Legislative Update

March 29, 2008

Session Moves to Final Stage
The Minnesota Legislature is moving into its final stage as it approaches adjournment.  For the first two months of session, most of the work has been done at the committee level.  Bills have been processing though the many different policy committees, whether they be the Agriculture Committee, the K-12 Education Committee, the Public Safety Committee, or the Health and Human Services Policy Committee.

During the last two weeks the focus has still been on committee work, but they have shifted from the policy committees to the finance and tax committees.  Both the House and the Senate have been developing their proposals to balance the state’s budget.

Now the focus shifts once again.  Most of the committees have completed their work for the year and the action is on the House and Senate floors.  Bills are being debated for final passage.  A majority of a legislator’s time for the next month or so will be spent in floor sessions.  For bills that pass both bodies but in different forms, they will go to Conference Committees made up of equal numbers of House and Senate members to work out the final differences.  If the conference committee can agree to identical language, the bills must be re-passed by both bodies and sent to the Governor for signature.

No final adjournment date has been set, other than the Constitutional deadline of the third Monday in May (May 19).

House and Senate Pass HHS Budget Bills
As reported in earlier updates, the legislature is working to pass a supplemental budget bill to address the $935 million deficit.  Governor Pawlenty presented his budget-cutting ideas to the legislature three weeks ago and now it’s the House and Senate’s turn to develop their budget ideas.

This last week both the House and Senate passed their budget bills.  While they use some of the Governor’s ideas, their budget proposals are very different from the Governor’s.

The good news is that neither the House nor the Senate adopted Pawlenty’s idea of using money from the Health Care Access Fund (HCAF) to balance the budget.

The House DFL proposal stands in sharp contrast to Pawlenty’s plan to take nearly $400 million from the HCAF during the next three years to shore up the state’s general fund, which is facing a $935 million deficit.  The DFL budget bill H.F. 3976 authored by Rep. Thomas Huntley, DFL-Duluth, rejects the governor’s proposal to transfer $250 million from the HCAF fund and to shift $48 million of spending each year for three years to the HCAF that is currently paid for from the general fund. 
 
DFLer’s would take $19 million of HCAF dollars to fund qualified health centers, the critical access dental program, and medical education. These expenditures currently come from the general fund

Overall, the DFL proposal is much less reliant than Pawlenty’s on cutting health and human services programs. In total, the House would cut these programs by about $56 million less than the governor in the current biennium and by about $138 million less during the next three years.  The House accepts many of the Governor’s proposed shifts and delayed payments to hospitals, his recommendation to increase managed care withholds, and his proposal to cap growth in waivered programs.

The Senate DFL leaders introduced their health and human services budget bill  this past Wednesday.  It was a mixed bag for physicians, since it protected the Health Care Access Fund but proposed a cut in provider reimbursement.  If passed, the budget bill would cut provider payments by 3 percent for fee-for-service patients enrolled in Medical Assistance, General Assistance Medical Care, and MinnesotaCare. This cut would apply to all inpatient and outpatient services except dental and mental health services.  The 3 percent cut to outpatient providers would save the state $4.5 million fiscal year 2009, $5.8 million in fiscal year 2010, and $6.2 million in fiscal year 2011.

On the upside, the budget bill would not use the Health Care Access Fund to fill the anticipated deficit in the general fund. It would also set aside money to fund measures passed in 2007 that would allow more Minnesotans to be eligible for state health care programs.  The Senate DFL budget also includes the hospital payment cuts included in Pawlenty’s budget proposal.

These two competing bills will be acted on by both the House and Senate floors next week and then will go to conference committee.  In addition to reconciling the differences between the two bills, they will also have to negotiate with the Governor in an attempt to reach an agreement that he will sign.

Health Care Reform Moves to Floors
Legislation to implement major health care reform ran into a few potholes last week.  This legislation includes investments in our public health infrastructure, insurance reforms to assist small employers and individuals to purchase health insurance, a strong emphasis on primary care and prevention, funding for care coordination and the medical home concept, and comprehensive payment reform designed to change the financial incentives for providers.  The legislation arose from the work last summer of the Governor’s Health Care Transformation Task Force and the Legislative Commission on Health Care Access.

The bills are authored by Rep Tom Huntley from Duluth (HF 3391) and Sen. Linda Berglin from Minneapolis (SF 3099).  For the last three weeks, they have been moving through the many policy committees necessary with very little problem.  The most controversial provisions have been related to the payment reform, specifically to what is referred to as Level 3.  Level 3 is envisioned as a way to allow innovative payment structures, while holding providers accountable for the “total cost of care.”  Providers from throughout the state have been raising concerns with the Level 3 concept because of the fear that it would be a return to providers being forced to accept insurance risk through capitation.  Also, many were questioning how a small provider could bid on the total cost of care without being a part of a large, integrated care system.

Last week the legislation ran into trouble as Governor Pawlenty announced that he no longer supported passage of the health care reform legislation.  Even though much of the legislation comes from his Transformation Task Force, he has been receiving strong pressure from House Republicans to oppose the bill because of the confusion of how Level 3 reforms would work.

The MAFP has raised serious concerns with Level 3, but also continues to support the language that promotes medical homes.  The bill proposes certification of providers to serve as medical homes, starting with patients with chronic conditions.  It would provide a care coordination fee designed to reward providers who manage patients’ conditions and provide high quality care.  The bill also acknowledges a need to increase reimbursements for primary care services.

The Minnesota Medical Association has been working to slow the implementation of the payment reform and remove the Level 3 reforms.  An amendment suggested by the MMA has been agreed to by Rep. Huntley that would delay all of the implementation timelines by one year and instead of requiring providers to bid for the total cost of care would allow providers to develop package pricing for identified chronic conditions such as diabetes, depression, and heart disease.  Rep. Huntley will offer that amendment in the House Finance Committee on March 31.

Sen Berglin has agreed to portions of the MMA’s amendment.  Her bill was heard on the Senate floor on March 27, where she delayed the timelines and included the package pricing language.  Her bill, however, still contains the total cost of care concept of Level 3.

These bills will also be heading to a conference committee within the next two weeks.   There is still significant momentum to pass a health care reform bill this year.  How comprehensive the final bill will be is still unknown.

Naturopath Registration Bill Appears Dead
Legislation to begin registering doctors of naturopathy who have graduated from an accredited four-year school of naturopathy appears dead for the year.  This bill (HF1724-Walker/SF 1520-Torres Ray) would have registered naturopaths under the Board of Medical Practice and would have distinguished these individuals from “traditional naturopaths” who have had no standard training.  The bill did not expand naturopaths’ scope of practice beyond what they are doing today as unregulated providers.

The bill was heard in the House Public Health Finance Division last week where members voted to table the bill.  The strongest opposition to the bill came from the natural health supporters who didn’t want any regulation of any kind of naturopaths.  The status of the bill is unclear in that the author may try to revive it yet this year.

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