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Minnesota Legislature

Revisiting GAMC

Published (4/22/2010)
By Lauren Radomski
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It was standing room only during an April 6 joint meeting of the House Commerce and Labor Committee, House Health Care and Human Services Policy and Oversight Committee and House Health Care and Human Services Finance Division. Officials from the departments of health, human services and commerce were on-hand to explain when provisions in the federal health care reform law will take effect. (Photo by Andrew VonBank)Less than a month after legislators and the governor agreed on a new way to provide medical services to Minnesota’s poor, the state is faced with yet another major health care dilemma: implement a version of General Assistance Medical Care that some hospitals are rejecting, or scrap the hard-wrought compromise in favor of a federal solution that carries a $1 billion cost.

Hanging in the balance are tens of thousands of low-income Minnesotans, many of whom struggle with mental illness, homelessness or both. As a group, they can’t manage the premiums and paperwork required of most state health care programs, and they make costly emergency room visits their first point of care.

The state’s decision also has implications for other patients, who could see their costs rise as hospitals choose to forgo state funding that has strings attached. Hospital officials from around the state say they will not participate in the revised GAMC program that requires significant service and administrative changes to treat an unknown number of patients for low reimbursement.

They favor an alternate solution made possible by the federal health care law: enrolling GAMC participants and other low-income adults in the state’s Medicaid program. This so-called “early option” is essentially a jump on what will happen in 2014, when the GAMC population will be covered under a federal expansion of Medicaid. If state officials decide to pursue the early option, more Minnesotans would be served under Medicaid over the next three years at an estimated cost of $2 billion, half of which would need to come from the state.

The prospect of a federal solution to the GAMC issue was an unknown as legislators began to meet on the topic last year. “We did…the best job that we could under the circumstances, trying to solve a problem that the Legislature in Minnesota believed we should solve,” said Rep. Erin Murphy (DFL-St. Paul), who sponsored the GAMC law.

Under the law, low-income, childless adults will continue to receive access to basic medical services through partnerships of hospitals and clinics — dubbed “coordinated care delivery systems” — reimbursed at reduced rates. The 17 hospitals serving 80 percent of the GAMC population may implement this model as soon as June, while hospitals with smaller numbers of GAMC patients may receive temporary funding as they decide whether to form similar delivery systems.

Legislators acknowledged the law was imperfect at the time of its passage, but what they didn’t expect was that several major hospitals statewide would choose not to participate in the new service model. At a meeting of the House Health Care and Human Services Finance Division April 15, some hospital officials said they would rather draw from the temporary funding pool than use larger but insufficient payments to operate under the new GAMC program.

“In essence, we’re asked to function as an insurance company,” said Jerome Crest, chief administrative officer at Immanuel St. Joseph’s Hospital in Mankato. Under the new program, hospitals are asked to take on the total risk of providing care for any GAMC patients assigned to their facilities, Crest said. Those assignments, determined by the Department of Human Services, will not be available until after the April 30 deadline for hospitals to opt in or out.

“As I raised my children, when they had to know right now, the answer was ‘no,’” said James Davis, vice president of operations for CentraCare Health System, which runs St. Cloud Hospital. CentraCare officials said the St. Cloud facility would be responsible for treating all GAMC patients in central Minnesota, what Davis called “unlimited liability for unlimited and undefined numbers.”

In the Twin Cities metropolitan area, officials from Hennepin County Medical Center announced that their facility will not take part in the new program. Neither will Mercy, United or Abbott Northwestern hospitals, though Dr. Penny Wheeler, chief clinical officer with Allina Hospitals and Clinics, said leadership will continue to evaluate how the coordinated care model could work in the future.

The Department of Human Services has not released the names of the hospitals that are still considering participation in the new program.

Hospital officials reiterated that their facilities will continue to treat everyone who shows up needing care. But in the long term, Crest predicts hospitals will either reach the same dire financial straits facing some nursing homes or shift costs on to patients.

The feedback left some division members frustrated. Rep. Jim Abeler (R-Anoka) said he was hoping to hear specific suggestions on how the GAMC law could be better.

“There are gaps in the law. It happened quick and when those kinds of things happen, you’ve got to make tweaks,” he said, adding he hopes the Legislature could make several “tweaks” to the law before the end of session.

Defining reform

Division Chairman Rep. Thomas Huntley (DFL-Duluth) favors a different solution: take up the early federal option so that members of the GAMC population are covered by Medicaid.

He sponsors HF3713, which would expand eligibility for Medical Assistance, the state’s Medicaid program, to certain poor, childless adults beginning next year. Huntley proposes to pay for the $1 billion state match by using the money that otherwise would have gone toward caring for the GAMC population, as well as drawing down the Health Care Access Fund, which helps low-income workers purchase insurance. Under Huntley’s bill, transfers from the General Fund would keep the projected deficit in the HCAF from growing beyond the $409 million expected in fiscal year 2013 under current law. The bill would also repeal parts of the GAMC law so that the program would cease to exist.

Critics are skeptical of the state’s ability to pony-up $1 billion and wary of a federal effort they claim lacks sustainability and cost containment. Some are also protective of opportunities for Minnesota to implement reforms of its own, including components of the new GAMC program.

“It’s just a little bit unfortunate that because of the lure of federal dollars out there that we’re seeing a sudden retreat away from what I think would be a very good Minnesota-centered solution,” said Rep. Matt Dean (R-Dellwood).

Rep. Steve Gottwalt (R-St. Cloud) echoed similar sentiments.

“We have got to start finding different ways of delivering care to people who need it, in this state and across this country, and simply moving people on to Medical Assistance doesn’t get it done,” he said.

A companion, SF3310, sponsored by Sen. Linda Berglin (DFL-Mpls), awaits action by the Senate Health and Human Services Budget Division.

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