reduce or cut certain
services that are federally mandated. Ms. Clement distributed a chart
pertaining to the service category and explained which service is required
by federal or state mandates or by rule, and if a rate-set is a federal
mandate, state mandate, or a rule. (Attachment #1)

Medicaid attempted to minimize the impact on recipients by reducing
reimbursement and limiting benefits, rather than eliminating services.

The services identified in this rule docket are case management services
for developmentally disabled and mentally ill Medicaid recipients. The
services are brokerage services in which case managers help direct
individuals to resources. These are not diagnostic or treatment services.
These changes do not affect any other developmental disability or mental
health services that Medicaid recipients are currently receiving or may
need in the future.

For disabled individuals, crisis case management services continue to be
available through Medicaid. For mentally ill individuals, crisis hours are
contained in the new four-hour per month limitation. Individuals who need
additional crisis case management may access these services through
psychosocial rehabilitation and mental health clinics. Additionally, the
department’s regional mental health program is also available any time of
day to provide help during crisis.

As of December 2002, there were 64 providers actively providing mental
health case management services to 1,800 Medicaid recipients. In fiscal
year 2002, Medicaid spent approximately $6.0 million for this service.

Fifty-six (56) providers actively providing targeted service coordination for
approximately 1,900 developmentally delayed adults. Medicaid spent
approximately $3.5 million for targeted service coordination for these
recipients.

There were 66 active providers rendering target service coordination to
2,200 Medicaid children. Medicaid’s 2002 cost for this service totaled
$3.9 million.

The budget hold back, based on the limit on available case management
hours and the projected reduction in targeted service coordination, is
projected to save $2.2 million in 2003.

While Medicaid has attempted to minimize the effects of these reductions
on recipients and providers, it acknowledges that there will be some
individuals whose needs are not met, and providers who will be unable to
provide the same level of care. Medicaid staff has been meeting with
providers to work through these issues.

The Department of Health and Welfare (DHW) received 289 requests for
hearings. Nine written comments were received, seven of these were
negative – with most expressing concerns that the reductions will result in
higher costs resulting from emergency and hospital care that could have
been avoided through case management. The DHW will hold two
hearings early this year to give individuals the opportunity to testify.

Maureen McDonald testified in opposition of IDAPA 16.0309.0215.

Diane Strunk testified in opposition of IDAPA 16.0309.0215.

Steve Hansen testified and provided written comments in opposition of
IDAPA 16.0309.0215. In summary, he recommended that these
temporary rules, (IDAPA 16.0309.0215) be adopted only with strong
language from this committee, and the Legislature as a whole, that
requires the Department of Health and Welfare continue to aggressively
negotiate and implement rules which:

1. Will relieve the providers of case management and service coordination
   from professional liabilities which may be directly associated with these
   rules, as they relate to the areas of client abandonment.

1. Prohibits the Department from using inconsistent and arbitrary
   interpretations which might be hidden in provider agreements or regional
   guidelines which are not specifically defined in rule in the future.

1. Ensures that the Department’s expectations of service coordinators are
   reflected in both rule and practice in order to ensure that such
   expectations match the recent cut in reimbursement for the service.

1. Ensures that a single person be identified at the state level by the
   Department who can determine equity in the regional interpretation and
   implementation of any rules relating to service coordination for adults
   with developmental disabilities or EPSDT service coordination, and have
   the authority to give direction as needed.

1. Ensures that when the idea of offering cost of living adjustments to
   Health and Welfare employees in the future, such as consideration is
   accompanied by the Department’s good faith review of similar
   adjustments for those providers who are in the trenches, doing the work
   that the taxpayer intends their tax dollars to support.

1. Ensures that the additional rule recommendations which are being
   developed in the current case management work group be adopted in
   the form of new temporary proposed rules no later than April 1, 2003,
   with necessary revisions being made throughout this year, and complete
   the promulgation process before the next legislative session. The
   department should agree to assist in travel costs associated with current
   members of that workgroup being able to participate in that process.

Laura Scuri testified in opposition to IDAPA 16.0309.0215.

Debbie Johnson provided written comments and is strongly opposed to
these rules. In summary she wrote, “as families we are the gatekeepers
of these services. We know the ones that work and the ones that don’t.
We can also help you identify areas in which to examine and the ones
that need praise. The current rules, with the exception of the payment
portion works well. For many Idaho families TSC/CM services are their
lifelines.”

Karen Canfield of Boise, opposed IDAPA 16.0309.0215. In summary,
she wrote “Medicaid is a complex challenge, but it seems that the cuts
could be made in a more equitable fashion say…2.5 percent across the
board, rather than taking it all away from disabled adults and children, that
have lost so much already in the way of benefits the last several years.”

Penney Friedlander of Coeur d’Alene, wrote opposing any budget cuts.
The Trinity Group Homes, Inc., in Coeur d’Alene, is a nonprofit agency
providing a supportive group home environment to adults who have been
diagnosed with major mental illnesses. ” We have experienced a direct
loss of service providers in Coeur d’Alene due to an inability for the
providers to cover costs. The situation is dire. We implore you to analyze
the effects of budgetary changes in determining whether costs will be
reduced. Consider the larger picture.”

Bob Madderra submitted written comments in opposition to the rules. He
wrote “the already limited amount of four hours costs the state of Idaho
more money due to the alternative when crisis situations occur. Persons
with mental illnesses need differing amounts of targeted case
management. Limiting it to four hours is unreasonable, and there needs
to be more flexibility for cases that need additional attention.”

After reviewing the rule, and with specific attention to areas on pages 49,
55 and 61 of IDAPA 16.0309.0215, and listening to testimonies, Senator
Kennedy explained that it appears to him in our discussion of who is
taking comparative hits as a result in the reductions of service, he has to
think that the group taking the biggest hit are the recipients in the mental
health situation who are not even being represented before the committee
today.

At the discretion of Vice Chairman Compton, an additional review of
IDAPA 16.0309.0215 will be scheduled at a later date in order to allow
committee members additional time to consider the rule prior to making a
decision.

16.0310.0202

This rule removes Idaho legislative intent language that capped
intermediate care facility rates from July 1, 2000 through June 30, 2002.
The changes also allow the existing rate methodology which relies on the
prospective payment system to be restored beginning July 1, 2002.

Intermediate care facilities provide services to mentally retarded
individuals. These individuals typically have higher level of care needs
and are unable to function effectively in the community. Sixty-four (64)
intermediate care facilities in Idaho serve approximately 470 individuals.
The cost of providing care in fiscal year 2002 totaled $34.5 million. By
lifting these caps, the total annual cost to Medicaid is estimated at $35.5
million in fiscal year 2003, and $36.2 million in fiscal year 2004. This
reflects an average annual increase of approximately 2.3 percent.

Medicaid has been routinely meeting with industry representatives to
ensure requirements are reasonable, costs are managed and care is
safely and effectively rendered. Intermediate care facility providers
perform a valued service to Medicaid recipients whose needs are uniquely
served by this industry.

16.0310.0203

Hospital services represent the largest Medicaid expenditure category,
followed by nursing home and pharmacy services. Medicaid payments for
hospitals during state fiscal year 2002 were made in four general
categories:

1. inpatient hospital services totaled approximately $104 million
2. outpatient hospital services totaled $35 million
3. hospitals also received $10.3 million in a disproportionate share
   (DSH), and
4. another $10.4 million in federal upper payment limit (FUPL).

The DSH and FUPL payments are based on Medicaid inpatient utilization
rates.

The first two payment categories are based on hospital claims submitted
to Medicaid. Hospitals receive interim payments based on a percent of
charges, and are later subject to a cost settlement process managed by
Medicaid’s contractor auditor, Myers & Stauffer.

All hospitals received prior notice of the 3.5 percent reduction in their
interim payments, and the related change that will occur during the cost
settlement process.

Steve Millard, president of the Idaho Hospital Association(IHA) testified
and the Association does not oppose the rules. He recommended the
committee approve the rules.

EXCUSED:

16.0309.0215

The purpose of this docket is to meet budget holdback directives while
continuing to meet the Department of Health and Welfare’s commitment
to providing access to the right care for the right price.

These rules relax some of the provider requirements for targeted service
coordinators and targeted case managers because of reduced
reimbursement and benefit limitations.

Several persons sent letters or provided a precise indication or testimony
in opposition to IDAPA 16.0309.0215.

The Committee held a lengthy discussion about the ongoing debate about
the reduction of case management hours (20 hrs to 4hrs) per month, what
is federal or state mandated services, safety value, emergency hours,
general and federal funds and mandates, and asked those in opposition
to IDAPA 16.0309.0215 what suggestions could be offered to the
Department of Health and Welfare to provide budget cuts to programs,
and increase in taxes to avoid and afford programs.

A Medicaid status report for January 2003, a budget snapshot, was
reviewed. The Department of Health and Welfare has seen four budget
cuts since 2001. In Medicaid, this has meant $115 million in cost
avoidance. Medicaid is projected to spend about $849 million in fiscal
year 2003 – about $234 of that in state general funds. There are three
basic ways to affect the amount spent in Medicaid. They are:

1. By the number of people on the program;

2. By the number and duration of covered services; and

3. By the amount paid for services.

A fourth tool-managing health care services to eliminate unnecessary or

ineffective care – can achieve some dramatic cost avoidances in the short
term by providing cost and utilization controls that have been missing.

Cost containment initiatives during the past fiscal year included:

1. Changing the discount for pharmacy reimbursement from A WP -11

percent to 12 percent,

2. Requiring prior authorization on brand name prescriptions,

3. Restricting early prescription refills,

4. Including the Children’s Health Insurance Plan in the drug rebate

program,

5. Changing the initial hospital length of a stay from 4 days to 3 days,

6. Creating a standardized reimbursement method for transportation

services,

7. Requiring prior authorization for durable medical equipment,

8. Changing the reimbursement methodology for Medicare crossover

claims,

9. Limiting adult dental benefits to emergency services,

10. Applying the Medicare rates to selected Medicaid services,

11. Increases Healthy Connections enrollment,

12. Reducing reimbursement rates for case management services for

DD,

13. Limiting case management hours for MI,

14. Reducing hospital reimbursement,

15. Requiring prior authorization for select classifications of medications.

1. Medicaid absorbed about 2.6 percent of a holdback beginning in
   November 2002. This was originally 3.5 percent, but the Governor
   asked the Division to hold off its planned implementation of waiver
   cutbacks.
2. State General Fund still needs to find approximately $160 million
   to address revenue shortfalls.
3. For every state dollar taken out of Idaho Medicaid, the state loses
   an additional $2.3 dollars in federal funds.

Committee members discussed the problems that the Department of
Health and Welfare must face during this tight budget situation. A way of
controlling expenditures, maintaining personnel to perform services, and
when rules are mandated by federal or state determination. Senator
Darrington pointed out that Line 18 of the following chart would explain
this program. Senator Darrington encouraged committee members to
use the chart to help determine if a program is mandated and service is
required.

At the discretion of Vice Chairman Compton, no decision will be
made at this time regarding IDAPA 16.0309.0215.

16.0311.0301

This bed cap was first set in 2000 in intent language attached to the
appropriation for medical assistance. This temporary rule was
promulgated at that time to implement the legislative intent
language. The bed cap language was repeated in the appropriation
for 2001 and the Department requested a year’s extension of this
rule. Although the bed cap language was not repeated in the 2002
appropriation bill, the Department requested and received an
extension of the bed cap for another year.

The Department consulted with the Idaho Association of
Community Options and Resources, the ICF/MR association, and
there is no objection to this request from the association. The
Department is aware of no concerns from any other group.

Committee members requested Medicaid to provide data about
persons place out-of-state and if, at the time of that placement,
Idaho had empty beds.

16.0314.0201

This rule change was initiated in partnership with the Idaho Hospital
Association. This change updates the rules to the current standard
of practice and reflects federal guidelines and standards. The Joint
Commission on Accreditation for Healthcare Organizations holds
hospitals to state rules and requirements. The current rule requires
a history and physical examination to be performed within 72 hours
of admission. This rule change allows physicians to complete a
history and physical exam up to sever (7) days prior to a planned
admission and shortens the completion time to 48 hours for all other
patients except emergency admissions.

16.0319.0101

Ms. Ransom reported that during the 2000 legislative session, the
Board and Care Act and the Residential Care Act for the Elderly
was amended to allow a provider to make application to care for up
to four (4) residents in a certified family home. These rules were
developed with input from providers, advocates, and consumers
through public meetings and members of the Board and Care
Council and the Residential Care for the Elderly.

These rules will assist in ensuring residents receive the right care,
in the right setting with the right outcomes in the most cost efficient
manner.

16.0319.0102

This rule was developed in response to a recommendation by the
Board and Care Council for the Elderly and the Residential Care
Council. This rule requires a CHF to arrange for emergency
transportation of residents with medical and/or behavioral
emergencies. Providers are not equipped or trained to provide this
type of service. This rule change will help ensure residents who
have emergent needs are met.

16.0322.0101

This rule was developed in response to a recommendation by the
Board and Care Council for the Elderly and the Residential Care
Council. This rule requires a Residential or Assisted Living
Facilities to arrange for emergency transportation of residents with
medical and/or behavioral emergencies. Providers are not
equipped or trained to provide this type of service. This rule change
will help ensure residents who have emergent needs are met.

16.0322.0201

These rule changes were made to align the rules with statutory
changes made by Senate Bill 1365 to the Board and Care Act and
the Resident Care Act for the Elderly during the 55^th session of the
2000 Legislature.

These rules correct the name of Residential OR Assisted Living
Facilities, add a new definition, an authorized provider to recognize
nurse practitioners and clinical nurse specialists licensed by the
Board of Nursing and physician assistants. Changes reflect current
standards and name changes of the National Boards or Councils.

Ensures all residents, not just the elderly, are to be informed of their
right to develop advanced directives; modifies and ensures rules
referring to administrators qualifications are consistent with the
Department of Health and Welfare’s rules governing criminal history
clearance.

EXCUSED:

SEATTLE WA

She explained one of Secretary Thompson’s goals is a healthy America.
He launched his comprehensive initiative on disease prevention in a
National Press Club speech April 30, outlining steps that individuals can
take on their own for good health.

1. A new Web site “HealthierUS.gov” has been created.
2. Physical activity – outlined the special benefits of physical activity
   and moderate exercise for older Americans. Center for Disease
   Control (CDC) launched a $190 million multicultural media
   campaign in July aimed at promoting a healthier lifestyle for young
   people.
3. Healthy diet – A report was released in June showing that
   overweight and obesity cost America $117 billion annually and
   accounts for at least 14 percent of deaths in the U.S., or some
   300,000 premature deaths each year. Nearly one-third (1/3) of
   U.S. adults now classify as obese, and obesity among young
   people is growing rapidly.
4. In October, $100 million was made available to tribal organizations
   for prevention and treatment of diabetes among American Indians
   and Alaska Natives. On average, American Indians and Alaska
   Natives are 2.6 times more likely to have diabetes than non-Hispanic whites of similar age.
5. HIV/AIDS – In addition to efforts to improve health for all
   Americans through healthy diet and exercise, HHS maintained and
   expanded its efforts to prevent HIV/AIDS and support treatment,
   both domestically and internationally. Total HHS spending on
   HIV/AIDS increased from $11.4 billion in FY2001 to $12.1 billion in
   FY2002, with a further increase of almost $1 billion proposed in
   the President’s budget for FY2003. HHS’ contribution to the global
   effort against HIV/AIDS increased from $276 million in FY2001 to
   $486 million in FY2002.





6. Bioterrorism preparedness – America ended the year 2002 much
   better prepared to confront terrorism. Under HHS Secretary
   Tommy G. Thompson’s leadership, the department led the
   nation’s efforts to be ready in particular for possible incidents of
   bioterror. HHS’ budget for bioterrorism increased tenfold, from
   $305 million for FY2001 to $2.98 billion in FY2002. Of the budget
   increase, more than $1 billion was provided to states and major
   cities to support increased preparedness by hospitals and public
   health systems. The objective is local preparedness, with national
   resources ready to be deployed immediately whenever and
   wherever needed.





7. Smallpox and other vaccines – HHS took steps to provide enough
   smallpox vaccine to be able to vaccinate every American, in the
   possible event of a release of this disease. In December,
   President Bush announced a careful policy of voluntary
   vaccination for front-line health care and emergency personnel, to
   ensure effective response if the disease were released.
   Vaccination of others is not recommended at this time, in the
   absence of an emergency. In addition, production of the current
   anthrax vaccine was resumed, and research into improved
   vaccines for anthrax and other diseases was accelerated.





8. Disease surveillance and communications – In order to detect any
   possible release of disease agents by terrorists, the nation’s
   disease surveillance system is being expanded, with spending
   increased from $67 million in FY2001 to $940 million in FY2002.
   This expansion will also help to quickly identify outbreaks of
   naturally-occurring diseases. The nation’s network of public
   health laboratories is being expanded.





9. Teen smoking – Results from the “Monitoring the Future” survey
   for 2002, showed a significant decrease in smoking by teens,
   accelerating a trend that began after teen smoking reached a high
   point in 1996. This year’s survey also showed that teen alcohol
   consumption was down, as was teens’ use of illicit drugs.

1. In 2002, HHS approved waiver and plan amendments for state
   SCHIP and Medicaid programs that expanded access to health
   coverage to more than 600,000 additional Americans. These
   changes provided additional services to more than one (1) million
   other beneficiaries. Since the start of the Bush Administration,
   HHS has approved waivers and plan amendments that expand
   access to coverage to nearly 1.8 million Americans and improved
   benefits for more than five (5) million other Americans.

Other areas briefly discussed were a one-page list of acronyms used by
HHS, delay and lengthy of time to process Waiver requests (goal is a 90-day turnaround), and promoting seniors’ access to prescription drugs.

58.0101.0201

After review, the Committee addressed concerns and questions about
several sections in IDAPA 58.0101.0201, including Section 603.01(e) the
burning of plastics, i.e., plastic bailing twine; Section 603.01(g) burning
petroleum products; Section 603.01(h) burning lumber treated with
preservatives; Section 611.02 on-site wastes burning, and Section 611.03
daylight burning only. Also of concern is the enforcement procedure, and
keeping the old rule in place while rejecting this new proposal.

Discussion: After discussion to reject part or all of IDAPA 58.0101.0201,
it was determined the complete new rule would be rejected. The
Department of Environmental Quality can bring a new docket to the
committee next year.

Motion to reject IDAPA 58.0101.0201 was approved by voice vote.

58.0106.0201
and

58.0106.0202

16.0309.0217

Other changes in the rule relate to the assessment of late penalties. At
the current time, the Department of Health and Welfare is allowed to
assess a penalty to providers for submitting a late review to our
contracted quality improvement organization. This rule would allow a
penalty to be assessed by the Department for internal reviews. This
would ensure that all procedures are submitted in a timely manner for
review in order to support public health and safety.

16.0309.0218

This docket addresses the right service for the right price and eliminates
Medicaid payment for the entry of laboratory results into the Clozapine
National Registry for participants who require this medication for the
treatment of their mental illness.

In October 2001, the Department of Health and Welfare (DHW) reduced
its payment for this service from $29.07 to $5 in order too more accurately
reflect the complexity of the service and bring our payment into line with
what other states were paying. Further, DHW’s research found that Utah,
Wyoming, Montana, and Nevada were not paying for this service at all
under their Medicaid programs. During SFY 2002, Medicaid paid $39,143
for this service. In light of the state’s financial picture, continued payment
by Idaho Medicaid could not be justified.

16.0309.0301

Medicaid payment for out-of-state nursing home care is very limited and
generally is only allowed if the care the person needs are not available in
an Idaho facility. Because of the complexity of the current acuity-based
reimbursement for instate nursing homes, the Department of Health and
Welfare has elected to pay out-of-state facilities the same rate as they
receive from the Medicaid program in their home state. This simplified
their billing and claim submission and is the method previously and
currently used by the department.

16.0310.0201

This docket is a companion to IDAPA 16.0309.0208 and describes the
method to pay federally qualified health centers and rural health clinics
based on a federally required prospective payment system. These rules
delete the previous reimbursement system and replace it with a reference
to the method specified in the Federal Law.

This change was negotiated with the affected industries before the rules
were promulgated. No public hearings were held and two (2) positive
comments were received.

16.0310.0204

This rule change removes wheelchairs from the content of care for
Intermediate Care Facilities for the Mentally Retarded. This rule change
was negotiated between the Department of Health and Welfare and the
ICF/MR industry.

This change has three positive effects:

1. It eliminates the cash flow problem experiences by small ICF/MR
   facilities when a participant requires a highly specialized and
   expensive wheelchair.
2. As the Medicaid program pays for such chairs on a fee schedule
   rather than billed charges, the cost is less to the Medicaid
   program.
3. The participant is more readily accepted for admission into the
   small facilities and keeps the wheelchair, no matter if he moves
   between facilities and into a community placement.

MOTION

16.0310.0301

This docket addresses the payment of out-of-state nursing home care,
and is the companion of IDAPA 16.0309.0301. No hearings were held,
and two (2) positive comments were received during the comment period.

This rule allows the Department of Health and Welfare to reimburse out-of-state nursing homes using the rate being paid by the Medicaid
jurisdiction in which the facility is located. Technical changes are also
made to update manual section references and other editorial changes.
In addition, this docket adds a section on incorporation by reference and
incorporates 42 CFR Part 447, and the Medicare Provider
Reimbursement Manual into these rules.

EXCUSED:

The following ten (10) IDAPA rules were presented by Phil Gordon from
the Division of Welfare.

16.0301.0201

This rule assists families who go off cash assistance due to work, to
continue receiving Medicaid for six (6) months with up to an additional six
(6) months, if the participant remains employed. These changes will help
transition these individuals to work and move families off welfare.

This rule also adds back rules that specify those items that are not
counted in determining income available to the participant, as prescribed
by federal regulations-income exclusions. Some of those are:

1. Commodities and Food Stamps
2. Housing subsidies, and
3. Income tax refunds.

MOTION

16.0304.0103

Food Stamp families will receive an increase in their benefits ranging from
$5 to $30 depending on the size of the family. For example, a household
of one (1) will increase from $130 to $135 per month, and a household of
four (4) will increase from $434 to $452.

These changes are superceded by IDAPA 16.0304.0202 – increase for
2002. This rule corrects the language that aligns with federal policy
related to aged and disabled individuals who cannot buy and prepare their
own meals separately from others in the home.

The Department of Health and Welfare has been applying the correct
policy and the automated system is correctly calculating benefits, but now
the Department is correcting the rule site.

16.0304.0201

1. Who must register for work.
2. What costs can or cannot be paid for work program funds (in
   particular, supportive services.
3. When to apply penalties for individuals quitting a job or reducing
   their work hours.
4. How they can re-establish eligibility.

Next, the rule lengthens FS eligibility for some households, able bodied
adults without dependents (ABAWDS) in high unemployment areas
beyond the three (3) month limits. A relatively small number of individuals
are impacted, i.e., depressed economic areas. For example, northern
Idaho, determined by the Department of Labor and listed in rule,
Individuals still must comply with the work plan.

The Department of Health and Welfare put into the rule some language
that expands work services to a larger FS population. Again, this enables
the Department to move more individuals into employment and off public
assistance.

16.0304.0202

This puts into rule the annual federally mandated FS “cost of living”
increases for 2002. This increases income limits, standard utility
allowance, and the FS allotment amount. Per federal regulation, this
increased the asset limit for disabled individuals from $2000 to $3000.
The Department of Health and Welfare now considers asset limits the
same for both elderly and disabled. By federal requirement, the
Department added a rule that increased the standard deduction for larger
families: households size of four (4) or less is $134, households of size of
five (5) is $147, and a household of size six (6) or more is $168.

Now lawful non citizens, who are blind or disabled, can receive Food
Stamps. This is a policy and rules change based on federal regulations.

1. 25,000 families on FS – a very small number who would now be
   able to receive FS under this change.
2. The benefits would be 100 percent federally funded.
3. Increased workloads would be managed.

MOTION

16.0305.0201

This rule impacts some elderly or disabled individuals living in a homelike
setting. They can have their care paid for with federally matched dollars,
instead of 100 percent general funds. This nets the State a substantial
general fund cost savings.

1. Homelike setting – certified family homes, in someone’s home
   (lives with family).
2. Developmentally disabled adults – residential and assisted living-group home (businesses) that serve disabled and elderly. Lower
   level of care is required.
3. About 350 individuals – putting individuals on the State Plan PCS
   (personal care service) Medicaid coverage.
4. Saves $700,000 – instead of costing $1 million a year in state
   general funds, it now costs $300,000 in general funds.

This rule also allows providers to be paid directly for services.

16.0305.0202

1. Tightens the rule regarding asset transfers – clarifies what
   transfers are allowable and what transfers are not. Penalties
   apply to nursing home and Home and community based services
   (HCBS) clients.
2. Unless a transfer meets the exception requirement, it is presumed
   (rebuttable presumption) the transfer was made for the purpose of
   qualifying for Medicaid.
3. This rule will clarify policy and reduce confusion regarding these
   transfers.

This rule also increases personal needs’ allowance for veterans in nursing
home. Allows veterans in nursing homes to retain an additional $50 of
their income, for personal needs for a total of $90 for incidentals such as
shaving needs. This affects approximately 120 veterans in nursing
homes. This rule will have a minimal increase to the general fund cost.

The rule clarifies “end of treatment” for breast and cervical cancer
patients. This is to ensure that the Division of Medicaid and the Division
of Welfare are defining the end of treatment the same.

Discussion:

1. Senator Burkett asked Phil Gordon is presumption rebuttable or
   not? Mr. Gordon responded “yes” the presumption is rebuttable.
   It would be the responsibility of the individual who had the assets
   to prove that they did not make the transfer for the purpose of
   making themself eligible for Medicaid or in making that transfer,
   the amount would still be eligible as the value of that asset.





2. Senator Darrington understands that rebuttable presumption is a
   federal requirement in numerous programs – Medicaid and non-Medicaid. We have to have rebuttable presumption in programs
   by federal law. Mr. Gordon has the same understanding as
   Senator Darrington.

1. Senator Burkett stated he thinks it is important that if we change
   the rules that presumption is rebuttable by individuals or clients, so
   he moved that the language be changed back on page 121.
   Karen Gustafson, the rule coordinator for Administrative Rules,
   explained the Committee could approve or reject the docket, they
   could reject a subsection without rejecting the complete docket,
   the underlined text would be returned and the strikeout section
   would go away.

MOTION was repeated by Senator Burkett – Motion to approve IDAPA
16.0305.0202 with a rejection of the change in .01 on page 121, regards
to the language “Rebuttable Presumption.”

Point of Clarification: Senator Kennedy asked Senator Burkett if he
meant Section 831.01, on page 121 of the rule. He answered “yes.”

Motion was seconded by Senator Kennedy.

Roll Call Vote:

Senator Sweet voted No Senator Burkett voted Aye

Senator Ingram voted Aye Senator Bailey voted Aye

Senator Kennedy voted Aye Senator Brandt voted Aye

Senator Compton voted Aye Senator Darrington voted No

Motion received six (6) Ayes and two (2) No (Nays)

16.0305.0203

This rule provides an easier application and benefit renewal process for
elderly and disabled individuals by allowing and encouraging telephone
interviews, instead of those individuals having to go to the Welfare office.
This reduces a hardship for these individuals, and streamlines the
eligibility process.

Amended Section 05.05.106.03.c is incorrect and has been removed from
the rule. Legal aliens entitled to benefits if blind or disabled, are eligible
under a different rule – Section 03.05.106.01.b.

The rule eliminates a Medicaid eligible group who’s federal funding ended
December 31, 2002. It was a program that helped defray a small portion
of their Medicare premium (SLMB 3). The Department ended the
program because the federal funding ended.

This rule clarifies and aligns eligibility rules between programs, in an effort
to simplify those rules. Qualified Medicare beneficiary (QMB), specified
low-income Medicare beneficiary (SLIMBL), and the aid to the aged, blind
and disabled (AABD), now consider income and resources (related to
exclusion and disregards) the same. This will remove ambiguity that will
help the Department operate the program more efficiently. An example or
definition of Room and Board is “lives with.”

16.0308.0201

It will add back into rule a policy, inadvertently omitted, that requires
parents who receive TAFI cash payments to assign legal rights to any
Child Support payments to the State (up to the grant amount). This is not
a new policy, just correcting a rule site.

16.0414.0301

This rule eliminates the need to update the rules every year, and will save
the cost associated with the rulemaking process.

16.0612.0101

The Department of Health and Welfare (DHW) will have a rule
(recommended by the Child Care Oversight Committee) that requires a
child care agreement between the provider and the Department,

1. This will clarify responsibilities (providers and department),
2. Enhance accountability, and
3. Strengthen the DHW’s ability to recoup misspent dollars.

Extends minimum health and safety guidelines to all Idaho Child Care
Program (ICCP) providers, including family and relative providers.

Removes the exemption for specific relative providers.

Health and safety guidelines:

1. Must sign self-declaration that no conviction for specific crimes.
2. Agree to health and safety inspection.
3. Maintain a current CPR/First Aid certification.

The third change specifies that Child Care payments will be made directly
to the providers.

EXCUSED:

16.0411.0201

The purpose of this docket is to establish clear standards for
professionals rendering Medicaid services. This pending rule clarifies the
requirements in the Developmental Disability Agency rules regarding the
professional requirements for individuals providing intensive behavioral
intervention to children in developmental disability agencies and in
schools. Intensive behavioral intervention is only available to children,
ages 0-21 years old that has self-injurious, aggressive or severely
maladaptive behavior and severe deficits in areas of verbal and nonverbal
communication. These services require prior authorization, periodic, and
annual review. Provider qualifications include specific degree
requirements and experience. There has been a lack of clarity in
certifying intensive behavior intervention professionals as the current rule
allows individuals with “related degrees” to be considered and this lead to
confusion and an interest in incorporating all standards in rule rather than
leaving them subject to interpretation. The rule includes a provision to
grandfather currently certified professionals who continue to provide
intensive behavioral intervention services.

Three hearings were held to provide an opportunity for individuals to
testify. Twenty-seven (27) comments were received. Most articulated
strong opposition to the original proposed language, but there were
multiple comments that also indicated a value for high standards and the
need for quality through competence. Amendments were made in
response to these concerns. At this time, Ms. Jones is unaware of
outstanding opposition to the rule language.

Work has begun to improve the training to develop provider competency
and demonstrations of competencies. This change to the training system
is supported through the University of Idaho Center on Disabilities and
Human Development as well as an advisory group made up of providers
and family members.

16.0504.0101

Domestic Violence program standards provide guidelines for existing
programs and direction for communities that are developing new
programs. The Standards Committee has acknowledged that Idaho has
reached a level of service provisions that requires development of a
formal process to more effectively ensure program accountability and
assure victims are treated fairly, professionally, and given the help
needed. A minimum quality of services for battered victims and their
children should be assured.

Idaho Courts must use only treatment programs that are approved by the
Idaho Council on Domestic Violence and Victim Assistance (ICVVA),
Idaho Code 18-918. A current list of approved programs is available at
www.state.id.us/crimevictim. Where batterers’ treatment is ordered by a
court, it is now recognized that this treatment should be provided only by
those who have an understanding of the complex nature of domestic
violence and who meet the standards developed by the ICDVVA and
experts in the field of batterers’ treatment. In order to be effective,
treatment programs for domestic violence perpetrators must meet these
standards, and should be closely monitored by representatives of the
criminal justice system, members of the community and victim service
programs.

The last update of the rules of the council was in 1990. Recent legislative
changes to Chapter 52 of the Idaho Code need to be incorporated into the
rules as well as updating existing rules. The rule change will incorporate
the name change and additional assigned responsibilities of the Council
as enacted by the Legislature. Other changes include updating the
formatting of the chapter.

16.0506.0201

The Department began requiring criminal history background checks for
potential foster parents in the mid-1980’s. Most of the background checks
performed by the Department are required by the Federal Child Protection
Act of 1994, which mandates background checks for those individuals
providing services to children and vulnerable adults. At the inception of
the background process, the Department was charging just the
passthrough amount for the background check and has continued this
practice to the present. The current passthrough cost and the current
background check fee is $34, $24 for the FBI and $10 for the Bureau of
Criminal Identification (BCI). Since the start of this process, the
Department has fully absorbed their share of the cost of completing the
background check. Due to current financial difficulties, the Department
has determined a need to increase the background check fee to begin to
cover some of the agency’s cost of completing the background check.
The Department has in the past several years experienced a substantial
increase in the number of background checks performed. The
Department has not been in a position to increase staff to handle the
increased volume of required background check. The upgraded Criminal
History automated system as well as streamlining the complete process,
and allow the Department to continue to handle the volume without
adding staff.

The text of this pending rule has been amended in accordance with
Section 67-5227, Idaho Code.

16.0601.0101

These rules are the result of state and federal changes. In 2001, the
Legislature passed two bills that are reflected in these rules. One is the
Safe Haven Act, which allows a parent to be exempt from being placed on
the child abuse registry if they follow the procedures of abandoning and
infant within 30 days of birth.

The other piece of legislation is subsidized guardianship. This process
provides support for children and their legal guardian when adoption is
not an option for that foster child. The subsidized guardianship parallels
the same process that already exists for subsidized adoptions. These
guardianships are for foster children whose parental rights have been
terminated and adoption has been fully explored, but ruled out for the
child.

A recent review of our Federal Title IV-E plan led to several corrections in
the rules. Section 403, Section 426, and Section 900 reflect the changes
necessary for IV-E compliance. Briefly Title IV-E refers to Section IV-E of
the Federal Social Security Act which provides financial assistance to
states for foster care and adoption assistance to eligible children in the
state’s custody.

Other federal changes now require the Department to report on children
adopted from foreign countries that are placed in the Department’s care.
Section 923 sets forth these requirements.

These rules also defined parent and changes were made but not
published to consistently reflect the use of the word parent throughout the
text. Descriptive summary summarizes the changes.

16.0601.0201

This rule deals with dispositioning child abuse and neglect referrals.
Department social workers follow a standardized assessment protocol
when there are allegations of child abuse or neglect. The primary
concern during the assessment is the safety and well being of the child.
Once the assessment has been completed a disposition is documented.
An individual who has abused or neglected a child is placed on the
department’s central registry. A central registry of persons who have
abused or neglected children is essential for the continuing protection of
our children should that individual become a day care provider, foster
parent, or adoptive parent. The central registry is part of the required
background check for certain employment or activities involving children
or vulnerable adults. The registry is not open to the public.

These rules propose changing from five (5) dispositional codes to two (2).
Having two dispositional codes will result in greater inter-rater reliability,
reflect more accurately the actual incidents of child abuse and neglect in
the state and more importantly helps protect children from individuals that
should be on the central registry.

Section 560.01(a) adds the words “family services” to clarify that the
incident has to be witnessed by a Department of Health and Welfare
worker. Sections 561 and 563 just reorganize the existing language.
Persons placed on the central registry have the right to appeal that
decision and have their name removed from the registry as stated in
Section 561.

16.0601.0301

The Department made some changes to the word parent in a previous
docket through an omnibus clerical correction. Upon further review, the
department needed to add better language around the word parent. The
term Certified Adoption Professional was added in place of the term
qualified individual. Sections 889 through 895 incorporates the change in
the term as well as reorganizes the existing sections. Section 890.04
provides the standard appeal process for Certified Adoption Professionals
should they be decertified by the Department of Health and Welfare.

16.0602.0201

In 2002, the Senate and House unanimously approved the revisions to
the Child Care Licensing Act, giving the Department the authority to
oversee children’s therapeutic outdoor programs in Idaho. The
Department believed this was a very strong endorsement of the project
and for the protection of children in out-of-home care who receive
services in therapeutic outdoor programs.

The change in the statute was the result of a three-year project to update
all of the child care licensing standards, and to include therapeutic
outdoor programs. During that process, committees consisting of child
care providers, consultants, department representatives and consumers,
worked extensively in the development of the rules.

Public hearings were held in Coeur d’Alene and Boise. The only
comment received was from a neighborhood association in north Idaho
who supports the proposed rules. During the presentation in 2002 for the
statute change, representatives from the three (3) outdoor programs in
Idaho testified before the Legislature in support of the proposed
legislation.

In this time of serious budget constraints, the Department must consider
the cost of services provided, including those associated with child care
licensing. Currently, there are three (3) programs that have submitted
applications and are in the process of being licensed. The Department
does not anticipate a significant increase in that number. The cost of
including outdoor programs to the licensing responsibility of the
Department was debated extensively last year, and an estimated cost
breakdown was submitted to the House. Because of the limited number
of programs in Idaho, and some of them being associated with currently
licensed residential programs, the Department believes it can absorb the
additional workload with the current staff. Costs associated with the
licensure of the outdoor programs consist primarily of per diem and travel.
The estimated annual cost is approximately $2,400.

The Department is looking at the possibility of developing a schedule of
licensing fees for residential child care facilities, children’s agencies and
children’s outdoor therapeutic programs. This was discussed with all of
the workgroups during the rule revision process, and the majority
supported a fee schedule, as long as it was fair. There lies part of the
challenge. The Department must look at the size of the programs,
services offered, for profit vs. not for profit, in determining if fees are
appropriate and if so, in what amount.

The Department is currently surveying surrounding states and continuing
to communicate with members of the workgroups on this issue.

16.0603.0301

This tevide. We focused
reductions in staffing and services to areas where impact on community,
staff, and client safety would be avoided.

The FACS reduction plan took into careful consideration the need to
achieve required levels for general fund maintenance of effort for mental
health, substance abuse, and infant and toddler programs, to avoid
reductions in federal dollars. We are seriously close in all of these
programs to having state general funding levels that are below the target
maintenance of effort levels required by the federal government, for
continuation of funding through Block Grant appropriations. Depending
upon the program, our match rate ranges from a high of 80 percent to a
low of 50 percent. Most of the remaining state general funds appropriated
to FACS are heavily leveraged against federal dollars.

The hold back strategy, as it relates to the reductions in sheltered
workshops funding, meets the priorities that were established in the
budgeting process. The Department fully recognizes the reductions the
workshops are being asked to make have impacted the consumers they
serve, and have reduced the funds that are available for them to conduct
their business operations. But looking at the overall perspective of the
impact, and of the alternatives that we faced when developing our plan,
there were no-good options, only options that provided varying degrees of
disadvantage.

Mr. Deibert discussed the proposal of diverting $443,400 from the
Division of Medicaid budget to the FACS budget to fund sheltered
workshops. He outlined the process he would use for determining those
funds. If he could do as he wanted with those monies ($443,400), he
would find ways to leverage those dollars to maximize the overall impact
on the service delivery system for social and behavioral services.

If the $443,400 is returned solely to the workshop program, it will not
generate any additional federal match funds that could be used to provide
services to the citizens of Idaho. It would benefit only those clients, who
receive vocational services through the sheltered workshop program, and
the community supported employment.

Last week, the Department received notification from the federal
government about our allotment for the substance abuse block grant. We
anticipated we would receive between $200,000 to $300,000 in additional
federal monies, but the notification indicated we would receive $30,000 in
additional federal funding for substance abuse services. In that program,
we have a 9 percent increase in the rate of utilization. Substance abuse is
one of the most significant and perplexing problems we face in Idaho.

He emphasized the Department looked at the overall perspective for
services we provide, or asked to provide by constituents. We have
greater priorities, at this time, for our social and behavioral services. We
have greater opportunities to maximize the availability of funding by a
different utilization of savings that have been identified through the
Medicaid Program for the $443,000, and requested the committee
members to look at the overall perspective of the service delivery system,
and the needs that we have in social behavioral services.

He explained these are challenging times for everyone, but funding the
sheltered workshops with Medicaid savings is going in the wrong
direction.

1. Total projected operating budgets – $22,490,851.
2. Projected revenues from provision of Health and Welfare
   vocational services (work services and community supported
   employment) – $3,114,450.
3. Projected revenues from provision of Idaho Division of Vocational
   Rehabilitation Services (fees for various vocational services) –
   $997,488.
4. Projected revenues from provision of Health and Welfare Medicaid
   Services (not vocational services) – $6,872,248.
5. Projected revenues from industrial activities, fund raising and other
   sources (no fees for vocational services) – $11,506, 665.

He reported, “for every $2.60 made available by the state of Idaho as
Health and Welfare and Idaho Division of Vocational Rehabilitation fees
for vocational services, the eleven organizations that are members of the
Idaho Association of Community Rehabilitation Programs generate
$7.40.”

M.C. Niland, president of the Western Idaho Training Company in
Caldwell and a representative for the Workshop Association, testified in
support of restoring $443,400 to the shelter workshop program. She
emphasized the effects upon those individuals served by the sheltered
workshops. Changes in an individual’s work program or living standards
can evoke a strong mental or emotional response, or even a violent
response, from those affected individuals. She requested the committee
seek the necessary $443,400 funding for sheltered workshops.

A motion was made by Senator Compton to ask in the committee’s letter
to the Joint Finance-Appropriations Committee (JFAC) to fund an
additional $443,400 to the Department of Health and Welfare
appropriations, and direct the transfer of these additional funds to the
sheltered workshop program.

Motion was seconded by Senator Ingram.

DISCUSSION:

1. Original intent language showed a Medicaid savings of $923,700
   from which JFAC was going to state that $443,400 of the savings
   would be diverted to the sheltered workshop program. That
   cannot possibly happen as the state would lose $1.3 million in
   matching dollars, then we would not have the $923,700 in
   Medicaid savings.
2. Ensure JFAC understands the germane committee is asking for an
   additional funding of $443,400 for the sheltered workshop
   program, not diverting the funds from Medicaid.
3. The additional funds would be state general revenues of $443,400
   and will have noting to do with the Medicaid funds.
4. Frustration of the Department of Health and Welfare and
   providers, and lack of funds for needy programs.
5. The Department of Health and Welfare should have presented a
   priority list to the committee, at the beginning of the session, and
   explained why and how the Department use to determined
   program cuts. The committee should have been fully informed
   about the options the Department used to cut programs, and those
   they did not choose to cut.
6. If no additional funds become available, revisit the workshop
   program issue.
7. Prioritization of programs.

Senator Bailey called for the question.

The beforehand motion was carried by a voice vote of 5 Ayes and 2
Nays.

Senator Stegner voted No. Senator Brandt voted No.

EXCUSED:

16.0309.0214

Ms. Clement presented a brief overview of the temporary rule docket 16-0309-0214. These rules define Medicaid pharmacy management
practices.

The purpose of these temporary rules is to support the Department of
Health and Welfare’s cost containment efforts by providing access to the
right care for the right price.

Idaho paid $114 million for Medicaid prescription drug benefits in fiscal
year 2002. Nationally, drug costs have been the fastest growing
component of Medicaid expenditures, growing at an annual rate of 20
percent, compared to overall Medicaid expenditure growth of 9 percent.

Prescription drugs are the third most expensive Medicaid benefit following
nursing home care and hospital services, and account for 14 percent of
the Medicaid budget.

To slow this growth, Idaho ­ like other states are pursuing a variety of
cost containment methods including reducing payment rates, requiring
generic substitution, and requiring prior authorization of drugs.

Medicaid’s existing prescription drug rules do not include the necessary
management tools to control spending. The current rules list the specific
names of excluded drugs that must be prior authorized by the department.

The number of new brand name drugs and classes of drugs that
continuously become available, make it impossible to continue listing
each specific drug in rule.

These temporary rules allow Medicaid to review brand name prescription
drugs for medical necessity when there may be a less expensive and
equally effective drug available.

The concept of “medical necessity” is built into all that Medicaid does in
the healthcare field. The state plan, as well as federal rules and state
statutes mandates a strict adherence to medical necessity criteria in all
areas.

Coupled with medical necessity in the state plan and federal requirements
is the principle of “least costly.” This rule clearly defines both aspects of
this requirement. Medicaid must be able to assure both elements.

These rules describe when a prescription is considered medically
necessary, and clarify coverage and limitations.

Additionally, by identifying categories of drugs that must be prior
authorized rather than identifying each specific drug, the department does
not need to update rules every time a new drug is introduced by the
pharmaceutical industry.

Further, under the existing rules, early refills of prescription drugs have
been identified as an unnecessary and costly practice that needs to be
controlled to reduce unnecessary Medicaid spending.

These temporary rules allow Medicaid to require that 75 percent of the
previous prescription has been utilized before Medicaid will pay for a refill.
Most private health insurers use 90 percent.

The Department’s efforts to address the escalating pharmacy costs
intensified in January 2002. Medicaid began implementing a prior
authorization process for all drugs exceeding average prescription
utilization. On average, 45,000 Medicaid clients receive approximately
four prescriptions per month.

After an analysis of the medications it prior authorized, and the resources
required to support this initiative, Medicaid determined that a more
focused management approach would be more effective than prior
authorizing all medications based solely on volume. In addition to
reviewing use of prescriptions in amounts exceeding the FDA and
currently accepted guidelines, Medicaid identified three therapeutic drug
classes for review.

This management review focused on prescription antihistamines,
antacids, and antidepressants that were not only prescribed more
frequently than other medications, but were also available at varying
prices.

Significant costs have been avoided each month since this management
review process was implemented in May 2002

Additionally, these rules allow for generic substitution where possible.
Medicaid acknowledges that in certain areas ­ especially mental health
and other neurological conditions that it is prudent to use brand names as
opposed too generic. Medicaid currently functions in this manner.

In addition, therapeutic substitution allows for evaluation within a drug
classification to determine clinical efficacy and equivalence, thus allowing
price competition to occur based on good science.

The combined effect of these management review approaches, and the
75 percent refill limit, helped to avoid an estimated $4.2 million in
pharmacy costs.

These temporary rules became effective in late May. Medicaid’s state
plan amendment, incorporating the medical necessity definition and
clarifying prior authorization requirements was approved by the Centers
for Medicare & Medicaid in November 2002.

This rule docket was published in the December Administrative Bulletin.
Negotiated rulemaking was not formally conducted because of the
mandatory reduction in Medicaid spending, however the Department of
Health and Welfare has continuously met with various stakeholders to
obtain input.

Two positive comments and thirty-one requests for a hearing were
received by the department.

A hearing will be conducted on February 20, 2003 in Boise.

Of those requesting this hearing, 61 percent were received from out-of-state pharmaceutical companies.

Local requests came from advocacy groups and a Boise law firm.
Advocacy groups are particularly concerned with maintaining consumer
access to newer medications.

These rules will not create a formulary that excludes certain drugs.

These rules will allow Medicaid to make decisions based on good
scientific evidence that are already standard practice in commercial health
insurance plans.

Medicaid will encourage the utilization of effective medications at the best
price, but if a physician provides the evidence that an individual requires a
more expensive drug, that drug will be authorized.

The purpose of this rule docket is not about limiting access ­ it is about
appropriate access.

Without these rules, the department’s ability to manage pharmaceutical
costs will be severely restricted.

Medicaid’s current budget is based on the expectation that it will be able
to continue to manage drug utilization, and slow the rise in our
prescription drug costs.

Senator Kennedy discussed a Mountain Home constituent who reported
he had surgery and was given a generic pain killer by his doctor. The
constituent had a serious reaction to the generic drug. The doctor faxed
Medicaid for permission to prescribe the non-generic pain killer, and was
denied the right to do that. The question is – in the event someone cannot
take the generic substitute recommended by the department, is there a
policy that says a patient will go without any medication?

Ms. Clement stated, “No.” She will get all the fact pertaining to this case
and respond to the question as soon as possible. Senator Brandt
explained he had previously contacted the Department of Health and
Welfare, and a response should be forthcoming today.

Cynthia Swanson from the National Alliance for the Mentally Ill, testified
in opposition to IDAPA 16.0309.0214. She reported the national, state,
and local affiliations oppose any restrictions on medications used to treat
mentally ill patients.

Jack Lewis, a registered pharmacist in Idaho since 1977, testified in
support of the Medicaid rules. Three (3) topics discussed included prior
authorization, the 75 percent refill rule, and generic vs brand drugs.

Jim Alexander, a pharmacist in Idaho for 30 years, testified in support of
the Medicaid rules. He believes Medicaid is doing the thing right by using
generic drugs whenever possible to control the cost of drugs.

Dr. Jim Scheel, a physician in Idaho and a lobbyist for the Idaho Medical
Association, testified in opposition to the rules. He has concerns about
the 75 percent refill mandate and certain disease classifications such as
asthma. He wants physicians to have authority and flexibility to prescribe
a drug. The Association realizes the concerns about the increases in
pharmaceutical costs, and applauds the Department’s efforts in trying to
get a handle on the problem. He has concerns about the implementation
of the rules.

Thomas Young, MD, for the Division of Medicaid, addressed committee
members’ questions and concerns pertaining to physicians’ flexibility to
prescribe drugs; the 72-hour rule to obtain prior authorization and a 24-
hour, or less, turnaround time for prior authorization; Medicaid’s
automated system for prior authorization; some $4.2 million savings in the
2003 Medicaid budget and projected higher savings in the 2004 budget
year; quality improvement and studies pertaining to outcomes and
recovery times; cross reference of drugs; 156,000 Medicaid patients;
children are exempted from the prior authorization rule, and in his opinion,
as a practicing physician, Medicaid’s effort to control pharmaceutical
costs is the right thing to do.

William Roden, representing the Prarmaceutical Research and
Manufacturers of America (PhRMA) provided a lengthy testimony in
opposition to major portions of IDAPA 16.0309.0214. He testified that on
behalf of PhRMA, but more importantly, on behalf of the patients who
need the medicines we produce, and the doctors who prescribe them, we
believe the temporary rule, as written, is neither in the best interest of
constituents who need medicines, nor in the long-term best interest of the
health and of the state. There are many issues involved with this rule.
He stated his testimony merely touched the surface. Formularies, prior
authorization for prescribing practices, preferred drug lists that are
dependent for their success in forcing additional rebates by the drug
companies, are all issues that should be explored. The one premise they
all have common is that “cost” is the determining factor – not the patient or
the doctor. He reported this rule has no safeguards for the patient or the
doctor. The Department will be the prescriber – the medical practitioner,
and it will be based primarily on economic considerations, no the needs of
the patient. Mr. Roden requested the temporary rule not go forward, let
the Department do its work on the proposed rule, letting it adopt
recommendations based on the hearings.

Two persons, who did not testify, but did provided a precise indication in
opposition to IDAPA 16.0309.0214, is also noted. (See attached sign-in
sheets).

Department of Health and Welfare Deputy Director Joyce McRoberts
addressed the questions of Senator Kennedy about a Mountain Home
constituent (page 4 of the minutes). She stated the Department had not
received a statement from the doctor; therefore, no further action was
taken.

Mr. McRoberts distributed a handout explaining changes to the
prescription drug rules being made to allow better management of
Medicaid spending and to make it easier for clients and providers to
understand the Medicaid prescription drug program. The four (4) page
handouts are attached. (See attachment # 1)

A discussion and review of numerous sections, subsections, and
clarifications of sections, publication and retroactive dates of this rule, was
held.

At the discretion of Chairman Brandt, IDAPA 16.0309.0214 will be held
in Committee and rescheduled for Tuesday, February 4, 2003, for a final
review. This action will allow committee members additional time to
review the prescription drug rules.

EXCUSED:

16.0309.0214

Discussion:

1. Several committee members reported they have problems with the
   rule;
2. One area of concern is, but not limited to, the medical insurance
   industry;
3. A physician knows best what a patient’s medical needs are;
4. Concept of the rule will save state many dollars;
5. Changes will require close monitoring
6. Changes to Sections 805 and 812.03 reviewed;
7. Management care;
8. Will rule return during the 2004 legislative session as a proposed
   rule;
9. Dramatic fiscal savings during the past six (6) months,
10. The language in the rule.

A roll call vote was requested and granted by the Chairman.

Roll Call Vote:

Senator Ingram voted No Senator Burkett voted Yes

Senator Sweet voted No Senator Stegner voted Yes

Senator Darrington voted Yes Senator Compton voted Yes

Senator Brandt voted Yes Senator Kennedy voted No

Senator Bailey voted No

The motion carried 5 Yes and 4 No.

16.0309.0215

As a result of the reduction in reimbursement for Targeted Service
Coordination (TSC), the rule changes removed all caseload limit
requirements, and removed the requirement for availability of a care
coordinator on a twenty-four (24) hour basis. As a result of the reduction
in the ESC (Early Periodic Screening, Diagnosis, and Treatment (EPSDT)
Service Coordinator reimbursement, the rule changes remove all
caseload limit requirements, and remove the requirement for availability of
a care coordinator on a twenty-four (24) basis.

The rule changes will also reduce ongoing Targeted Case Management
(TCM) for the mentally ill from unlimited hours to a maximum of four (4)
hours per month, remove all caseload limit requirements, remove the
requirement for availability of a case manager on a twenty-four (24) hour
basis, and specify that crisis assistance will no longer be a required core
element of targeted case management. Also, hours available for initial
evaluation and service planning were reduced from eight (8) hours to six
(6) hours.

Senator Brandt explained he had met with Department of Health and
Welfare Director Karl Kurtz, some TSC providers, and others, to try and
resolve the issue of the reduction in hours. The Department showed a
willingness to work with providers and try to reach a consensus before the
Legislature’s seine die. He read into the minutes a letter he received from
Director Karl Kurtz. (Attachment #1)

Director Kurtz stated in his letter: “As a follow up to our conversation on
January 28, 2003, I would like to state that the Department of Health and
Welfare shares your committee’s concern regarding the 4-hour limit for
targeted case management for persons with mental illness. I agree it is
important the Department work with providers to develop an agreed upon
methodology for crisis case management hours.

Since the Department shares your concern about situations where there
is an emergency, we have and will continue to work with the providers in
modifying those rules for emergency situations prior to the adjournment of
the 2003 legislative session, so the new rules will go into effect in April or
at adjournment.

We hope this action addresses the committee’s concerns about Docket
No.16-0309-0215.”

Committee members expressed concerns with IDAPA 16.0309.0215.
After a lengthy review of these rules and specific problem areas within the
rules on pages 51, 52, 58, and 61, the following action was taken.

Discussion:

1. The rule does not have broad acceptance statewide
2. Face-to-face monthly meetings;
3. The promise of the Department of Health and Welfare;
4. The definition of a case manager’s functions and responsibilities,
5. Crisis situations.

MOTION

The substitute motion was seconded by Senator Ingram.

Roll Call Vote on the substitute motion:

Senator Ingram voted Yes Senator Burkett voted Yes

Senator Sweet voted No Senator Stegner voted No

Senator Darrington voted No Senator Compton voted No

Senator Brandt voted No Senator Kennedy voted Yes

Senator Bailey voted No

The substitute motion failed with 6 No and 3 Yes.

Roll Call Vote on the original motion:

Senator Ingram voted No Senator Burkett voted No

Senator Sweet voted Yes Senator Stegner voted Yes

Senator Darrington voted Yes Senator Compton voted Yes

Senator Brandt voted Yes Senator Kennedy voted No

Senator Bailey voted Yes

The motion carried with 6 Yes and 3 No.

Senator Brandt encouraged everyone to work together to develop rules
to help Idahoans in need. He looks forward to working with all the parties
involved.

EXCUSED:

24.1401.0201

Ms. Jacobsen reported that opposition to IDAPA 24.1401.0201at the
January 15, meeting had been negotiated and issues were resolved.

On January 15, Craig Dickerson had testified opposing this rule making,
but testified today he is now in favor of the rule.

16.0309.0213

In 2001, the Legislature amended Idaho law to remove a requirement that
the state pay for abortions to save the health of the mother.
Implementation was delayed until July 1, 2002, because of a court suit
challenging the legality of the amended statute.

The court upheld the amendment. At the time, the court ruled that the
state law requirement to have two physicians certify the necessity of an
abortion violated federal law and could not be enforced by the state. The
court’s decision was effective July 1, 2002.

The temporary rule implements both the statutory amendment and court
decision by:

1. Removing state payment for abortions to save the health of the
   mother.
2. Changing the two physician certification requirement to
   certification by one physician.

An identical proposed rule was published at the same time as this
temporary rule. Unfortunately, the comment period expired after the date
for submitting rules to be reviewed this session, however, the pending rule
will be presented during the 2004 legislative session.

16.0309.0216

The Department of Health and Welfare is requesting that the Committee
extend this temporary and proposed rule. These rules are required to
comply with legislative intent language in the Department’s appropriation
bill, and essentially limit adult dental procedures to emergency situations.

Retta Green from the Idaho Community Action Association (ICAN),
testified in opposition to IDAPA 16.0309.0216.

J. L. Byington testified in opposition to IDAPA 16.0309.0216, and
requested that dental services be restored.

Ronald Matthews from the Idaho Community Action Association, testified
in opposition to IDAPA 16.0309.0216.

Jessica Fry testified and explained the difficulties in finding dentist and
doctors willing to take Medicaid clients. She did not indicate support or
opposition to IDAPA 16.0309.0216.

Committee members reviewed several sections of IDAPA 16.0309.0216,
and asked many questions about the rules. The Committee also
reviewed numerous pages of the rule such as pages 68, 70, 71, and 72.
Other areas discussed included the following:

1. Emergencies and who would deem a case as an emergency. A
   dentist determines a case as an “emergency”;
2. If a dentist deemed a case as an “emergency” would services be
   provided? Ms. Allyn answer “yes”;
3. Dental services for clients more than age 21;
4. Pregnant women and children (PWC);
5. Reimbursement rates;
6. Rule changes will address the Governor’s concerns.

A lengthy discussion was also held by the committee members about the
Joint Finance Appropriations Committee’s (JFAC) directions given to the
Department of Health and Welfare to “not cover adult dental” except for
an emergency, and the responsibilities of germane committees, and the
setting of policies.

At the discretion of Vice Chairman Compton, no decision will be made at
this time for IDAPA 16.0309.0216. The rule will be held while the
chairman reviews concerns and issues with the House Health and
Welfare Committee’s chairman.

This legislative change is necessitated by the following:

1. Antiquated Requirements in the Existing Statute – The existing
language of Idaho Code 54-918 requires the Board of Dentistry or its
agent to conduct written and clinical examinations in dentistry and
hygiene in order to ascertain the fitness and qualifications of applicants
for licensure in Idaho. That requirement does not change in the proposed
legislation. Traditionally, the Board has conducted the written
examination through an agent, the American Dental Association. That will
not change in the proposed legislation. At one time the Board conducted
its own clinical examination and graded the examination in accordance
with the mandate of the existing statute (passing grade of 70 percent for
each section of an examination with a general average passing grade of
75 percent). Due to increasing numbers of applicants and a lack of
appropriate testing facilities as well as trained, independent examiners, in
the mid-1980’s the Board discontinued conducting the clinical examination
and joined with a number of other states to participate in a regional testing
organization to conduct the clinical examination. That regional testing
organization is referred to as the Western Regional Examining Board
(WREB). For purposes of the clinical examination requirement, the Board
of Dentistry accepts the results of the WREB examination and, since
2001, also accepts the results of the Central Regional Dental Testing
Service (CRDTS). Those testing organizations conduct examinations at
dental and dental hygiene schools using trained and calibrated
examiners. It will greatly simplify the Board of Dentistry’s application of
the examination statute if the language is clarified to specifically state that
the regional or national testing organizations shall establish the
examination’s passing grade standard or level of competency.

2. Recent District Court Decision – An applicant for licensure who
received a general average passing grade of 74 percent (as opposed to
the 75 percent required by the existing statute and the testing entity) on
an examination required by the Board of Dentistry brought legal action
requesting that the district court direct the Board of Dentistry to issue the
applicant a license. The district court found in favor of the applicant and
directed the Board to grant the license. The district court determined that
the board of Dentistry was required to average the scores of all the
examinations conducted, both written and clinical, in order to arrive at a
general average passing grade. The Board has traditionally relied upon
the literal language of the statute to require that an applicant score at
least 70 percent on each section of an individual examination, with the
general average grade for each individual examination to be at least 75
percent. Given the disparate nature of the written and clinical
examinations, The Board has never favored or adopted the averaging
approach identified by the district court in the legal proceeding.
Recognizing that the existing language of the examination statute was
somewhat imprecise, the Board of Dentistry preferred to revise the
language of the statute rather than appeal the adverse district court
decision.