Political Overview

While VAHHS has put a lot of effort into the certificate of need reform bill and the Medicaid budget this session, the issues that are dominating politics at the State House are Act 60 and permit reform.

Last week the House Ways and Means Committee issued an Act 60 reform bill that dramatically alters how Vermonters pay for education by shifting from the property tax to consumption and income taxes. Governor Douglas believes the tax increases will harm Vermont's fragile economy and opposes the House proposal. The Senate passed an Act 60 reform bill before Town Meeting that increases the statewide property tax and sends that money back to towns in the form of a higher per pupil block grant. Even if the House has the votes to pass its reform bill, it is still uncertain if an Act 60 bill will pass this session.

Governor James Douglas took his message of permit reform on the road last week. The Governor traveled to key Senate districts and demanded that the legislature act this year on his permit reform proposal. The House is likely to pass a permit reform bill in the next few weeks. It is unclear if the Senate will have enough time to act before the session ends. There will be a lot of finger pointing by the Governor and the Senate Democrats if a permit reform bill doesn't pass this session.

Medicaid reform has yet to surface as a major political issue this session but it has the potential to in the very near future. This week the House will debate a proposal in the FY 04 budget bill to replace the existing co-pays that Medicaid recipients pay with premiums based on the recipient's household income. This proposal has the potential to increase costs for families with incomes of $40,000-50,000 with children enrolled in the Medicaid program, and decrease costs for older, sicker Vermonters with chronic conditions. The jury of advocates for the elderly, children and low-income Vermonters is still out on whether the premiums are a good idea. Governor Douglas's silence on this proposal is noticeable. It is a clear bet that the Governor does not want to be seen as the one that rolled back programs that provide health insurance to Vermont's children.

Issues of interest to VAHHS addressed this week by the General Assembly include:

Certificate of Need (H.128)

The House Health and Welfare Committee voted 10-0-1 (Rep. Linda Kirker, R-Essex, was absent) to advance H.128, the certificate of need bill, on Friday, March 28th. VAHHS lobbied hard on this bill and was able to get some key changes made to the bill, thanks in large part to a group of six members of the committee that felt strongly that the bill should not be punitive to hospitals. Because the bill adds new whistleblower protections for health care workers, the bill may be referred to the House Judiciary Committee. Here is a link to the House Calendar for March 31, 2003, which contains the text of H.128 as approved by the committee.

VAHHS opposes the following provisions in H.128:

• CON jurisdictional thresholds are increased, but a letter of intent is required for any project over $500,000 and BISHCA can require a CON if the project would drive utilization or rates. This provision makes the threshold increases meaningless.
• By rule, BISHCA is given the authority to "batch" CON applications on an annual basis.
• "Bill backs" to applicants to pay for the cost of additional staff needed by BISHCA to review a CON application would be authorized.
• Whistleblower protection for health care employees, including punitive damages for a violation.

VAHHS either supports or is neutral on the following provisions in H.128:

• BISHCA, in consultation with the POC and hospitals, is required to adopt rules establishing a standard format for and the contents of a hospital community report. On 1/1/05 and annually thereafter, each hospital is required to publish its community report. The report will include quality and financial measures, information about governance and a summary of a consumer complaint resolution process.
• By 3/1/04 and annually thereafter, each hospital is required to prepare a community needs assessment identifying and prioritizing the health care needs of its community. A uniform format determined by BISHCA would be used and a summary would be included in the hospital's community report.
• By 1/1/05, BISHCA must submit to the Governor a four-year health resource allocation plan to be used as a basis to make CON decisions. The new plan would supplement the State Health Plan (goals and values) and the Certificate of Need Guidelines now required by law.
• The membership of the POC is increased from nine to thirteen and it is given the task of consulting with BISHCA regarding quality and financial measures to be included in hospital report cards, in addition to making recommendations on CONs. Hospital budgets would be no longer be reviewed by the POC. The commissioner of BISCHA would review and decide budgets.
• Before making a final decision to deny a CON, the commissioner of BISHCA must serve notice of a proposed decision on the parties and provide the parties with an opportunity to present briefs and oral argument on the proposed decision.
• BICHCA reversal of a POC recommendation in a CON case would have to be based on "clear and convincing evidence," making it much more difficult for the commissioner to overturn a POC recommendation.
• CON thresholds are increased, and beginning 1/1/05, the commissioner may by rule make adjustments to the thresholds to reflect inflation. Mental health agencies or centers are exempted from CON review. Mobile facilities would be subject to CON review. The criteria that an applicant must satisfy to obtain a CON are changed substantially. The Health Care Ombudsman can intervene by right as a party to any CON.
• As a condition for deeming a CON application complete, the commissioner may require that an applicant meet with the commissioner to discuss the resolution of the applicant's compliance with prior CONs (in an earlier draft BISHCA was allowed to deny a CON application based on prior misconduct by the applicant).

Anesthesiologist Assistants (S.144)

On Thursday, March 27th, the Senate Finance Committee voted unanimously to advance S.144, the bill that proposes to establish a system for certifying Anesthesiologist Assistants (AAs) in Vermont. The committee only briefly considered the new fees established in the bill.

The Senate Government Operations Committee also took testimony on the bill on Friday, March 28th. Dr Michael Tarazi and Donna Madigan, RN of Southwestern Vermont Health Care Corporation, and Dr. Howard Schapiro of Fletcher Allen Health Care, testified on behalf of VAHHS. All indications are that the Government Operations Committee supported the bill, but since they did not have the bill in their committee, no formal action was taken.

The bill will likely be up for action on the Senate floor as early as Tuesday, April 1st. Sen. Jim Leddy, D-Chittenden, plans to offer a number of friendly amendments on the Senate floor. Those amendments include one to grandfather an AA that graduated from an AA program before the program was a masters-level program, and another grandfathers an anesthesiologist that is not board certified (because he or she might be educated in Canada or Great Britain, for example) to supervise AAs when the anesthesiologist is credentialed by and working for a hospital full-time. Here is a link to the Senate Calendar for Tuesday, April 1, 2003, with the text of S.144, along with the amendments that will be offered by Sen. Leddy.

FY04 Medicaid Budget (H.464)

The House Appropriations Committee unanimously advanced H.464, the FY 04 budget bill this week. The committee unanimously endorsed the proposal to replace the existing Medicaid co-payments with premiums based on the recipient's income. Premiums would range from $7 per month to $97 per month. These premiums would replace co-pays for individuals participating in VHAP, VHAP-Rx, VScript, VScript Expanded, Dr. Dynasaur, SCHIP and the working people with disabilities program (WPWD). The only exception is that the existing emergency room co-payments for VHAP and the working people with disabilities program ($25 for appropriate use /$60 for inappropriate use) would remain in effect to deter improper use of the emergency room. An individual will be dropped from Medicaid when the delinquent premium balance is equivalent to two monthly payment periods. The state will collect the premiums and as a result, this proposal has the potential to reduce the cost shift to hospitals.

There was one small victory for hospitals in the FY 04 budget bill. As you know, Governor Jim Douglas proposed to institute a 5 percent coinsurance requirement for hospital inpatient and outpatient services with a $100 annual cap for adult Medicaid beneficiaries enrolled in PC-Plus (managed care) and those enrolled in fee-for-service (those who have other insurance in addition to Medicaid and are enrolled in another state waiver program). The Governor's proposal was expected to save the state approximately $300,000 in state funds (and close to $780,000 with the federal match included). The House Appropriations Committee voted to reduce this coinsurance requirement to 2.5 percent with a $50 cap, so now the coinsurance requirement will only save $152,500 in state funds and approximately $400,000 in total state and federal funds. So in essence this saves hospitals $400,000 (assuming they were unable to collect any of the payments from the patients). This is an important incremental step. We will continue to push for the total elimination of this coinsurance requirement in the Senate.

On the tobacco fund front, the committee agreed to restore nearly all of the tobacco control programs. The Governor had proposed reducing tobacco control programs from $5.2 million in FY 03 to $2.9 million in FY 04. The House Appropriations Committee's budget bill funds these programs in FY 04 at $4.5 million (including $720,000 in increased tobacco settlement funds expected in FY 04). In other news, the FY 03 increase in the tobacco settlement funds ($932,000) was transferred to the Medicaid Trust Fund and used to balance the FY 04 Medicaid budget.

Here is a link to the lengthy FY 04 budget bill, H.464. Medicaid is section 147.

S.25, Child Passenger Safety Seats

The Senate passed S.25, a bill that requires booster seats for children up to the age of eight traveling in a motor vehicle, among other things. VAHHS supports this bill. The bill is on the Senate Notice Calendar.

S.74, Pharmaceutical marketers

The Senate passed S.74, a bill that requires pharmaceutical manufacturing companies to disclose to the Vermont board of pharmacy the value, nature and purpose of any gift, fee, payment, subsidy, or other economic benefit, and the name of the recipient, provided in connection with detailing, promotional or other marketing activities by the company, directly or through its pharmaceutical marketers, to any physician, hospital, nursing home, pharmacist, health benefit plan administrator, or any other person in Vermont authorized to prescribe, dispense, or purchase prescription drugs in this state.

S. 159, Birth Information Network

The Senate Health and Welfare Committee unanimously advanced S.159, a bill that proposes to create a birth information network for the purpose of identifying and enrolling in services infants whose health and welfare would benefit from early medical intervention and health and social supports. The bill will be up for action on April 1st. Here is a link to the Senate Calendar for April 1, 2003, with the text of the bill.

Medical Malpractice Reform (H.270, S.156)

At the request of the Vermont Medical Society, two identical bills to reform medical malpractice were introduced this year. H.270 is the House bill and S.156 is the companion Senate bill. Earlier this session the House and Senate Judiciary Committees held a joint hearing to consider these bills. The Vermont Bar Association hosted a forum to discuss these issues a few weeks later. Since then there has not been any activity regarding this issue at the State House. The Vermont Medical Society plans to work on these issues over the summer in the hope that the bills will be taken up next year. VAHHS strongly supports these bills and is ready to assist the Vermont Medical Society in any way to move these bills forward.