Legislative Update

April 28, 2008

Budget Conference Committee Moving Slowly
The Conference Committee to address the state’s $935 million shortfall continues to meet, but at a very slow pace.  There has been no overall agreement between legislative leaders and the Governor on the overall budget targets so no real decisions can be made.

To attempt to start the negotiations, Governor Pawlenty put a new proposal on the table this week.  In response to pressure from physicians and legislators, he has cut in half the amount he wants to raid from the Health Care Access Fund to $125 million.  At the start of the legislative session, Pawlenty proposed taking $250 million from the HCAF to help balance the budget.

While this is a move in the right direction even the smaller amount is a totally inappropriate to use of the HCAF to balance the budget.  Physicians throughout the state have strongly objected since Pawlenty put forward his budget balancing plan that immediately transferred $250 million, and over a three-year period would take nearly $400 million out of the HCAF.  Hundreds of physicians contacted the governor and urged him not to break the previous promises made to physicians that provider tax funds would only be used to help Minnesotans get access to health care.

Legislators also voted against Pawlenty’s raid on the fund.  Both the House and the Senate passed budgets earlier this month that covered the shortfall without tapping the health care fund.  Legislative leaders have told Pawlenty that this new proposal is still unacceptable.

While neither the House nor Senate budget bills use the HCAF, they recommend different ways to balance the budget.  The biggest difference for physicians is that the Senate bill cuts public program reimbursements for outpatient providers by 3 percent.  Physician payments have not been increased for 9 years, and they haven’t been rebased for 16 years.  This issue has not been decided yet.

Health Care Reform Discussions Also Slow
The Conference Committee to work out the differences between the health care reform bills has begun to meet, but is also making slow progress.  The members of the Conference Committee are:

Senate                                                            

Linda Berglin (D-Minneapolis)             

Tony Lourey (D-Kerrick)                                

Kathy Sheran (D-Mankato)                             

Ann Lynch (D-Rochester)                               

Julie Rosen (R-Fairmount)                             

 House

Tom Huntley (D-Duluth)

 Paul Thissen (D-Minneapolis)

 Diane Loeffler (D-Minneapolis)

 Kim Norton (D-Rochester)

 Jim Abeler (R-Anoka)

The progress is slow because the funding for this bill is so closely tied to the budget bill.  Both the Senate and House bills are funded using the HCAF.  There is not enough money in the HCAF to fund the health care reform bills and balance the state’s budget, so until that decision is agreed to neither bill can proceed.

There continues to be strong support for the health care home model and care coordination fees.  There are many discussions taking place in the Capitol halls among the many different stakeholders to try to find agreement on language that can begin needed payment reform that does not include the “Level 3” proposal that would require providers to join large integrated systems in order to be able to accept insurance risk.  It is MAFP’s hope that a compromise can be reached and we can pass comprehensive health care reform this session.

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