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For the week ending March 12, 2004
Political Overview
This week lawmakers returned from Town Meeting recess. The sense of urgency lawmakers had to complete their work the week before they left for break has dissipated. Town Meeting typically signals the mid-point of the session but the big issues this session - health insurance reform, prescription drugs and workers' compensation - are still far from complete. Permit reform, the major unfinished bill from last session, is still locked up in conference committee negotiations. One bright spot is the FY05 budget bill that will likely be debated on the House floor starting Monday, March 22nd. The third week of March is not a record breaker for the budget bill to hit the House floor but it is significant because it shows real progress on the only must-pass bill of the session.
Hospital and nursing home CEOs, trustees and staff amassed at the State House on March 10th for a successful VAHHS-sponsored "Hospital Day." Hospital CEOs, trustees and VAHHS staff met with dozens of legislators at a legislative breakfast, followed by a meeting with Governor Douglas, where he specifically stated he did not support a provider tax for H.759. Many thanks to all who participated.
VAHHS Issues
Health Insurance Reform (H.759)
The small market health insurance reform bill, H.759, which contains the $15 million provider tax on hospitals, was referred to the House Ways and Means Committee this week. Tom Huebner, CEO of Rutland Regional Medical Center (RRMC) and Board Chair of VAHHS, testified on Wednesday, March 10, against the proposed annual 1.4 percent tax on hospital net operating revenue. Tom explained that the tax was inequitable because it would only tax Vermont providers and not out-of-state hospitals like DHMC and it would only apply to hospitals and not other providers. Also, the tax would have different impacts on the hospital rates in different communities depending on a hospital's payor mix. Tom also testified that VAHHS was opposed to the cost containment council established in the bill but supported some provisions in the bill including tax credits for certain employers to offer high deductible health savings accounts to their employees and the ability of insurers to offer healthy lifestyle discounts to subscribers.
The Joint Fiscal Office issued a fiscal note regarding H.759, which states that the 1.4 percent tax would actually have to be raised to 1.55 percent in order to raise $15 million.
The Committee also heard from BISHCA Commissioner John Crowley and BISHCA General Counsel Herb Olson. Commissioner Crowley said he would prefer the premium tax but would be comfortable if the committee voted the bill out with the hospital provider tax.
The House Ways and Means Committee spent a lot of time debating the pros and cons of the premium tax versus the provider tax to fund the reinsurance pool. It is uncertain at this time if the committee will support either tax or the reinsurance pool mechanism. Next week some employer groups in the state are expected to testify against any tax increase. A representative of VAHHS will likely testify before the committee again in the near future to answer questions that need to be addressed in the wake of testimony the committee has heard to date. Here is a link to the bill as introduced.
http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/intro/H-759.HTM
Hospital Provider Tax (fee bill, no bill number yet)
PATH Commissioner John Michael Hall testified in the House Ways and Means Committee this week regarding the hospital provider tax, including the long-standing hospital provider tax that is used for the purpose of drawing down federal funds for the Medicaid program (not the $15 million tax in H.759). The total provider tax for SFY 2005 is proposed at 4.86 percent of net patient revenue. The total provider tax is related to 1) disproportionate share hospital (DSH) payments and 2) rate increases. In the recently enacted Medicare law, Congress authorized a 16 percent increase in the DSH payment cap. Commissioner Hall testified that the portion of the hospital provider tax related to DSH would need to be raised to 3.56% percent of net patient revenue starting July 1, 2004, for the state to draw down the maximum allowable DSH payments. The remaining 1.25 percent is related to the rates. The final outcome of this provider tax remains very unsettled.
Hospital Licensing Fees (fee bill, no bill number yet)
The House Ways and Means Committee issued a second draft of the miscellaneous fee bill. The Committee decided to reduce the newly proposed hospital base licensing fee to $1,000 and leave the newly proposed $25 per bed fee, which will reduce the amount collected from $120,825 per year to approximately $57,225 per year. Earlier drafts set the base fee at $7,250 (with a $3,000 discount if JCAHCO certified), plus a new $25 fee per hospital bed. The committee also decided to delete the proposed DOH 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. It is uncertain at this time whether the committee will make further changes to the bill before taking action.
Pain Management (no bill number yet)
The House Health and Welfare Committee took testimony all week from various parties regarding a pain management bill. The bill was drafted by a working group of interested parties, including VAHHS, spearheaded by the Vermont Attorney General's Office. Jill Olson testified that VAHHS is opposed to the sections of the bill that set standards related to assessment and treatment of pain and penalties for not following those standards. Those sections of the bill were removed in the most recent draft (latest version). In this latest draft the department of health is directed to collaborate with interested parties to study palliative care and pain management. The bill also amends the hospital and nursing home bill of rights to ensure that staff at the facility provides each patient with pain assessment and treatment. Finally, the bill gives rulemaking authority to the secretary of human services to ensure residents in nursing homes, hospitals and other facilities have a right to pain management and treatment. The House Health and Welfare Committee will likely take up the bill again next week.
Advance Directives (H.752)
Last week the House postponed 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. This week the House Judiciary Committee took testimony and decided the bill was too controversial to move this year. As a result, the House Health and Welfare Committee, that earlier had advanced the bill, asked that the bill be returned to their committee for fine-tuning. The House Health and Welfare Committee took testimony on the bill this week and issued a new draft late Friday, March 12th (latest version). All surrogacy provisions were removed because they were particularly controversial. The committee will likely take up the bill next week.
Nursing Home Cost Study
Department of Aging and Disabilities Commissioner Patrick Flood presented a cost containment study to the House Health and Welfare Committee this week comparing the costs per person to be cared for in a nursing home versus the home based waiver program. This information relates to the 1115 Long Term Care Waiver application that the Douglas Administration filed this fall with the federal government. The conclusions in the report are:
Whistleblower (S.154)
By a 21-8 vote, the Senate passed S.154, a bill that proposes to establish whistleblower protections for hospital employees. The bill also creates a hearing process before the commissioner of the Department of Labor and Industry for alleged violations of the law. The Senate amended the bill on the floor to make it clear that the hearings before the commissioner must comply with the administrative procedures act and appeals of the commissioner's decisions go to Superior Court. After passing the Senate, the bill was referred to the House General, Housing and Military Affairs Committee. Here is a link to the bill as it passed the Senate.
http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/senate/S-154.HTM
Civil Monetary Penalties (H.566)
H.566, a bill that proposes to impose civil monetary penalties for provider fraud, passed the House this week. VAHHS still has concerns about the addition of 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. After passing the House, the bill was referred to the Senate Judiciary Committee. Here is a link to the bill as it passed the House.
http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/house/H-566.HTM
Medical Malpractice Study Committee (S.156)
S.156, a bill that proposes to establish a study committee related to medical malpractice actions and insurance, was referred to the Senate Appropriations Committee this week. The committee will review any potential cost associated with the bill. The study committee membership includes representatives from BISHCA, 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
Optometry (S.54)
This week the Senate passed S.54, a bill that expands the scope of practice for optometrists. After it passed the Senate, the bill was referred to the House Health and Welfare Committee. Here is a link to the bill as it passed the Senate.
http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/senate/S-054.HTM
Prescription Drugs (S.288)
The Senate Appropriations Committee advanced S.288, a prescription drug bill this week. This is a comprehensive prescription drug reform bill that includes provisions related to prescription drug disclosure, pharmaceutical marketer disclosure, pharmacy benefit manager regulation and the prescription drug fair pricing program, among others. Here is a link to the Senate Calendar for Tuesday, March 16, 2004, which contains the full text of S.288, as the Senate Health and Welfare Committee, the Senate Finance Committee and the Senate Appropriations Committee advanced it. This bill will likely be up for action on the Senate floor next week.
http://www.leg.state.vt.us/docs/2004/calendar/SC040316.htm
Mental Health
The House Health and Welfare committee will be taking testimony regarding Vermont's mental health system beginning Wednesday, March 17th. The committee released the following list of nine questions for witnesses to address in their testimony:
This list was distributed to members of VAHHS's inpatient mental health committee for their consideration.
Public Hearing on FY 2005 Budget - Vermont Interactive Television
The Senate Appropriations Committee will hold a public hearing on Vermont Interactive Television on Monday, March 29, 2004, from 5 to 7 pm. The purpose of the hearing is to give Vermont citizens throughout the State an opportunity to express their views about the State's fiscal year 2005 budget. Thirteen (13) V.I.T. site locations across the state will be used for the hearing.