Friday, April 17, 2015
House Committee Unveils HHS Finance Omnibus
As the Legislature moves into focusing its efforts on passing the state's biennial budget, the House HHS Finance Committee unveiled its spending package on April 16. The354 page bill will be the subject of a number of committee hearings next week as the bill is "marked up" or amended before being sent to the House floor. Authored by Rep. Matt Dean (R - Dellwood) with a total price tag of $11.6 billion, the bill contains all state spending on HHS programming. This equates to a $1.1 billion cut from projected spending for the next two years.
One of the central pieces of the spending package is repeal of the MinnesotaCare program, a health insurance program that serves low income Minnesotans from 138-200% of poverty and replacing it with what is being called MinnesotaCare II. In 2013, the DFL legislative majorities expanded the program to qualify it as a Basic Health Plan (BHP), a program recognized under the ACA. Rep. Dean and many Republicans have argued that the current program is too expensive and unsustainable.
Under Rep. Dean's bill, MinnesotaCare is replaced by MinnesotaCare II. This proposal would shift enrollees to commercial health insurance products purchased on MNsure, the state's health insurance exchange. Importantly, the shift of enrollees to commercial insurance products would be coupled with a sliding scale of state tax credits to individuals and families to subsidize the purchase of enhanced silver-level health insurance products. It remains unclear at this point how affordable the plans would be for many low-income Minnesotans; some have suggested that a family of four would see a yearly increase of $800 in premium costs alone. Of note, physician services provided under these plans would reimburse at commercial rates and not the anemic reimbursement under MinnesotaCare or Medical Assistance. Rep. Dean has stated that his bill would allow for an accelerated repeal of the provider tax. Current law repeals the tax on 12/31/2019, and a related bill by Rep. Dean would move that repeal up by one year to 12/31/2018.
Other notable spending and policy components in the bill include:
- A requirement that medical services provided via telemedicine be reimbursed at the same rate as services provided in person. This piece was a major priority for the Minnesota Hospital Association and many clinic and hospital systems.
- Many changes to MNsure, the state’s insurance exchange. The bill would require DHS to seek a waiver from the federal government to allow individuals to purchase health insurance products directly from health plans and still be eligible for tax credits currently only available on purchases made on the exchange. Other provisions in the bill serve to cap the salary of MNsure officials, make the MNsure executive director an appointee of the Governor, and begin to move the state away from MNsure towards a federal exchange.
- A requirement that DHS establish a web-based interactive application to help consumers compare local pharmacy prices for the most commonly prescribed drugs.
- New tools and requirements for DHS to monitor public health care programs to ensure that only eligible enrollees are receiving services. The nonpartisan Office of the Legislative Auditor (OLA) has published a number of reports in recent years pointing to a sizable number of ineligible enrollees receiving benefits.
- Additional reporting requirements on the managed care organizations (MCOs) that manage the state’s Prepaid Medical Assistance Programs (PMAP) on behalf of the state. The new requirements include reporting on administrative expenses, funds spent on lobbying, marketing, and salaries for health plan executives.
- Expands the authority of daycares, recreation centers, colleges and universities, and other places to stock and use epinephrine auto-injectors (“Epi-Pens”). The bill requires regular training in the use of the devices for employees while providing “Good Samaritan” liability protections for their use.
- A requirement that patients be given certain information if a prenatal diagnostic test indicates the presence of a trisomy condition. The MMA and others opposed this provision as intrusion into the physician-patient relationship.
- A number of provisions related to mental health, including mandated Medical Assistance coverage of pediatric resident psychiatric treatment, improved data collection around suicides, an increase in reimbursement for those who provide chemical dependency treatments, and a pilot program for the diversion of low level criminal offenders with mental illness from jail to treatment centers.
- Enhanced authority for pharmacists to administer vaccines. Current law allows pharmacists to administer only influenza vaccines to patients ten and older. Under this provision of the funding bill, pharmacists would be allowed to administer influenza vaccines to patients as young as six while allowing them to administer other vaccines to patients 13 and older. The language also requires pharmacists to both consult the MIIC prior to administering the vaccine and enter it following administration.
Also noteworthy are the things that are not included in the budget. The budget does not include any increases in reimbursement for primary care services. Many physicians groups sought to extend the ACA’s primary care “bump” that brought Medical Assistance reimbursement up to that of Medicare. That enhanced payment ended in December 2014. The funding proposal also eliminates the entire appropriation for the Statewide Health Improvement Program (SHIP), a program that offers grants to schools, cities, and counties to invest in public health infrastructure. First established in 2009, SHIP has been used to fund smoking cessation programs, expand farmers markets, and reduce obesity rates.
The Senate budget proposal is likely to be announced early next week, and is certain to include significantly more spending on these programs. After passage by both bodies, the differences will be negotiated in a conference committee of members from both bodies.
Primary Care MA Payments
As mentioned, the House HHS Finance Bill does not include any increase in physician payments under MA or MinnesotaCare. In the Senate, however, we are still trying to get an increase included in their bill. Sen. Kathy Sheran's (DFL - Mankato) bill to reinstate the primary care increase that was funded in the ACA for two years. It was heard in the Senate HHS Finance Division on April 15 and laid over for possible inclusion in the omnibus bill. Surprisingly, the fiscal note prepared by the Department of Human Services was nearly $132 million over two years. While there is sympathy to include some type of increase for primary care services, this cost is considered too much to be included. Efforts continue to scale the bill back in order to achieve some level of increased payments for these services.
Compact Bill on the Floors
Following a short, unexpected detour to the House Ways & Means Committee, the Interstate Medical Licensure Compact now awaits action on the floor of both the House and Senate. The financing of the bill was the subject of some discussion in the Ways & Means Committee, as the fiscal note prepared for the bill originally showed some costs to the Board of Medical Practice. Following additional discussion, the BMP determined that any additional costs could be absorbed through its current appropriations and license fees.
Little opposition has come forward on the bill thus far. The bill has a wide coalition of supporters, including the Minnesota Medical Association, Minnesota Hospital Association, Allina Clinics, Mayo Clinic, Gundersen Health System, Essentia Health, and others.
Legislators Consider E-Cigarette Tax Cut Proposals
The tax levied on e-cigarettes would be rolled back under a bill considered in the House Tax Committee this week. The House bill, HF 2182, is authored by Rep. Greg Davids (R - Preston), and was heard on April 16. The Senate bill, SF 2025 (Sen. Lyle Koenen, DFL - Clara City), had been scheduled for a hearing but was removed. Many expect it to be rescheduled soon.
Current law taxes e-cigarettes and the e-cigarette liquid used in the devices at a rate of 95% of the product’s wholesale value. Under the bill, the tax would be based upon the volume of liquid nicotine. The proposal is widely seen as benefiting those large tobacco manufacturers who sell the "closed system" e-cigarette devices sold in gas stations and convenience stores. Conversely, the bill would likely increase the tax rate on devices sold in smaller, independent e-cigarette retailers. Anti-tobacco groups have been highly critical of the bill, as the law would cap the tax going forward, while current law allows the tax to grow as the price of the product increases. The Raise It for Health Coalition, a coalition of many health-related groups, also noted that these same devices are far more likely to be used by children and adolescents due to their wide availability.
Tobacco companies such as RJ Reynolds and Altria dominate the e-cigarette market in the United States, particularly in the "closed system" e-cigarette market.
Prior Auth Bill Receives Finance Hearing
The effort to reform the prior authorization process took another step forward when the bill was heard in the Senate HHS Finance Committee on April 17. As was expected, the bill was held over for possible inclusion in the Senate's HHS finance omnibus where it is expected to be included when it is unveiled early next week.
During the last committee stop, the bill was further amended to address concerns raised by the Minnesota Council of Health Plans and the Department of Human Services. The heart of the bill remains, and would represent a significant reduction in administrative burden for prescribers while adding important patient protections. The amendment changes some of the timelines for action by health plans included in the original bill, and narrows them to only apply to prescription drugs. The amendment further clarified that a change to a generic drug from a brand name pharmaceutical is not considered step therapy for the purposes of the bill.
The House version of the bill did not receive any hearings. Given that the language is only contained in the Senate’s version of the HHS Finance omnibus, the bill will be considered as part of the conference committee hearings on the overall HHS budget.
Senate Higher Ed Budget Funds Residency & Medical Education Programs
The Senate Higher Education & Workforce Development Budget Division announced its budget package earlier this week, and it includes significant investments in medical education, residencies, and research. Included in the budget proposal is $346,000 each year for the St. Cloud Hospital’s family medicine residency program, $467,000 each year for the United Hospital's family medicine residency program, and $645,000 each year for Hennepin County Medical Center's family medicine residency program.
Similar to Governor Dayton’s proposal announced earlier this year, the Senate bill would provide $25 million in additional funding of the University of Minnesota Medical School’s research programming during the next biennium. The bill also provides for grants for research into spinal cord injuries and traumatic brain injuries. The University of Minnesota and the Mayo Medical Foundation also receives just under $7.5 million to fund a joint partnership in genomics research.
In a creative attempt to capture more funding, the bill also authorizes the University to refinance the existing bonds for the construction of TCF Bank Stadium with the savings earmarked for the predesign and design of improved health education and clinical research facilities of the University of Minnesota Medical School and the Academic Health Center.
Workers Compensation Reforms Introduced
A flurry of negotiations preceded the introduction of a package of worker's compensation reforms. The bills,SF 2056 and HF 2193, were introduced on April 13 and are authored by Senator Dan Sparks (DFL - Austin) and Rep. Tony Albright (R – Prior Lake). Given the late date of introduction, the bills will take a slightly circuitous route through the legislative process.
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 2013 when legislation was passed instructing the Department of Labor and Industry (DLI) to study a shift in reimbursement methodology, a study prompted by rising medical costs.
Importantly, health care services provided in outpatient settings or in ambulatory surgery centers (ASCs) will remain unchanged until at least 2017 when DLI will have authority to pursue rules to implement a new methodology for other outpatient surgical 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 Minnesota Orthopaedic Society (MOS), argued that no study or attention had been paid to ASCs or other outpatient surgical services unlike inpatient services.
Under the proposal, 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 expense, 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 DLI on the impact of the reforms within two years of the effective date, set for January 1, 2016.