VAHHS Legislative Report

For the week ending February 10, 2006

Political Overview
Speaker of the House Gaye Symington is trying to keep the legislature moving along. She has requested that all committees complete their work on bills with appropriations by Friday, February 17, 2006 in order to allow time for the Appropriations Committee to stay on track with the FY2007 budget. The Speaker also issued a notice to all lawmakers that next week the House will meet on the floor at 3:30 p.m. each day in order to allow committees to have full committee work days.

The Governor’s Vermont Promise Scholarship program topped this week’s controversy list. This week the Governor angrily responded to rumors that his Scholarship proposal was “dead on arrival,” and that democratic leaders had threatened other legislators about supporting this proposal. To add fuel to the fire, Senator Susan Bartlett (D-Lamoille), Chair of the Senate Appropriations committee, offered a Scholarship alternative idea that would grant graduates who work in certain professions the chance to eliminate half of their educational debt, much like the nursing loan repayment program currently funded in the budget. .

Also this week Representative John Tracy (D-Burlington) announced that he will be running for Lieutenant Governor. He will likely face a primary with Senator Matt Dunne (D-Windsor) who announced he will also run.
VAHHS Issues
Health Care Reform
The Senate Health & Welfare Committee continues to work on the Common Sense Initiatives (CSI) bill and focused on hospital reporting this week. The committee plans to work late next week in order to get the bill completed and debated on the Senate floor.

On Thursday, three members present on the Senate Health and Welfare Committee voted unanimously to adopt the infection reporting language as passed by the House earlier in the day (H. 258). The language will not immediately go to the Senate floor. Instead, it will be incorporated into the Senate CSI bill.

Also On Thursday morning, the "consensus group" (VAHHS, VMS and VDH and Jeanne Keller representing consumers) delivered draft language for the adverse event section of the CSI bill to the Senate Health and Welfare Committee. The committee had been taking testimony on the concepts in the bill since Tuesday. The committee expressed strong appreciation for the quick, hard work of the consensus group. Senator Lyons suggested that the bill include a rule making process that explicitly continues the collaborative process by including members of the "consensus group." VAHHS supports that idea.

The House Health Committee continues to work on draft 2.2 of their health care bill. Ken Thorpe, the consultant to the Health Care Commission, will be in town on Monday and Tuesday to help the committee through the final pieces of the bill, which the committee plans to complete on Tuesday. Once the House Health Care committee votes the bill it out it will be referred to House Ways and Means committee in order to review potential revenue sources. The Ways and Means committee has been working on this for the last two weeks. The plan is to have the House Ways & Means complete its work on the bill by Friday in order to have it debated on the House floor the week of February 21.

The “X Health” benefit plan was officially named “Catamount Health” this week. The major sections of the bill (addressing chronic care infrastructure, disease management for high-utilization Medicaid and state enrollees, Catamount Health administration and benefit structure, cost-shift reduction) remained unchanged with the committee focusing on refining language in each section. The benefit structure refers to a comprehensive primary care, preventive, chronic care and hospital services that would be actuarially equivalent to the Cigna plan offered to state employees.

On Tuesday, Steve Kappel, Joint Fiscal, testified on approaches to control financial liability through reinsurance, enrollment caps and underwriting. He returned on Thursday afternoon to provide the committee with population statistics on Vermonter health insurance status in various federal poverty level brackets. Paul Jarris, Commissioner of Health, and Jim Hester, Vice President of MVP, provided additional testimony on the complexity of implementing the Chronic Care information technology (IT) infrastructure with suggested language on extension of the Chronic Care IT timeline by at least 2 years, defining reporting and decision-making mechanisms through the General Assembly and oversight by the Commissioner of Health rather than the Secretary of Administration. Josh Slen, Director of the Office of Vermont Health Access (OVHA), provided response to the bill draft including suggested modification of the language on the cost-shift and intent to raise provider payments. He provided comments about a potential shift to a DRG-based Medicaid payment system. This would be accomplished through use of a third party vendor that would work in facilitating the change through OVHA and providers. Additional comments were made regarding the intent to develop a hospital pilot project in this area.

On Thursday afternoon Bea Grause, President of VAHHS, offered language to the committee on pilot projects. The language directs the office of rural health and primary care and OVHA to issue a request for proposal for community Medicaid payment pilot projects in two separate hospital service areas with the goal to increase integration and collaboration among health care professionals and community partners to coordinate the delivery of health care. RFP responses will address a comprehensive evaluation process that will measure improvement and changes in access clinical outcomes, quality and cost containment; it will define parameters for sharing the financial risk and any savings; will have a stop-loss provision in the event of catastrophic or disaster; and a proposed budget that includes cost containment, budget neutrality provisions and incentive grants. Grause also testified that on Wednesday the VAHHS board unanimously agreed to a transparent process that would illustrate how hospitals could reduce their charges if the state measurably increased Medicaid reimbursements. Grause recommended a $20 million increase in Medicaid payments.

The financing of the various initiatives in the bill including “Catamount Health” remains undetermined with intent language around the Global Commitment in the current draft of the bill. All of these issues will be resolved early next week.

S. 198 – Act Relating to Reporting Medical Errors and Establishing a Sorry Works Program
The Senate Judiciary Committee took further testimony on S. 198. The committee continued to debate whether to include "explanations" under the safe apology section and will probably make a decision next week. The Vermont Trial Attorneys expressed concern that the current wording of the safe apology language might restrict their access to the medical record. There appeared to be broad agreement on all sides that that was not the intent and that the language may need to be changed to address that concern. The committee decided to hold off on making a final decision on the Section 3, the written notification provision. Instead, they asked Senator Leddy to review the issue as part of the adverse events bill. The draft adverse events bill supported by VAHHS in its final draft form requires that hospitals implement disclosure policies (consistent with current Joint Commission on Accreditation of Hospital Organization standards) but does not require written notification. The committee heard testimony from once malpractice insurance carrier who expressed concern that the bill contains no provision to notify a carrier of a potential claim.

2007 State Budget
Cindy LaWare, Secretary of the Agency of Human Services (AHS), gave an overview of the agency’s FY2007 budget in House Appropriations. Areas covered under the AHS budget include: the Department of Aging and Independent Living (DAIL), Corrections, the Department for Children and Families, OVHA and the Vermont Department of Health (VDH). The agency proposed that the budget is in balance primarily due to the Global Commitment. The Chair challenged this statement saying that in meetings with the Administration late last week and earlier this week that there is a projected deficit of $4 million.

Secretary LaWare stated that the budget funds the Governor’s 2007 initiatives (see more detail below), does not have any provider reductions in relation to last’s year’s base, includes sufficient funds to cover projected caseload needs, furthers staffing goals of the reorganization initiatives such as centralization of information technology staff and field directors, fully supports the recommendations of the Vermont State Hospital (VSH) Futures Report and continues the Governor’s 7.5% general fund commitment to support the developmental and mental health provider system. The current budget level funds hospitals based on last year’s base that was reduced by $16.5 million with no inflation factor.

DAIL Budget
DAIL Commissioner Patrick Flood stated that his department is responsible for the policy and implementation of all long term care services including nursing homes and Medicaid funded home-based services. In October 2005, the Medicaid funding for these services were combined into their new 1115 Waiver, Choices for Care. The overall budget for the department is $152,034,744 with a proposed increase of $9.7 million in state funds for FY2007. These funds are separate from the Global Commitment. Initial indications are that the program is working as designed, that more people are using home-based services than ever before, nursing home utilization is down and that the waiting lists are much smaller. Commissioner Flood testified that the following areas are being recommended for increases: Area Agencies on Aging of $250,000; $244,000 for four additional slots in traumatic brain injury slots; $150,000 for home health administrative staff to address licensing activities, one for quality assurance and one for financial review; $100,000 for adult protective services to improve the APS system including crisis response, coordination with law enforcement and prevention; $100,000 for healthy aging to assist elders to stay physically active; and $10,076,713 to cover projected caseload as well as provide the designated agencies with a 4% cost of living adjustment.

Within the OVHA budget are long term care funds of $10.7 million. The $10.7 includes approximately $7 million for nursing home inflation, case mix rate adjustment and extraordinary relief contingency funds. The remainder $3.75 million is to support the home based care system.

OVHA Budget
OVHA Director Josh Slen gave an overview of his department’s budget. The Governor’s recommend for FY 2007 is $673,863,426, which is the state’s largest programmatic expenditure. The office has a staff of 88. There are 12 enrollment/eligibility groups in Medicaid that include: the aged, blind and disabled; ladies first; SCHIP; underinsured children; caretakers; Vermont Health Access Plan (VHAP),; VHAP-Pharmacy; VScript, VScript-Expanded; Healthy Vermonters; and VPharm. The department also administers 8 programs including: traditional Medicaid, Dr. Dynasaur, and those above. OVHA is the largest insurer in Vermont with 155,768 covered lives. The health industry is a nearly $4 billion dollar business in Vermont with Medicaid representing 16.8% of the spending in that system.

Director Slen stated that on October 1, 2005Vermont entered into a 5-year comprehensive 1115 Waiver to provide Vermont with financial and programmatic flexibility to help maintain broad public health care coverage with more effective services, to continue to lead the nation in exploring ways to reduce the number of uninsured and foster innovation in health care by focusing on health care outcomes. It converts OVHA to a public managed care organization. The primary fiscal advantage to the Managed Care Organization (MCO) model is that the MCO can invest in health services irrespective of current funding source, as long as they are responsible investments investments that provide necessary health care services to Vermonters. This will bring an estimated $135 to $165 million in new federal funds.

As part of the Waiver, OVHA will receive an actuarially-certified monthly capitation payment for the AHS to pay for health care services. The premium is established at $65,371,811 for the first year of the Waiver. Programs included in the premium: all acute care services, mental health services (including Community Rehabilitation and Treatment programs), developmental services, substance abuse treatment, Medicare non-covered VPharm, non-duals for VHAP RX and VScript, and Medicaid funded programs administered by other areas of state government. The following items are not included in the Global Commitment: 1115 long term care waiver, disproportionate share hospital payments, State Children’s Health Insurance Program, VPharm wraparound expenses, Medicare Part D “clawback” payments and administrative expenditures for systems enhancements.

Also included in the OVHA budget are one time disproportionate share hospital funds of $20 million that was postponed last year by the legislature.

VDH Budget
House Appropriations reviewed FY2007 budgets the entire week. Paul Jarris, Commissioner of Health, and Jim Hester, Vice President of MVP, provided the committee with a brief overview of timeline and resource allocation for building the chronic care IT infrastructure. This was followed by a review of FY2007 Blueprint/Chronic Care Initiative budget requests for the Health Department including $575,000 for the community focus area, $500,000 for self management, $650,000 for provider practice, $4,100,000 for IT and $359,000 for the health systems focus area. These requests encompass a total of 8 position requests. Questions related to community grants administration and programmatic changes ensued on topics such as Fit and Healthy Kids and School Lunch Programs. The budget also includes: $100,000 for oral health initiatives; $437,500 for civil confinement; $2.7 million for the drug education, treatment, enforcement and rehabilitation program (DETER IV); $600,000 for residential substance abuse treatment for men; $675,000 for the substance abuse community provider inflationary increase of 7.5%; $4 million that covers a 4% increase for designated agency provider inflation plus $600,000 for caseload growth in wrap-around services for children with severe emotional disturbances.

Related to the Vermont State Hospital (VSH) is a $3.8 million increase for maintaining and improving VSH. These funds will be used to continue staffing at needed levels to maintain high quality care and funds for additional staff to response to the recent Department of Justice, Fletcher Allen Health Care and Board of Health reports.

The budget also includes a $3.3 million appropriation for the VSH Futures Planning and Implementation. Specifically the funds will be used for the implantation and operation of new programs and enhances services for the following: 16 beds for sub-acute care, 6 bed secure residential facility; community-based hospital diversion support (4 crisis beds), enhanced peer support services, staff secure adult transportation instead of using sheriff transport, and new care management system to appropriately triage adults between inpatient, sub-acute facilities, residential programs and crisis beds. It also includes funds for staff to implement the Futures Project with a focus on communications and stakeholders involvement, day-to-day project management, assist with CON and licensing processes. Capital costs of $1.35 million for planning for a new inpatient facility are part of the Capital Bill being reviewed by both the House and Senate Institutions Committees.

H. 644, An Act Relating to the Continuation of the Mental Health Oversight Committee
The Senate Health & Welfare reviewed H. 644 and gave their approval of the bill to continue the mental health oversight committee until July 1, 2011. The bill was referred to Senate Appropriations due to appropriation in the bill.

Capital Bill - Vermont State Hospital
The Senate Institutions Committee took up the Vermont State Hospital portion of the Capital Bill on Friday. The Senate heard essentially the same testimony that was given to House Institutions last week. Tasha Wallis, Commissioner of the Department of Buildings & General Services, stated that they are seeking $1,350,000 for permitting, legal and architectural fees to get the project moving forward. Meg O’Donnell, Director of Government Relations and Assistant General Counsel at Fletcher Allen Health Care, stated that Fletcher Allen leaders met with Beth Tanzman's team and Tasha Wallis's team on January 10 to begin a discussion about locating new inpatient psychiatry units on or near the Fletcher Allen campus. It was a very good discussion with two primary outcomes. First, it was an opportunity to introduce key people at FAHC, the Division of Mental Health, and Buildings and General Services to each other. Second, it provided an opportunity to outline the issues and tasks ahead of us in the planning process. There was an extensive discussion of the constraints on any new building projects on the FAHC campus, such as zoning and city regulations. Fletcher Allen has identified a core team within Fletcher Allen that brings architectural, space planning, program, and regulatory expertise to the process. Tanzman has also identified a core team from the state that has corresponding expertise. Fletcher Allen has established a Burlington Futures Group so that we have strong communication with local partners and neighbors. The state will lead this process overall. All processes will be conducted with community input. The committee will continue to take testimony on this.

H. 258, An Act Relating to the Disclosure of Rates of Hospital-Acquired Infections
The House passed H. 258 on the floor on Thursday. The bill is now in the Senate and will be incorporated into the CSI bill.

H. 567 - Program for All Inclusive Care for the Elderly (PACE)
The bill has passed both the House and Senate and is awaiting the Governor’s action.

Medicare Part D
House Human Services had their weekly update from Josh Slen, Director of the Office of Vermont Health Access (OVHA), on Medicare Part D. The state has asked the federal government to provide reimbursement for an additional two weeks bringing the state to the end of February. The state has spent $4 million through the end of January. The Human Services Committee introduced a bill that would extend the benefit for additional two weeks for a total of $11 million the stated has committed. The bill also includes $400,000 from the Global Commitment fund to the Department of Aging and Independent Living to assist individuals with enrollment. The bill passed the House floor on Thursday and now moves to the Senate for their approval.

House and Senate Appropriations Committee - Joint Public Hearing on Fiscal Year 2007 Budget on Vermont Interactive Television
Monday, February 13, 2006, 5:00 to 7:30 p.m. – The House and Senate Appropriations Committees will hold a joint public hearing on Vermont Interactive Television (V.I.T.) to give Vermonters throughout the state an opportunity to express their views about the State budget for fiscal year 2007. All V.I.T. sites will be available for the hearing: Bennington, Brattleboro, Castleton, Johnson, Lyndon, Middlebury, Newport, Randolph, Rutland, Springfield, St. Albans, Waterbury, White River Junction, and Williston. The V.I.T. web site has an up-to-date location listing, including driving directions and telephone numbers: www.vitlink.org11-0-0
For further information about the format of this event, call the House Appropriations Committee office at 802/828-2251. Requests for interpreters should be made to the office no later than 4:00 p.m. on Friday, February 3.
Bill of Interest Introduced this Week
H. 847 – AN ACT RELATING TO MEDICAL MALPRACTICE INSURANCE (Representative Jewett of Ripton): This bill proposes to require medical malpractice insurers to obtain the approval of the commissioner of banking, insurance, securities, and health care administration for proposed rate increases of 10 percent or more and to hold hearings on such increases at the request of any interested person. The bill would allow any person to intervene and authorize courts to award advocacy and witness fees if the person has made a substantial contribution to the proceeding. The bill also would allow the commissioner to determine that the surplus of a medical malpractice insurer is excessive and to not approve a rate increase until the surplus is no longer excessive.

H. 851 - AN ACT RELATING TO EXTENDING VPHARM COVERAGE FOR INDIVIDUALS ELIGIBLE FOR MEDICARE PART D (Committee on Human Services): This bill proposes to extend the funding for VPharm in order to continue to provide assistance to Vermonters who are not receiving appropriate coverage under the Medicare Part D prescription drug benefit for an additional two weeks.