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Minnesota Legislature

At Issue: Cuts hang in the balance

Published (5/1/2009)
By Patty Ostberg
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After more than eight hours of debate and more than 50 amendments offered, the House passed the omnibus health and human services finance bill 85-49 on April 27. The catch is, funding in the bill depends largely on $1.5 billion in tax increases contained in the tax bill (HF2323) passed by the House April 25 and now under consideration in a conference committee.

Sponsored by Rep. Thomas Huntley (DFL-Duluth), HF1362 attempts to maximize the state’s $1.8 billion in federal stimulus dollars while making nearly $400 million in “painful” cuts in service programs. Huntley said cuts contained in the bill are the “best case scenario” if all the funding mechanisms pull through; otherwise, human service cuts could be closer to $900 million.

Minnesota leads the nation in health care standards, but the bill allocates funds to meet American Recovery and Reinvestment Act of 2009 requirements instead of bringing down long-term spending levels, said Rep. Matt Dean (R-Dellwood).

The bill would not reduce eligibility requirements for Medical Assistance or MinnesotaCare, but hospitals, long-term care facilities, the use of personal care attendants and those using public dental assistance would all receive reductions.

After working with disability representatives on which services they use the least, Huntley said, “It’s sort of like are we asking people, ‘You right-handed or left-handed? ’Cause we’ll cut off the arm you don’t use as much.’”

Simultaneously the Senate debated and then passed 40 - 23 its version of the omnibus bill, SF695, sponsored by Sen. Linda Berglin (DFL-Mpls). A conference committee has been convened to work out the differences.

Spending reductions include delayed rebasing for nursing homes; a 3 percent cut to long-term care facilities; certain 3 percent rate reductions to hospitals, including reducing reimbursement rates for those on Medical Assistance and General Assistance Medical Care; and limiting personal care attendant hours to 310 hours per month/per individual. Rebasing includes adjusting for inflation in reimbursement for Medicaid rates.

In an effort to minimize cuts, the bill would make changes to meet federal requirements for receipt of federal stabilization funds. Changes to Medical Assistance could result in a reimbursement rate of 62 percent from the federal government, with the state responsible for 38 percent. The current ratio is 50-50.

The bill lacks in reform and reductions and will have serious problems when the one-time federal money runs out, said House Minority Leader Marty Seifert (R-Marshall). “You cannot build all of these spending bills around a tax bill to pay for them that barely passed.”

Gov. Tim Pawlenty has said he will not sign any bill with tax increases.

Huntley said that under the governor’s proposal, several hospitals could be forced into bankruptcy through uncompensated care for the 113,000 people who would be kicked off public programs. Those without care will show up in emergency rooms, costing more money in the long run, he said.

Rep. Laura Brod (R-New Prague) successfully offered an amendment that would allow any surplus in the Health Care Access Fund to be used to reduce provider tax rates.

Huntley said the fund currently has a surplus, but the amount goes down every year, as it’s used for those covered by MinnesotaCare. Using the surplus leaves less to help those needing health care, he said.

Stemming from recommendations in an Office of the Legislative Auditor report on personal care assistance, the bill would change how personal care assistants are paid for working with care recipients. PCAs would be limited to 310 hours of work per month. Currently there is no monthly limit. The bill also has several detailed documentation requirements, including PCA provider agency information to be kept by the Human Services Department, in an attempt to reform potential areas of fraud or abuse. Owners of PCA companies who have more than a 5 percent interest and all managerial officials would be subject to a background study.

Money would also be invested to meet the federal Children’s Health Insurance Program Reauthorization Act of 2009 that could result in an additional $20 million to increase the number of children on public health insurance by easing the enrollment process, Huntley said. The additional children “are already eligible — it’s just that they don’t sign up or their parents don’t sign them up,” he said.

Another $4 million would be invested to meet provisions of, and receive funding from, the federal Health Information Technology for Economic and Clinical Health Act that is designed to help the state convert health records to electronic forms.

In an attempt to set a fixed amount given to providers for treatment of a specified group, a total-cost-of-care pilot project is included in the bill. The human services commissioner would work with interested providers to establish the alternative payment reform for frequent users of high-cost health care services. Hennepin County Medical Center would be the main provider conducting the project, Huntley said.

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