Political Overview

A clear preference for getting something done over defending ideological ground dominated the 2003 session of the Vermont General Assembly. From the beginning of the session, leaders of both chambers made it clear that wasting time on fringe issues such as parental notification from the right or universal health care from the left would not be tolerated at the expense of moving forward on the list of moderate priorities established by newly-elected Governor Jim Douglas.

The governor's own style of dogged yet polite pragmatism reinforced this mood. The voters helped too, replacing several more extreme members with freshmen of moderate politics and pleasant personalities. The voters also gave second-term Speaker Walter Freed, R-Dorset, an almost evenly split House of Representatives, with neither major party controlling a clear majority. This forced the speaker to make politically balanced appointments to most committees. While he kept firm control of the key money committees (Appropriations and Ways and Means), many of the other committees contained an even balance of Republicans and Democrats, with strategic assignments for the House's four Progressives and two Independents helping to achieve that balance. The speaker also created the impression, if not the reality, of shared leadership by appointing a Republican chair and a Democratic or Progressive or Independent vice-chair to every committee. As the session progressed, this symbolic power sharing became real and, in most cases, loyalty to the substantive work of the committee overcame loyalty to party or ideology. That is why the House had a productive session.

The dynamic in the Senate was not as complicated. The new 19-11 Democratic majority was dominated by moderate voices who did not allow the fatal drift to the left that had plagued Senate Democrats in the past.

All of this led to a cooperative and low-key environment during the 2003 session, marred only by the April political shouting match between Governor Douglas and Senate President Pro Tem Peter Welch, D-Windsor, over so-called permit reform. It appears that both participants thought better of that dust-up by the end of the session. Even though permit reform did not pass, the comments of both political leaders were more constructive than critical at the end.

From a pure political standpoint, the governor gets the most credit for a productive session because he is the leader of the state. This is fair, because he would get blamed for an unproductive session. In terms of campaign fodder for legislative leaders, both parties have plenty of positive claims to make about helping the state move forward. Neither party picked up much ammunition with which to attack the other. In the absence of scandal, what happens in Montpelier doesn't really matter in legislative races. They usually are dominated by local politics and personalities.

Bills of interest to VAHHS that were enacted into law (or are awaiting the Governor's signature) with Internet links to the text include:

Hospital Regulation, Certificate of Need (H.128)

H.128 is the most significant hospital regulation bill to be enacted into law since 1996 when the Health Care Authority was eliminated and the Department of Banking, Insurance, Securities and Health Care Administration and the Public Oversight Commission were created. VAHHS worked hard all session to improve the bill and make it workable for hospitals. A detailed summary of the bill as it passed both the House and Senate and is awaiting the Governor's signature is attached. The bill has various effective dates.

FY04 Budget Bill (H.464)

The FY04 Budget Bill, H.464, contains a significant policy change for the Medicaid program, namely shifting the primary method of financing the program from co-payments and deductibles to premiums. Here is a link to an analysis of the final FY04 Medicaid budget prepared by the Legislative Joint Fiscal Office.

Some of the highlights of the FY04 Budget for hospitals include:

1. Hospital Reimbursement - The law increases the provider tax by 1.25 percent above the rate set at the beginning of the year - or from 3.25 percent to 4.50 percent. The 1.25 percent increase in the provider tax is estimated to raise an additional $10.7 million, with a federal match of approximately $17.3 million (at the current match rate) for a total of nearly $28 million. Of that, hospitals will receive approximately $15.1 million in state and federal matching funds to increase Medicaid reimbursement rates. The remaining close to $12.9 million state and federal funds generated from the increased provider tax on hospitals will be used to eliminate most co-payments and deductibles for Medicaid beneficiaries as well as helping finance the shift to premiums. The Retreat Healthcare will be taxed as a "mental hospital or psychiatric facility" at the rate of 3.80 percent beginning April 1, 2003, and the revenue generated will be used to fund a Retreat-specific package separate from that outlined above for all other hospitals. The law also includes a provision that directs the agency to conduct discussions with Dartmouth Hitchcock Medical Center and VAHHS with the aim of developing and implementing a Medicaid reimbursement formula that maintains the rate parity that currently exists between Dartmouth and Vermont hospitals (this is because Dartmouth is not slated to receive Medicaid rate increases as a result of the provider tax increase since Dartmouth does not pay provider taxes in Vermont). Finally, the bill directs the agency to establish a new base for the mid-sized hospital class, and rebase Grace Cottage, Gifford, Mount Ascutney and Porter to an all-inclusive per diem amount reasonably related to the Medicare critical access hospital rate.

2. Hospital co-payments - Hospitals will continue to have some "cost-sharing" obligations in the form of co-payments under the budget bill. First, there will continue to be a $25 co-payment for each medically necessary emergency room visit by VHAP participants. This is to discourage improper use of the emergency room. Second, there will be a $75 co-payment for inpatient services and a $3 co-payment for outpatient services for all enrollees in traditional Medicaid (excluding children, pregnant women and residents in nursing homes), which is estimated to cost $350,000 in state funds. All other co-payments and deductibles for all pharmacy programs and for all providers, including physicians, will be replaced by premiums beginning January 1, 2004.

3. Medicaid premiums - The switch from co-payments to premiums is arguably the most significant change to the Medicaid program since the creation of VHAP in the early 1990s. VHAP uninsured, pharmacy assistance programs (VHAP pharmacy, VScript, VScript Expanded) and coverage for working people with disabilities will have almost all existing co-payments eliminated and will be financed by income-sensitive premiums. The rationale is that with co-payments (where you pay when you seek services), older and sicker Vermonters paid more than younger, healthier Vermonters. Premiums will range from $4 per month for an individual on VHAP with an income below 50 percent of the federal poverty level to $75 per month per household for Working People With Disabilities with an income of 225-250 percent of the federal poverty level. Premiums will be paid on a prospective basis meaning that payment must be received by the first of the month in order to have coverage that month (except for pregnant women and children who qualify for three month retroactive coverage). Many low-income advocates are concerned that Vermonters will not pay the premiums and will drop out of the Medicaid program, which could result in increased bad debt for hospitals when these individuals show up at the emergency room without health insurance. Implementation of premiums will have to be monitored carefully to avoid this result.

4. Nursing Homes - The FY04 budget increases the bed tax from $3,166.29 to $3,388.25, or by $221.96 per bed, effective July 1, 2003 to July 1, 2005. The increased bed tax will generate approximately $1.5 million to fund part of the inflation factor for nursing homes, while general fund revenue will fund the remainder of the inflation factor. Recent estimates from the Department of Aging and Disabilities suggest that the inflation factor for FY04 will be approximately 4 percent, which will cost approximately $3.5 million, although the actual amount will not be known until the end of June when the final numbers come in. In addition, the Agency of Human Services is directed to seek a waiver that would exempt Wake Robin, Merten's House and The Arbors from the bed tax in the future since they pay the tax but do not benefit from increased Medicaid rates since they do not serve any Medicaid beneficiaries.

5. Bonds - The final budget contains a provision that removes the exclusion of US savings bonds from nursing home eligibility calculations.

6. Substance Abuse Treatment - The budget adds close to $1.8 million in new spending for substance abuse programs including $125,133 for 10 additional student assistance counselors, $992,107 for outpatient treatment and aftercare (including an opiate treatment facility), $517,101 for residential treatment and $165,000 for recovery centers. All but the $165,000 for recovery centers is new general fund spending and is expected to draw down matching federal funds. The budget all includes a plan for the operation of an 80-bed inpatient facility to treat persons with drug addictions. The new facility would offer care not currently offered in the state. The proposal is designed to reduce costs and offer more effective treatment for these individuals.

7. Misc. The budget also calls for a $750,000 Medicaid rate increase to dentists, a $200,000 rate increase for residential care facilities, and $250,000 for the nursing loan repayment program.

Anesthesiologist Assistants (AAs) (S.144)

On May 23, 2003, the Governor signed into law S.144, the bill that authorizes the Medical Practice Board to certify anesthesiologist assistants in Vermont. The law is effective upon passage. The Department of Health and the Medical Practice Board now begin the rulemaking process to implement the law. It typically can take up to six months to promulgate rules from the time the rules are drafted so it will still be some time before the Medical Practice Board will start certifying anesthesiologist assistants in Vermont. The law also contains provisions to clarify Vermont law relative to limited temporary licenses obtained by residents at Fletcher Allen.

Agency of Human Services Reorganization (H.450)

H.450, a bill that authorizes the Secretary of the Agency of Human Services to restructure the agency according to broad goals and principles, was enacted into law on May 29, 2003. The bill is effective upon passage. There are many opportunities in the new law for stakeholders to be involved in agency restructuring. For example, the secretary is directed to convene 12 regional advisory groups and one statewide advisory group to advise him on the design of the agency. The law also creates a legislative oversight committee on human services restructuring. By January 15, 2004, the secretary must prepare his initial recommendations for agency restructuring to this legislative oversight committee. By January 15, 2005, the secretary must prepare a strategic plan for the agency and present it to the General Assembly, and update it biennially.

Safety Seats (S.25)

S.25, a bill that revises Vermont law regarding the use of child safety seats, was enacted into law. The law is effective January 1, 2004.

Vermont State Hospital Space Study and Appropriation (H.457)

As a result of recent violations at the Vermont State Hospital, the Capital Construction Bill contains a provision that authorizes the commissioner of buildings and general services, in consultation with the commissioner of the department of developmental and mental health services (DDMHS) and with the approval of the secretary of administration, to undertake emergency steps to lease, create, or renovate space for specialized units, which may be funded with an emergency appropriation. The language also directs DDMHS to conduct a comprehensive evaluation of the need for psychiatric inpatient services throughout Vermont, including services provided by the Vermont State Hospital, in order to map out strategic recommendations for the future of the hospital. In the course of this study, the department shall consult with advocates for patients at the facility, representatives of the Vermont state employees' association, representatives of community mental health centers, the Vermont Psychiatric Society (a part of the Vermont Medical Society), and the department of buildings and general services. The commissioner of DDMHS must report her recommendations to the House and Senate Committees on Institutions and on Health and Welfare on or before January 15, 2004. The provision also requires that by September 1, 2003, DDMHS shall adopt clear protocols for ensuring that patients from all wards have access to the recreation area outside the confines of the building that houses the inpatient psychiatric unit, consistent with each patient's individual treatment plan. These requirements can be found in section 33 of the Capital Construction Bill, H.457.

Statewide Needs Assessment of Dialysis Treatment (S. 170)

S.170, a bill that requires the department of aging and disabilities to conduct a statewide survey and study of all dialysis treatment in Vermont, was enacted into law. The report must identify all funding mechanisms currently paying for dialysis treatment in Vermont, identify existing gaps in the delivery system and explore alternatives to the present delivery system, including the use of mobile dialysis units. The report is due to the House and Senate Committees on Health and Welfare and to BISHCA to assist that agency in developing the new health resource allocation plan, by November 15, 2003. The bill is effective July 1, 2003.

Birth Information Network (S. 159)

S.159, a bill that directs the commissioner of health to establish a birth information network designed to identify newborns that have special medical needs, was enacted into law. The law authorizes the commissioner of health to appoint an advisory committee to comment on the effectiveness of the birth information network and to gather information about funding opportunities. The advisory committee shall be composed of representatives from the primary organizations involved in network data collection and use. The department of health is authorized to collect information for the birth information network. The commissioner of health, in collaboration with appropriate partners, is authorized to "coordinate existing data systems and records to enhance the network's comprehensiveness and effectiveness" including such data systems as vital records, the Medicaid claims database, the hospital discharge data system and health records, (such as discharge summaries, disease indexes, nursery logs, pediatric logs, and neonatal intensive care unit logs) from hospitals, outpatient specialty clinics, genetics clinics, and cytogenetics laboratories. The law is effective July 1, 2003.

Professional Regulation (H.449)

H.449, a bill that revises miscellaneous laws in the office of professional regulation, passed both the House and Senate and is awaiting the Governor's signature. The bill makes revisions to the statutes affecting clinical mental health workers, optometrists, pharmacists, chiropractors, and naturopathic physicians, among others. It also requires that pharmacy technicians be registered with the state for the first time.

Mandatory Child Abuse Reporting (S.93)

In addition to adding clergy to the mandatory reporting list, S.93 requires the Department of Social and Rehabilitation Services to develop standard reporting, information, education and training protocols for Vermont's mandatory reporting law. The bill adds criminal penalties to all of those who are required to report under the law, including health care providers and hospital administrators. The law is effective on May 27, 2003.

Annual Report Due Date of Behavior Health Care Task Force (H.96)

H.96, a bill that changes the date that the annual report from the behavior health care task force is due to the General Assembly from December 1 to January 15 of each year, was enacted into law. The law is effective July 1, 2003.

Bills of interest to VAHHS that will carry over to 2004:

This being the first year in a two-year biennium, all bills that were not enacted into law this year remain "on the wall" and carry over until next January when they can be taken up again. Some of the key bills of interest to VAHHS in this category include:

Abuse of Vulnerable Adults (S.17) (passed the Senate)

Whistleblower Protection (H.399, H.470, S.154)

Nurse Staffing Ratios (H.335, S.158)

Ban on Mandatory Overtime (H.337, S.157)

Use of Involuntary Restraints (H.328)

Health Care Access and Affordability (H.196) (reforms commercial health insurance market)

Medical Marijuana (S.76) (passed the Senate)