Communications: Legislative Update

Legislative Update

Wednesday, May 20, 2015  
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Legislative Session Finishes in a Flurry; Special Session Pending

The 2015 legislative session came to a close in fast order at midnight on Monday, May 18, amidst a chorus of shouts and partisan finger pointing. While leadership from both sides are claiming they finished on time, legislators will be back soon for a special session because of vetoes of key budget bills. With Republicans holding the House and DFLers controlling the Senate, Governor’s Office agreement on the budget proposals was sometimes difficult to find. While a global agreement seemed to have been struck between the Speaker of the House Rep. Kurt Daudt (R – Crown) and Senate Majority Leader Sen. Tom Bakk (DFL – Cook) in the days before the constitutionally-mandated adjournment date, Governor Dayton derided the agreement because of his belief that the E-12 education budget didn’t spend enough.  Long an advocate for a significant increase in state funding to support universal pre-kindergarten for all Minnesotan children, the Governor vetoed the E-12 budget bill thus setting in motion a special session in the days or weeks to come.

Complicating the plans for a special session is the fact that the entire Capitol – including the House chamber – was closed to the public immediately following adjournment as part of the multi-year Capitol renovation project.  It remains to be seen where a special session will occur, though Governor Dayton has suggested that legislators can meet in a tent on the front lawn of the Capitol.  It’s likely that any special session called will be short with much of the work between legislative leadership and the Governor’s office being completed before legislators are called back.

HHS Budget a Mixed Bag for Physicians

After a series of marathon conference committee hearings lasting through the night and into the early morning hours, a conference committee of members of both the House and Senate passed a500+ page budget for the state’s health and human services.   The $15 billion package was considered and adopted by both bodies in the final hours of the session and is expected to be signed soon by Governor Dayton.

Conference committee members faced a difficult task, as the House and Senate packages contained very different spending levels and policy provisions.  The Senate author Sen. Tony Lourey (DFL – Kerrick) proposed a bill that included an increase of $340 million over current spending, while the House author, Rep. Matt Dean (R – Dellwood) put forward a budget that cut more than $1 billion in the next biennium.  In addition to the authors, conference committee members included Senators Kathy Sheran (DFL – Mankato), Melisa Franzen (DFL – Edina), Jeff Hayden (DFL – Minneapolis) Julie Rosen (R – Vernon Center) and Representatives Tara Mack (R – Apple Valley), Nick Zerwas (R – Elk River), Joe McDonald (R – Delano), and Joe Schomacker (R – Luverne).

The final conference committee report did not include the central provision of the House proposal – elimination of MinnesotaCare.  Arguing that continuing this state program was unsustainable due to growing costs, the House Republican plan replaced MinnesotaCare with tax subsidies for low-income individuals and families to purchase health insurance via the state’s insurance exchange, MNsure.  The proposal drew significant attention and controversy, as opponents argued that the insurance products available to these enrollees would be unaffordable or of suspect value.  As part of the repeal of MinnesotaCare, House Republicans also accelerated the repeal of the 2% provider tax.  The final finance package rejected the dismantling of MinnesotaCare, though there is increased premiums and cost-sharing for enrollees.  The provider tax remains scheduled for repeal on December 31, 2018.  Also included as part of the agreement, was the creation of a 29-member task force charged with studying and making recommendations about the financing of health care programming going into the future.

MNsure was also the subject of a number of proposals contained in the competing spending packages.  The House proposal to repeal the exchange and move enrollees into the federal exchange was rejected, as was a Senate plan to move MNsure into the Governor’s Cabinet as a means to add greater transparency and accountability.  A few changes to MNsure were included in the final package, including a House-supported effort to seek a federal waiver to allow the use of federal tax credits to purchase insurance products outside of the exchange; current law only allows subsidies for eligible individuals and small business for plans purchased on the exchange.  The spending bill also provides greater transparency and notice requirements of the insurance rates for products on the exchange.

The spending package contains dozens of smaller policy and spending pieces.  The Statewide Health Improvement Program (SHIP) survived an effort by House Republicans to defund the program and, in fact, was given greater authority to support efforts to address the impact of dementia and other conditions more common among elderly populations.  

Language requiring payment for services delivered via telemedicine was also included in the finance package.  A central priority of the Minnesota Hospital Association and many of its member hospitals and health systems, the law was authored by Rep. Tara Mack (R – Apple Valley) and Sen. Julie Rosen (R – Vernon Center) before being incorporated into the spending omnibus.  The final version includes provisions prohibiting health plans from excluding payment for services delivered via telemedicine if covered under a face-to-face encounter.  A provision included in the original provision to require an additional, separate payment for the originating site (i.e. where the physician or provider was located) was dropped in the face of significant opposition from the health plans and the Chamber of Commerce.

Other smaller, notable pieces of the final package include:

  • New funding of $250,000 for the promotion of advanced planning and health care directives, an initiative led by the Twin Cities Medical Society (TCMS).
  • Changes in the state’s medical privacy laws to allow a provider to release medical records from a deceased patient to another provider for the purposes of diagnosing or treating the deceased patient’s surviving adult child.
  • Language requiring notices and information to be provided to patients upon discharge from a hospital, including information on post-hospital care, counseling, etc.
  • New reporting on efforts to reduce disparities in infant mortality.
  • Expanded reporting & audit requirements for the health plans that administer the state’s health plans for public enrollees. 
  • A new integrated care for high risk pregnant women pilot program.  The intent of the new program is to improve birth outcomes and strengthen early parental resilience for pregnant women who are medical assistance enrollees, are at significantly elevated risk for adverse outcomes of pregnancy, and are in targeted populations.  The program receives $271,000 in the next biennium.
  • Establishes a working group charged with developing recommendations about opioid prescribing protocols and thresholds.  DHS is instructed to implement the programs for physicians serving public health plan enrollees, and will include notices when prescribing falls outside the standard.  
  • Full funding of $750,000 per year for the Minnesota Poison Information Center, a statewide resource housed at the Hennepin County Medical Center.

Physician Compact Signed into Law:  Minnesota the 8th State to Approve

Minnesota became the eighth state to pass the Interstate Compact for Physician Licensure, ensuring that it will become effective later this year once operating rules are adopted.  This new path to receive licensure will ease the process of licensure for physicians who wish to be licensed in multiple states.

Under the bill, SF 253, sponsored by Sen. Kathy Sheran (DFL - Mankato) and Rep. Tara Mack (R – Apple Valley), Minnesota will participate in a newly created interstate compact that will expedite the licensing process for physicians who wish to practice in multiple states.  Completely voluntarily for physicians, the commission established under the bill would serve as a "clearinghouse" that would ease the burden of seeking licensure in multiple states.  With eight states now approving the compact, an Interstate Commission is established to administer the licensing processes of member states.  It is governed by two members from each member state.

For a physician to receive state licensure through the Interstate Commission, he or she must meet a higher level than normal licensure, including being board certified and having no disciplinary actions from their home state on their record.  The next steps for the Interstate Commission will be the development of operating rules before it can begin processing licensing requests.

The bill had very little opposition as it went through the committee process and it passed both bodies with unanimous votes.  Supporters include the Board of Medical Practice, the MMA, the Minnesota Hospital Association, Mayo Clinic, Allina Health, Sanford Health, Essentia Health, Children’s Hospitals and Clinics, Gillette Specialty Healthcare, and Gundersen Health.

Medical Assistance Primary Care Payment Bump Not Included

An effort to increase physician reimbursement for services provided under state health programs was included in the Senate’s version of the HHS finance package, though it was not included in the final spending bill.  Initially introduced by Sen. Kathy Sheran (DFL – Mankato) and Rep. Nick Zerwas (R – Elk River), the proposal originally called for extending the ACA’s requirement that primary care physician services under Medical Assistance be reimbursed at the same level of Medicare.  Because of the state cost of that proposal it was greatly pared back to a modest 1% biennial increase.  Even this token funding increase was rejected by conferees.

Health Care Workforce Future Receives Attention

Bipartisan and bicameral support for expanded investments in the state’s future health care workforce made their way into a number of bills passed in the last days.   The final package of HHS spending proposals included an increase of $2.6 million each year for loan forgiveness programming for physicians and other health care providers who agree to practice in rural and underserved areas of the state.  Authored by Sen. Greg Clausen (DFL – Apple Valley) and Rep. Deb Kiel (R – Crookston), the new investments are geared toward primary care physicians.

The spending package also included new policy intended to better utilize the skills of foreign-born immigrant and aslyee physicians.  Contained in the finance bill is a $1 million each year appropriation to allow MDH to integrate these physicians into the state’s healthcare workforce.  In addition to providing support for training programs for international immigrant medical graduates, the funding is intended to help MDH develop and maintain a roster of those immigrant physicians interested in entering the workforce and develop a system to assess and certify the readiness of interested immigrant physicians.  These proposals were originally authored by Sen. Jeff Hayden (DFL – Minneapolis) and Rep. Glenn Gruenhagen (R – Glencoe).

Also noteworthy is a renewed investment in the University of Minnesota Medical School.  Designed to improve the school’s national ranking and draw down more NIH research funding, the school received an additional $30 million in funding via the higher education omnibus budget bill.  That bill also contains language requiring monthly reports by the University to the Higher Education Committees in the House and Senate regarding the Board of Regents progress in developing and implementing a plan to conduct human subject research at the University.  The U of M came under fierce scrutiny for the handling of the suicide of a subject participating in a psychiatric drug trial in 2004.  The case was the subject of a highly critical report from the Office of the Legislative Auditor who stated that the case involves “serious ethical issues and numerous conflicts of interest(s)” between the University and drug manufacturers.

Prior Authorization Reform Fails to Pass in 2015

Legislation to reform prior authorization (PA) for medications failed to pass during the 2015 session but it remains alive for next year.  Legislation introduced by Sen. Melisa Franzen (DFL – Edina) and Rep. Tony Albright (R- Prior Lake) was designed to address the flawed PA system that results in patients not getting their drugs in a timely manner.

The language from SF 934 was included in the Senate version of the HHS Budget bill up until the last night of session, but in the end was not included in the final package.  The bill would have provided more information about drug coverage to consumers prior to purchasing insurance, it would have provided more information to prescribers about why a drug was denied and what alternatives are covered, it would have shortened timelines for health plans to make PA decisions, and it would have limited formulary restrictions for covered drugs during an enrollee’s benefit year.

While the bill passed three separate committees in the Senate with bipartisan support, it never received a hearing in the House because of concerns raised by opponents that the bill would have limited health plans’ ability to control drug costs.

Supporters of the bill included over 40 advocacy groups representing physicians, pharmacies, physician assistants, and patients.  Efforts will continue over the next year to gather momentum leading into the 2016 Legislative session.  The coalition of supporters (listed on the web site fixPAnow.com) plan to meet with individual legislators and work with the media to highlight how the current use of PA is interfering with patients receiving their needed drugs in a timely manner.  This remains a top priority for organized medicine and many of the patient and disease groups in the coalition.

Status Quo for Tobacco and Nicotine Policy

Changes to the state’s tax policy regarding tobacco and nicotine died when the legislature adjourned without considering a larger tax bill.  Efforts to repeal the annual inflationary increase in the tobacco tax, lower the tax rate on the most expensive cigars, and a negative change in how e-cigarettes are taxed were considered in one or both bodies though none were passed into law.  A proposal to close a loophole that currently makes large containers of moist tobacco less expensive, a proposal supported by the Raise it for Health anti-tobacco coalition, was also left on the sidelines and not enacted.

Mental Health Infrastructure Receives Attention, Funding

Legislators from both parties and both bodies made mental health a high priority throughout the legislative session, and the HHS spending package includes an increase of $46 million in supports for mental health.

Suicide prevention efforts found new funding and policy provisions, including better data gathering and text-based prevention tools.  Mental health crisis supports received more than $8 million in state funding, as well as language requiring health plans to support crisis services.  DHS is also instructed to establish a central phone number to provide 24-hour telephone consultation for mobile crisis teams.  First episode of psychosis supports received more $250,000, and more than $800,000 was earmarked for respite care for families of children with mental illnesses.  The bill also extends Medical Assistance coverage for inpatient pediatric psychiatric treatment, though the change is not effective until July 1, 2017.

The funding bill also included increased funding for chemical dependency prevention efforts, as well as new investments in safe alcohol and drug withdrawal management programs.  Funding for communities to focus on adverse childhood experiences (ACEs) was included, though the funds are not available until the next biennium.  The bill also includes $500,000 for fetal alcohol syndrome prevention.  DHS is awarded more than $5 million to establish behavioral health care homes to focus on mental health needs, though the program is not effective until July 1, 2016.  New funding for school-based diversion for students with co-occurring disorders was also included.

Harmful Changes to Malpractice Cases Defeated at the End of Session

For the third year in a row, attempts by the trial lawyers to change medical negligence cases was defeated at the end of session.  Under current Minnesota law if a plaintiff dies before a negligence cases is completed, the case and the “pain and suffering damages” in the case go away.  The trial lawyers’ bill would have allowed those pain and suffering damages to continue even after the injured party died.  The bill would have allowed survivorship of the case.

The MMA joined with a broad coalition of health care interests, the Chamber of Commerce and others to oppose this effort that would have broaden the ability of individuals to sue for damages.  Under the bill, surviving family members would have been allowed to pursue legal actions that would “stack” damages for both pain and suffering as well as wrongful death in cases where injured party died.  A Senate amendment that was adopted over the objections of the trial lawyers improved the bill greatly, but in the end, the provision was not acted on in the House.  

Pharmacists Immunization Scope Expanded

Pharmacist’s authority to administer vaccines was included in the HHS spending package over the objections of some in the physician community.  Under the provision, pharmacists are allowed to administer influenza vaccinations to patients as young as six, and other immunizations to those as young as 13.  The law also requires pharmacists to report immunizations either to the Minnesota Immunization Information Connection (MIIC) or to the patient’s primary care physician, as well as requiring the pharmacist to utilize the MIIC to assess the immunization status of all individuals prior to administering a vaccine.  Current law allows pharmacists to administer influenza vaccines to patients ten years and older and all other vaccines to those patients 18 and older.

The language was originally authored by Sen. Julie Rosen (R – Vernon Center) and Rep. Roz Peterson (R – Lakeville).  The Senate version of the bill had been amended to limit the authority for pharmacists for flu shots and only booster immunizations once the immunization had been initiated by a physician, though that approach was rejected in favor of the more robust House version. 

Workers Compensation Reforms Enacted

Marking the first reforms of the workers compensation system in decades, the legislature passed and the Governor signedHF 2193, authored by Senator Dan Sparks (DFL - Austin) and Rep. Tony Albright (R – Prior Lake).  Passage of the bill came after months of negotiations between interested stakeholders. 

The package reflects an agreement reached between the Minnesota Hospital Association, the business community, and workers compensation insurance carriers and only applies to hospital inpatient services and supplies.  Stakeholders have been negotiating a possible bill since at least 2013 when legislation was passed instructing the Department of Labor and Industry (DoLI) to study a shift in reimbursement methodology, a study prompted by rising medical costs.

Importantly, health care services given in outpatient settings or in ambulatory surgery centers (ASCs) will continue to be reimbursed under the current "usual and customary" charge structure until at least 2017 when DoLI will have authority to pursue rules to implement a new methodology for outpatient services.  The question of adding ASCs to the package has been one of the major points of contention in recent months.  Health care interests, including the MHA, MMA, and MOS, argued that no study or attention had been paid to ASCs or outpatient services unlike inpatient hospital services. 

Under the new law, reimbursement for workers compensation treatments provided for inpatient hospital services will be shifted to the Medicare MS-DRG system. Maximum payment will be 200% of the amount paid by Medicare for the applicable DRG.  A few exceptions are allowed, including those cases where a patient's care exceeds $175,000 in medical expenses, as well as all services provided by Critical Access Hospitals.  Facilities with that federal designation will continue to be paid at 100% of usual and customary charges. 

As part of the shift to a DRG system, new prompt payment requirements are included in the package.  The bill requires payment for services or denial of the entire bill within 30 days while also prohibiting payers from requesting additional documentation.  While allowing post-payment audits by carriers, the bill also prohibits line-item adjustments by the carriers.  Furthermore, the bill requires study by DoLI on the impact of the reforms within two years of the effective date, set for January 1, 2016. 

Of note, the legislation instructs DoLI to pursue a shift to the Medicare Hospital Outpatient Prospective Payment System or other fee schedule for payment of outpatient services provided by a hospital or ASC no earlier than 2017.  The intent of this language is to encourage stakeholders to reach agreement on outpatient services prior to the 2016 legislative session, as all parties concur that a mutually-agreed upon legislative solution is preferable to a change in rules. 


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