Political Overview

This week lawmakers raced to meet the "crossover" deadline set for Friday, February 27th for advancing legislation that must pass this year. Committees toiled late into the evening each night as nerves wore thin. This activity created a buzz in the State House that is more typical of the last few days of the session. There was noticeable relief on Friday as lawmakers left the State House for a week long Town Meeting recess.

Many health care related bills met the crossover deadline. The most significant event this week for hospitals, however, was that the House Health and Welfare Committee voted to reverse course and impose a $14 million per year provider tax on hospitals to replace a premium tax for the purpose of funding a reinsurance pool as part of Governor Douglas's health insurance "bucket bill" (now H.759). The committee's rationale for the switch was that a provider tax allows them to pass the cost of the reinsurance pool along to a broader base of payers, including self-insured plans, which they could not reach with a premium tax due to preemption by the federal ERISA law. VAHHS did not have an opportunity to testify regarding this bill in the House Health and Welfare Committee. The bill will likely be referred to the House Ways and Means Committee where VAHHS will strongly oppose the proposed provider tax.

VAHHS Issues

Health Insurance Reform (H.759)

After weeks of testimony, the House Health and Welfare Committee, by a vote of 8-3, advanced a committee bill, H.759, containing most of the provisions from H.713, the Governor's health insurance reform "bucket bill." Vice Chair Rep. Kinny Connell, D-Warren, Rep. Steve Maier, D-Middlebury, and Rep. Clint Martin, D-Springfield, voted to oppose the bill because they prefer a VHAP buy-in approach to providing health insurance to the uninsured rather than the reinsurance mechanism proposed in H.759. The bill is not on-line yet but a copy is attached to this report. VAHHS sent out an "Advocacy Alert" to all Vermont hospital CEO's via email last Friday, a copy is also attached to this report.

The most significant provisions in the bill for hospitals are as follows:

An annual assessment of 1.4 percent on each hospital's net operating revenue beginning January 1, 2005. The assessment is projected to raise $14 million. The $14 million, along with a $1 million grant expected from the federal government, will generate a total of $15 million needed to fund the Governor's "Small Market Access Reinvestment Trust" or "SMART" program. If, however, the SMART program needs additional funds to pay claims then the Commissioner of BISHCA has authority to impose additional assessments on hospitals. The committee expects hospitals to recoup these assessments by raising charges to private payers but the bill doesn't specifically mention such a pass thru.

SMART is a reinsurance trust that will allow nongroup and small group health insurers to transfer all or a portion of the expenses associated with certain individuals to be paid for by the funds in the trust. In essence, SMART is a high risk pool. The purpose is to provide premium relief (up to 10 percent) to all private health insurance companies in Vermont.

The bill establishes a "Health Care Cost Containment Council," consisting of various panels including a health care payer panel, a health care provider panel, a health care facility panel (VAHHS is a member of this panel and the Commissioner of Health is the chair), a health care patient and consumer panel, and any other panels of interested parties that the Commissioner of BISHCA wishes to designate. The council is authorized to engage in cost containment activities, including participating in hospital budget reviews and certification of need (CON) proceedings. One other activity of particular interest to VAHHS members is that the council is authorized to enter into "negotiations with health care facilities and health care providers relating to charges, utilization, and quality." It is possible that these panels will be exempt from antitrust laws because the state specifically grants them the authority to act and oversees their activities. If this were the case, the health care payer panel, for example, could possibly decide how much they'd collectively be willing to pay providers.

The bill requires the formation of an interactive health care information and communications database plan.

The bill authorizes the Commissioner of BISHCA to promulgate rules for common claims forms, health care provider patient invoices and health insurance statements. Expenses to implement these common forms and procedures can be billed back to hospitals (50 percent) and health insurance companies (50 percent).

There are many other important provisions in the bill as well. The bill will likely be introduced on March 9th and referred to the House Ways and Means Committee. The bill may also be reviewed by the House Commerce Committee and will likely have be to approved by the House Appropriations Committee.

Whistleblower (S.154)

The Senate Economic Development, Housing and General Affairs Committee voted 5-1 to advance S.154, a bill that proposes to establish whistleblower protections for hospital employees. The bill also creates a hearing process in the Department of Labor and Industry for alleged violations of the law. VAHHS testified in opposition to the bill because Vermont hospitals already have non-retaliation polices in place. The Senate Judiciary Committee may take a look at the bill after they return from Town Meeting recess but the Judiciary Committee will probably not take possession of the bill so that it will pass the Senate in time for the House to consider it this year. Here is a link to the Senate Calendar for March 9, 2004, containing the text of S.154 as advanced by the Senate Economic Development, Housing and General Affairs Committee.

http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/calendar/sc040309.htm

Medical Malpractice Study Committee (S.156)

The Senate Judiciary Committee voted unanimously to advance S.156, a bill that proposes to establish a study committee related to medical malpractice actions and insurance. Committee membership includes representatives from BISCHA, the Medical Society, VAHHS, the Vermont Trial Lawyers Association, the Vermont Bar Association, the healthcare ombudsman's office and the American Insurance Association. To assist the committee in understanding the factors that contribute to the costs of medical malpractice insurance, Fletcher Allen Health Care is directed to provide medical malpractice claims experience data to the committee. The committee must report its findings to the General Assembly by December 15, 2005. Here is a link to the Senate Calendar for March 9, 2004, with the text of S.156.

http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/calendar/sc040309.htm

Nurse Loan Forgiveness (H.583)

By an 11-0 vote, the House Health and Welfare Committee advanced H.583, a bill related to loan forgiveness for advanced nursing degree debt. The bill will likely be referred to the House Appropriations Committee because it contains a $200,000 appropriation. The text of the bill can be found on the House Calendar for March 9th. Here is a link to that calendar.

http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/calendar/hc040309.htm

Civil Monetary Penalties (H.566)

By a 10-1 vote, the House Judiciary Committee approved H.566, a bill that proposes to impose civil monetary penalties for provider fraud. VAHHS, the Vermont Medical Society, PATH and the Vermont AG's office reached an agreement that would provide for two-tiered penalties - one tier for intentional acts and a second, lower-level tier of penalties for unintentional acts. The committee agreed to go along with parts of that agreement by reducing the penalties for unintentional acts, including imposing a $5,000 cap on attorney's fees and investigative costs. However, the committee added a civil penalty of up to $100 per false claim or up to $100 for each false document submitted in a false claim for unintentional acts. This provision was not agreed to by the interested parties and VAHHS opposes it. At the request of VAHHS and the Medical Society, the bill also requires PATH to issue rules to establish procedures for providers to obtain advisory opinions regarding coverage and reimbursement for Medicare and Medicaid and directs PATH to issue fraud alerts to providers at least four times a year. These education and information provisions are designed to assist providers in complying with the intricacies of billing for Medicaid so they can avoid mistakes and avoid prosecutions for fraud. The bill is pending on the March 9th Notice Calendar for the House (see attached link). http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/calendar/hc040309.htm

Advance Directives (H.752)

The House decided to postpone action on H.752, the advance directives bill, until Tuesday, March 16, 2004, to allow the House Judiciary Committee an opportunity to review the bill. The bill proposes to improve end-of-life care for Vermonters by simplifying the legal requirements for advance directives (such as living wills and health care proxies) and creating a registry of advance directives for the use of health care providers, including emergency medical personnel, health care facilities, and residential care facilities. The bill also contains a controversial provision related to the newly created Do-No-Resuscitate Orders (DNRs) that states that a patient's physician may issue a DNR order for patient who is neither terminally ill nor chronically debilitated, provided the physician is satisfied that the patient has personally given informed consent to the DNR order. The House Judiciary Committee will continue taking testimony on this bill after the Town Meeting recess. http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/intro/H-752.htm

Hospital Licensing Fees/X Ray Equipment Fees

VAHHS and the Department of Health (DOH) are still at an impasse over the proposed new hospital licensing fees to be placed in the miscellaneous fee bill. The DOH's proposal is to increase the hospital licensing fee from a $10 application fee (established in 1949) to a $7,250 base fee, plus impose a new fee of $25 per hospital bed. A hospital can reduce the base fee to $4,250 if it is accredited by the Joint Commission on Accreditation of Health Care Organizations. These fees are estimated to generate an additional $120,825 per year, which the DOH proposes to use to cover the cost of staff that handles the licensure process. According to Committee Chairman Richard Marron, R-Stowe, the House Ways and Means Committee decided to reduce the base fee to $1,000 and leave the $25 per bed fee, which based on the DOH's projections, will reduce the amount collected to approximately $57,225. The House Ways and Means Committee also rejected the DOH's proposed new fee of $100 per x-ray tube, which was expected to raise $150,000 to cover the costs associated with the DOH's radiation control program. No word yet on the DOH's response to the committee's decision. The fee bill is exempt from the "crossover" deadline so the bill still has a chance of passing this year.

Optometry (S.54)

By a 26-0-4 vote, the Senate gave preliminary approval to S.54, a bill that expands the scope of practice for optometrists. The bill will be up for final action in the Senate on March 9th. Here is a link to the Senate Journal for February, 27, 2004, with the text of S.54 as approved by the Senate.

http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/journal/sj040227.htm

Prescription Drugs (S.288)

This week the Senate Finance Committee voted 5-2 to advance S.288, a prescription drug bill. The Senate Finance Committee voted to amend sections of the bill that were drafted by the Senate Health and Welfare Committee, namely, sections on prescription drug disclosure, pharmaceutical marketer disclosure, pharmacy benefit manager regulation and the prescription drug fair pricing program. The bill was referred to the Senate Appropriations Committee on Friday, February 27th. Here is a link to the Senate Calendar for Thursday, February 26, 2004, which contains the full text of S.288, as it was advanced by the Senate Health and Welfare Committee and the proposal of amendment offered by the Senate Finance Committee.

http://www.leg.state.vt.us/docs/2004/calendar/SC040226.htm

Public Hearing on End of Life Care

The House and Senate Health and Welfare Committees held a joint public hearing regarding "End of Life Care: Choices and Challenges," on Thursday, February 26, 2004, at 7 pm at the State House. The hearing was broadcast live on Vermont Public Television. The hearing was intended to continue the dialogue on this important issue after members of both committees decided early in the session to not take any action on the various "Death with Dignity" bills pending in the General Assembly. Feedback from lawmakers after the hearing was very positive, with everyone in agreement that the testimony was thoughtful on this difficult topic.