MAO Legislative Update
March 15, 2016
Eric Dick, MAO Lobbyist
Five Weeks Left; Larges Differences Remain between House and Senate
The legislature has five weeks to go before their constitutional deadline of May 23 and very little agreement has been reached on the major issues for the year. Both the Senate and the House entered session with the hope to address a few bill issues like funding for our road and bridges, support for a capital bonding bill for needed infrastructure, and finding ways to use the state's $900 million budget surplus. The challenge, however, is that both sides have very different ideas on how to address those issues.
The furious pace of the legislative session continued in recent weeks as the Legislature passed the second committee deadline. By April 8 all bills had to have passed all non-finance or tax committees in both bodies in order to be alive. Because of this the universe of viable bills has shrunk dramatically. With few exceptions, bills that have not cleared the policy committees in both the House and Senate are likely dead.
The third and final deadline is April 21. By that date that bills that include tax or spending provisions must have cleared all committees and be on the House and Senate floors for consideration. Once bills pass both body’s floors, and if they have differences, conference committees are established with members from the Senate and the House to negotiate an agreement for a final bill.
At the halfway point in session the challenge of major philosophic differences between the House and Senate remain. With this being an election year for all 201 legislative seats, many legislators want to have something to show the voters what they accomplished this year. For some, stopping action on what the other party wants is better than passing something they believe is bad.
Whether legislative leaders are able to put differences aside and find agreement is still unknown. Many years when it looked like nothing would get done, agreements quickly came together near the end. That could still yet happen this year.
Prior Authorization Reform Heard in Senate
The effort to reform the laws that govern prior authorization for medication took a step forward in the Minnesota Senate. Dania Kamp, MD, a family physician from Moose Lake testified before the Senate Health & Human Service Finance Division on Wednesday April 13 in support of legislation to fix the flawed medication prior authorization process. She was joined by a parent from Rosemount whose daughter suffers for severe seizure disorders and has had many difficulties getting the medications she needs because of prior authorization. The legislation is designed to reduce the administrative hassles caused by prior authorization and to ensure that patient can get their needed medication in a timely manner.
Authored by Sen. Melisa Franzen (DFL – Edina) SF 934 is legislation developed by the Minnesota Medical Association and supported by the dozens of physician and patient advocacy groups – including the MAO – to provide more transparency to patients regarding what medications are covered by their insurer, to reduce administrative hassles for prescribers, and to limit the number of times a prior authorization can be requested. The Coalition to Fix PA have more than 45 organizations supporting the bill physician groups, pharmacy groups, hospitals, and patient groups.
Kamp told committee members her perspective as a rural physician and how the growing hassles of insurance company prior authorizations are making it difficult for her patients to get the treatments they need. In addition, these hassles are one of the key reasons we are seeing a growing level of burnout by physicians.
The Senate bill received four hearings in the Senate in 2015 but failed to receive a hearing in the House last year. Despite pressure on the House to hear the bill again this year, it again did not get heard. Follow the hearing on Wednesday the language was recommended for inclusion in the Omnibus Health & Human Services Budget Bill. While SF 934 as a stand-alone bill no longer move forward, the hope is that the language will be included for discussion in budget conference committee with the House.
House and Senate Set Budget Targets
To help facilitate its work on budget bills every year both the House and the Senate set what are called budget targets. These are overall spending levels set for each portion of the state budget.
The House set its budget targets for the health and human services programs on Friday April 8 at zero ($0). This means that the overall spending levels for the 2016 session will include no new net spending. The target does specifically allow the re-purposing of existing funding to allow the moving of existing funds to for some new programs, as long as spending in other HHS programs are reduced. The House recommends reducing spending on MNSure administrative costs by more than $11 million and frees that money up for other programs.
On Wednesday April 13 the Senate announced its budget targets for 2016 that were much higher than the House. They set aside $43.3 million of new spending for health and human services programs. The specifics of how this money will be spent will be released early in the week of April 18 when the Senate will release its omnibus HHS budget proposal. It is expected that the Senate bill will include increasing eligibility in the MinnesotaCare program from 200 percent to 275 percent of the federal poverty level.
Once both bodies establish their budget targets they will process and pass their specific budget bills. From there the House and Senate leadership will need to agree to joint budget targets before bills can be reconciled in conference committee and a final budget can be passed. All of this work must be complete before the Constitutional deadline to complete their work of May 23.
Senate Committee Approves Reinstatement of Provider Tax
The Senate Health & Human Services Finance Division voted to support reinstating the 2 percent provider tax that is scheduled to sunset at the end of 2019. This provision will most likely be included in the omnibus HHS finance bill they release next week.
This is the second hearing the Senate has had on legislation to reinstate the provider tax (Provider Tax language). This is one of the recommendations that came from the Health Care Financing Work Group that met during the summer and fall of 2015.
Under the most recent version of the bill the tax would permanently be set at 2 percent, but the uses of the funds would be restricted to “subsidizing health care coverage for eligible low-income Minnesotans.” Other programs currently funded by the 2 percent tax, such and the Office of Rural Health, the State Health Improvement Program or SHIP, the Medical Education and Research Cost fund or MERC, would be eliminated.
The bill also creates two new “incentive programs” to increase payments to physicians and other health care providers. One program is a quality incentive pool based on goals and measures established by the Commissioner of Human Services. The second program is an uncompensated incentive pool based on the proportion of uncompensated care rendered by specific providers. These payments would only be made if the Health Care Access Fund is running a surplus.
Supporters of this proposal argue that without the provider tax the future of the MinnnesotaCare program and other efforts to provide health coverage for low-income Minnesotans are at risk. Critics question why we are reinstating a tax at a time when both the General Fund and the Health Care Access Fund are both running large surpluses. Many strongly believe that the provider tax is too selective and adds to the overall cost of providing care. Others strongly support the MinnesotaCare program and believe we need to keep the tax to ensure patients can afford coverage.
Funding for Family Medicine Residency Moves Forward
Legislation to provide additional money for family residency programs that focus on training rural physicians passed another hurdle when it was heard in the Senate Health & Human Services Finance Division on Monday April 11 and was recommended for inclusion in the final budget bill.
The bill, SF 2442, authored by Sen. Kathy Sheran (DFL – Mankato) reinstates a $1 million grant that was cut by the Legislature in 2015. This grant will go to family medicine residency programs that are located outside of the twin cities that focus on serving rural communities. The program has to place at least 25 percent of their graduates in rural areas to qualify for the funding. The grants will be used to expand training for family medicine residents and recruit and retain faculty. Under the criteria in the bill, the money will go to the programs in Duluth, Mankato, and St. Cloud.
The funding was cut in 2015 following concerns raised by the Minnesota Office of Rural Health that the funds were being used to expand the size of the residency programs. After meetings between the office and the training programs it was agreed that the money should be restored with clearer criteria for measuring success.
The companion bill in the House, HF 2628 (Rep. Matt Dean – GOP, Dellwood), has passed the Health & Human Services Reform and was heard in the House Health & Human Services Finance Committee on Tuesday April 12, though it was not included in their budget proposal.