MAO Legislative Update
March 4, 2016
Eric Dick, MAO Lobbyist
Session Set to Begin
Legislators from around the state will return to St. Paul for the 2016 legislative session on March 8 for a brief but likely frenetic period. The session must conclude no later than midnight on May 23.
The start of the session this year is later than any time in recent memory, largely due to the fact that the ongoing Capitol restoration has left almost the entire Capitol building off-limits to legislators, staff, and the public. Only the House floor will be open once the session commences, and a strict limit on capacity has been set. The Senate will hold its floor proceedings in the recently opened Minnesota Senate Office Building. The construction of the new building was the source of significant controversy in 2014 as the Republican minority attacked the building as both too expensive and unnecessary. And while DFL members have moved into their offices in the new building, the Republican Senate Caucus remains in their old offices in the State Office Building.
With the late start, the deadlines set by legislative leaders to help guide the work of the House and Senate also point to a furious pace of committee hearings. The first deadline, set for April 1, is the date by which bills must have been favorably acted upon in the policy committees of one body or the other. The second deadline falls on April 8, and is the date that those same bills must have cleared the other legislative body. April 21 is the third deadline and is the date by which all spending or tax proposals must have reached the floor of the House and Senate. The aggressive timeline will make for a very speedy start to the session.
Casting a shadow on the entire session is the looming election season. All 201 legislative seats will be up before voters in November 2016. While many observers believe both the majority GOP in the House and DFL in the Senate are in good positions to retain their majorities, a strong national election tide in either party’s favor could tip the scales in favor of either party.
Taxes, Transportation, and Bonding Likely to Dominate Session
Three issues are anticipated to dominate much of the headlines out of St. Paul during the legislative session. With House Republicans and Senate Democrats unable to reach agreement on both a tax bill and transportation plan last year, those two issues will remain front and center in 2016. House Republicans have made tax cuts a central priority for the session, though the contours of a tax bill have yet to emerge. Both parties have stated their desire to invest in transportation improvements, though the means to do so is in disagreement. Senate DFLers and Governor Dayton have expressed their support for a hike in the gas tax while Republicans have supported increased transportation spending from the General Fund or via a bonding bill.
The second year of the biennium is traditionally the year in which the Legislature considers a bonding bill, and that will be the case this year. Bonding is the means by which the state funds major projects like new or improved university buildings, municipal civic center restorations, and the like. The question this year will be how large a bonding bill will be considered. Bonding bills are often among the last pieces of a session to come together. Because passage of a bonding bill requires a two-thirds majority, proponents of the bills must find bipartisan support. As such, bonding projects in a legislator’s district are often a “chit” used to secure votes. Bonding bills are also often used as leverage for the passage or defeat of other proposals, too.
Governor Dayton has also pledged to make investments in early education a priority, though it remains to be seen if agreement can be reached on the issue. Dayton and many DFLers have supported proposals to provide universal pre-K while House Republicans have spoken of their supported for more targeted investment via expanded scholarship programs for low-income Minnesotans.
Key Issues for MAO Consideration
While it is always difficult to predict exactly which issues will garner attention at the Capitol, the MAO will be carefully monitoring action at the Legislature for a number of specific issues.
Thanks to a bipartisan agreement reached in 2011, the state’s provider tax is set for repeal on December 31, 2019. That said there has been a growing chorus of calls by some in the Legislature to rescind the repeal, effectively extending the tax indefinitely. The MAO will partner with other physician and provider groups to strongly oppose any effort to extend the provider tax.
The MAO will also continue the partnership with the Minnesota Medical Association and others to pass medication prior authorization reform. The “Fix PA Now” coalition, of which the MAO is a member, will continue to press for passage of SF 934 (Sen. Melisa Franzen, DFL – Edina) and HF 1060 (Rep. Tony Albright, GOP – Prior Lake), a bill to simplify medication PA and ensure patients get the medications they need in a timely manner. The bill passed all necessary committees in the Senate last year but did not receive a hearing in the House of Representatives. Advocates for the bill have held multiple meetings with key legislators in the House in an effort to ensure hearings in 2016.
There have been some rumors that audiologists will be pursuing legislation in 2016, though the intent of any potential legislation remains unknown. The MAO will carefully watch for bills that would change or broaden the scope of practice for audiologists at the risk of patient safety.
Budget Picture a Bit less Rosy
Officials from the state’s fiscal agency, Minnesota Management and Budget (MMB), announced a picture of the state’s budget health on February 26, and the figures represented a slight weakening of the state’s budget forecast. MMB’s latest projection estimates that the state will have a $900 million budget surplus for the 2016-2017 biennium, down from an estimated $1.2 billion surplus that had been forecast in December. The pullback in the surplus estimate, MMB reported, is due to a somewhat weakened economic outlook and slower than previously projected revenues coming into state coffers. Estimates for the 2018-2019 fiscal year are even more impacted by the slowdown, with the projected surplus down from more than $2 billion to $1.1 billion. The lower General Fund surplus figure will likely further complicate plans by the Governor and legislative leaders to make new investments in transportation and education, as well as paying for broad tax cuts.
Estimates for the fiscal health of the Health Care Access Fund (HCAF), however, took a positive turn in the new forecast. Thanks to lower expenditures, the forecast for the HCAF improved to a surplus of $610 million in fiscal year 2016 and $1.166 billion in fiscal year 2019. The surpluses in the HCAF are positive news, though legislators of both parties have too often used surplus funds to pay for purposes outside of the original intent of the provider tax, the source of funding for the HCAF.
Senate Committee Studies Prescription Drug Pricing
The Senates HHS Policy Committee convened a hearing on February 29 to consider the rising costs of pharmaceutical drugs. The hearing featured testimony from Stephan Gildemeister, the Minnesota Department of Health’s (MDH) health care economist. Gildemeister presented early results from an analysis of medical and retail prescription drug spending. The study was largely derived from data from the state’s All Payer Claims Database (APCD).
Not surprisingly, the study found that prescription drug prices are rising rapidly and consuming a growing portion of overall health care spending. Of note, the study found that spending on prescription drugs administered in a medical setting – in a clinic or hospital – is growing markedly faster than spending that is part of a clinic or retail pharmacy. Also presenting at the hearing was University of Minnesota professor Steven Schondelmeyer, PharmD PhD. Schondelmeyer discussed a number of examples of spikes in drug pricing, including the high profile case of Turning Pharma and its recent action to increase by 5,000% the price of Daraprim, a drug used to treat a parasitic infection.
A number of bills related to prescription drug pricing are likely to be introduced at the legislature in 2016. One proposal, authored by Rep. Joe Atkins (DFL – Inver Grove Heights) has already been pre-filed. Rep. Atkins’ bill would establish a program that would make drugs reimported from Canada available to Minnesotans. Another pre-filed bill would require greater reporting by drug manufacturers around “ultra-high priced pharmaceuticals,” defined under the bill as those with a wholesale cost of more than $10,000 per year or per treatment. The intent of the proposal is to bring about greater public transparency of high cost drugs. The likelihood of any of these proposals gaining traction in a short session with split partisan control remains to be seen.
Many New Faces at the Capitol
With the legislature returning to session next week a number of new legislators will be taking their first official acts as legislators. Since the end of session in May 2015 four special elections have been held to fill seats vacated by retiring legislators or, in one case, the death of a legislator.
House Republicans had a surprising win in early February when they picked up a usually reliable DFL district. Rep.-Elect Chad Anderson (GOP – Bloomington) will replace Rep. Ann Lenczewski (DFL – Bloomington), who retired in late 2014 to take a job as a lobbyist.
Rep. Elect Rob Ecklund (DFL – International Falls) will take the seat of Rep. David Dill (DFL – Crane Lake), a long-serving representative who passed away in August 2015. Rep. Ryan Winkler (DFL – Golden Valley) left the legislature last summer to move with his family to Belgium for a career opportunity and was replaced in his reliably DFL district by Peggy Flanagan (DFL – St. Louis Park). Rep.-Elect Flanagan had previously served as the executive director of the Minnesota Children’s Defense Fund.
One familiar face is among the new legislators. Former representative Jim Abeler won election in the race to succeed former Senator Brandon Petersen (GOP – Andover). A chiropractor and past chair of the House HHS Finance Committee, Abeler had retired from the House in 2014.
Also new at the Capitol this year is Emily Johnson Piper, the new Commissioner of the Department of Human Services. Commissioner Piper replaces former Commissioner Lucinda Jesson, who was appointed by Governor Dayton to a seat on the Minnesota Court of Appeals. Piper had previously served as Dayton’s general counsel and deputy chief of staff.
White Coat Day at the Capitol Set for March 23
Make plans to join your physician colleagues for the annual Minnesota Medical Association’s Day at the Capitol set for March 23, 2016. This day of advocacy and fellowship is an important effort in advancing policies that help physicians and patients, and is a great opportunity for you to directly engage with your legislators on the issues facing organized medicine. Following presentation from key legislative leaders, individual meetings will be scheduled for you and your local colleagues with your Senator and Representative.
With most of the Capitol closed to the public due to ongoing construction, our 2016 Day at the Capitol will begin away from the Capitol building. Like last year, we’ll start our day with a noon lunch at the DoubleTree by Hilton St. Paul Downtown where we’ll hear from key legislative leaders and MMA advocacy staff. From there we’ll take the light-rail Green Line to the Capitol for meetings with your own elected officials before returning to the DoubleTree for a late afternoon reception and debriefing.
The “White Coats Day” at the Capitol is a key piece of the organized medicine’s advocacy strategy, and your participation is important to our efforts. Please make plans to join us for this fun and enjoyable day. More information and registration details are available here.
Read more →