LGN 2007 Session Wrap-Up
During the final days of session a semicircle of chairs formed outside Governor Pawlenty’s office as members of the media waited anxiously with legislators, staff and lobbyists for the traditional handshake signifying that a budget compromise had been reached between legislative leaders and the Governor. Although meetings continued throughout the weekend well into the early morning hours, by Monday it became apparent that despite lengthy negotiations all the kinks could not be ironed out in the bulk of the finance budget bills. Without the traditional handshake, stakeholders questioned whether it was feasible to successfully complete work. Still legislative leaders remained confident that the Governor would consider the budget proposals they had constructed.
In the last three budget cycles, the legislature has failed to complete work by the constitutional deadline to adjourn. This year the push to resolve budget issues took on a new urgency as majority leadership in the House recognized that a special session would be highly detrimental in the 2008 elections. During negotiations it became vividly apparent that Speaker Margaret Anderson-Kelliher was not going to tolerate a dragged out battle. In what many saw as one of the most memorably conclusions in recent years, by midnight on Monday the House and Senate completed their work on all major funding provisions.
In the end the legislature presented the Governor with the following budget proposals:
- $11.1 billion E-12 Education package including levy authority for certain districts;
- $3.16 billion package for Higher Education including tuition increase controls;
- $3.8 billion Transportation “lights on” funding proposal;
- $11.5 billion for Health and Human Services, including state health care expansion and nursing home funding increases;
- $164 million Tax proposal including expansion provisions for Thomson West and the Mall of America and an inclusion for inflation in the state budget forecast (a provision that will likely draw a veto from the Governor);
- $716 million proposal for State Government Finance allowing for a study of State Document Preservation; and,
- Jobs and Economic Development funding at nearly $419 million providing for a $1 million per year increase in funding to the Boys and Girls Clubs. The Senate was also able to complete work on a secondary $334 million bonding bill but the House failed to act before adjourning.
Although a concrete compromise was not reached on all the proposals contained within the budget bills, both sides remain confident that the bulk of necessary funding provisions will be signed into law avoiding the need for a special session.
Based on the February forecast, the state had an expected budget of $34.57 billion over the 2008-09 biennium. Taking into consideration revenue projections of $33.6 billion, the budget surplus carried over from the current biennium of $2.1 billion and reserve revenue, the state estimated that total resources available for 2008-09 would near $35.7 billion. The major discrepancies between the Governor’s budget recommendations and the outcome of the finance budget bills occurred within E-12 Education and Health and Human Services appropriations. When all counts were tallied the legislature funded $2.6 billion under the Governor’s budget recommendation for K-12 and $1.9 billion over the Governor’s recommendation for Health and Human Services. Taking into consideration that the legislature failed to conclude work on a Transportation Appropriations Bill and a budget year Bonding Bill, coupled with the likelihood that the Tax Bill will be vetoed, it is estimated that the legislature will have an additional $500 million to $1 billion to work with during the 2008 legislative session. The extra dollars will come in handy as the legislature attempts to fill the gaps created, however, that also means the contentious issues sidelined this year will be back on the table.
In all reality, the 2007 legislative session will likely not be remembered by Minnesotans for the antics on and off the floor in the waning moments, or the vetoes issued by the Governor, but rather one key provision that crossed party lines. After several years of failed attempts, Minnesota will go smoke free this fall. Still legislators will have their work cut out for them when they return for the 2008 Legislative Session on Tuesday, February 12, 2008 to address bonding and supplemental funding issues with the potential to readdress issues vetoed by the Governor over the next couple days.

2007 Session Health Report
Throughout the 2006 election cycle, candidates on both sides of the aisle campaigned on platforms featuring comprehensive proposals to expand access, maintain quality and contain the rising cost of health care. With Democrats gaining control of the House and padding their majority in the Senate, along with the governor expressing support for providing health coverage for children in December, many political observers expected ambitious expansions of public programs to provide coverage to the uninsured.
High expectations, however, underwent an inevitable decent as freshman legislators and newly minted Democratic leaders recognized that any attempt to overhaul the health industry was going to require more time, preparation and input from the public before moving forward, thus setting the stage for what may be an active 2008 legislative session.
In the initial health spending bill, House and Senate DFLers opted to craft an omnibus health bill rolling back cuts to MinnesotaCare and other public programs implemented in 2003 and 2005, authorizing a 3 percent Cost of Living Adjustment (COLA) increase and commissioning a variety of study groups looking at different health reform proposals.
Due to the volume of public program expansions and their adverse long term fiscal implications, Governor Tim Pawlenty promptly vetoed the initial proposal in early May, sending it back to the legislature for further review. Pawlenty specifically asked legislators to cut up to $200 million out of its initial request.
Subsequent deliberations exposed the significant philosophical disparities between the Governor and the Senate with regard to health care reform. The views of House health conferees were in large part muted primarily because of recalcitrant personalities within the other negotiating parties.
The final product of the compromise reflected the proverbial middle ground that some of the more moderate members of the legislature promised to deliver. The Health and Human Services Omnibus Spending Bill, which the Governor’s office is currently reviewing, spends about $10.2 billion in the current biennium, and authorizes a number of expansions to MinnesotaCare that legislators anticipate will result in approximately 56,000 new beneficiaries, 37,000 of whom are children.
The bill authorizes two percent Cost of Living Adjustment (COLA) increases in 2008 and 2009 for long term care facilities across the state, which left several legislators with multiple nursing homes in their districts under whelmed. Hospitals will receive some financial relief from one time Federal dollars via the Medicaid disproportionate share hospital (DSH) program, which provides financial support to hospitals serving a significant number of low-income patients with special needs.
Some hospitals will also receive financial assistance via the Medical Education and Research Costs (MERC) fund, which was established in 1996 to compensate hospitals and clinics for a portion of the costs of clinical training. These costs had traditionally been covered by teaching facilities charging higher rates for patient care; however, third party payers in recent years had become less willing to pay the higher charges at teaching institutions, leaving teaching facilities at a competitive disadvantage.
Early in the session, there was talk about authorizing a statewide uncompensated care fund; however, a lack of revenue prevented this vision from becoming policy. Additionally, health committee members have maintained that a large portion of uncompensated care can be alleviated by ensuring that all Minnesotans have some sort of health insurance. Missing from this discussion was the additional challenge health providers are experiencing from the low reimbursement rates offered by public health programs.
The Minnesota Medical Group Management Association (MMGMA) took the lead in advancing legislation that clarifies a current law requiring health care providers and health plan companies to provide information to consumers on payments received or provided and enrollee costs.
Originally introduced by Rep. Julie Bunn (DFL-56A) and Sen. Linda Berglin (DFL-61) in the Senate, the section changes the terminology in current statute from “reimbursement” to “allowable payment” and requires information on the amount due from the enrollee and enrollee out-of-pocket expenses to be provided in the estimate. If a consumer does not have health insurance, the health care provider must give the consumer a good faith estimate of the average allowable reimbursement the provider accepts from private third-party payers for the services specified by the consumer as well as the estimated amount the non-covered consumer will be required to pay.
The legislature stuck to its pledge to include legislation streamlining the administrative aspect of the health care delivery system by adding a provision requiring the state to develop uniform billing forms and coding requirements to be used by all payers and providers – a proposal that has also gained the support of the Governor.
Policymakers are hoping this section will result in replicating a similar system developed in Utah that allows the many different billing systems used by doctors, insurers and hospitals to communicate with one another statewide. Additionally, the state’s competing insurers worked together to cut a list of 900 codes for accepting or denying medical claims down to 90 with common definitions. In subsequent years, Utah has been largely immune to the staggering increases in health premiums that other states have endured.
The omnibus bill also included legislation establishing a system requiring dispensers of controlled substances to electronically report specified information to the Board of Pharmacy. This proposal was crafted in conjunction with the National All Schedules Prescription Electronic Reporting Act (NASPER), and includes an amendment prohibiting the Minnesota Board of Medical Practice from using information collected in the registry to prosecute anyone who prescribes the medication. The amendment came in response to concerns that health care providers would feel pressure to under-prescribe medications to patients to avoid arrest, however, legislators have heavily emphasized that the intent of the bill is to go after people who are abusing or selling prescription drugs.
The provision relies exclusively on federal funding, however there have been rumors circulating that there are no federal funds available. If this is the case, the NASPER bill would not be implemented unless the state provides funding in a future biennium.
During the health spending bill’s review on the Senate floor, Senate Health and Human Services Budget Division Chair Linda Berglin (DFL-61) added a provision authorizing a two year moratorium on the construction of any radiation facility located in 11 counties across the state. The new policy would not apply to the relocation or reconstruction of any facility owned by a hospital if the relocation or reconstruction is within one mile of the existing facility.
All of the contents with the omnibus bill that come with a price tag, however, remain tentative as the Governor reserves the right to veto any line item within the bill which he does not like.
Missing from the Health and Human Services Omnibus legislation was a bill requiring health plans to cover the cost of language interpreters. In spite of hospitals, providers and health plans reaching a compromise on the measure, the language interpreter bill was removed from the health omnibus bill in response to a veto threat.
The compromise included a provision authorizing an Interpreter Services Work Group to develop findings and make recommendations regarding access to and quality of interpreter services. This veto threat came in spite of widespread bipartisan support for the measure, which was viewed by many health providers as a legislative priority. Remaining undeterred, supporters of the language interpreter bill will continue their campaign to advance this measure in 2008.
On a more positive note, Gov. Tim Pawlenty signed the Freedom to Breathe Act into law this legislative session, making Minnesota the 20th state to institute a comprehensive smoking ban at places of employment to include bars and restaurants. The law, which may very well become the most prominent new measure to pass during the 2007 legislative session, will officially go into effect on October 1.
The Freedom to Breathe Act marks a significant victory for a coalition of health providers, health plans and concerned citizens who have worked tirelessly with cities, counties and state legislators garnering support for a ban. This effort has entailed advancing smoking bans in cities and counties across the state where voters could see that such a policy would prove to be a family friendly, healthy alternative to unnecessarily exposing employees and consumers to secondhand smoke.
Proponents of a statewide proposal effectively conveyed that the Freedom to Breathe Act is a common sense initiative that Minnesotans have asked for and patiently waited for. In a recent study conducted by Clearway Minnesota, 69 percent of Minnesotans said they would support a comprehensive statewide smoke-free law that includes bars and restaurants.
In the past, opponents have successfully stalled legislative efforts citing personal rights and potential small business harm. Those arguments, however, have lost credibility as other states experienced revenue growth in the hospitality industry after comparable bans were implemented.
The legislature also passed a bill requiring every hospital, outpatient surgical center and nursing home across the state to adopt a written safe patient handling policy establishing the facility’s plan to achieve by January 1, 2011, the goal of minimizing manual lifting of patients by nurses and other direct patient care workers by utilizing safe patient handling equipment. In conjunction with this undertaking, the state has allocated one million dollars over the biennium to be used for grants to aid providers in purchasing any necessary equipment to comply with the new regulations. The grants will be for up to $40,000 per applicant.
Another bill that did not pass, but will likely resurface in 2007 implements a number of recommendations made by the Workers’ Compensation Advisory Council including the reduction of reimbursement and fee schedules for workers compensation for all hospitals within the 11 county metro region, and seeks to require physicians to use the fee schedules utilized by the Centers for Medicare and Medicaid Services for workers compensation.
This bill did not receive a hearing in the House before the policy deadline, but the Department of Labor and Industry is planning to assemble a group over the summer to review this issue. This group will be just one of several planning to meet between legislative sessions that members of the health provider community should be aware of.
What Lies Ahead
Although the legislature has adjourned for the 2007 session, the work is just beginning for health care providers. Representative Huntley is planning to facilitate a series of meetings where citizens and legislators will look at comprehensive and pragmatic solutions to obtaining the goals legislators campaigned on last year.
Some ideas that are sure to resurface will involve capping health premiums, authorizing certificates of need and potentially expanding the hospital moratorium process to all health care providers. Legislators have opined in open forums about whether diagnostic imaging facilities and ambulatory surgical centers contribute to the rising cost of health care, and whether the growth of new freestanding surgical centers are part of the problem.
These accusations were amplified in February when the Minnesota Department of Health released a report declaring an overabundance of decisions to build medical facilities based on making money for hospitals and doctors vice what’s best for patients.
With these accusations fresh in the minds of influential policymakers across the state, it is imperative that the health care providers who wish to open their own practices step forward to tell their story.
Another initiative sure to generate conversation over the summer is the proposal to advance a constitutional amendment that grants every Minnesotan the right to affordable health care. Introduced by Rep. Huntley, the proposed amendment, which would appear on the 2008 ballots if passed, specifically states “that every resident of Minnesota has the right to health care and that it is the responsibility of the governor and the legislature to implement all necessary legislation to ensure affordable health care.”
Supporters have stated that comprehensive reforms are necessary in the health care industry to help contain the rising cost of care, and a constitutional amendment would require policymakers to take action. Opponents of the constitutional amendment have voiced concern that such an amendment may lead to a government run single payer health care delivery system which has delivered adverse, and in some cases catastrophic effects in other countries.
Health care providers should look at the aforementioned summer forums as opportunities to ensure they have a seat at the bargaining table when discussions about the health care industry are held as their level of involvement and expertise is a crucial necessity. As more information is obtained about these informational forums, we will work to create opportunities for health care providers to weigh in.

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