VAHHS Legislative Report

For the week ending January 6, 2006

Political Overview

The Vermont General Assembly reconvened Tuesday, January 3, 2006, for the second year of the current biennium and the pace for the first week of the session was much more like April than January. Bills that did not pass during the first year of the biennium are still alive and will pick up where they left off in the process. Leadership and committee assignments normally carry over from the first year, but this fall Speaker Gaye Symington announced a number of committee assignment changes in the House.

The House of Representatives is made up of 86 Democrats, 60 Republicans, 6 Progressives and 1 Independent, for a total of 150 members. The Senate has 19 Democrats and 11 Republicans among its 30 members. Speaker Symington, D-Jericho, presides over the House and is the political leader of the Democrats. Republican Lieutenant Governor Brian Dubie presides over the Senate, but the political leader of the Senate is President Pro Tem Peter Welch, D-Windsor. The Lieutenant Governor wields the gavel and breaks tie votes but has little other power.

Politics is taking center stage with the first congressional seat open in decades with the retirement of Senator James Jeffords. Congressman Bernie Sanders will run for the open Senate seat. Welch and Senator Mark Shepard, R-Bennington, have announced they will run for the open House seat. Other political aspires include: Senator Matt Dunne, D-Windsor, will be running for Lieutenant Governor against incumbent Brian Dubie. Senator Hinda Miller, D – Burlington, is running for the Mayor of Burlington. This will open up a few seats in the Senate for the elections in November.

Tuesday and Wednesday began with the House dealing with unfinished business from last year, including the Governor’s veto of the health care reform bill, H. 524. The Administration was successful in sustaining the veto.

Governor James Douglas gave his State of the State Address on Thursday, January 5th to a joint assembly of the House and Senate. The theme of Governor’s message is making Vermont affordable for Vermonters. Key pieces addressed include: health care, taxation, energy, economy, affordable housing, jobs, higher education initiatives and the safety of our communities. See link for the full text of the Governor’s speech: (http://www.vermont.gov/tools/whatsnew2/index.php?topic=GovPressReleases&id=1657&v=Article).

The Governor proposed capping education property tax at no more than the rate of inflation each year. The Governor also announced the Vermont Promise Scholarship program, a program that will provide 1,000 awards per year to attend one of the state’s higher education institutions. Individuals will not have to pay the money back if they remain in Vermont.

Related to health care, Governor Douglas stated that more must be done to improve access to affordable health insurance. Governor Douglas also acknowledged the work started this week by Senate Health & Welfare committee on the consensus package and asked that both the House and Senate pass a consensus package by the end of February for his signature.

Governor Douglas released a plan two weeks ago that he feels will lead Vermont on the right path for meaningful health care reform. The plan includes: reduction in health insurance costs, increased access to all Vermonters and increased Medicaid reimbursements to physicians which will help reduce the cost shift on privately insured individuals and the Medicaid Global Commitment.

The leadership of the House and Senate quickly responded to the State-of-the-State Address. They stated that the legislature will focus on three main principles: 1) All Vermonters should have access to affordable health care; 2) Vermont must take steps to ensure an affordable, safe, clean and reliable energy future for our homes and businesses; and 3) We must strengthen our rural economy from the core to the corners of the state.

More details on how to fund these initiatives proposed by the Governor will be given at the Governor’s budget address on January 19.

The Medicare Modernization Act Prescription Drug Program (Part D) became “operational” on January 1, 2006. The system however, is not operational and Governor Douglas ordered the Agency of Human Services to take the necessary steps to reinstitute Vermont program provisions, as they existed on December 31, 2005 for all eligible Vermonters. This temporary action will provide more time for the federal government to fix the deficiencies in the current Medicare Part D system, which will protect vulnerable Vermonters and relieve pressure on pharmacists and other health care providers. The House quickly passed an appropriations bill of approximately $7 million and sent it to the Senate for their approval today.

VAHHS Issues

Health Reform
The Senate Health & Welfare handed out a draft health care bill on Tuesday based on the consensus legislation distributed in early November.

The Governor outlined 12 cost-saving and quality-improvement measures that he believes he and Democrats, who control the legislature, can agree on. The new Senate bill contains enhancements to health information technology, reducing insurance premiums for those who live healthy lifestyles, establish community grants to set up wellness programs, mandate that hospitals report infection rates, establishing common forms used by all doctors and insurance companies, creating a consumer price and quality database, allowing doctors to apologize to patients when they make mistakes without that being admissible during malpractice lawsuits, and enhancement to the physician loan repayment program if they agree to practice in Vermont.

The Senate began hearing testimony on specific portions of the bill this week. Health Commissioner Paul Jarris, Jim Hester, Vice President of MVP, Greg Farnum, President of Vermont Information Technology Leaders (VITL) and Kim Kalajainen, Vice Chair of VITL, gave a brief overview on health information technology. The committee was pleased to hear that a plan for collaboration was tentatively agreed to by executive committees of VITL and Blueprint. The tentative agreement states that VITL and the Blueprint will collaborate on the selection of a common IT infrastructure. The common vendor is key for implementation of VITL’s medication history pilot project and the Blueprint’s first component of its chronic care information system and diabetes registry.

The committee outlined its agenda for the next 5 weeks. Dr. Ken Thorpe, consultant hired by the Health Care Commission, will be in town all week.   The tentative agenda is as follows:
            Week of January 10: Sections 1-5: Healthy lifestyles
            Week of January 17: Sections 11 and 12: Administrative Standardization
            Week of January 24: Sections 13-17: Information Technology
            Week of January 31: Sections 6 and 19: Community Grants and Loan Repayments for Health Care Professionals
            Week of February 7: Sections 7-10: Sorry Works and Hospital Infection Rate Reporting

The House Health Care Committee took testimony all week from organizations that have come forward with a health care reform package. Bea Grause, President of VAHHS, gave an overview of the Association’s reform plan. Dialog with committee members pertained to the age and cost of hospital infrastructures (physical plant/facility), future capacity of hospitals to invest capital in infrastructures, demographic shifts affecting the healthcare system (growing elderly/Medicare population) and the cost shift. The committee will continue to take testimony next week from groups such as the Vermont Medical Society.

Prescription Drug Monitoring
Senate Judiciary took testimony on the S. 90, the Prescription Drug Monitoring bill this week. At the end of the last year’s session, Judiciary Chair Richard Sears asked key stakeholders meet to come up with compromise. The intent of the bill is to prevent drug addiction of prescription drugs and fight crime. An electronic database will be created and maintained by the Vermont Department of Health that would record each time a Vermont doctor prescribes and local pharmacy dispenses an addictive drug. The database will help prevent physicians from unwittingly duplicating prescriptions already prescribed by other physicians. One area of concern in the original bill was law enforcements access to the database. Under the current version of the bill, law enforcement will only be given the information on an individual suspected of fraudulent or illegal activity. Law enforcement will not have access to the database. This reporting requirement is not required for hospital emergency rooms provided that the quantity dispensed is limited to an amount adequate to treat the patient for a maximum of 48 hours.

The committee will be taking up this bill on Tuesday, January 11 and plans to vote the bill out that day.

Medical Malpractice
Senate Judiciary began their review of the medical malpractice report that Banking, Insurance, Securities and Health Care Administration (BISHCA) completed on December 15, 2005. The legislature mandated a study of medical malpractice liability insurance in 2004. VAHHS was appointed to this study committee.

The testimony taken on January 6^th focused on the finding of the report. Members of the Senate still appear interested in the idea of use of captive insurance.

Bea Grause testified that the VAHHS Board considered the idea of captive insurance at the Association’s June 2005 board meeting. She stated that while the Association is happy to discuss new legislative ideas on captive insurance, the Association was not in a position to independently take on this considerable endeavor.

Senate Judiciary appeared pleased with the factual findings of the report and will focus their attention week on S. 198, the “Sorry Works” program.

Staffing Ratios
The House Human Services heard testimony on H. 227, staffing ratios. A number of individuals testified on behalf of VAHHS including: Bea Grause, Jean Harry, Chief Nursing Officer at Fletcher Allen Health Care and Mary Wicker, Chief Nursing Officer at Southwestern Vermont Medical Center.

Grause stated that VAHHS opposes the bill because the measures it requires have not been reviewed by performance measurement experts and thus the measures may not be valid, reliable or useful. In addition, the added time and expense required to comply with this regulation would add undue administrative costs. Grause stated that 3 years ago the General Assembly passed Act 53, An Act Relating to Hospital and Health Care System Accountability, Capital Spending and Annual Budgets. The Act requires the Commissioner of BISHCA to establish rules for hospitals to annually report on measures of quality and patient safety that are “valid, reliable and useful.” Toward this end, the Commissioner convened an expert Hospital Report Card Committee to consider measures that meet this standard and hospitals have spent considerable time collecting and publishing data on the nationally recognized measures identified to date. VAHHS recommends that this process be used for staff reporting.

Jean Harry and Mary Wicker echoed the sentiments expressed by Grause. They further stated that hospitals do not have standard 8-hours shifts and questioned the usefulness of this information.

The committee also heard testimony from BISHCA supporting the Act 53 process.

The committee also heard from the nurses union and Vermont State Nurses Association in support of the bill. VSNA stated that they feel this bill is a patient rights issue.

The committee will be having committee discussion on Tuesday, January 11 and will also likely take the bill up the week of January 17.

Health Care Financing
The committee heard testimony by Michael Del Trecco including presentation of figures on the burden of uncompensated care and the cost shift. Questions followed on a variety of issues including defining the cost shift, discussion of cost shift issues outside the Vermont market and Medicaid funding sustainability. Testimony by Tom Huebner, President of Rutland Regional Medical Center, provided additional explanation of the challenges faced by hospitals as a result of the cost shift in maintaining programs and services for community members and employees such as pension funds. Questions addressed topics such as how hospitals will respond to a correction/compensation for the cost shift, how hospitals outside Vermont fair in comparison in Medicaid/Medicare payments, maintaining hospital programs that currently run at a deficit (behavioral health, ob/gyn, etc.) and whether increasing Medicaid payments would provide incentive to continue move towards creating operational efficiencies.

Budget Adjustment
The committee heard testimony by Rick Palmisano, President of Retreat Health Care, and Michael Del Trecco, Vice President at VAHHS. Financial figures illustrating the impact of the provider tax on Retreat Health Care were presented in addition to further explanation of financials previously distributed to illustrate the origin of financials and actual current impact. Explanation of the difference in financial burden between Retreat and acute care hospitals in the state was provided including a discussion of cost shifting and the current circumstances that allows BISHCA to raise acute care payment rates, but not for Retreat Healthcare. The Committee contacted Josh Slen, OVHA, for further explanation of the process for administering the tax to hospitals and for discussion of methodology to recover Retreat Healthcare's differential as a result of the inpatient reduction. The Committee concurred that retroactive payment based on Jan. 1, 2005 payment rates should be provided to Retreat to compensate for the reduction.

Greg Farnum, President of VITL, testified in House Appropriations that although they are just beginning their fundraising efforts things are moving much slower than expected and to date has raised $11,100. Consistent with what has been stated in the past, VITL will not be able to move forward with vendor contracting for implementation without the matching funds. BISHCA has submitted language to the committee asking that the funds be released. The release of the funds is contingent on a coordination plan with the Vermont Blueprint for Health that will be submitted and approved by the Secretary of Administration. This plan is drafted and tentatively agreed to by both the VITL and Blueprint Executive Committees.

Program for All Inclusive Care for the Elderly
House Commerce took testimony on the Program for All Inclusive Care for the Elderly on Thursday afternoon. There is general agreement that PACE should be exempt from certificate of need and health maintenance organization requirements, although BISHCA would like some jurisdiction over the program.

Bill of Interest Introduced

H. 564 - An Act Relating to the Vermont Hospital Security Plan: This bill would provide access to and coverage for health services provided in hospitals and offer opportunities for premium relief to all Vermonters. The bill would establish a global hospital budget for the state and an individual hospital budget for each hospital in the state. It would establish a Vermont hospital security trust fund from which a negotiated payment would be made to each hospital for health services provided.

H. 567 – An Act Relating to Exemption from CON and HMO Requirements for PACE: This bill proposes to give BISHCA permission to excuse PACE from all CON and HMO requirements.

S. 198 – An Act Relating to Reporting Medical Errors and Establishing a Sorry Works Program: This bill proposes the following provisions related to reporting and notification of medical errors: (1) Making 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; (2) Requiring health care providers to report medical errors to patients; (3) Establishing a program called Sorry Works intended to reduce medical malpractice litigation and insurance premiums through reporting of medical errors. Health care providers who choose to participate in this voluntary program would be required to report unexpected patient injuries to the patient, the provider’s patient safety officer, and the program which maintains a confidential database of all such incidents. The program is authorized to award grants to health care providers to offset their costs of participation.

S. 211 - An Act Relating to Insurance Coverage for Treatment By Any Authorized Health Care Provider: This bill proposes to require health insurance coverage for covered services regardless of the type of provider.

S. 252 – An Act Relating to Insurance Coverage for Naturopathic Treatment for Chronic Conditions: This bill proposes to require insurance coverage for naturopathic services in treatment for chronic conditions.

S. 253 – An Act Relating to Insurance Coverage of Acupuncture: This bill proposes to require insurance plans that cover acupuncture to cover that service without regard to the type of health care provider providing the acupuncture service.

S. 261 – An Act Relating to Prescription Drug Pricing and Regulation: This bill proposes to (1) encourage the use of a common preferred drug list; (2) implement a counter-detailing program to provide prescribers with factual information relating to pharmaceutical drugs and their prices; (3) require the licensing of PBMs; (4) provide the office of the attorney general with additional investigative power under the disclosure laws applicable to pharmaceutical marketers; (5) implement the Healthy Vermonters Plus pharmaceutical discount program; and (6) require disclosure and certification of pharmaceutical drug prices on a confidential basis to the office of Vermont health access.