April 30, 2010
Both the House and Senate have
released outlines of their Health and Human Services budget bills to
address a portion of the $994 million state deficit. Most of this
update will focus on the specifics of each body’s bills.
House Moves Omnibus HHS Bill; Senate to Act
Monday
The House HHS Finance Division passed their budget bill out of the
House Finance Committee on April 28. It reduces spending for HHS
programs by $18.4 million in FY10 and by $147.9 million in FY11. In
the Senate the final bill has not yet been released, but Sen.
Berglin did release the spread sheet showing where the cuts will
take place. Her bill reduces spending by $6.69 million in FY10 and
by $113.4 million in FY11. Both bills are significantly better for
physicians and hospitals compared to the $346 million reduction
proposed by the Governor and compared to the GAMC bill that passed
earlier this year. Both the House and Senate proposals shift the
GAMC population (adults without children earning under 75% of FPG)
to Medical Assistance (MA) through the early expansion allowed under
the federal reform. Both bills also maintain coverage for single
adults under MinnesotaCare and maintain current funding for the
Medical Education and Research Cost (MERC) program, both of which
were recommended to be cut under the Governor’s budget proposal.
The bills differ in how they generate revenue
to fund this expansion. The House imposes a 2.5 % HMO surcharge to
draw down more federal matching funds, imposes a 3% cut to
non-primary care physician payments in FY 11, and imposes a 7%
ratable reduction for hospitals in FY 12 and FY 13, exempting the
Children’s Hospitals and Gillette from the cut.
The Senate proposal has fewer provider cuts but
uses more MA surcharges on HMOs, hospitals, nursing homes, and group
homes. It increases the hospital surcharge from the existing 1.56%
to 2.63% July 1, 2010 and 2.3% January 1, 2011. Instead of cuts to
provider payments, the Senate cuts payments to health plans by 3%
for the PMAP and by 10% for MinnesotaCare coverage for adults
earning over 75% of FPL. These cuts save the state $42 million and
$14.7 million respectively, but there is language that states that
the health plans can not pass these cuts on to providers.
The schedule for next week is for the House
bill to be in the Way’s & Means Committee on Monday and could be on
the House floor Monday or Tuesday. The Senate bill will formally be
released Monday morning and passed out of the Senate HHS Finance
Division. It would most likely be on the Senate floor by Wednesday.
Below are brief summaries of the House and
Senate HHS budget proposals.
House HHS
HF 2614
Article 2
Physicians and professional services
The House bill cuts physician reimbursements by
3% effective July 1, 2010. This does not apply to office visits and
preventive medicine visits provided by family physicians, general
internists, general pediatrics, and geriatricians.
Hospital Cuts
Hospital payments for inpatient admissions are
cut by 7% beginning June 1, 2011. This is where the House bill gets
a large portion of its savings. Children’s Hospitals and Gillette
Children’s Hospital are exempt from this cut.
HMO Surcharge
A new 2.5% surcharge is applied to HMOs and Blue Cross to
capture more federal matching money. This increase is effective
June 1, 2010. The bill then increases payments to HMOS after August
1, 2010 by 1.4% to pay back some of the surcharge, but then cuts
payments made to HMOs by 1% on January 1, 2011, to get more savings.
Payment Reform Demonstration Project
The bill establishes a demonstration project for providers serving
an identified group of patients who are enrolled in a state health
care program and are high utilizers of services or have
characteristics that put them at risk of being high utilizers. The
goal is to reduce hospitalizations, ER visits, high cost medication,
specialty services, or nursing home or long term care. The projects
will give priority to providers serving patients with chronic
medical conditions or complex medical needs that are complicated by
a physical disability, serious mental illness, or serious
socio-economic factors. The project must reduce total cost of care.
There is also an Intensive Management Care
Program established for enrollees over 18 who are in the top 5% of
total costs. The program is designed to reduce costs by 20%.
Therapy Services
As opposed to the Governor’s recommendation to
eliminate coverage for therapy services, the House bill requires
prior authorization for the following services:
- Physical therapy services exceeding 80 units of
any approved CPT code, 20 modality sessions, and 3
evaluations/reevaluations.
- Occupational therapy services exceeding 120
units and 1 evaluation.
- Speech therapy exceeding 50 treatments and 1
evaluation.<.ul>
Other Changes
- Oral interpreter services are covered only if
the interpreter is on the registry or roster established by the
commissioner, effective July 1, 2010.
- Sets the MA eligibility level for adults
without children earning up to 75% of FPG retroactively to April 1,
2010, for and funds this expansion with the HCAF.
- Reduces non-emergency co-payments for ERs from
$6 to $3.50 and increases the monthly maximum from $7 to $12.
- Establishes a MinnesotaCare supplemental
hospital coverage option to pay for inpatient hospital costs over
$10,000 and requires MinnesotaCare marketing materials to state that
adults without children in MinnesotaCare are responsible for
hospitalization costs over $10,000.
- Includes Medication therapy management as a
covered service under GAMC between April 1 and May 31.
Article 5, Miscellaneous
Autism Spectrum Disorder Coverage
The bill creates a new mandate for coverage of
specific services for autism spectrum disorder. It specifies
coverage levels and the type of treatment providers and services.
It exempts the state employee health plan from the mandate due to
the cost to state’s budget. Some of the private plans currently
cover these services and some don’t.
Coverage for Private Duty Nursing Services
The bill requires health plans to pay for
private duty nursing services at the same level as Medical
Assistance. This is designed to provide incentives to keep people
out of the hospital and saves the state money.
Office of Inspector General
The bill creates a new Office of Inspector
General within the Department of Human Services. This office is
designed to enhance anti-fraud activities. It is unclear why this
office is needed and how it differs from the anti-fraud activities
that DHS current does.
Article 6, Department of Health
E Health Records and Health Information
Exchange
The Health Information Exchange bill is
included in this bill. Health information exchanges are designed to
allow individual HIT systems to be interoperable. The bill will
ensure that all information follows the patient across the full
continuum of care, prevent fragmentation of health information that
can occur when there is not interoperability or cooperation between
health information exchange providers, ensure that organizations
that form exchanges are adhering to nationally recognized standards,
ensure patient privacy and security and ensure that that the
Minnesota infrastructure is in place by 2010 to allow Minnesota
providers and hospitals to achieve the meaningful use standard. The
bill also establishes oversight and fees for health information
exchanges.
Birth Center Licensing
The birthing center licensure bill is also included in the HHS
budget bill. It establishes licensure for birth centers using the
Commission for the Accreditation of Birth Centers (CABC) standards
and includes other professionals in reviewing birth center outcomes
including representatives of the College of OB/GYM, American Academy
of Pediatrics, the Minnesota Hospital Association, and the Minnesota
Ambulance Association. It also adds birth centers to the list of
essential community providers.
Lead Levels
The bill directs the Commissioner of Health to revise clinical
and case management guidelines for blood lead levels to reflect new
recommendations for protective action and follow-up services for
child blood lead levels that exceed 5 micrograms of lead per
deciliter of blood. The Commissioner is required to consult with a
statewide organization representing physicians, the public health
department of Minneapolis and other public health departments, and
nonprofits with expertise in lead abatement and complete the
revisions by January 1, 2011.
Article 7, Health Care Reform
Accountable Care Organizations (ACO)
The bill provides language to allow the
development of ACOs. It requires DHS to establish uniform
definitions for the total cost of providing all necessary services
to a patient through an ACO as specified in the federal reform
bill. It permits an ACO to establish package pricing beginning July
1, 2012. It requires quality measurements for ACOs by June 30,
2012, and published comparative price and quality information on the
total cost of care by January 1, 2013.
Health Care Homes
The bill provides slight modification to our
health care home language for eligible individuals with chronic
conditions who select a designated provider, a team of health care
professionals, or a health teams as the individual’s home to assure
compliance with the federal reform bill.
Federal Health Care Reform Demonstration
Project
It requires the Commissioner of Human Services
to apply for all of the demonstration grants in the federal reform
including:
- Evaluation of integrated care
around hospitalization.
- MA global payment system
- Pediatric ACO
- MA emergency psychiatrist and
- Grants to provide incentives for
prevention of chronic diseases.
Health Care Reform Task Force
The bill requires the Governor to re-establish
the Health Transformation Task Force to advise and assist in the
implementation of the federal health care reform bill. It requires
a report to the Legislature on recommendations by December 15, 2010.
Health Insurance Exchange
The bill also requires state to apply for one
or more planning grants relating to establishing state insurance
exchange. The Commissioner shall also consider whether the exchange
should be established before the federal deadline of January 1,
2014.
Senate HHS Bill Ready Monday
Based on the spreadsheet, the Senate cuts $120
million for the FY10/11 biennium. Included in the Senate
recommendations are the following:
- It expands MA coverage to adults without
children earning under 75% of FPL ($115 million) as of June 1, 2010,
using the HCAF.
- It increases the hospital MA surcharge from
1.56% to 2.63% July 1, 2010, and 2.3% on January 1, 2011. This
raises $43 million of which hospitals receive roughly $35 million
back in various adjustments to their MA rates.
- It does not include any new cuts to physician
payments, but it does extend the 1.5% cut that the Governor
instituted through unallottment to FY12 and FY13.
- It delays hospital rebasing through January 1,
2013, which saves the state $9.2 million in FY11 and $94 million in
FY12/13.
- Increases the managed care withhold
- It increases the HMO MA surcharge by
approximately 1%
- It reduces payments made to HMOs for
MinnesotaCare single adults earning above 75% of FPL by 10% and for
PMAP by 3% effective July 2010. These cuts can not be passed on to
providers.
- It increases the appropriation to the Board on
Pharmacy to fund NASPER program. The costs of this program will be
assessed to the other licensing boards that regulate prescribers.
- The bill does not make any cuts to MERC and
does not eliminate coverage for single adults in MinnesotaCare.
