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KY Health Choices

Kentucky is among the latest states to receive approval from the Centers of Medicare and Medicaid Services (CMS) to transform its Medicaid program.  As a continuation of Kentucky’s recent Medicaid modernization efforts—that focused on improving technology infrastructure and pharmacy and care management—the Cabinet for Health and Family Services, with public input, developed the KYHealth Choices 1115 waiver application.   

The waiver’s goals include stretching resources to meet the needs of the Commonwealth’s nearly 700,000 beneficiaries, and encouraging personal responsibility.  (The principal of accountability applies to Medicaid providers, as well, who will be required to utilize best practices and adhere to performance-based contracts.)  The KyHealth Choices waiver, approved by CMS on January 18 2006, specifies the following six components that will help the Commonwealth achieve its goals. 

Targeted Benefits.  KyHealth Choices will provide tailored benefit packages to four categories of beneficiaries, including the general population, children, elderly and beneficiaries with disabilities or mental retardation.  All beneficiaries will receive a standard benefit package; however, optional benefits may be targeted toward the needs of specific recipients.  The standard benefit package, known as Global Choices, will provide basic medical services for most members, including mental health services.  Other packages will target services to the needs of children and individuals requiring long-term care services.  Benefits may vary in amount, duration and/or scope of services, and may include certain limits, such as dollar limits or limits on the number of office visits.

Cost Sharing.  The waiver requires most members to pay a portion of their covered services through co-payments and premiums on an income-based sliding fee scale.  (Cost-sharing requirements do not apply to certain member categories, such as pregnant women, children and members who have already reached their annual cap.)  Beneficiaries will not have co-payments for preventive services, such as annual check-ups and vaccinations.  Members who reach an annual cap on co-payments will not be required to share in additional costs.

Enable Beneficiaries to Enroll in Employer-Sponsored Health Insurance.  KyHealth Choices will require beneficiaries to enroll in employer-sponsored private health insurance if it is available and if it is more cost-effective for the Commonwealth.  The Health Insurance Purchasing Program will help enrollees pay premiums and wrap around commercial coverage with Medicaid services.

Integrating Care.  The Medicaid program will draw from the private sector’s experiences and use best practices to coordinate mental health, physical health and mental retardation and developmental disabilities services.

Disease Management.  KyHealth Choices will implement disease management programs for chronic conditions such as cardiovascular disease, pulmonary disease, and pediatric obesity and diabetes.

Get Healthy Accounts.  KyHealth Choices will provide incentives to beneficiaries who are engaging in healthy behaviors.  Funds will be deposited in accounts to offset specific health care-related costs, such as co-payments, smoking cessation and weight loss programs.  Initially, participation in the program will be limited to pulmonary disease, diabetes and cardiac conditions.

In addition, the waiver will offer a consumer-directed option to certain individuals who are enrolled in a long-term care benefits package.  To be eligible, individuals must be able to direct their own care and understand the risks and responsibilities associated with managing their own care.  Members who chose this option may access non-medical and non-residential services—e.g., home adaptations to enable them to stay at home — that best meet their needs. 

The Kentucky Department for Medicaid Services will implement the 1115 Waiver beginning in March, 2006.  The Department will evaluate the program to determine its impact on access to care, quality of care and cost savings.