VAHHS Legislative Report

For the week ending February 24, 2006

Political Overview
The looming crossover deadline of March 3 has committees working at full tilt. Members of some committees have even asked to be excused from the floor in order to get bills out of committee. On Tuesday Representatives voted to allow members to remain in committee. For the last two weeks, the Speaker has had difficulty keeping a quorum on the floor, but she too is pushing to keep the overall agenda moving.

More tax increases surfaced this week. The House Transportation Committee voted 7-4 to a 6-cent increase in state taxes on gasoline and diesel. The increase would bring in $26.5 million and would allow the state to take advantage of extra federal money for road and bridge projects. The committee also recommended creating a new dedicated fund that would be earmarked annually for this special fund. The Committee proposes raising taxes on motor fuels to help the state take advantage of a windfall in federal transportation dollars over the next five years. The recommended increase will raise the state tax on gasoline from 19 cents a gallon to 25 cents and the state tax on diesel from 25 cents a gallon to 31 cents. The Administration and the Legislature want to find an extra $24 million a year to spend on transportation projects to be able to tap into the $66 million available annually from the federal government. Increasing the gasoline tax by 6 cents would raise an extra $22 million a year.

At the Governor’s weekly press conference, a reporter commented on recent developments of the House health care bill H. 861 and asked the governor about his intentions to actually achieve any kind of reform this legislative session through compromise. The governor responded emphatically with his desire to create effective reform in the care system, but did not believe that the House bill as presently drafted would accomplish such in a cost-effective manner. He further commented on sustainability of funding sources and his intention to use the tobacco settlement funds for the Vermont Promise Scholarship Program. The governor voiced his concern that the ultimate responsibility of funding this bill long-term would likely fall on the tax-payer. Reporters retorted by questioning the burden placed on employers in the Governor’s plan that proposes shifting Medicaid/VHAP eligible into employer-based plans. His response was that employers were not being asked to offer anything they haven’t already. While some are optimistic, it looks like the legislature is headed for a repeat of last year; another proposed consensus plan without enough actual consensus or momentum for it to move outside the Governor’s Office.

On Thursday afternoon, Harvey Yorke, President of Southwestern Vermont Health Care, provided a brief discussion and a question and answer session for legislators on “How Hospitals Really Operate”. The impact of various legislative strategies including modification of payment systems was discussed with a first hand view of how these changes affect Vermont hospitals. Additional topics discussed included medical errors, physician recruitment challenges, consumer driven health plans, etc. Legislators present asked a variety of questions on topics such as Medicaid patient attendance rates at medical appointments, Health Savings Accounts, payment incentives, chronic care management in the group setting and conversion of facilities from acute to long-term facilities.

VAHHS Issues

Health Care Reform

This week the House Ways and Means committee voted 7-4 on party lines to use two kinds of tobacco dollars to raise $66.2 million over four years to fund H. 861, An Act Relating to Health Care Affordability for Vermonters (Catamount Health). Beginning on July 1, the tax on cigarettes would increase by 60-cents to $1.79 a pack. Twenty-two percent of the revenue collected would go toward Catamount Health for the uninsured and for those individuals with chronic conditions. It is projected that revenues would increase over the next four years anywhere from $13 million and slowly decreasing to $11.2 million in 2010. The committee also recommended using the $13 million in tobacco settlement funds that begin in 2008. The rest of the funds would come from the Global Commitment savings. The total cost of the program being offered by the House is $132.2 million over four years. These proposed changes will require $66 million in additional state dollars ($132 million with the federal match through the Global Commitment) through the end of 2010, leaving only $40 million under the Global Commitment cap in case there is an unanticipated need. Funding sources beyond 2010 are undetermined and largely dependent on future Global Commitment/1115 Medicaid Waiver agreements with the federal government. In addition, the committee added language for future consideration of mandatory enrollment if necessary in achieving a 98 percent rate of insured. H. 861 will be in the House Appropriations Committee on Monday afternoon for their review of the appropriations section of the bill. VAHHS believes that the bill will pass out of the House on party line vote and if the financing piece is not changed a veto scenario is almost inevitable.

The House Health Care Committee began its review of S. 310, An Act Relating to Common Sense Initiatives in Health Care (CSI) and also began brainstorming on future work of the committee. The committee will be taking testimony over the new few weeks. VAHHS continues to have concerns regarding the funding of the adverse event reporting section of the bill. Hospitals would be billed $40,000 for the first year of the program and will split program costs 50/50 with the state in subsequent years. The commissioner of health estimates the cost of the program to be $320,000.

The Senate Appropriations committee began looking at the appropriation pieces of the CSI bill and will continue this on Tuesday. Their plan is to vote the bill out on Tuesday.

The schedule for next week is floor discussion in both the House and Senate on both reform bills. Also on the schedule for debate on the floor is the Capital Bill. CSI will be debated on the Senate floor Thursday and Friday. H. 861 will be debated on the House floor on Wednesday and Thursday.

Capital Bill

The House Institutions Committee passed the Capital Bill on Tuesday morning. In the end the committee decided to include $1 million for planning for the replacement of the Vermont State Hospital. Late last week the committee removed funding because they said they had insufficient information about the scope of the project. The committee put conditions on the release of the funds. They include: the administration must obtain approval of the state hospital plan from the mental health oversight and joint fiscal committees and provide detailed explanations of all expenditures; must report regularly on the progress of the design works and permitting; and update the committee on the discussions with Fletcher Allen Health Care on the ownership, staffing and administrative responsibilities.

Medicare Part D

The State of Vermont will make the big switch back to Medicare Part D in two weeks. Joshua Slen, Director of the Office of Vermont Health Access told the Human Services Committee that the switch will take place on March 8, allowing the two weeks needed for the pharmacists, advocates and beneficiaries to prepare. Chair of Human Services Ann Pugh asked Slen to delay the switch for a week since the legislature will be on town meeting break, not allowing the committee to intercede if need be. Slen stated that was a decision that would need to be approved by the Governor’s office. Slen estimates that 80% of the people are documented as being properly enrolled in one the plans. Slen also stated that a crisis center will be established prior to the switch for individuals to call if they need assistance.

H. 404 – An Act Relating to Mental Health and Substance Abuse Providers

The House decided to not concur with the Senate proposal of amendment and a committee of conference will be appointed.

S. 198 – Act Relating to Reporting Medical Errors and Establishing a Sorry Works Program

On Thursday, the Senate Judiciary Committee voted 5-0 in favor of an amended version of S.198 that deletes section 3 of S.198 as it was introduced. Section 3 would have mandated written notification by health care facilities, and physicians, to any patient affected by an adverse health care event. In the legislation, an “adverse health care event” was very broadly defined as an “untoward incident, a therapeutic misadventure, or an iatrogenic injury.”

The amended version of S.198, as reported by the Senate Judiciary Committee, now contains the following three sections:

Section 1 is the title of the bill;

Section 2 establishes a “safe apology” statute in Vermont in order to encourage greater communication between physicians and their patients about possible medical errors without fear of the discussion being used against the physician in a future civil proceeding.

The section provides that an oral expression of regret or apology, including any oral good faith explanation of how a medical error occurred, made by or on behalf of a health care provider or health care facility, that is provided within 30 days of when the provider or facility knew or should have known of the consequences of the error, does not constitute a legal admission of liability for any purpose and shall be inadmissible in any civil or administrative proceeding against the health care provider or health care facility, including any arbitration or mediation proceeding.

Section 3 establishes a voluntary “Sorry Works!” pilot program under the oversight of the commissioner of banking, insurance, securities and health care administration. The program would be open to one or more hospitals that voluntarily choose to participate beginning on January 1, 2007. Hospitals may participate only with the approval of the hospital administration and the hospital's medical staff.

Under the program, participating hospitals and physicians would promptly acknowledge and apologize for mistakes in patient care that result in harm and promptly offer fair settlements. If the settlement is accepted, further litigation with respect to the mistake would be prohibited. Participating hospitals shall ensure that patients and families are made aware in writing of their right to retain their own legal counsel to ensure that their rights are protected and to help facilitate negotiations for fair settlements.

Senator Sears asked VAHHS to work with legislative council to add a more significant funding component to the bill to offset hospital liability exposure of participating in the new program to encourage hospitals to participate. As VAHHS testified on Thursday, at this point there are no volunteers for the pilot program. The one hospital that was prepared to participate has so far been advised against doing so by their malpractice carriers.

Workers Compensation Medical Fee Schedule

The Senate Economic Development, Housing and General Affairs met to discuss the medical fee schedule and the Department of Labor’s proposed Workers Compensation rulemaking. Stephen Monahan reported to the Committee that he would have proposed rulemaking out not later than March 17, 2006. The rulemaking is leaning to a payment methodology that is based on % of Medicare. Senate Economics indicated that they were going to introduce language that would legislate a payment methodology if the rulemaking process could not be completed by a date to be determined. The percentage being discussed is 140%.

VAHHS has been working with Monahan at the Department of Labor on this issue and has stressed the following concerns that the proposed rulemaking could do: 1) create administrative problems that have not been taken into consideration (i.e. how will this work for critical access hospitals, will inpatient reimbursement have an outlier provision and complexities related to Medicare Outpatient PPS), 2) add significant cost to the billing process, and 3) jeopardize reimbursement levels by linking the payment methodology to Medicare. The President’s FY 2007 budget has substantial Medicare cuts. It is estimated that these budget changes would decrease Vermont’s payments by $20 million.

Title 20 – An Act Relating to Emergency Management and Public Safety

The Senate and House Government Operations Committees took testimony on Title 20 revisions. VAHHS, the Vermont Department of Health (VDH) and Vermont Medical Society submitted joint testimony in both committees. Commissioner of Public Safety, Kerry Sleeper, gave an overview of the federal government and their response to Hurricane Katrina. He acknowledged that the response to Hurricane Katrina was very inadequate. He stated that he is very confident in the work and partnerships formed in Vermont and that as a state we have proven that we respond as a team. Barb Farr, Director of Vermont Emergency Management (VEM), gave a quick overview of the changes they would like to see in Title 20. Chairman Jim Condos stated that they will continue to work on the bill, but will let the House take the lead with their bill. The committee plans to hold two public hearing on this after town meeting week.

The House Government Operations committee presented draft 1.3 of their bill. Some of the changes recommended by VAHHS and VDH two weeks ago were incorporated in to the draft bill. Prior to the hearing, the parties were able to come to conclusion on more issues including: VEM and the Bennington Medical Reserve Corps (MRC) will revise the current memorandum of understanding (MOU) to designate the MRC as a mobile support unit; include a hospital representative on the State Emergency Response Commission; and include the health department district office a member of the local emergency planning committee. Issues still needing additional work include: clarifying the definition of volunteer; expanding the definition of first responders to include hospital and public health personnel to model the federal definition; and further clarification on liability and immunity provisions. The committee asked the parties to get together and resolve the outstanding issues by early next week. Dixie Henry, legal counsel for the Vermont Department of Health, will work with the department of public safety attorneys on the legal issues. The committee plans to take up and vote the bill out on Thursday, March 2, 2006.

Bills of Interest Introduced this Week

H. 864 – An Act Relating to Capital Construction and State Bonding (Committee on Institutions): This bill proposes to authorize bonding, appropriate capital funds, and address miscellaneous related items. It includes the planning funds for the Vermont State Hospital and $8,250,000 for the departments of health and public safety to purchase a building at IMB to begin construction and renovation of the property for the health and forensic laboratories

S. 310 – An Act Relating to Common Sense Initiatives in Health Care (Committee on Health Care): This bill proposes to: (1) allow a healthy lifestyle insurance discount for the small and nongroup markets; (2) establish a grant fund for communities to create wellness programs; (3) create a medical event reporting and patient safety improvement system; (4) require infection rate reporting in hospital community reports; (5) establish a common claims and procedures work group; (6) require a common credentialing form; (7) coordinate Vermont’s health care reform initiatives, including those relating to information technology; (8) create a consumer health care price and quality information system; (9) establish loan repayment programs to recruit and retain medical providers in underserved geographic and specialty areas; (10) revise the advance directives law; and (11) make appropriations for these programs.