From the Well: February 18, 2024

It is the informal gathering place for lobbyists, reporters, constituents, and lawmakers.

Centrally situated between the chambers of the House of Delegates and Senate,

The Well is where information is often shared, alliances are formed, and deals are made.

86th West Virginia Legislature

April Interim Meetings

State Capitol

April 18, 2024

West Virginia News Headlines

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HEALTH CARE: The Joint Committee on Health and Human Resources went into “overtime” for a lengthy discussion about 2024 expenditures, waivers, and IDD (Intellectual and/or Developmental Disabilities).

INSURANCE: The Joint Standing Committee on Insurance and PEIA heard a presentation about insurance options for West Virginia state employees through the state Public Employees Insurance Agency (PEIA).

ENERGY TRENDS: The Joint Standing Committee on Energy and Manufacturing heard presentations from oil and gas and coal industry experts on industry, markets, and government trends.

AGENCY REVIEWS: A Senate attorney presented the Joint Committee on Government Organization with a detailed report about how the Legislature could comply with provisions of Senate Bill 687, which alters the process for review of state agencies and the state’s professional licensing boards.

DNA REPORT: State Police officials gave the Joint Committee on the Judiciary a detailed report on DNA.

President Blair, following a detailed “post-audits” presentation Tuesday by Mike Jones, Audit Manager in the Post Audit Division, said during a Post Audits Subcommittee meeting that he believes the state’s 428 VFDs would be better served if the Legislative Auditor’s Office were more proactive in terms of VFD reviews, which attempt to ensure that public funds allocated to VFDs are spent in conformity with law.

When asked whether he knows how the Legislative Auditor’s Office could be more proactive in securing VFD review details, Jones said, “I don’t have an answer for you at this time.”

Moments earlier in his presentation, Jones noted his office corresponds with VFDs by hardcopy letter and e-mails, but he stressed that decentralized VFDs lack “tech savvy” in many instances.

“That’s too late,” President Blair commented. “They’ve already done these things.”

He said the Legislative Auditor’s Office could bolster its VFDs’ review effectiveness if VFD officials completing reviews would have instant access to the Legislative Auditor’s Office for questions or instructions in completing reviews.

Delegate Kayla Young of Kanawha County also noted the state Auditor’s Office is more “public facing” than the Legislative Auditor’s Office — a point Blair opined, saying the Legislative Auditor’s Office, which Jones said has a staff of “two” besides himself, may not be best equipped for VFD reviews. He cut short of stating the Legislative Auditor’s Office should be removed from the process.

President Blair said VFD officials are in the process of “putting out fires, not shoving out paperwork” both as a result of mission and varied staffing in terms of accountability for funds. President Blair said a “helpline” or other means could enhance or ease communications with VFDs, although Jones said his office is accessible.

The Legislative Auditor’s presentation distinguished the differences in role and function of that office and the state Auditor’s Office, especially in terms of divergent roles – that of “review” and that of an audit. Jones, however, noted some VFDs conclude they are audited twice, although the situation occurs infrequently.

“We hope that through the new procedure of notifying the state auditor’s office of our audits and our continued efforts to keep the departments informed and work with them we can continue to improve this process and continue to reduce the burden on the departments,” Mr. Jones said, but noted he didn’t have considerable detail about the state Auditor’s Office protocols, although both entities are communicating, he said.

Based on the Legislative Auditor’s Office findings, 27 Departments were in full compliances with Legislative Auditor directives, while 67 of the 94 VFDs providing review information were cited for co-mingling state-allocated moneys with local or other funds.

In most instances, the Legislative Auditor’s Office noted that VFDs correct review findings, although not always.

Those comments prompted House Speaker Roger Hanshaw of Clay County to ask about correspondence he received about a VFD allegedly “saving” state-allocated funds with other funds for future purchase of a “vehicle.”

Mr. Jones said state funds could be “saved” for vehicle purchases.

Speaker Hanshaw questioned whether the Legislative Auditor’s Office is encumbered by conflicting laws or regulations. He said the Legislature and Auditor’s Office should be seen as “one.”

A central question posed is whether moneys, based on reviews, could be withheld from VFDs until review findings were corrected. Mr. Jones answered in the affirmative, pointing to a slide that noted the process.

Once reports are prepared, the state Treasurer is notified of each VFD not in compliance, and funds spent out of compliance are withheld from distribution and subject to distribution to “compliant departments.”

Dr. Cynthia Persily, Secretary of the West Virginia Department of Human Services, told the Committee that leftover funds were used in previous DHHR administrations to fund needed services. The common practice of transfers among departments will no longer take place due to the separation of DHHR into three agencies. She added the change should provide more transparency on where the funding goes.

Dr. Persily said the terminology of rates and wages is often confusing.

“We discuss rates. Medicaid does not pay wages,” Dr. Persily said.

Commissioner Cindy Beane added to the presentation on waivers. The age and disabled waiver program changed because of the pandemic when no one wanted to go into nursing home care. For TBI, or traumatic brain injury, there is no wait list, and it is the smallest program. The IDD waiver program has the bulk of changes and flexibilities.

Following their presentations about funding levels and programs, Senator Eric Tarr of Putnam County prefaced a round of questions by saying, “Please don’t think I’m picking on you. When I say ‘you,’ I’m referencing the department.”

Senator Tarr followed with several questions about requested appropriations going back to 2018. He specifically asked whether anyone testified to the Legislature that more slots would be opened for IDD. Dr. Persily answered that the agency didn’t go down that far to that specific request.

Senator Tarr concluded his questions saying, “We would like to see more transparency rather than have the bureaucracy make these decisions.”

Dr. Persily assured him that the agency will not transfer dollars between lines or between departments.

“We will not have the ability to do that,” she said.

Delegate Mike Pushkin of Kanawha County asked Commissioner Beane about the discrepancy between what is appropriated and what is spent. He asked whether staffing shortages play into not receiving services that have been authorized. Secretary Persily responded, saying the agency doesn’t have enough staff and an additional $45.1 million is needed to reach a competitive wage.

Ray Ratke, CEO of enCircle, discussed Medicaid IDD waiver services from the provider’s perspective. enCircle took over the group homes of Stonebrook in Martinsburg.

“During the pandemic, we all struggled” in terms of hiring and keeping staff, Mr. Ratke said. He pointed out that his facilities provide care 24/7 and they currently serve 27 individuals but have had to cut staffing.

“We are in a crisis. Every business is struggling to hire people,” Mr. Ratke said.

He tied the staffing problem directly to rates and said the administrative Medicaid waiver process is complicated and antiquated, requiring billing and accounting for time in 15-minute increments. He said his facilities currently have 70 staff positions and had to turn away 102 residents because they cannot staff beds.

Mr. Ratke told the Committee the business lost $692,000 in FY 2024.

“We’re operating on a loss that’s not sustainable,” Mr. Ratke said.

Chair Amy Summers of Taylor County asked Mr. Ratke whether enCircle would be closing homes. He responded, “I’m under oath, so I have to tell the truth. We are evaluating. We have reserves to pay staff, but we can’t sustain that long term.”

His specific request for the Legislature was for rates to be increased and to end the “highly inefficient” 15-minute increments for billing.

Knight discussed The Health Plan’s role in providing both self-insured and fully insured insurance options to West Virginia state employees.

Ryan Jewell, The Health Plan’s Senior Vice President of Sales, said the differences between the self-insured option administered by United Medical Resources (UMR) and where the state bears the risk for high-cost claims, and the fully insured option provided by The Health Plan, which charges the state a set premium. Jewell noted that if all state employees switched to The Health Plan, actuarial estimates indicated the state could save around $120 million per year.

Mr. Jewell presented maps and data on The Health Plan’s current membership concentrations. He also discussed efforts to expand The Health Plan’s statewide network in recent years. Mr. Jewel outlined similarities and one key difference in benefits between the health plan and PDI’s self-funded option – namely that the health plan has a higher out-of-pocket maximum.

Delegate Amy Summers of Taylor County asked Mr. Jewell whether The Health Plan covers GLP-1 weight loss drugs. They are no longer covered by PEIA. Mr. Jewell said PEIA gives his company the flexibility to make such coverage determinations, but The Health Plan does not currently cover weight-loss medications.

Mr. Jewell continued, “We are studying the data of our diabetics that are taking the GLP-1s to determine how their risk scores ultimately come down and then weighing that against our complete book of business on how the non GLP-1 diabetics are faring and their total costs and then evaluating the risk scores. Because the data is so young, I guess we don’t have accurate data to be able to determine if the GLP-1s are saving money in totality or would it be better to just stay on some sort of injectable insulin.”

Eric Vir, CFO of Pillar Energy, discussed recent natural gas pricing trends in Appalachia. He noted prices declined in 2020 because of COVID but rebounded in 2021-22. However, 2023 saw low demand and full storage levels. He said current storage levels in Appalachia and the U.S. are above the five-year average because of weak demand. European storage is also near historic highs.

Production in Appalachia spiked with the Marcellus shale but has plateaued around 35 billion cubic feet per year because of insufficient pipeline takeaway capacity. Appalachia lags other regions in access to markets and export facilities. Mr. Vir said.

Jim Crews of Marathon Petroleum said LNG exports are critical for the U.S. gas market, with about 15 billion cubic feet per day currently exported and additional terminals planned by 2030. However, he said President Biden’s temporary ban on exports is a concern.

Mr. Crews said the initial relief for LNG infrastructure would come from increased gas production in the Haynesville Shale formation of Louisiana and Texas during the next few years. Beyond that, Appalachian gas reserves would need to help fill the gap as exports ramp up further.

Legislators reviewed maps that show potential pipeline routes that could connect Appalachian gas to Gulf Coast LNG terminals. However, Mr. Crews acknowledged the immense challenges of building new interstate pipelines because of permitting delays and legal battles.

In summary, Mr. Crews stressed the importance of LNG exports and Appalachian gas reserves to meet growing global energy demand, but he said infrastructure constraints are a major threat if not addressed through policy reforms and coordinated infrastructure development.

Ben Beakes, President of the Metallurgical Coal Producers Association, provide context about the metallurgical coal industry in the U.S.

He presented data showing that more than 50% of met coal produced in the U.S. comes from the association’s six member companies, which operate in Pennsylvania, West Virginia, Virginia, and Kentucky.

He noted that met coal is largely exported, with about 75% of production leaving the U.S. Key importers include Europe, Asia, and South America. He said challenges in Europe’s steel industry include high energy prices, environmental policies, and economic headwinds. Growth in demand from India and stability in China and domestic U.S. markets were positives, he said.

Mr. Beakes concluded that prices are currently respectable though not ideal given inflationary pressures, and producers have avoided overproduction. Near-term indicators are positive domestically and mixed globally, depending on events and policies, he said.

Chris Hamilton, President of the West Virginia Coal Association, summarized challenges facing the coal industry, including President Biden’s anti-fossil fuel policies that aim to close remaining coal power plants.

He discussed a potential new carbon rule from EPA requiring carbon-capture technology on coal plants within seven years. However, carbon-capture technology has not been implemented commercially at coal plants in the U.S.

He also addressed supply-chain problems, workforce shortages, and the impact of the bridge collapse in Baltimore, which affects coal transport.

Reviews are conducted by the Performance Evaluation and Research Division (PERD), which Mr. Fletcher said oversees performance evaluations under the Legislative Auditor’s authority, agency reviews, and regulatory board reviews, according to the West Virginia Performance Review Act. The Division conducts research on special topics as requested by the Legislature or mandated by separate legislation.

PERD staff presents most reviews to the Joint Committee on Government Organization.

Mr. Fletcher noted that reviews no longer are “tied to Department presentations” made to the Legislature and that the SB687 “takeaway” is that the Joint Committee on Government Organization, as well as other legislative committees and legislators, will have “more input and opportunities for input into how executive agencies and regulatory divisions are reviewed.”

He said the review scope is “much broader” and can pinpoint legislators’ concerns about agencies’ duties, whether agencies have overlapping functions and roles with other agencies, agency finances, and “what it (an agency) does.”

Mr. Fletcher noted, however, the Joint Committee on Government and Finance has final say regarding reviews.

Committee members had questions about reviews having been completed and not released to the Legislature.

PERD Director John Sylvia noted that five reports, completed last calendar year, had not been released to the Legislature – the most significant, perhaps relating to the effects of lost instructional time — “learning loss” – because of the pandemic. He said the report was to have been presented during the November 2023 interim meetings in Wheeling, but the state superintendent could not attend the meeting. Mr. Sylvia said the item was not placed on the subsequent December 2023 or January 2024 interim meeting agendas. Additional reports involve a Real Estate Division rule about parking, fee schedules for the Board of Respiratory Therapy, fees for the Board of Dietitians, and a review relating to the Board of Speech and Language Pathologists.

Mr. Sylvia said reports, as in the past, may be started but a few were halted for various reasons, including timeliness, the given scope of the reviews, and subsequent changes in laws prompting reviews.

Members asked whether the reports would be made available, although it appears the response is one the Legislature’s leadership may direct.

Mr. Fletcher provided the Committee with what he termed an “informal schedule” for reviews, noting the affected Cabinet-level departments have 104 entities “nested within agencies (that are not) readily apparent.” Mr. Fletcher suggested the Joint Government Organization Committee consider following the existing Legislative Auditor’s schedule for reviews, although saying the decision now lies with lawmakers. For that reason, Mr. Fletcher said the Legislature may want to initiate a process for agency reviews that is not contingent upon interim meeting agency presentations.

According to the Legislative Auditor’s website, 668 such reports, including PERD reports, have been completed.

The report, accompanied by Power Point slides and other documents, centered on privacy protocols relating to DNA collection, as well as the Combined DNA Index System, which is a computer software program that operates local, state, and national databases of DNA profiles from convicted offenders, unsolved crime scene evidence, and missing persons.

Both Ms. Lemons and Ms. Runyan emphasized protocols ensuring DNA collection is not personally identifiable and that few persons have access to DNA samples or even DNA reports — even some which, due to the Combined DNA Index System (CODIS) protocols, is stored in an Internet cloud format. Committee members seemed to be pleased with the presentation in terms of privacy, although the House of Delegates rejected House Bill 4627, its version of the legislation, by a 66-30 vote. The concern was about privacy of data and access to it.

Senate Bill 765, similar legislation, was referred to Senate Rules on February 22.

Both presenters stressed that State Police personnel involved in DNA work are civilians, and they were quick to acknowledge past indiscretions involving a WVSP laboratory serology official — rather than DNA-related — that led to imprisonment of persons deemed innocent, including an individual convicted and who served time for sexual assault — the first such victim exonerated in the state for imprisonment.

“That has allowed us to be the lab that we are,” Ms. Runyan said.

Most Committee members’ questions focused on the use of DNA and its credibility in police work. Delegate Geoff Foster of Putnam County said, based on his knowledge, genetic markers are essentially encrypted and not subject to personal identification – a concern some House members made during the 2024 regular session.

Both presenters discussed DNA data collection, use, and storage in detail.

Presenters also discussed constitutional concerns, as well as CODIS protocols.

Delegate J.B. Akers of Kanawha County inquired about exonerations after persons have served jail time.

Presenters said it occurs, and states increasingly have developed legislation that specifies expungement of records usually upon court petition, as well as retesting procedures.

·     August 11-13

·     September 8-10 (Parkersburg)

·     October 6-8

·     November 10-12

·     December 8-10