Governor Tim Pawlenty recently outlined his Administration’s goals with regard to health care policy, calling for universal health coverage in Minnesota, a statewide smoking ban, a ban on prescription drug advertising, financial incentives to providers who use electronic medical records and a number of other changes to the health care industry.

According to the Saint Paul Pioneer Press, Pawlenty stated that Minnesota’s long term goal should be universal coverage. While he could see where a state mandate might be helpful, the governor noted that there are a number of steps that must be taken in reaching this objective.

As a starting point, he urged lawmakers to advance legislation providing health coverage to the 70,000 children statewide who currently lack benefits. Rep. Paul Thissen (DFL-63A) and Sen. Yvonne Prettner Solon (DFL-7), who has been mentioned as a possible chair of the Senate Health and Family Security Committee in 2007, have each championed this proposal in their respective chambers during previous legislative sessions.

The governor also called for more accountability from health plans, saying that the state must determine whether Health Maintenance Organizations (HMOs) have been successful at controlling costs and improving the quality of health care. He also voiced support for authorizing a uniform system of billing codes among insurers to reduce administrative costs and delays.

Restating a goal from his first term in office, Gov. Pawlenty called for more progress in paying doctors and hospitals based on performance and quality vice the volume of procedures. Specifically, his agenda stated that doctors should be rewarded for low cost and high quality.

Throughout the campaign trail, many DFL candidates listed expanded access to quality health care as a primary goal in Minnesota. At the beginning of the 2006 legislative session, the Senate DFL Caucus called for the state to use a current surplus in the Health Care Access Fund to restore cuts made to state run health programs in 2003 and 2005. Given the bipartisan support for a common goal, there is a good chance that the 2007 legislative session may be defined by significant reforms to the health care industry.

2006 Election Results

As prognosticators and polls alike have suggested for the past year, the 2006 elections saw a vast number of incumbents lose their seats, nearly all of which belonged to the Republican Party. As this article goes to print, the Democrats have gained more than twice the number of seats they needed to gain control of the House of Representatives, and currently hold a larger majority than Republicans ever enjoyed during their 12 years in control. Additionally, Democrats are poised to gain control of the United States Senate. Sen. Amy Klobuchar soundly defeated Rep. Mark Kennedy by nearly 20 percentage points making her the first female U.S. Senator elected in Minnesota, and Retired Army Sergeant Major and teacher Tim Walz upset Rep. Gil Gutcknect in Minnesota’s 1st District.

In Minnesota, Gov. Tim Pawlenty overcame the Democratic tide, narrowly beating Attorney General Mike Hatch, though he was the only Republican reelected in a statewide race. The Republican Party was also able to maintain control of the 6th Congressional District with Michele Bachmann defeating Patty Wetterling in an exceptionally nasty contest that set a state record for spending on a House race.

Minnesota’s Senate Democrats were able to add to their majority by tentatively picking up six seats in this election. The big news of the night was the loss of Senate Majority Leader Dean Johnson. Despite the loss of Johnson and another Democratic Senator the Senate Democrats were able to increase their majority by defeating seven incumbent Republican Senators and by picking up an open seat, leaving the Senate with approximately 44 Democrats and 23 Republicans. The incumbent State Senators who were defeated include:

Carrie Ruud (4- R)
Cal Larson (10-R)
Dallas Sams (11- DFL)
Dean Johnson (13- DFL)
Sean Nienow (17-R)
Mike McGinn (38-R)
Bill Belanger (40-R)
Mady Reiter (53-R)
Brian LeClair (56-R)

Democrats took control of the Minnesota House, picking up around 19 seats. Going into the election the House was comprised of 68 Republicans and 66 Democrats. It looks like the House Democrats were able to defeat twelve Republican incumbents and pick up six open seats giving them a stunning 85-49 seat majority. The incumbents who were defeated in the House were:

Judy Soderstrom (8B-R)
Paul Gazelka (12A-R)
Greg Blaine (12B-R)
Pete Nelson (17B-R)
Ray Cox (25B-R)
Greg Davids (31B-R)
Lloyd Cybart (37A-R)
Tim Wilkin (38A-R)
Duke Powell (40A-R)
Phil Krinkie (53A-R)
Mike Charron (56A-R)
Karen Klinzing (56B-R)

Access election results.

Many of the aforementioned changes have a significant impact on the makeup of the House and Senate committees overseeing health care policy and financial matters.

Minnesota Senate

Before a single vote was cast in the 2006 Election, the Minnesota Senate’s health care committees were already poised to bid farewell to three very experienced legislators with the retirements of Becky Lourey, Steve Kelley and Sheila Kiscaden. Minnesota voters also relieved Senators Sean Nienow and Brian LeClair of their duties as policymakers, creating two additional vacancies needing to be filled before January.

Sen. Yvonne Prettner Solon (DFL-7) is widely expected to chair the Health and Family Security Committee, and Sen. Linda Berglin (DFL-61) is expected to continue guiding the health care budget through the legislative process. With so many candidates vowing to make health care reform a priority on the campaign trail, there may be an extensive waiting list to fill the departing legislators’ shoes. Sen. Tarryl Clark (DFL-15) and newly elected Sen. Kathy Sheran (DFL-23) are among those who have expressed interest in serving on the Health and Family Security Committee in the past. Sen. Paul Koering (R-12), who served on the Senate Health and Human Services Budget Division last year, may also gain a seat on the committee.

Minnesota House of Representatives

When the House of Representatives convened in 2006, there were a few certainties most political observers could agree on: Fran Bradley, Char Samuelson and Barb Goodwin would not be returning and a Democrat-controlled legislature would result in Rep. Tom Huntley (DFL-7A) holding a gavel. One relevant question that will be answered in the next few weeks will be whether House Democrats break up the Health Policy and Finance Committee into two separate groups. If this is the direction Democrats choose to go, Huntley may assume responsibilities over the financial committee while Rep. Mary Ellen Otremba (DFL-11B) will most likely take over the Policy committee.

What most political observers didn’t anticipate was that Tim Wilkin’s tenure as a state legislator would come to an end. Health Policy and Finance Committee member Duke Powell was also defeated by Democratic challenger Will Morgan in District 40A. With Democrats enjoying an 85-seat majority, chances are Wilkin and Powell will not be the only Representatives leaving the committee. Rep. Patti Fritz, who worked as a nurse for 29 years at St. Lucas Care Center, has expressed much interest in serving on a health care committee, and will in all likelihood get her wish. Rep. Mindy Greiling (DFL-54A) and newly elected Reps Julie Bunn (DFL-56A), Marsha Swails (DFL-56B) and Erin Murphy (DFL-64A) have also expressed interest in serving on the committee.

We will continue to provide regular updates on the makeup of the House and Senate health care committees as new information surfaces.

Future of Health Care Discussed at Citizens League Forum

Legislators, lobbyists, health care professionals and citizens flocked to The Forum at Minnesota Public Radio Tuesday to listen to, and participate in, the Citizen’s League’s public forum entitled “The Future of Health Care: Shifting the Focus from Treatment to Prevention.” Conducted as part of the League’s Summer Policy Series, the forum featured Stephen T. Parente, Assistant Professor of Finance, Carlson School of Management; and former commissioner of the Minnesota Department of Health and CEO of the Courage Center Jan Malcolm as panelists.

The discussion focused on the need for drastic change in many aspects of the health care industry in hopes of making care more effective and efficient. According to Citizens League President Sean Kershaw, who moderated the forum, the United States is currently ranked 37th worldwide in the effective delivery of health care in spite of astronomical amounts of money spent on research, improving technology and treating diseases.

Malcolm asserted that the United States needs to take a more proactive approach to health care, focusing on preventative care vice treatment. Such a paradigm shift would require not just personal choices, but community and public policy choices. Malcolm did not rule out universal coverage as a viable option, but specifically mentioned that health plans and providers need to focus on preventative care vice treatment of diseases, and insurance policies should have built-in incentives rewarding preventative visits.

Additionally, Malcolm stated that some obstacles preventing the United States from becoming a healthier nation need to be solved at the socioeconomic level. For example, the United States is currently ranked 28th worldwide in infant mortality, in part because many pregnant women do not receive adequate prenatal care for financial reasons.

Parente stated that citizens who wish to change the current structure of health care must look at how the current health care structure was developed from a historical perspective. According to Parente, employers began providing health care coverage in the pre WWII era to retain quality employees when pay raises weren’t an option. Health care coverage was a cheap alternative that proved to be an effective selling point. As the cost of health care increased in double digits in recent years, employers are finding it increasingly challenging if not impossible to provide health coverage. In an interesting turn of events, providing health coverage can potentially hinder an employer’s ability to give pay increases. Parente believes that Health Savings Accounts (HSAs) have the potential to significantly curb the cost of health care without hindering quality

Parente has co-authored a legislative proposal giving health plans the legal green light to offer National Health Savings Accounts (NHSA) which would not be subject to any state mandates. The proposal states that “if enacted, NHSAs would provide the most personal, affordable, and portable form of health insurance available in the United States and would offer the best opportunity for reducing the ranks of the uninsured by first addressing critically restrictive pricing and risk selection.” (See attachment to view the proposal in its entirety.)

Parente and Malcolm agreed that more information sharing may also help in changing the way we view health care, and there is an increased demand for electronic medical records. Parente specifically recommended that health plans and providers should share information on all of the treatment a patient is receiving, particularly in the realm of prescribing medications. While neither panelist would go as far as to support an internetwork created by the Federal government sharing electronic health records primarily because of privacy concerns on the part of consumers, both observed a growing amount of support for such a project from prominent Democrats and Republicans.

During the question and answer portion of the lecture, Thomas Swain, who chaired the Minnesota Health Care Commission, from its inception in 1992 through 1995, cited a list of items including medical technology and Ambulatory Surgical Centers (ASC) as factors contributing to the rising cost of health care. He specifically claimed that ASCs create an environment where there is more supply than what is necessary, which leads to consumers receiving surgical procedures and tests they did not need. Swain also stated that many consumers receive prescriptions for medication they do not need, which also leads to increased cost. In response to this observation, Parente stated that consumers should not be so quick to fault technology as an agent for increased cost, but view it as an investment in enhancing the delivery of effective health care.

A number of legislators also attended the event including Representatives Joe Atkins (DFL-39B), Neil Peterson (R-41B) and Melissa Hortman (DFL-47B).

Employers Discuss Cost of Health Coverage at Citizen's League Forum

As part of its Summer Policy Series, the Citizen’s League held a discussion Monday at the Forum at MPR entitled “Medical Facilities Mind Opener: More Choices. More Care. More Cost?” The event gave large health care purchasers a venue to share their views on the League’s Medical Facilities Study Committee’s report, “Developing Informed Decisions: Seeking Market Reforms to Advise Medical Facility Expansion,” which was completed in April.

Cal Ludeman, Commissioner of Employee Relations, Carolyn Pare, CEO of the Business Health Care Action Group and Jerry Woelfel, Compensation and Benefits Vice President, Securian Financial Group each voiced support for the League’s recommendation that the state establish a quasi-public body that requires information on all facility investments for any expansion of service capacity in medical care. This recommendation is in response to the perception that doctors are more focused on making money than treating patients.

This state body would primarily be a consumer group that is informed by the expertise of the Department of Health and other state agencies. Its role would be to balance consumer interests with supplier interests and “the tendency in medical care toward false (supplier-induced) demand.” The Citizens League does not rule out giving this body, referred to in the report as the Minnesota Medical Information Authority (MMIA), the authority to approve the building of new health care facilities. Their primary objective seeks to help consumers become better informed through the wider dissemination of information.

All three panelists also spoke on the challenges businesses face with regard to reconciling the cost associated with providing health coverage to employees, and advocated giving consumers more information and control over the health care market. Woelfel stated that while Securian Financial Group has taken a number of proactive steps to educate employees on leading healthy lifestyles, it is becoming tremendously difficult to wrestle with staggering annual cost increases. Pare stated that other industries such as retail are focused on catering to the needs of customers, and noted there is some ambiguity with regard to defining customers in the health care arena.

Frank Iossi with the Mayo Clinic voiced the clinic’s concern over the Citizen’s League’s report, noting that the report’s recommendations are very similar to Certificates of Need (CON), which often hinder medical facilities’ ability to purchase state of the art equipment and thus treat patients. Iossi also emphasized the clinic’s commitment to providing the highest quality of care available to its patients. The rationale behind the certificates of need dealt with the perception that CONs can streamline the purchasing process, and subsequently accelerate the acquisition of resources. Realistically, the process has been known to have the opposite effect.

The Citizen’s League will be holding a series of events throughout the summer which can be viewed on its web site.

House Passes Omnibus Health Bill

The House unanimously approved Rep. Fran Bradley’s (R-29B) health omnibus bill (HF 3967), which has been scaled back considerably throughout committee deliberations. The remaining language intends to comply with the recently passed federal Deficit Reduction Act of 2005 with sections addressing MA asset availability and transfers, the state long-term care partnership program and asset recovery, state health care program citizenship verification, and payments for services provided in hospital emergency rooms. A provision requiring persons applying for assistance from the State to provide verification of their citizenship was not mentioned during floor debate. Other provisions call for additional funding to help the state with the implementation of the Medicare prescription drug bill, reimbursement of critical access dental care and the establishment of a Pharmacy Payment Reform Advisory Committee.

House Passes Another Cost Containment Bill

In a roundabout turn of events, the House re-passed Rep. Jim Abeler’s (R-48B) Health Care Cost Containment bill with a new bill number (SF 367) because the Senate was unable to advance companion legislation. Due to time constraints, the Senate did not bring Sen. Sheila Kiscaden’s (IP-30) companion measure (SF 1640) to the floor for a vote. In response, the House Health Care Cost Containment Division met to introduce a delete-all amendment to the House version of one of Sen. Kiscaden’s bills that passed in 2005. The newly revamped SF 367 is currently awaiting consideration in the Rules Committee.

The House passed Rep. Abeler’s original bill (HF 1862) last week, which as reported in last week’s update has been scaled back considerably compared to previous versions. The bill consists primarily of recommendations to conduct a number of studies, use electronic billing and establish evidence based medical standards. Medical associations would be allowed to put those standards together. It also authorizes health maintenance organizations to offer higher deductibles and out-of-pocket maximums, and sets parameters for the types of policies service cooperatives currently offer to school districts and other local governments. During the floor debate last week, amendments were added to limit the tort liability of licensed private ambulance services to the liability limits that apply to local government ambulance services and require HMO executives making more than $200,000 annually to disclose their salaries.

HF 1862 no longer includes any language on the Public Employees Insurance Plan (PEIP) and the language authorizing a 3,000,000 cap was also removed.

Enzi Bill Stalls in U.S. Senate

Legislation on the federal level seeking to prohibit states from requiring health plans to cover certain services stalled in the Senate last week, when Senate Democrats blocked a motion that would have limited debate on the measure by a vote of 55-43. Senate leaders needed 60 votes to limit debate.

Introduced by Sen. Mike Enzi (R-Wyo.), the bill would supersede at least 25 existing mandates in Minnesota including requiring health plans to cover blood tests to screen for prostate cancer, mammograms and supplies to treat diabetes. Supporters of the bill including Minnesota Sen. Norm Coleman and the National Association of Realtors claim it will make health insurance more affordable for working families. Senator Mark Dayton (D-Minn.), 41 Attorneys General including Minnesota Attorney General Mike Hatch, the American Cancer Society, AARP and the American Medical Association oppose the measure. The U.S. House of representatives has already passed companion legislation.

NASPER Update

During floor debate over the Senate’s the omnibus data practices bill, Sen. Linda Berglin (DFL-61) unsuccessfully attempted to attach an amendment establishing a reporting system that would require dispensers of controlled substances to electronically report specified information to the Board of Pharmacy. Introduced by the legislation was crafted in conjunction with the National All Schedules Prescription Electronic Reporting Act (NASPER), which is a bill proposed by the American Society of Interventional Pain Physicians to provide and improve patient access with quality care, and protect patients and physicians from deleterious effects of controlled substance misuse, abuse and trafficking. The NASPER Act would grant federal funds to states to create comprehensive records.

Similar legislation has already passed in Indiana, and Berglin noted that the Iowa legislature was also considering the proposal. Berglin amended the bill, adding language addressing data privacy, allowing law enforcement officials access to the file and tracking users who access the records. Sen. Sheila Kiscaden (IP-30) spoke out against the amendment, which eventually failed. The NASPER bill was never heard in the House, therefore it is unlikely it will become law this year.

Week ending May 12, 2006

House Ways and Means Clears Blinking Tax and Scaled Back Health Omnibus Bills

The House Ways and Means Committee passed two of Health Policy and Finance Committee Chairman Fran Bradley’s (R-29B) bills Monday, one of which authorizes a contingent reduction of the Provider Tax in the event of a surplus in the Health Care Access Fund (HF 2935). Both bills have been added to the general registrar. During debate of the measure, Rep. Tom Huntley (DFL-7A) was very supportive of the proposal, noting that $580 million in revenue generated from the provider tax has been used for expenses other than expanding access to health care services.

While the contingent reduction proposal has little if any chance of passage this legislative session because its Senate companion bill never received a hearing, it has received a great deal of visibility and bipartisan support that could translate into additional momentum during future legislative sessions.

Much like Rep. Jim Abeler’s (R-48B) health care cost containment bill last week, Rep. Bradley’s health omnibus bill (HF 3967) has been scaled back considerably. The remaining language intends to comply with the recently passed federal Deficit Reduction Act of 2005 with sections addressing MA asset availability and transfers, the state long-term care partnership program and asset recovery, state health care program citizenship verification, and payments for services provided in hospital emergency rooms. A provision requiring persons applying for assistance from the State to provide verification of their citizenship is expected to generate controversy on the House floor. Other provisions call for additional funding to help the state with the implementation of the Medicare prescription drug bill, reimbursement of critical access dental care and the establishment of a Pharmacy Payment Reform Advisory Committee.

House Passes Cost Containment Bill

The House passed Rep. Jim Abeler’s (R-48B) Health Care Cost Containment bill (HF 1862) Thursday by a vote of 100-30, which as reported in last week’s update has been scaled back considerably compared to previous versions.

The bill consists primarily of recommendations to conduct a number of studies, use electronic billing and establish medical practice standards. Medical associations would be allowed to put those standards together. It also authorizes health maintenance organizations to offer higher deductibles and out-of-pocket maximums, and sets parameters for the types of policies service cooperatives currently offer to school districts and other local governments. HF 1862 no longer includes any language on the Public Employees Insurance Plan (PEIP) and the language authorizing a 3,000,000 cap was also removed.

During the floor debate, amendments were added to limit the tort liability of licensed private ambulance services to the liability limits that apply to local government ambulance services and require HMO executives making more than $200,000 annually to disclose their salaries.

Scheid-Wilkin Bill Expands Provider Disclosure

Legislation requiring providers to disclose the average allowable payment from private third-party payers for the 50 most commonly performed services or procedures is advancing rapidly in the House and Senate. Introduced by Rep. Tim Wilkin (R-38A) in the house and Sen. Linda Scheid (DFL-46) in the Senate, the House bill (SF 2500) passed unanimously last week and its Senate companion received its second reading on Friday.

Week ending May 6, 2006

Scaled back Cost Containment Bill Clears Ways and Means

The Ways and Means cleared a considerably scaled back version of Rep. Jim Abeler’s (R-48B) Health Care Cost Containment bill (HF 1862) Wednesday, referring it to the House floor for a final vote.

The bill consists primarily of recommendations to conduct a number of studies, use electronic billing and establish evidence based medical standards. Medical associations would be allowed to put those standards together. It also authorizes health maintenance organizations to offer higher deductibles and out-of-pocket maximums, and sets parameters for the types of policies service cooperatives currently offer to school districts and other local governments. HF 1862 no longer includes any language on the Public Employees Insurance Plan (PEIP) and the language authorizing a 3,000,000 cap was also removed.

The Committee discussed at length a provision authorizing health-related boards or professional provider organizations to establish evidence based practice standards for treating patients within their respective scopes of practice. Rep. Karen Klinzing (R-56B) introduced an amendment deleting the entire section, which ultimately failed.

Rep. Ron Abrams (R-43B) also voiced concerns, stating that he does not want to create a set of standards that will result in future legislative battles where different provider groups battle over issues that have nothing to do with the health of the patient. He cited recently passed legislation restricting radiation therapy facility construction – a bill that is in reality part of a campaign seeking to permanently require radiation therapy facilities to be constructed only by an entity owned, operated, or controlled by a licensed hospital – as an example of the type of future public policy he hopes to avoid. Abrams went on to refer to the radiation therapy facility construction bill the “most rubbish” he has ever heard in his 18 years in the legislature. Rep. Abeler agreed to work with legislators to rework the language. According to Abeler, Sen. Sheila Kiscaden’s (IP-30) companion legislation is waiting to be scheduled for review in the Senate Finance Committee.

Contingent Provider Tax Reduction Included in Defeated House Tax Bill

The House Committee on Taxes defeated Committee Chairman Rep. Philip Krinkie’s (R-53A) tax proposal by a vote of 12-15 last night, which included legislation authorizing a contingent reduction of the provider tax rate by 1/10 percent increments in the event of a projected surplus in the Health Care Access Fund. The plan also authorized about $800 million in tax cuts, $400 million of which would be derived by lowering two of the three income tax rates that kick in as Minnesotans’ incomes rise. While the contingent reduction proposal has little is any chance of passage this legislative session, it has received a great deal of visibility and bipartisan support that could give it additional momentum in future legislative sessions.

Road Map to Adjournment

The Minnesota Legislature’s constitutional deadline for adjournment is May 22nd. Despite the fact that there are only two weeks left in this session, there is still a lot of work to be done. Legislative leaders met this week and set May 17th –Syttende Mai, the Norwegian Independence Day- as their target date for adjournment. There have only been twelve bills signed into law so far despite the introduction of over fifteen hundred bills in each body this session.

The most important task for legislators to complete this session is the bonding bill. The Capitol Investment Conference Committee met for the first time this week to try and work out the differences between the two bills. They discussed a proposal which contained a number of items that the House and Senate provided similar funding for in their bills. The House offered an additional proposal on Thursday hoping to kick-start negotiations. The bill that passed the House spent at total of $999.9 million on projects and the Senate bill spent $1.1 billion. Legislative leaders have discussed keeping the final bill below $1 billion.

On Monday the House passed their $88.8 million dollar supplemental budget bill. The proposed funding provides for deficiency items, emergency items, and items that have been mandated by the federal government. The bill provides $33 million to cover a shortfall in sex offender confinement and $31 million for treatment of a greater number of mentally ill and dangerous persons. The bill passed the House 103-29. The Senate, after stripping all of the policy provisions out of its' supplemental budget bill, still has not been able to pass it off the Senate floor. The two sides will not be able to conferee their supplemental budget bills until the Senate passes their bill.

Week ending April 28, 2006

Health Omnibus Bills Gain Momentum

The House and Senate health finance committees reviewed their respective omnibus bills this week. The Health Policy and Finance Committee approved its version (HF3697), sending it to the House Ways and Means Committee for additional consideration. The Senate Health and Human Services Budget Division's proposal has beenpassed along to the Finance Committee to be included in a full Senate Omnibus bill. The Finance committee is scheduled to review its omnibus package on April 18th.

The House version allocates $87 million of the Health Care Access Fund surplus in FY 2007 to subsidize the Minnesota Comprehensive Health Association (MCHA), which offers policies of individual health insurance to Minnesota residents who have been turned down for health insurance by the private market, due to pre-existing health conditions. An initiative strongly endorsed by the Chamber of Commerce, the funds directed to MCHA are meant to provide financial relief to small businesses and employers that must rely on the plan to provide coverage to their employees.

The proposal drew the ire of Committee Democrats who believe the surplus should be used to restore cuts made to state-run health plans in 2003 and 2005. Amendments introduced by Rep. Barbara Goodwin (DFL-50A) and Rep. Mary Ellen Otremba (DFL-11B) seeking to divert funds from MCHA to Minnesota health plans were defeated in party line votes. Rep. Neva Walker (DFL-61B) also introduced an amendment prohibiting the transfer of monies from the Health Care Access Fund to items not related to MinnesotaCare, which sparked much debate on the original intent of the funds generated by the provider tax, and legislators’ failure to adhere to those standards. Walker’s amendment was also defeated.

The House bill includes a contingent reduction of the provider tax rate by 1/10 percent increments in the event of a projected surplus in the Health Care Access Fund on odd years, but does not fund any of the governor’s mental health system transformation proposals. Geoff Bartsh with HealthPartners and Kris Flaten with the State Advisory Council on Mental Health each stated that they would have liked to have seen more funding provided to the governor’s recommendations, noting that the Minnesota Mental Health Action group studied this issue extensively and provided sound recommendations.

Additionally, the House version includes a number of legislative proposals originally developed during Health Care Cost Containment Division hearings including a provision allowing for-profit HMOs to provide health coverage in Minnesota; authorization allowing HMOs to impose deductibles of up to $5,000 per person and $10,000 per family; a provision increasing maximum caps on out of pocket expense cost-share payments and a provision allowing health plans to include $3,000,000 lifetime maximum benefits clauses in its contracts. A section prohibiting providers from allowinga patient to die from starvation or dehydration unless that patient has indicated in writing that he or she does not wish to live on life support was deleted during committee deliberations.

Staying true to its initial goals, the Senate used the Health Care Access Fund surplus to restore cuts made to state-run health plans in 2003 and 2005. Specifically, the Senate bill contains appropriations for the next biennium to fund the elimination of the add-back of depreciation for farm self-employed income for purposes of MinnesotaCare, to eliminate the MinnesotaCare limited benefit set, to eliminate MinnesotaCare premiums for military members and their families, to increase from $10,000 to $20,000 the MinnesotaCare inpatient hospitalization cap, to eliminate dental copays for adults without children and parents at under 175 percent of the federal poverty level, to permit MinnesotaCare for undocumented immigrant children, to increase the provider rate through MinnesotaCare by 2.049 percentand to eliminate insurance barriers for children above 150 percent of the federal poverty level, according to the Health and Human Services Budget Division’s web site.The NASPER bill, which establishes a reporting system that would require dispensers of controlled substances to electronically report specified information to the Board of Pharmacy, was also included.

The Senate matched the Governor’s request for funding for the Mental Health System transformation, restoredsome funding cuts madeto the Minnesota Food Assistance Program; restored cuts to child care subsidies made in previous years; funded a prescription drug discount program and uses a portion of the surplus to allow small businesses to enroll in MinnesotaCare. The Division also adopted an amendment sponsored by Sen. Linda Higgins (DFL-58) making changes to the process for making exceptions to the hospital moratorium.

Week ending April 21, 2006

House and Senate Health Committees to Debate Health Omnibus Proposals

The House and Senate Committees will begin amending their respective health omnibus bills next week; though it has become apparent the two measures will have few similar provisions. The Senate Health and Human Services Budget Division will begin discussions on Monday morning at 10:00 in Room 107 of the Capitol. The Health Policy and Finance Committee will meet from 10 a.m. to noon on Monday and Tuesday, to walk through the bill, and will reconvene at 4 p.m. or to the call of the chair on both days. Copies of the omnibus package (HF 3697) will be available today outside 563 State Office Building beginning at 4 PM, and will also be available on the committee website.

Legislation crafted in conjunction with the Health Care Cost Containment Division hearings has been held for possible inclusion in the omnibus bill, though Health Policy and Finance Committee members appear to have grown weary of debating the subject. During Tuesday’s hearing, Division Chair Rep. Jim Abeler (DFL-48B) incorporated changes made in other committees to HF 1862, which has thus far been the primary vehicle for the Division’s proposals. A number of those changes were inspired by trying to avoid fiscal notes.

When it became clear there would be cost involved with the portion of his measure involving the Public Employees Insurance Plan (PEIP), Abeler proposed a delete-all amendment to HF 2438 to craft a bill identical to HF 1862, minus the PEIP provision. The Committee denied this motion. There is also an interesting article on the Cost Containment Division in the 31 March edition of Session Weekly.

An amended version of Committee Chairman Fran Bradley's (R-29B) reform proposal (HF 3658) is also being held for possible inclusion in the Health Care Omnibus bill. The provision requiring providers to develop and maintain uniform contractual obligations with all health plans was deleted in exchange for a proposal for a study of the concept. That study would be conducted by the Health and Commerce Departments. Provisions that would make for-profit and non-profit HMOs subject to a uniform premium tax rate on health coverage same were also deleted. During deliberations, the committee rejected an amendment offered by Rep. Tom Huntley (DFL-7A) removing language authorizing for profit HMOs to provide coverage in Minnesota.

The Senate is continuing its call to use the Health Access Fund surplus to restore cuts made to Minnesota health care plans in 2003 and 2005 in hopes of reducing the number of people in the state without health insurance. A few of the other proposals for consideration in the Senate bill include providing limited medical assistance coverage for individuals eligible for Medicare Part D and directing commissioner to seek reimbursement from federal government for funds used to subsidize the program; establishing several incentives to encourage elderly persons to use reverse mortgage proceeds to pay for long-term care services in their own homes as an alternative to nursing facility placement; and authorizing an exception to the hospital construction moratorium to allow the construction of a 25-bed hospital in Cass County within 20 miles of the state Ah-Gwah-Ching facility, provided the license holder is approved by the county board.

We will continue to monitor the development of both omnibus bills and provide regular updates.

NASPER Update

The Senate Health and Human Services Budget Division’s omnibus bill may also include legislation establishing a reporting system that would require dispensers of controlled substances to electronically report specified information to the Board of Pharmacy. Introduced by Sen. Linda Berglin (DFL-61), the legislation was crafted in conjunction with the National All Schedules Prescription Electronic Reporting Act (NASPER), which President Bush signed into law in 2005. The NASPER Act would grant federal funds to states to create comprehensive records.

Similar legislation has already passed in Indiana, and Berglin noted that the Iowa legislature was also considering the proposal. Berglin amended the bill, adding language addressing data privacy, allowing law enforcement officials access to the file and tracking users who access the records. Rep. Jim Abeler (R-48B) has introduced companion legislation (HF 3264) in the House.

Senate Considers Offsetting Federal Cuts to County Case Management

The Senate Health and Human Services Budget Division reviewed legislation this week, introduced by Sen. Sharon Marko (DFL-57), seeking to provide state funds to offset cuts made to counties’ case management budgets as a result of the Federal Budget Deficit Reduction Act.

Speaking in favor of SF 3155, Hennepin County Social Worker Monica Jochmans stated that Hennepin County stands to lose $20 million in federal support – a cut that will inevitably result in layoffs and increased caseloads for already an over-extended case management department. Jochmans also stated that every dollar spent on case management saves taxpayers five dollars in the long run by allowing social workers to engage in “preventive practices.” Berglin recommended moving the 90 million dollar proposal to the Tax Committee where there is currently a 317 million dollar legislative proposal to provide tax relief. The Division held the measure to give Sen. Marko time to ponder the recommendation.

Senate to Vote on Legislation Giving Pharmacists the Right to Refuse Prescriptions

The full Senate may have an opportunity to vote on legislation authorizing pharmacists to refuse to fill prescriptions under certain conditions, and requiring that pharmacy employees disclose all of the prescriptions they refuse to fill. Sen. Steve Kelley (DFL-44) authored an amendment the Committee added requiring the employer whose pharmacist refuses to fill a prescription to ensure that patient receives his or her medication. The Health Policy and Finance Committee cleared similar legislation in March, which requires pharmacies that refuse to fill prescriptions to make “reasonable accommodations” to patients such as referring them to another business.

Week ending March 31, 2006

State Legislature Clears First Deadline

The first of three committee deadlines set by the House and Senate passed on Tuesday, March 28th, where bills were required to be out of policy committees in the house of origin by this date in order to be considered for further action. A more definitive number of live bills will be known following the next committee deadline on April 4th, in which all House and Senate bills must be out of all policy committees in the other body. The third and final committee deadline is April 11th, when omnibus finance bills must be out of House and Senate finance committees.

Legislation Banning Self Referral Removed from Consideration

The road to first deadline was paved with good intentions this week as the Senate Health and Family Security Committee debated legislation banning physicians from referring services through use of magnetic resonance imaging, positron emission tomography, linear accelerator equipment, or computerized axial tomography under certain conditions, and establishing a Certificate of Need reporting procedure for expenditures over $5,000,000.

However, before the bill could be debated, Sen. Sheila Kiscaden (IP-30) stripped the language banning self referrals. Representing MMGMA, Paul Louiselle voiced concerns about other provisions in the measure.

Sen. Kiscaden later amended the bill again to raise the reporting threshold to $5 million, which had been reduced to $1 million in the earlier amendment. The bill still authorizes the requirement for public notice provisions, but no longer requires the Commissioner approval over a project. The rationale behind the certificates of need (CON) dealt with the perception that CONs can streamline the purchasing process, and subsequently accelerate the acquisition of resources. However, in reality, the process has been known to have the opposite effect.

The committee passed the amended version of SF 1640 and referred the bill to the Finance Committee. We will continue to monitor the status of SF 1640 and provide regular updates.

Health Care Cost Containment Division Bills

As deliberations continue, the content and appearance of Rep Jim Abeler’s (R-48B) health care reform package is continuing to evolve. All provisions dealing with the currently dormant Minnesota Employee Insurance Program (MEIP) have been removed from the bill as has a provision requiring insurers that cover prescription drugs to provide or arrange for medication therapy management. Legislation calling for a medical malpractice insurance report may not be too far behind. Abeler has also opted to remove language dealing with the reinsurance program which mirrored legislation introduced by Rep. Barb Sykora (R-33B).

Abeler has, however, worked diligently to make a number of changes to the Public Employees Insurance Plan (PEIP) to make the plan more stable and enticing to counties or other public entities looking for coverage. HF 2832, which currently includes language permitting health maintenance organizations to use higher deductibles and out-of-pocket maximums and impose a lifetime benefit limit and permitting service cooperatives to provide health reinsurance programs, was approved by the Commerce and Financial Institutions Committee, and has been referred to the general registrar.

Throughout the legislative session, Rep. Abeler has maintained that his primary goal in the advancement of the Health Care Cost Containment Division’s legislative proposals was to create a dialogue regarding the rising costs of health care, and at the minimum prompt legislators to generate tangible proposals to quell this trend. In that regard, he has been very successful in the House. That conversation will continue on April 4th, when the Health Policy and Finance Committee debates another of Abeler’s proposals.

Health Policy and Finance Committee to Review Bradley Bill

The Health Policy and Finance Committee will also debate Committee Chair Fran Bradley’s (R-29B) health care reform package (HF3658) April 4th, which makes a variety of changes in laws affecting health care and health coverage. The bill calls for providers and health plans to provide more cost disclosure and transparency, and allows for-profit HMOs into the Minnesota market. The bill also prohibits health care providers from varying the amount they will accept as full payment for a health care service based upon the identity of the payer, upon a contract between the payer and provider, upon the identity of the patient, or upon whether the patient is covered by a “group purchaser.” There is currently no companion legislation in the Senate.

National All Schedules Prescription Electronic Reporting Act

The Senate Health and Family Security Committee passed legislation (SF 2899) this week establishing a reporting system that would require dispensers of controlled substances to electronically report specified information to the Board of Pharmacy. Introduced by Sen. Linda Berglin (DFL-61), the legislation was crafted in conjunction with the National All Schedules Prescription Electronic Reporting Act (NASPER), which is a bill proposed by the American Society of Interventional Pain Physicians to provide and improve patient access with quality care, and protect patients and physicians from deleterious effects of controlled substance misuse, abuse and trafficking. Rep. Jim Abeler (R-48B) has introduced companion legislation (HF 3264) in the House. SF 2899 has been referred to the Senate Judiciary Committee.

Radiation Therapy Facility Construction Bill

The House Health Policy and Finance Committee debated legislation this week restricting radiation therapy facility construction by removing a sunset provision scheduled to take effect in 2008. This bill seeks to permanently require radiation therapy facilities to be constructed only by an entity owned, operated, or controlled by a licensed hospital. Introduced by Rep. Duke Powell (R-40A), the bill was amended, moving the expiration of the sunset provision from 2008 to 2013.

Senate DFL Proposal Held for Inclusion in Omnibus Bill

The Senate DFL health care reform bill (SF 2725) has been laid over for possible inclusion in a health care omnibus bill. Introduced by Sen. Linda Berglin (DFL-61), the bill uses the surplus in the Health Care Access Fund which is projected at $122 for 06-07 and $176 for 08-09 for funding the following proposals:

establishes a prescription drug discount program
establishes a small employer buy-in option for MN Care
increases the income limit for single-adults and households without children to 190 percent of federal poverty guidelines
repeals the MNCare limited benefit set
increases coverage for self-employed farmers
raises hospital inpatient reimbursement cap to $20,000

The bill also includes a proposal to use the health care access fund to increase the provider reimbursement rates for state run health plans.

Wal-Mart Bill Advances in the Senate

The Senate Health and Human Services Budget Division approved SF 2672 this week, which requires large employers to pay the state for deposit in the health care access fund account the difference between the 8 percent of the wages paid to Minnesota employees and what the employer pays for medical costs of its employees. Often referred to as the “Wal Mart bill,” this measure’s companion legislation in the House, introduced by Rep. Joe Mullery (DFL-58A), was recently defeated in the Health Policy and Finance Committee.

Week ending March 24, 2006

Similar Objective, Different Proposals

Minnesota legislators have heard the concerns from citizens about the rising costs of health care, and they are ready to act. The problem is House Republicans and Senate Democrats have completely different ideas of how to accomplish this.House leaders believe that if consumers have more information on the cost of health care, they will be able to shop smartly, and the solution to quelling costs may lie in stimulating competition in the private market. There are currently a number of proposals requiring health plans and providers alike to disclose more information on the cost of various procedures.

The Senate, on the other hand, believes that using the Health Access Fund surplus to restore cuts made to Minnesota health care plans in 2003 and 2005 will reduce the number of people in the state without health insurance. The Health Policy and Finance Committee recently sent a clear and concise message to the other chamber, voting down the aforementioned Senate proposals.

As deliberations continue, it is becoming increasingly clear the House and Senate plan to move forward with their proposals, and the end result could very well be two health care reform initiatives that look nothing alike. In other words, odds are legislators in the health care arena can look forward to a lot to talk about in conference.

In the interim, we would strongly encourage physicians and providers alike to contact their legislators, and share their views on this matter. If you would like some assistance in scheduling a brief meeting, please contact us, and we would be happy to help facilitate the process.

Ultimately, legislators on both sides of the isle want to do something about the 7.4 percent uninsured rate and the rising cost of health care. They simply have different views on how to satisfy their voters.

Maple Grove Hospital

Gov. Tim Pawlenty signed legislation authorizing Fairview Health Services and North Memorial Health Care to build a new hospital in Maple Grove. Expected to be completed in 2009, the 300 bed hospital will provide much needed health care services to the rapidly developing Northwestern quadrant of the Twin Cities. The issue was before lawmakers because of a moratorium on new hospital beds, put in place in the 1980s to try to curb hospital overbuilding.

Bradley Bill calls for More Price Disclosure

The Health Policy and Finance Committee recently approved legislation HF 3658 introduced by Committee Chair Rep. Fran Bradley (R-29B), which makes a variety of changes in laws affecting health care coverage including allowing for-profit HMOs to provide health care coverage in Minnesota. The House Commerce and Financial Institutions Committee also approved the measure, which currently awaits additional consideration from the Health Policy and Finance Committee.

One section of the measure prohibits health care providers from varying the amount they will accept as full payment for a health care service based upon the identity of the payer, upon a contract between the payer and provider, upon the identity of the patient, or upon whether the patient is covered by a “group purchaser.” Bradley stated that his intent was to simplify the negotiation process hospital and clinic administrators undergo when identifying reimbursement rates with health plans.

A number of the bill’s other provisions deal with price disclosure, requiring hospital and outpatient surgery centers to provide a written estimate of the cost of a specific service or stay upon request to a patient, doctor, or patient’s representative, and specifies what information must be included in the request for the estimate.

House Advances Multiple Health Care Cost Containment Proposals

Legislation crafted during the House Health Care Cost Containment Division's recent series of hearings gained the blessing of the House Health Policy and Finance Committee yesterday. Introduced by Rep. Jim Abeler (R-48B), HF1862 has been sent to the House Governmental Operations and Veterans Affairs Committee, while HF1863 is enroute to the House Taxes Committee. HF1862, the more comprehensive bill, includes a variety of provisions seeking to enhance the efficiency and cost of health care. Sen. Sheila Kiscaden (DFL-30) has introduced companion legislation, SF1640 and SF1639, respectively, in the Senate. Both await hearings in the Senate Health and Family Security Committee.

As reported in previous Health Care Updates, the Health Care Cost Containment Division advanced five bills (HF 1862, HF 1863, HF 2438, HF 2831 and HF 2832). HF 1862 includes all of the legislation from these measures except HF 1863. The intent for advancing the bills in this manner is to expedite the process of moving them through various committees. Any changes made to HF 2438, 2831 or 2832 during deliberations will be incorporated into HF 1862. For example, changes made to HF 2832 will also be incorporated into Article 4 of HF 1862.

House Advances Bill Authorizing Conditional Provider Tax Reduction

The House Health Policy and Finance Committee advanced legislation requiring the commissioner of finance to project the balance of the health care access fund every two years, and to reduce the MinnesotaCare taxes if a surplus is projected at the end of the current biennium. Introduced by Committee Chair Fran Bradley (R-29B), the legislation will now go to the Committee on Taxes for further consideration. Phil Riveness with the Minnesota Medical Group Management Association (MMGMA) testified in favor of the measure.

Senator Sheila Kiscaden (Ind-30) has also introduced legislation (SF 3067) clarifying the purpose of the health care access fund, and providing for a contingent

reduction in the MinnesotaCare provider tax in the event of a surplus. Her measure also eliminates certain transfers from the health care access fund. Rep. Tina Liebling (DFL-30A) has introduced companion legislation to Kiscaden’s bill in the House.

Legislators in both chambers have conjured up a number of creative and insightful ways to spent the Health Care Access Fund surplus. The aforementioned elected officials are striving to remind their colleagues of the origin of this surplus, and what it was originally intended for.

Berglin-Abeler Long Term Care Proposal Gains Momentum

The Senate Commerce Committee approved SF 2898 this week, which modifies state law as required by recent federal legislation in order to allow implementation of a Long Term Care partnership program under which persons who exhaust the benefits of a qualifying long term care insurance policy are permitted, when applying for Medical Assistance payment of long-term care services, to protect from MA recovery an amount of assets equal to the policy benefits utilized. Introduced by Sen. Linda Berglin (DFL-61), the bill passed and was referred to the Health Policy and Finance Committee. Rep. Jim Abeler (R-48B) has introduced companion legislation in the House.

Licensing Subcommittee Expands Physical Therapists’ Scope of Practice

The Health Policy and Finance Licensing Subcommittee met Monday to review five measures, most of which were advanced to the full Committee. HF854, introduced by Rep. Brad Finstad (R-21B), eliminates the prohibition against providing physical therapy after 30 days without a physician’s order or without first practicing for one year under a physician’s orders and repeals certain rules. The debate featured speakers in support of and opposed to the measure, and a large number of physical therapists attended the hearing. The physical therapists applauded upon the bill’s advancement. HF 854 will go to the Health Policy and Finance Committee for further recview.

The Subcommittee also passed two bills introduced by Rep. Jim Abeler (R-48B). HF2774 adds fees for annual renewal of inactive acupuncture registration and acupuncture reinstatement to the chiropractors statutes and authorizes medical assistance payments for mental health services provided by licensed professional counselors. HF 2731, introduced by Rep. Duke Powell (R-40A), requires EMT training programs maintain an average yearly pass rate on the state EMT certification examination. The bill also adds a requirement that each EMT training program maintain an average yearly pass rate on the state EMT certification examination equal to the national average pass rate. The pass rate is based on individuals who pass the examination on the first attempt.

The committee also passed HF 3434, introduced by Rep. Tom Huntley (DFL-7A), which modifies provisions related to speech-language pathologists and audiologists; and occupational therapists.

The subcommittee also defeated legislation introduced by Rep. Bill Hilty (DFL-8A), HF 3456, which instructs the Board of Social Work to issue a social worker license, without examination, to an individual who is currently licensed as a school social worker by the Board of Teaching and has been engaged in the practice of social work in an elementary, middle, or secondary school for the preceding 15 years.

Bill Briefs

HF 2934: Introduced by Rep. Fran Bradley (R-29B), this measure requires the commissioner of human services to develop and present to the legislature a plan to integrate the delivery of services to certain enrollees of state-administered health care programs. The bill has been held for possible inclusion in an omnibus health care bill.

SF 3016: The Health and Human Services Budget Division passed SF3016, introduced by Division Chair Linda Berglin (DFL-61), which restored cuts made to TANF in 2003 by raising eligibility levels and reimbursement rates for child care assistance programs, reinstating emergency services under GAMC for undocumented immigrants, eliminating GAMC co-payments and providing a 10 percent cost of living increase to the Minnesota Family Investment Program transitional standard. The bill also includes a revenue provision relating to foreign operating corporations to fund the public program spending. The bill will go to the Health and Family Security Committee for further consideration.

HF 3341: Introduced by Rep. Duke Powell (R-40A), this bill requires the Legislative Coordinating Commission (LCC) to provide legislators and legislative staff with the option of a health savings account (HSA) plan beginning in 2008. The House Policy and Finance Committee approved HF 3341, and referred it to the Governmental Operations and Veteran Affairs Committee.

HF 3360: Introduced by Rep. Fran Bradley (R-29B), this measure reduces Minnesota Comprehensive Health Association’s (MCHA) assessments on its members by providing 55 million of the health access fund. Approved by the House Commerce and Financial Institutions Committee on Thursday, HF 3360 has been referred to the Health Policy and Finance Committee.

HF3171: The House Policy and Finance Committee approved HF 3171 this week, which allows parents of deceased children to obtain one clean copy of their child’s birth certificate in certain circumstances. Introduced by Rep. Karen Klinzing (R-56B), the measure will now go to the House Civil Law and Elections Committee for further consideration.

Week ending March 27, 2006

House Approves Moratorium Exemption for Maple Grove Hospital

By a vote of 118-8, the House approved legislation authorizing Fairview Health Services and North Memorial Health Care to build a new hospital in Maple Grove. The Senate may take up the measure as soon as Monday.

The issue was before lawmakers because of a moratorium on new hospital beds, put in place in the 1980s to try to curb hospital overbuilding. Under the bill, the hospital would have up to 300 beds and be completed by the end of 2009.

Senate Health and Human Services Budget Division

The Senate Health and Human Services and Senate Early Childhood Policy and Budget Divisions held a joint hearing Tuesday morning to discuss restoring a number of cuts made to child care assistance programs in Minnesota.

The Division heard testimony from a number of advocates on SF 2819. Introduced by Early Childhood Policy Budget Division Chairman Sen. John Hottinger (DFL-23), restores cuts made to the Child Care Assistance Program in 2003. Read details. Funding would come from the general fund, though Sen. Bob Kierlin (R-31) suggested eliminating the provider tax and imposing a tax on new clothing, then using that revenue as a funding source.

The Health and Human Services Budget Division also discussed SF 3015 and SF3016, which restored cuts made to TANF in 2003. Closing the FOP tax loophole was a suggested source of funding.

Senate Health and Family Security

The Health and Family Security Committee met Tuesday to discuss six legislative initiatives addressing issues ranging from expanding long term care options to allowing newly separated veterans to enroll into MinnesotaCare without having to pay premiums.

The Committee passed SF2477 Introduced by Sen. Charles Wiger (DFL-55), which expands eligibility for MinnnesotaCare to veterans within 24 months of separation from the Armed Forces. Veterans would not be required to pay premiums. The Committee referred the bill to the Committee on Finance

SF 2898, introduced by Sen. Linda Berglin (DFL-61), modifies state law as required by recent federal legislation in order to allow implementation of a Long Term Care partnership program under which persons who exhaust the benefits of a qualifying long term care insurance policy are permitted, when applying for Medical Assistance payment of long-term care services, to protect from MA recovery an amount of assets equal to the policy benefits utilized. The bill passed and was referred to the Commerce Committee.

The Committee also passed SF 2621. Introduced by Sen. Gary Kubly (DFL-20), this measure requires all EMT programs to maintain a minimum average yearly pass rate on the state EMT certification exam that is equal to the national pass rate on the exam, as determined by the percentage of candidates who pass on the first try. A program not meeting this standard would be placed on probation with a performance improvement plan approved by the Emergency Medical Services Regulatory Board. The bill will now go to the full Senate for a vote.

Introduced by Sen. Paul Koering (R-12), SF2534 keeps the Brainerd Regional Treatment Center's laundry services open through 2010. The bill passed and was referred to the Committee on Finance.

SF 2726 Introduced by Sen. Berglin, this measure extended an essential community provider designation to a Hennepin County Mental Health provider. The bill passed and was referred to Senate floor for a vote. SF 2793 - Introduced by Sen. Berglin, this bill modifies an essential community provider designation. SF 2793 also passed and will now go to the Senate floor for a vote.

Health Policy and Finance Committee Reviews Bills for Possible Omnibus Package

The Health Policy and Finance Committee reviewed seven bills during today's hearing, opting to hold all of them for possible inclusion into a Health Omnibus Bill.

HF 2826 (Committee Chairman Fran Bradley (R-29)), 3481 (Rep Char Samuelson(R-50B)) and 3583 (Rep. Brad Finstad(R-21B)) each seek to require nursing facilities to conduct quarterly resident assessments. Currently, nursing homes conduct resident assessments every six months. Residents and advocates believe more frequent assessments might lead to more equitable rates. Bradley also suggested that the Committee look at the current appeals process with regard to payment errors to see if it is working effectively. Samuelson's bill was drafted with help from the Department of Human Services and Finstad's measure was drafted with help from CARE Providers of Minnesota. Bradley stated that the committee would analyze the three bills to come up with language to be included in the Omnibus package.

HF 3208, introduced by Rep. Dean Urdahl (R-18B), increases the Day training and habilitation provider rate reimbursement by 8 percent. A spokesman from Proworks, who provides this service in Meeker County, said the current rate makes it nearly impossible to do business and conduct necessary infrastructure improvements such as replacing old vehicles used for transporting patients. At the current rate, Proworks is on the verge of being unable to provide this service. Rep Jim Abeler (R-48B) noted that a similar business in Anoka County was forced out of business years ago for this reason, and the new contractor that took over charged the county far more than its predecessor had. According to Committee staff (though they were not positive), counties take bids from competing organizations when contracting out this service. Abeler cautioned legislators saying a new contractor may charge Meeker County more than Proworks was charging even with the 8 percent increase.

HF 3315 authorized nursing facilities to receive 231,000 dollars in reimbursement for sprinkler system projects and other initiatives to comply with federal Life Safety Code Standards. While there was general agreement this was necessary, Chairman Bradley pointed out that some of the federal standards, such as a sprinkler in the walk-in freezer, were questionable.

The Committee also passed HF 3255, which establishes a presumption that every person legally incapable of making health care decisions has directed his/her health care providers to provide nutrition and hydration sufficient to sustain life. The measure also prohibits any other person, agency or court from making a decision on behalf of the person to withhold or withdraw nutrition and hydration sufficient to sustain the person's life. Introduced by Rep. Tim Wilkin (R-38A), the legislation mirrors the "Terry Schiavo bill," which garnered national headlines in 2005. HF 3255 was referred to the House Civil Law and Elections Committee.

The Committee also passed HF 3258, which requires data collection and reporting on the existing parental notification requirement for minors and certain women seeking to have abortions; adds requirements for physicians performing or inducing abortions; and prohibits the use of state funds for abortions except when necessary to participate in a federal program. Introduced by Rep. Laura Brod (R-25A), HF 3258 was also referred to the Civil Law and Elections Committee.

Health and Finance Committee Defeats MinnesotaCare Expansions

The House Health and Finance Committee met Friday to debate four legislative proposals seeking to expand access to health coverage for low income Minnesotans. During a seven hour hearing that featured numerous heated arguments and partisan exchanges, none of the measures passed.

HF 3097, introduced by Rep. Neva Walker (DFL-61B) expands fee-for-service health care delivery under medical assistance, general assistance, and MinnesotaCare; and eliminates delivery of services to state health care program enrollees by prepaid health plans. During the hearing, Walker made a motion to make significant changes to the legislation, but later decided to pull the bill.

HF 3106, also introduced by Walker, provided for a constitutional amendment, which would go before the voters in November, affirming that every resident of Minnesota has the right to affordable health care. The legislation also authorized the development of a universal health care plan to be run by the state. Walker stated that she also wished to withdraw this legislation from consideration because her speakers were unable to attend the hearing. She also noted that she was only given two days to prepare for the hearing, and felt the time allotted was inadequate as the constituents whom she wanted to have speak on behalf of the legislation were unable to attend.

The Committee also debated HF 2691, which authorized offering State health coverage to individuals and small employers at their own expense, and MinnesotaCare coverage at full cost. Introduced by Rep. Katie Sieben (DFL-57A), the measure was defeated in a party line vote.

HF 2573, introduced by Rep. Joe Mullery (DFL-58A), was also defeated in a party line vote. The legislation required large employers, with 10,000 employees or more, to spend at least 10 percent of employee wages on health care coverage, or face criminal charges. The legislation arrived amidst reports of Wal Mart supervisors encouraging employees to enroll into state run health plans such as MinnesotaCare. A similar measure has already passed in Maryland.

Week ending March 3, 2006

Senate Health and Family Security Committee Debates Proposed Constitutional Amendment

The Senate Health and Family Security Committee debated approved bill sponsored by Senate Health and Human Services Budget Division Chair Linda Berglin (DFL-61) providing for a constitutional amendment, which would go before the voters in November, affirming that every resident of Minnesota has the right to affordable health care. Berglin said the measure does not spell out a funding mechanism, but provides a basic right. The measure, which featured a long line of speakers in favor and opposed to its passage, was approved and referred to Rules Committee.

Prior to its passage, however, Sen. Brian LeClair (R-56) introduced an amendment to SF 2625 giving every Minnesotan the right to affordable health care, but barred the judicial power of Minnesota from determining what constitutes affordable health care. LeClair voiced concern over the courts driving up the cost of health care if given the authority to interpret such an amendment, and Berglin maintained that the legislature would be capable of implementing her proposal. LeClair's amendment was defeated by a party line vote of 6-4.

The Committee also debated the Senate DFL's health care proposal (SF 2725), which uses the surplus in the Health Care Access Fund which is projected at $122 for 06-07 and $176 for 08-09 for funding the following proposals:

establishes a prescription drug discount program
establishes a small employer buy-in option for MN Care
increases the income limit for single-adults and households without children to 190 percent of federal poverty guidelines
repeals the MNCare limited benefit set
increases coverage for self-employed farmers
raises hospital inpatient reimbursement cap to $20,000
SF 2725 Passed the Health and Family Security Committee, and was referred to Committee on Finance.

The Committee closed by debating Sen. John Marty's (DFL-54) SF 2468, which directs the commissioner of health to prepare a proposal for the legislature establishing a universal health care program by 2010. It also authorizes a constitutional amendment giving all Minnesotans the right to affordable health care to be submitted to the voters in 2006. Marty stated that He said the bill sets forth a process for arriving at a plan for universal, affordable health care. The best way to bring health care costs down is to focus on prevention and early intervention. According to Janice Ray, a social worker from Duluth who testified, the Marty amendment offered specifics that were not provided in SF 2625. Sen. Michelle Fischbach (R-14) offered an amendment to delete a section outlining legislative findings. The amendment was adopted. The bill was approved and referred to the Rules and Administration Committee.

House Health Care Cost Containment Division Hearings

The House Health Care Cost Containment Division held two hearings this week, focusing primarily on a legislative proposal to give small businesses more flexibility in offering health coverage to their employees through the private market. Recent reports have indicated that a number of small business employers, businesses of 50 employees or less, have stopped offering health care coverage, and have started recommending that employees sign up for coverage under MinnesotaCare. Abeler believes this is a mistake because MinnesotaCare's low reimbursement rates make it difficult for providers to do business, and should be viewed as a safety net that Minnesotans can rely on until they can afford coverage from the private market.

The Division's hearing on 28 February focused on three measures introduced by Division Chair Rep Jim Abeler (R-48B).

HF 2831: This bill makes various changes in the Public Employees Insurance Program, now administered by the Department of Employee Relations, and the Minnesota Employees Insurance Program, now in statute but not now in operation. These are both voluntary health insurance pooling programs, the former for local government employees and the latter for private sector employees HF 2832: This bill creates a new health coverage reinsurance pool, modeled somewhat on the reinsurance pool for small employer health coverage, now in chapter 62L but currently dormant. HF 2438: This bill contains a variety of measures designed to reduce the cost and increase the quality of health care (http://ww3.house.leg.state.mn.us/hrd/bs/84/HF2438.html). The Division voted to refer Abeler's bill on 1 March, HF 2438 to the Health Policy and Finance Committee for consideration.

One provision within HF 2438 that will receive further review in the coming weeks permits health-related boards to establish practice standards for treating patients within their respective scopes of practice. The provision also allows the boards to use the services of appropriate public or private entities in developing or reviewing the standards and the evidence-based guidelines. The Division will be looking at providing some standards as to which organizations can offer insight into this process, or to paraphrase Rep. Abeler, 'to prevent a group of rogue optometrists' from redefining the standards.

Scott Leitz and Julie Sonier, with the Minnesota Department of health gave an update to the committee on statistics regarding small employer health insurance and uninsured trends. They used survey results from the 2001 to 2004 Minnesota Health Access Surveys. Representative Abeler is looking at HF 2438 as means to reform. Reinsurance is one option, but he does not want to shut down the private market. Buzz Cummins, the President and CEO of the Workers' Compensation Reinsurance Association and Kim Thompson of the Minnesota Association of Health Underwriters also gave presentations to the committee.

Representative Abeler has a delete-all amendment to HF 2438 which includes changes to evidence based standards, medication therapy, uncompensated care, and deducting health care premiums from taxes. The committee is going to spend more time next week looking at reinsurance. The bills have to be sent to the Division by the full Health Committee, so the bills will officially be in front of the committee next week. Representative Abeler is hoping to pass the bills out of his committee by the third week in March.

During its 1 March hearing, the Division heard testimony from heard testimony from the National Joint Powers Alliance, the Insurance Federation of America and Education Minnesota.

Mary Theurer from the National Joint Powers Alliance spoke on HF 2083, which requires pharmacists to provide a full explanation for the costs of medication. Currently, when a patient asks about the cost of medication, the pharmacist often answers by telling the patient the co-pay, according to Theurer. However, many patients have deductibles, and not having all of the information on the cost of their medications can drive up the costs of beneficiaries' premiums. Having all of the information on what certain pharmacists charge for various medications gives consumers the ability to shop around. Abeler thanked Theurer for her perspective, but noted that any revision should be made with Theurer and representatives from the pharmaceutical association at the table. The aforementioned personnel then convened in the hallway to further discuss this subject. Bob Johnson and Robyn Rowen with the Insurance Federation of America gave an overview on how insurance pools are formed.

House GOP Unveils Health Care Plans

The House Republican Proposal makes the following recommendations:

Increase Competition

Create a purchasing pool for insurers with less than 10% of market share.
Eliminate MCHA penalty for exiting the market
Allow for-profit HMOs
Enhance PEIP for Public Employees
Reform MEIP for Private Employees

Small Business Affordability

Rural health initiatives to reduce rural rates
Eliminate MCHA assessment
Coverage options for uninsured employees
Match health savings account contributions up to $500 for small businesses
Loss ratio flexibility

Empower Consumers

Improve access to provider price information
Enhance key health care information websites
Require clinics to provide information to patients on pharmaceutical assistance programs
Require medication therapy management for private providers
Issue administrative efficiency report cards for health plans
HSAs for legislators: lead by example

Improve the System

Require a single provider care rate for all private payers
Consolidate state-administered health care programs and set income-based premiums
Equalize premium taxes
Define and report uncompensated care
Encourage and assist DHS in using electronic billing for public programs
Enact medical malpractice reform for OBGYN and emergency care
Transfer HMO regulation to the Department of Commerce
Repeal the hospital capitol reporting requirement
Encourage evidence-based practices and alternative and complimentary health care

House Health Policy and Finance Committee Discusses Bonding Proposals

The House Health Policy and Finance Committee met today to discuss a number of bonding proposals brought forth by the Department of Health and Human Services. The bills reviewed on the first panel included HF 2986 (Rep. Laura Brod (R-25A)), which would authorize capital improvements to the St. Peter Regional Treatment Center; HF 2973 (Rep. Rob Eastlund (R-17A)), which provides for Human Services Campus Upgrades; HF 2981 (Rep. Judy Sodestrom (R-8B)), which provides funding for a Minnesota sex offender treatment program and HF 2595 (Rep. Bill Hilty (DFL-8A)) providing for an expansion to the Minnesota sex offender treatment program facilities.

Wes Kooistra, Assistant Commissioner for Chemical and Mental Health Services, DHS, and Mike Tessneer, Chief Executive Officer, DHS, testified before the committee, providing further information on the aforementioned bills. One interesting statistic that came out of the hearing was the fact that the development of the 400 bed sex offender treatment facility at Moose Lake will wind up costing about $117,500 per bed. That said, the new facility will cost about $60 less per day to operate than the current facility.

The Committee then reviewed HF 2920, introduced by Rep. Paul Gazelka (R-12A) authorized funding for the Brainerd Regional Treatment Center methamphetamine treatment center for women. Terry Sluss, Crow Wing County Commissioner also testified, providing statistics on the number of children who wind up in foster care because their mothers have become addicted to crystal meth.

Shifting gears, the Committee heard from Rep. Al Juhnke (DFL-13B), Patrick Lloyd, DDS, Dean of the University of Minnesota School of Dentistry and Lawrence Massa, CEO of Rice Memorial Hospital. Richard Diercks, Executive Director of the Minnesota Dental Association was also in the audience and available to answer questions. The panel answered questions in reference to Rep. Juhnke's proposal to build a dental clinic as part of the Rice Memorial Hospital, which is owned by the city of Willmar. The dental clinic would serve residents of Southwest and Central Minnesota. During his testimony, Lloyd noted that in 2003, Minnesota was identified as having suffered the greatest reduction in its dentist to patient ratio. This problem has been felt particularly in Rural Minnesota.

The Committee then heard from Rep. Tom Rukavina (DFL-5A) on the need for a helipad on top of the Virginia Regional Medical Center. Currently, patients who are flown in for treatment must land a mile from the hospital then be transported via ambulance.

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