2005 Legislative Report

For the week ending March 18, 2005

Political Overview
The non-healthcare highlight of the week was the joint session of the House and Senate on judicial nominations. Legislators voted to retain all four justices of the Supreme Court for another six years.
On health care matters, Senate and House Democrats scrambled this week to produce a health "reform" plan in an effort to erode the Administration's public advantage on this issue. Senator Bartlett announced a very draft plan over the weekend that primarily included "global budgets" for 3 mid-sized hospitals, investing $15 million in disease management and $20 million in provider cuts. The House Health Care committee is hurrying to put pen to paper on their version of reform (see below). The Governor continues to maintain, "I have my plan, where is yours," but this political advantage will likely erode as the time for end-of year compromises draws near. Senator Flanagan also introduced a health reform bill that puts mandated wholesale changes on a super-fast track. (S. 147)
The mysterious global commitment also remains an issue. Democrats are considering a wholesale rejection of the proposal, despite the threat that it would increase the size of the FY2006 Medicaid deficit. With just two months remaining, legislators will need to move more aggressively in coming together on a short-term strategy for Medicaid funding and a longer-term strategy for Medicaid and overall healthcare reform.

VAHHS Issues

Medicaid:
The House/Senate Medicaid working group continues to struggle over a process that will help them solve this year’s Medicaid funding crisis. They have primarily focused on pharmacy changes, steering clear of too many details in an effort to avoid getting bogged down. The process on how to proceed was discussed at great length. Secretary of Administration Charlie Smith and Agency of Human Services Mike Smith attended this week’s meeting and expressed their intention to attend future meetings. Mike Smith provided an overview and analysis of the provider cuts and discussed the goals of the Administration. To date, the committee clearly does not share the Administration’s goals, except to say that the numbers must work to balance the budget. Rep. Patti O’Donnell spoke out and supported hospitals and providers and was slightly critical of the plan saying we have built a system on the providers back and now cuts will correct the problem. She also reminded the Appropriations Committee that they have historically worked to increase reimbursement to providers, not balance the budget to their detriment.

The Office of Vermont Health Access (OVHA) heard from Vermonters’ this week on the Medicaid global commitment concept. The themes of the public hearings were: don’t cut Medicaid programs patients depend upon, concerns about the “unknowns” of the global commitment. Participants also voiced concerns about cuts to providers, which would result in decreased access. OVHA warned participants that alternatives could be more costs. The written comments deadline is Wednesday, March 23 and can be sent via email to candiy@ahs.state.vt.us or to Candi Young, Planning Division, Agency of Human Services, 103 S. Main St., Waterbury, VT 05671-1201.

Health Care Reform:
Mike Saxl, former Maine Speaker of the House, presented Maine’s Dirigo plan at AARP and in several House and Senate committees. The House Health Care Committee, chaired by Rep. John Tracy, (who announced this week that he is running for mayor of Burlington in 2006), did an about-face on plan to take their time putting together a reform plan. He announced on Monday that they were going to draft a health reform bill by the end of this week. While we are still waiting for a draft, committee discussion indicates that the bill will likely contain:
• Authorization for the Health Care Committee to meet through the remainder of this calendar year;
• A study on Administrative "simplification;"
• Funding for health information technology ($1 million);
• A mandated process for hospitals, physicians, health plans and others to create delivery system and payment reforms within 3 years. They are looking to slow the rate of health inflation growth to general inflation plus 3 percent.
Health Department Commissioner Paul Jarris also testified in House Health Care on the chronic care initiative and asked the committee to support the $1,038,000 appropriation in the FY2006 budget.
Mental Health:
The House Human Services committee was asked by House Institutions for language to incorporate in the Capital Bill related to the Vermont State Hospital (VSH). The committee took testimony from a number of advocacy groups and Michael Smith, Secretary of the Agency of Human Services. Many of the comments by the advocates were not related to the Capital Bill, but rather on the process of engagement and communication. Secretary Smith, although not in the room at the time, addressed some of these concerns by stating that he will develop a communications strategy and will reconvene the VSH Futures Committee. Related to the Capital Bill appropriation, Secretary Smith stated that he is asking for $725,000 for planning purposes and would like the support of the committee.
The Senate Institutions committee also heard testimony on the State Hospital. Secretary Smith stated that it is the goal to reduce the census at VHS to approximately 28 patients. The plan is to: integrate the 16 sub-acute beds with the designated agencies as well as 10 diversion beds, 6 secure residential beds and 4 acute beds within the designated hospitals. The Secretary also stated that a 28-bed facility would be built near, adjacent or attached to a community hospital in order to integrate physical with mental health. A requirement of the Centers for Medicaid and Medicare Services is that if the 28-bed facility is not located at an academic medical center, it would need to be located at a general hospital that is within a 35-miles radius of an academic medical center. This facility would also be governed and managed by an academic medical center.
H. 115 – An Act Relating to Advance Directives
The House Judiciary did a walk through of the advance directives bill. As reported last week we will attempt to have the last sentence removed related to advance directives executed in another state or jurisdiction.

H. 163 – An Act Relating to Criminal Abuse, Neglect, and Exploitation of Vulnerable Adults
House Judiciary continued their deliberations on H. 163. They again revised the definition of abuse by restraint adding language clarifying that the section on restraint and confinement "shall not apply if the confinement, restraint, administration or threat to administer is: (1) part of a legitimate and lawful medical or therapeutic treatment; or (2) lawful and reasonably necessary to protect the safety of the vulnerable adult or others, provided that less intrusive alternatives have been attempted if doing so would be reasonable under the circumstances." They continue to work on the definition of a vulnerable adult.

S. 113 - An Act Authorizing Nonprofit Hospitals to Convert Charitable Assets
Senate Finance took testimony on S. 113 this week. Anne Cramer, VAHHS legal counsel, testified that hospitals see no need for the regulation and just adds to administrative costs. Cramer spent time reviewing the existing review procedures before Banking, Insurance, Securities and Health Care Administration (BISHCA), including some time on the IRS related procedures that apply. Herb Olson of BISHCA testified that having a review process in place in the event of a transfer of nonprofit hospital assets to a for-profit would be helpful although they do not see an imminent need for the bill. Olson proposed a number of changes to S.113 to improve its procedures and to limit the scope of the bill to for profit transfers. Olson is concerned that hospitals not be discouraged from appropriate nonprofit transactions which might improve efficiencies. Senator Cummings has asked BISHCA and the Attorney General's office to forward to the drafter all agreed-upon changes. The committee will likely do mark up early next week.

Bills of interest introduced this week:
Last week’s report listed H. 505 - AN ACT RELATING TO STATEWIDE HOSPITAL PERFORMANCE REPORTS: This bill was pulled by the House leadership last minute late Friday afternoon. It was released from the House Rules committee today and will be given a new bill number early next week.
S. 147 – AN ACT RELATING TO THE VERMONT HEALTH CARE PLAN: This bill proposes to establish the Vermont health care plan as a universally accessible, comprehensive, publicly administered health benefit plan offering care and treatment to all Vermont residents.
S. 148 - AN ACT RELATING TO DISCLOSURE OF HEALTH CARE STAFFING LEVELS: This bill proposes to require health care facilities to disclose the facilities’ staffing levels and the facilities’ plans to provide sufficient staffing levels for patients.
S. 149 - AN ACT RELATING TO PROCEDURES INVOLVING MEDICAL MALPRACTICE ACTIONS: This bill proposes a number of changes related to medical malpractice actions. The bill: (1) requires the Vermont property and casualty guaranty association to pay medical malpractice claims which were timely filed against insolvent insurers; (2) provides for public inspection of all rate filings; (3) shortens the time period within which minors may bring medical malpractice actions; (4) sets standards for the qualification of physician expert witnesses; (5) limits damages for pain and suffering in medical malpractice actions to $250,000.00, adjusted every other year beginning in 2008 based on the Consumer Price Index; (6) makes an expression of regret or apology made by or on behalf of a health care provider inadmissible in any civil or administrative proceeding against the provider; (7) provides limited immunity to health care practitioners providing volunteer or public health services; and (8) establishes a mandatory arbitration process for medical malpractice actions