DHFAC Meeting Minutes
January 24, 2001
Present:
- Patricia Blevins
- Joseph DiPinto
- Bethany Hall-Long
- Deborah Hudson
- Joseph Lieberman
- David McBride
- Vincent Meconi (Chair)
- Charles F. Reinhardt
- Dennis Rochford
- Calvin Wilson
Absent:
- Thomas Grabowski
Welcome & Introductions
Vince Meconi, the new Secretary of Health and Social Services and Chair of the committee, introduced himself and other members of the committee.
Approval of minutes
Minutes from the November 30 meeting were approved without amendment.
2001 Initial Payment
Malcolm Cobin, Department of Justice
The Wilmington News Journal reported that the state lost $900,000 of the 2001 payment. This was not accurate. The $900,000 is in dispute and is being held in escrow.
Payments to date were projected to be $44.9 million; the state has received $39.5 million. The majority of the adjustment is based on a reduction in the volume of cigarettes sold - a 14% reduction from the base year of 1997. In addition to the reduction, the base has been increased based on new data, and our most recent payment included retroactive adjustments for that change.
Our first 2001 payment of $7.7 million was received on December 29, 2000; the projected amount for this payment was $10.1 million. This payment was reduced based on volume, and also included the retroactive adjustment for the new base figure. $900,000 was also held out based on the non-participating manufacturer (NPM) clause. That clause states that unless participating manufacturers are protected by a specific state law, any shift in market share to NPMs can cause payment to be withheld in escrow. If that shift is determined by an economic firm to be attributable to the settlement, the payment is permanently adjusted. Otherwise, the state receives the disputed money with interest.
Delaware enacted the required law on July 20, 1999. It is now in force and no further NPM disputes can occur, although retroactive adjustments based on new data could be applied. The National Association of Attorneys General and the settling companies are now arguing over what firm will analyze the market shift. This argument is likely to end in court. This will delay resolution of the disputed $900,000.
The committee asked Malcolm about Jane Brady's statement in a letter to Secretary Meconi that the funds could be eliminated in the future. Malcolm Cobin explained that payments could be eliminated if the companies all went bankrupt. This is a concern because of litigation in Florida that resulted in a multi-billion dollar judgement against the tobacco companies. The bond normally required by the state of Florida on such a judgement during appeal would be enough to bankrupt the companies. Florida passed a law waiving the bond, but it is being challenged. The other development that could lead to elimination of payments is elimination of tobacco sales, thus causing the volume adjustment to zero out the payments.
Given these factors, committee members expressed interest in revisiting securitization of the funds. The committee asked to reconvene the ad hoc committee that examined securitization issues last year.
Governor's Recommended Budget
Debra Lightsey
Secretary Meconi noted that the timing of the Governor's Recommended Budget was unusual this year, because it was released before Governor Carper resigned to join the U.S. Senate. Typically, the budget is done in January, but this year it was completed in December.
Debra Lightsey reviewed the master settlement agreement section of the proposed 2002 budget and compared it to the 2001 appropriations. She noted that all of the committee's preliminary recommendations were included.
| Iniative | HFAC Prelim Recommended |
FY 2002 Gov's Rec. Budget |
|---|---|---|
| DE Prescription Assistance Program | $5,150.4 | $5,150.4 |
| Tobacco Control & Prevention | $2,833.0 | $2,836.0 |
| Minor Capital Improvements to State-Run Long Term Care Facilities | $1,900.0 | $4,000.0 |
| Medical Coverage: Persons who Lose SSI due to Unearned Income (SSDI) | $2,970.0 | $2,970.0 |
| Uninsured Action Plan | $1,000.0 | $1,000.0 |
| Public Access Defibrillation | $375.0 | $375.0 |
| Chronic Diseases: Diabetes Pilot Project | $500.0 | $500.0 |
| Heroin Residential Program | $500.0 | |
| Increased Medicaid Eligibility for Pregnant Women & Infants | $408.7 | $408.7 |
| Substance Abuse: Transitional Housing | $200.0 | $200.0 |
| Lesser-Known Illnesses: Testing Regimens | $150.0 | $150.0 |
| Staff Assistance on Health Issues: Delaware Health Care Commission | $56.5 | $57.1 |
| TOTAL | $15,543.6 | $18,147.2 |
Debra noted that given the amount of the first 2001 payment, and projecting the second payment with a 14% reduction based on volume, the state can expect to receive approximately $22.5 million this year. The committee noted that if only the items in the Governor's Recommended Budget were funded, $4.3 million would be left for the strategic reserve. This is less than the committee targeted. Several committee members noted that carry forward for current projects will be a factor in available funds. Also, base amounts for payments increase in coming years. The committee requested information on the strategic reserve and realistic projections of future payments for the next meeting. They planned to look at a multi-year strategy for the strategic reserve.
The committee requested more detail on the $4 million in the proposed budget for capital improvements at state long-term care facilities.
Plans for February Public Forum
The committee approved a proposed plan for a public forum, with a few minor modifications.
Utilization of Delaware Prescription Assistance Program (DPAP)
Phil Soulé
Phil reported the following:
- 3,119 people are enrolled in DPAP
- Original estimates were that 6,700 people would be eligible. These were based on estimates using existing data from the University of Delaware and Medicaid. Without program experience, DHSS estimated for the maximum that could be expected.
- The population is defined narrowly because those eligible for the Nemours program are excluded. Nemours recently began capping benefits at $500 per client per year, and about 400 clients have hit the cap. One future direction is to look at supplementing Nemours.
- People with disabilities are a larger portion of DPAP enrollees than the elderly.
- Of those who are denied DPAP coverage, 27% are over income and 40% are Nemours eligible.
- The application was recently revised because 25% were coming back incomplete. That figure is down to 6-7%.
- Based on Senate Resolution 33, outreach efforts have been increased.
- Spending for SFY 01 is projected to be $2.5 million.
- To date, approximately 25 DPAP clients have hit their cap of $2,500. No one has qualified for the program based on the criteria that 40% of their income is spent on prescriptions. The highest percentages seem to be around 20%.
The committee asked for options on eligibility expansion, including costs. The scenarios should also re-evaluate the assumptions built into the initial cost estimates. The committee also asked for options for increased outreach.
Committee Members' Priorities
Each committee member was asked to share his or her priorities for this year's recommendations. These are summarized below.
David McBride
- Delaware Prescription Assistance Program modifications/expansion.
Joe DiPinto
- Delaware Prescription Assistance Program modifications/expansion
- Creating a chronic disease registry in the Division of Public Health to help guide efforts to prevent and treat chronic disease.
Charles Reinhardt
- Increased funding for tobacco control and prevention. Joe Lieberman
- Continued evaluation of initiatives
- Controlling "budget creep" with addition of programs government needs to fund.
- Prescription benefit management to ensure good use of prescription drugs, avoiding overmedication, adverse interactions, etc.
Patti Blevins
- Increased funding for tobacco control and prevention.
- If more money will go to public nursing homes' capital needs, should examine utilization and plan to maximize our resources in the future.
Bethany Hall-Long
- Health promotion/disease prevention and tobacco control, focusing on long term impacts with solid evaluation.
Calvin Wilson
- Creating a chronic disease registry in the Division of Public Health to help guide efforts to prevent and treat chronic disease.
- Addressing the underlying lifestyle factors that lead to disease and death, and promote wellness and prevention, not just treatment.
Deborah Hudson
- Creating a chronic disease registry in the Division of Public Health to help guide efforts to prevent and treat chronic disease.
- Continued support of Public Access Defibrillation.
Dennis Rochford
- Tobacco related chronic diseases.
- Smoking cessation.
- Smoking prevention, including getting tobacco out of schools.
Vince Meconi
- Tobacco prevention and control.
- Physical plant improvements to long term care facilities where we serve vulnerable populations.
Public Comment
Gilbert Sloan, The Advanced Technology Center for Medical Devices (ATC-MD)
Dr. Sloan spoke about ATC-MD and its partner, MIDI, Inc. MIDI has developed:
- A method for rapid identification of bacteria and yeasts.
- An automated method for identification of bacteria in blood cultures, thereby shortening hospitalization.
- A quick, inexpensive diagnosis for tuberculosis.
MIDI is collaborating with the Delaware Public Health Laboratory to:
- Exchange samples/data relating to TB.
- Implement the CDC program for detection of bioterrorism agents.
Other ATC-MD partners:
- Agilent Technologies has developed a new gas chromatograph suited to the needs of ATC-MD partners.
- Berger Instruments has developed a new method for purifying drug candidates.
Dr. Sloan asked that HFAC recommend funding for bioterrorism detection.
Daniese McMullin-Powell, ADAPT
Ms. McMullin-Powell noted that the DHSS budget does not include funds for transferring nursing home residents to community settings, nor is there funding for attendant services. Ms. McMullin-Powell stated that the Olmstead Supreme Court Decision said that unnecessary institutionalization is discrimination. Ms. McMullin- Powell suggested that the $4 million in the Governor's Recommended Budget for long term care facilities would be better spent to transfer people out of nursing homes and into community placements.
