2004 Legislative Report

For the week ending January 16, 2004

Political Overview

Governor Douglas and legislative leaders agreed this week to increase the official revenue forecast for the current fiscal year ending on June 30th (FY04) by $15.9 million and for the upcoming year starting on July 1 (FY05) by $9.5 million. The state economists were cautiously optimistic that Vermont's economy is slowly improving and the recession is over. With this information in hand, the Governor will present his FY05 Budget Address to a joint assembly of the House and Senate on Tuesday, January 20.

The House Appropriations Committee approved a budget adjustment bill for FY04 this week (H.585). The bill boosts funding to meet an increase in human services programs including Medicaid and the Vermont State Hospital, fills the state's reserve funds and funds various existing initiatives such as clean water programs and court diversion. One committee member characterized the committee's mood as one that desires to meet existing state commitments and not to identify new needs or start new programs. The budget adjustment bill will be up for action on the House floor starting on Tuesday, January 20th.

VAHHS Issues

Long Term Care

This week the House Health and Welfare Committee continued to take testimony on long term care. They heard from the Vermont Assembly of Home Health Agencies and the Area Agencies on Aging, both in support of the 1115 waiver to enable home and community-based services to be an entitlement the same way that nursing home care is today.

The Committee distributed a draft bill late on Friday afternoon, January 16th. The draft bill includes oversight of the 1115 long term care waiver application by the Vermont Health Access Oversight Committee, a recommendation for a $ 2.3 million up front appropriation for building up the home and community-based infrastructure (called "priming the pump"), a provision requiring savings realized from the waiver to be reinvested in home and community-based services and patient assessments to be done prior to hospital discharge. The assessment provision may be a problem in terms of hospital capacity and we will likely have some hospital discharge planners weigh in on the proposal. The bill will also likely contain provisions updating Vermont's statutes regarding advanced directives, including living wills and powers of attorney for health care.

Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) Commissioner John Crowley submitted his suggested revisions to Vermont's long term care insurance statutes. The proposal is to amend Vermont's law to bring it in line with the National Association of Insurance Commissioners (NAIC) model law on long term care insurance with two exceptions. First, insurers would be required to treat behavioral health the same as physical health due to Vermont's parity law. Second, insurers could not write policies that cover only nursing home care - other options must be available consistent with the 1115 Waiver application. This language is not in the draft bill and will likely be a separate bill, according to Committee Chair Tom Koch.

Workers' Compensation Hospital Fee Schedule

This week the Workers' Compensation Study and Advisory Committee issued their final legislative report. Significantly for hospitals, the report contains a recommendation that the Commissioner of the Department of Labor and Industry reconvene the Medical Advisory Committee to amend the Medical Fee Schedule to address hospital-based charges, durable medical equipment and pharmaceuticals.

This recommendation does not require any legislative action because Vermont law already gives the Commissioner of the Department of Labor and Industry the right to impose a fee schedule on any provider that accepts payments from workers' compensation insurance carriers, including hospitals. The department already has a fee schedule for doctors. Commissioner of Labor and Industry Mike Bertrand said he might reconvene the Medical Advisory Committee sometime this spring. The Commissioner knows VAHHS wants to participate in this discussion and will invite us to do so. The full report can be found at:

http://www.state.vt.us/labind/wcomp/advisorycom.htm

Premium Implementation

John Michael Hall, Commissioner of the Department of Prevention, Assistance, Transition and Health Access (PATH), testified before the Senate Health and Welfare Committee regarding the status of the department's efforts to implement the shift from co-payments to premiums for Medicaid recipients. As of 1/14/04, the total percent of premiums the department received per Medicaid program is as follows:

Dr. Dynasuar - 77.3 percent

Working People with Disabilities - 68.8 percent

Vermont Health Access Plan - 46.6 percent

VHAP Rx - 53.8 percent

VSCRIPT (prescriptions) - 53.4 percent

VSCRIPT Expanded - 39.3 percent

For some programs, if payment is not received by January 15, a termination notice will go out on January 20th, with "disenrollment" occurring as early as January 31, 2004. The committee was very concerned about the possibility of large numbers of individuals losing coverage as a result of not paying premiums. All providers have been asked to look out for patients having trouble with paying premiums or losing coverage. Commissioner Hall will be invited back in the next week or so with an update.

Vermont State Hospital

The Senate Institutions Committee held a hearing to discuss the Vermont State Hospital (VSH). The committee focused on the infrastructure and what could be done immediately to address the needs of patients at the facility. Providers from VSH stated immediate needs include: creating space for specialized units at a cost of at least $500,000 and $100,000 to sound-proof four seclusion rooms.

Agency of Human Services Reorganization/ Legislative Agenda

Agency of Human Services Secretary Charlie Smith testified in the Senate Health and Welfare Committee on the status of the agency's reorganization and legislative agenda. Secretary Smith stated that the reorganization will take place over the next three years. The agency's reorganization report will be released in two stages. The first report came out on Friday, January 16th, and focused on the process the agency followed to get public input. The second report, due out in mid-February, will contain more substance, including a summary of the actions the agency has taken or will take to reorganize.

Secretary Smith shared his agency's legislative agenda for 2004 including:

The Department of Aging & Disabilities will work on the 1115 Long Term Care Waiver.
The Department of Developmental and Mental Health will seek approval of S.118, a bill recommending changes to the civil commitment procedures for individuals with developmental disabilities. The Department will also seek authority for the Vermont Department of Health (VDH) to license the Vermont State Hospital.
The VDH priorities include: (1) updating the fee structure for hospital licensure. Currently, Vermont hospitals pay a $10 licensing fee per year and Secretary Smith stated that the increase will be to four digits ($3,000-4,000); (2) seeking to implement language in the FY04 budget bill by submitting a plan for development of a preferred provider system for prevention and treatment services for substance abuse; (3) seeking approval of S.279, a bill that amends Vermont law regarding opiate addiction treatment to allow methadone to be administered outside of a hospital and authorizes buprenorphine hubs; (4) legislation to create a prescription drug program for controlled substances and give VDH authority to create rules which would regulate the dispensing of controlled substance; (5) seeking legislation to assure that investigators for the Medical Practice Board have appropriate authority to conduct investigations and are assured certain protections; and (6) seeking funding to implement the Chronic Disease Initiative and the Fit and Healthy Kids initiative.

Nursing Home Wage Supplement

The budget adjustment bill, H.585, includes $300,000 for Vermont nursing homes to make up for approximately half of the shortfall in the FY04 wage supplement appropriation caused by a decline in the federal Medicaid match rate.

Respiratory Therapists

The Office of Professional Regulation granted a sunrise application this fall finding that respiratory therapists should be licensed in Vermont. Consistent with the Board's vote last summer, VAHHS is working to get a bill introduced to license respiratory therapists in Vermont. Rep. Harry Chen, D-Mendon, who is also an emergency room physician at RRMC, has agreed to be the lead sponsor of the bill. The bill will likely get introduced next week.

Forum on the Economic Impact of Health Care Costs on Vermont Employers

On January 28, 2004, the Senate Health and Welfare Committee is sponsoring a forum on the economic impact of health care costs on Vermont businesses, from 3 to 6 pm at the auditorium in the Pavilion Building in Montpelier.