VAHHS Legislative Report

For the week ending May 13, 2005

Political Overview

With less than one month remaining in this session, tensions are rising on many fronts. Legislators serving on healthcare committees continue to plow through complex healthcare issues at break-neck speed. The Senate Appropriations committee has also begun work on the Medicaid budget now that the House has passed this portion of the budget. The Douglas Administration and legislative leaders have continued their discussions on the differences between their latest health proposals. Most of the concern has and will focus on how any new health benefit is paid for. At present, the debate is a “payroll vs. premium tax” discussion, but we expect that other revenue ideas will be introduced into this discussion as it progresses. The outlook for a healthcare compromise remains unclear, but assuming that agreement can be reached on financing, the various proposals have plenty in common to construct an ambitious step forward. The Association’s focus has and will continue to be on both Medicaid and health care reform – two vitally important and related issues. Hospitals currently face dramatic Medicaid reductions – more than $11 million for Vermont hospitals in FY 2006. Cuts of this magnitude will hamper hospitals’ ability to lead change and invest in system-wide improvements.

The only new bill introduced this week is an appropriations bill for $800,000 to extend legislative pay until June 4. This means adjournment will not occur until mid-June!

VAHHS Issues

Health Care Reform
This week the Senate-version of H. 524 inched closer to completion. The Senate Finance committee finished its work on the bill and passed it out of committee on a 4-2-1 vote. The two no votes are Republican Senators Hull Maynard of Rutland and Mark Shepard of Bennington. Bea Grause, President of VAHHS and Richard Slusky, Administrator at Mt. Ascutney Hospital and Health Center, testified on global budgets, as did Deputy Commissioner Paulette Thabault and Commissioner John Crowley. These witnesses argued that the FY 2006 proposed spending cap limiting total annual growth of hospital costs to the Consumer Price Index plus the rate of growth of the Gross State Product was a “one-sized fits all” solution that just wouldn’t work. Hospital witnesses also expressed concerns that the FY 2006 budget cycle has already begun. The committee did not remove this section, which is the section the Association is most concerned about. Senator Welch did indicate that conferees would be willing to address this issue in conference.

At the Governor’s press conference this week he expressed his disappointment that the Senate has not offered a bipartisan solution. He criticized the Senate for not taking testimony from the Administration before passing the plan out of the Senate Health & Welfare Committee last week. He stated the plan proposed by the Senate has a tax implication and yet did not consult or brief the Tax Department on the proposal. Senate Finance this week did reach out to the Tax Commissioner. Staff from Legislative Council and the Tax Department will meet and get back to the committee on what the implications of H.524’s payroll tax proposal. The Governor’s premium assessment proposal is being criticized for proposing a tax on insurance plans, but he feels that the plans can absorb the tax without shifting the tax to premiums.

Proposals such as: funding for the Chronic Care Initiative, Health Information Technology, Healthy Lifestyle Discounts and the pharmacy provisions seem to have broad-based support and will likely be included in a health care compromise or the budget bill should a health care compromise fail. There is also general support for the studies that are included in all proposals.

Medicaid and Budget:
This week the Senate Appropriations Committee started work on the Medicaid portion of the budget. Senators Dick Sears (D-Bennington) and Jane Kitchel (D-Calendonia) recommended increasing the hospital payment reductions to $13.5 million. The committee is worried about FY 2007 and chose not to tap into the anticipated excess revenues that the House Appropriations Committee used when constructing the budget. This week the revenue figures for April were released with tax collections. For the month of April, revenues were $28 million above expectations ($151 million total). These are the funds that the House allocated in the Medicaid budget. Senate appropriators have proposed language in the bill that would allow hospitals to cost shift. VAHHS will continue to talk with Senators urging them to reduce these cuts. There will also be an opportunity during the conference committee.

H. 115 – An Act Relating to Advance Directives for Health Care
No legislative action was taken on this bill this week. It will be taken up next week in Senate Health and Welfare and Senate Judiciary.

H. 163 - An Act Relating To Criminal Abuse, Neglect, and Exploitation of Vulnerable Adults
The Senate passed H. 163 last week and the House did not concur with the Senate proposal of amendment and a conference committee will be appointed to work out the differences. House members include: Representatives William Lippert of Hinesburg, Maxine Grad of Moretown, and Michael Kainen of Hartford.

H. 227 – An Act Relating To Safe Staffing and Quality Patient Care
The House General, Housing and Military Affairs Committee took testimony from Pat Jones, Director of Quality at the Vermont Department of Banking, Insurance, Securities and Health Care Administration, this week. Jones stated that BISHCA is opposed to the strike-all amendment currently being contemplated by the committee. Jones stated that there is nothing in Act 53 that would preclude the workgroup from discussing inclusion of the reporting or disclosure of nurse staffing ratios in the report cards. VAHHS spoke to the Chairman and he is still undecided on what he plans to do with this bill.

H. 404 - An Act Relating to Access to Mental Health and Substance Abuse Providers
The House passed H. 404, An Act Relating to Access to Mental Health and Substance Abuse Providers. This bill supports mental health parity by ensuring broader access to licensed mental health and substance abuse providers. This bill now moves on to the Senate.

S. 113 - An Act Authorizing Nonprofit Hospitals to Convert Charitable Assets
The Senate concurred with the House proposal of amendment on S. 113. The bill now goes to the Governor for his signature.

Mental Health:
The Administration this week submitted a request to the Legislature to expand the number of locations where court-order psychiatric evaluations for individuals charged with crimes could be administered. Currently the only place a judge can send someone facing charges for a crime that also needs hospitalization for a mental illness is the Vermont State Hospital (VSH). Recently the number of court orders is extremely high and has been a challenge for VSH. An incident occurred a few weeks ago where staff was challenged and patients needed to be restrained.

The proposed law change has the support from hospitals, judges, corrections and advocates. VAHHS supports this request and Richard Palmisano, CEO at Retreat Healthcare, stated that the designated hospitals support the change as a way to provide patients with treatment and evaluations closer to home and in a less restrictive environment.

The House Human Services is outraged with the Administration with this last minute request and is appalled that the Administration would try to tuck this policy change in the budget if the committee does not move on the bill.

The Mental Health Oversight Committee also met this Wednesday to review the progress of the Vermont State Hospital and the Futures project. Paul Blake presented an update on both. Legislators and advocates present expressed continued concerned about the lack of communication and understanding about progress at both the VSH and plans to reform the entire mental health system.