Legislative Update

March 18, 2011

House and Senate Release Their Budget Targets
On March 10, the House and Senate released their budget “targets” for resolving the state’s $5 billion budget deficit for FY 2012-13. The targets set the amount each finance committee must cut (or increase) within their area of the budget.

According to the state’s most recent budget forecast, under current law the state needs $39 billion to continue services at the current level.  Republicans are proposing to spend $34 million, which is the same as the spending for the current biennium.  Dayton's budget reduces spending by $2 billion and raise taxes $3 billion to close the gap

These targets do not lay out any specifics on how or where the cuts will happen  That will be released next week.  The targets are set for the different areas of the state’s budget. 

• Health and Human Services: Total general fund spending for HHS in the forecast was estimated to be $12.33 billion for the upcoming biennium. The targets for HHS spending are $10.73 billion in the Senate and $10.70 billion in the House.  Respectively, these proposals would reduce spending by $1.6 and $1.63 billion.  In contrast, Governor Dayton’s budget reduces HHS spending by $148 million.

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• Higher Education: Total general fund spending for higher education is estimated at $2.9 billion.  The House and Senate targets cut spending by $411 million.  This represents 16% reduction.  The Governor proposed a 6.9% reduction.

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• Jobs and Economic Development:  Total general fund spending for jobs and economic growth is estimated at $168 million.  The House cuts $87 million (52% reduction) and the Senate cuts $65 million (39% reduction).

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• K-12 Education: The House, Senate and Governor continue the education shift that saves $1.43 billion.  Total general fund spending for K-12 is estimated at $14.3 billion. Spending for K-12 is reduced by $11 million in the House and Senate targets.

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• Local Government Aid & Tax Credits: Total general fund spending is estimated at $3.5 billion.  The Senate cuts $780 million (22%) and the House cuts $852 million (24%).

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• State Government:  Total general fund spending is estimated at $912 million. The Senate cuts $500 million (55%) and the House cuts $326 million (36%).

The details of achieving each target are left to each committee.  Committees now have until March 25 to complete their work.

 

House HHS Budget Outline Released
Rep. Jim Abeler (R-Anoka), chair of the House Health and Human Services Finance Committee released an outline of his budget bill to cut $1.6 billion from the HHS programs on March 16.  Abeler is trying to reduce spending without cutting people or programs or directly cutting overall reimbursements. 

 

His bill includes a number of new policy provisions that have not received much discussion.  One of the more controversial provisions is a new payment structure that he believes will identify high-utilizing, high-cost providers and reduce their payments significantly.  Abeler believes if we can identify these providers who are outside the norm in total per patient Medicaid spending and reduce their payments, we achieve large savings.  His way of accomplishing this is by cutting payments to the PMAP health plans by 10% and directing them to establish payments that penalize the high-cost providers.

 

While there have been studies that show large variation in costs between providers in the private sector, there has been no data showing that that variation exists in Medicaid.  It is hard to imagine that providers are over-utilizing in Medicaid when payments rarely cover the cost of providing the care.  The Department of Human Services has yet to develop a fiscal note showing any savings from this idea.  Abeler achieves his savings on nearly $300 million by cutting the health plan payments by 10%.

 

Abeler also shows his strong support for primary care and care coordination in his bill, by promoting a number of new programs designed to better treat high-cost chronic conditions.  The problem with his ideas is that he seems to develop a number of new condition-specific health care homes.  The bill develops a pregnancy home that would be paid a global payment for pregnancies, develops a health care home for children with high-cost mental illnesses, designates community mental health centers as eligible to be health care homes, and automatically deems a Federally Qualified Health Center to be certified a health care home if they apply.

 

The formal HHS budget bill will be released on March 21 and acted on by the committee on March 24.  The Senate has not released its bill yet but is expected on March 21.
 

 

Senate HHS Committee Raises Insurance Exchange Concerns
The Legislature continues to struggle with what to do about the federally approved Health Insurance Exchanges (HIE).  The Affordable Care Act (ACA) provides the option to form HIEs as a way to increase competition by facilitating “one-stop-shopping” for individuals purchasing insurance coverage.  If Minnesota does not establish an HIE then the federal government will implement its own HIE. 

 

This has become a very politically charged issue because it is tied to the federal ACA.  On March 11, the Senate HHS Committee had a very contentious hearing over whether the Department of Human Services had the authority to establish an HIE without legislative authorization.  The committee asked DHS Commissioner Lucinda Jesson and Department of Commerce Commissioner Michael Rothman to comment on the administration’s plan for implementing the health insurance exchange in Minnesota.  Chairman David Hann (R-Eden Prairie) asked the Commissioners if the administration believes it has the authority to implement the exchange without the Legislature’s involvement.  In particular, the chair asked for a response to a letter sent to the chair asking if a statement made to the chair by a DHS assistant commissioner that their agency can implement the exchange without any action by the legislature.  Commissioner Rothman replied that the administration is now just at the starting point of analyzing the exchange issue. He told the committee the administration prefers to work with the Legislature to develop a Minnesota-based exchange.  Sen. Hann made clear his strong disappointment that he believed his letter was ignored and that the administration refused to answer his question about taking action to implement the exchange without a change in law.

 

No State Money for ACA Programs
During the week of March 7, both the Senate and House HHS Committees heard bills to prohibit the use of state money to implement anything coming from the federal ACA bill.  The Senate committee heard SF 277, Sen. Nienow (R-Cambridge) and the House HHS Committee heard HF 468, Representative Glenn Gruenhagen (R-Glencoe), both prohibiting the expenditure of state funds to comply with certain federal health care laws.  These bills are supported by legislators who firmly believe that the ACA, or as they call it “ObamaCare,” is unconstitutional. 

Committee members raised concerns that passage of the bill will cost the state money since we are already benefiting from increased federal money.  Committee members offered several amendments to S.F. 277/HF 468, which were all defeated on party-line votes.

 

House HHS Passes Nurse Compact Bill
On March 11, House HHS Reform Committee heard HF 462 (Norton-DFL, Rochester), a bill to include Minnesota into the Nurse Licensure Compact. As part of the Compact, Minnesota nurses could practice in other states without needing additional licensure from the outside state.  Support for the bill came from the Minnesota Board of Nursing, and many of the hospital and health systems.  These organizations support H.F. 462 on the grounds of continuity of care, specialized care follow-up, tele-health, and better reciprocity with neighboring states whose nurses are already allowed to practice in Minnesota. Opposition to the bill came from the Minnesota Nurses Association on the grounds that H.F. 462 would weaken the Minnesota Board of Nursing’s regulating authority and patient safety. The committee passed H.F. 462 and re-referred it to the House HHS Finance Committee.
 

 

MAFP Will Have Representative on Autism Task Force
In a continuation of previous efforts, the House Health and Human Services Reform Committee passed HF 745, to reestablish the Autism Spectrum Disorder Task Force.  The bill, authored by Rep. Tara Mack (R – Apple Valley) in the House and Sen. Dave Senjem (R – Rochester) in the Senate, establishes a 19 member statewide task force to develop an autism spectrum disorder statewide strategic plan.  The task force is to focus on improved awareness, early diagnosis, intervention, and delivery of cost-effective treatment and services.  This legislation extends the Autism Spectrum Disorder Task Force first established in 2009.

 

The bill specifically calls for a member of the task force to be appointed from the MAFP.  Additional members are to be appointed from the MN Chapter of the Academy of Pediatrics, the Minnesota Psychological Association, parents of children with autism, individuals active in the minority autism community, legislators, and others. 

 

The Committee passed the bill unanimously on a voice vote, and referred the bill to the House State Government and Elections Committee.  The Senate has yet to schedule a hearing for the companion legislation, SF 527.
 

 

Bill to Regulate Cosmetic Procedures, Healthcare Advertising
Senator David Hann (R – Eden Prairie) has introduced SF 707, a bill that seeks to require additional disclosure in certain advertisements for physicians.  Additionally, the bill requires those individuals seeking certain cosmetic surgeries to receive an examination and written clearance from a physician, surgeon, certified nurse practitioner, or licensed physician assistant prior to receiving the procedure. 

 

The proposal has been brought forward by the Minnesota Dermatological Society with assistance from its national association, and is effort geared to better regulate so-called “medi-spas” that are treating patients with lasers without proper medical oversight.  Concerns have been raised over the bill’s treatment of different accreditation boards, and the proponents of the bill have been in consultation with many national specialty societies to more finely craft the language.  The language of the introduced bill is certain to be changed. 

 

 The bill does not yet have a House companion, nor is a Senate hearing scheduled.  Given the legislature’s focus on the state’s budget, the bill is unlikely to receive a hearing in the next weeks and – potentially – for the remainder of the legislative session. 
 

 

Alzheimer’s Data Collection Bill Moves Forward
Both Senate and House HHS Committees moved to include a new proposal to monitor Alzheimer’s disease into their omnibus bills this week.  The bills, being carried by Rep. Gottwalt (R – St. Cloud) and Sen. Senjem (R – Rochester), would require the Commissioner of Health to review currently available quality measures and make recommendations for future measurement aimed at improving care related to Alzheimer’s disease and other dementia diagnoses. 

 

In addition, the bill would require MDH to develop a health care home learning collaborative curriculum that includes screening and education on best practices regarding identification and management of Alzheimer’s and other dementia patients.  The bill seeks to quantify the value of early identification of disorders, the importance of family member supports, and effective collaboration between health care providers and other community supports. 

 

This legislation grew out of an Alzheimer’s work group that met over the last year.  MAFP Past President George Schoephoerster served on that work group.
 

- Dave Renner, MAFP Legislative Representative
(drenner@mnmed.org, 612-362-3750, 1-800-342-5662)