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For the week ending January 19, 2007

Political Overview

The Emergency Board, a Board consisting of the Governor, the chair of the senate finance committee, the chairs of the appropriation committees of the senate and house, and the chair of the ways and means committee, met with the State’s economists this week and voted to increase the current year's revenue target by only $1.4 million.  The committee meets twice a year to vote on revenue projections that are binding on both the executive and legislative branches of government.  The projections are based on the recommendations of one economist working for the governor and his staff and another working for the Legislature.

The estimate of new tax growth for the year is now $27.4 million.  The major pressures on next year’s budget include:  built-in salary increases for state employees, continuing growth in corrections and health care, obligations to meet the state's share for school construction projects, costs associated with replacing the Vermont State Hospital and a long list of roads and bridges in need of repair.  Energy costs and lack of snow are a contributing factor in the decrease in revenues.  The Governor will be giving his budget address on Tuesday, January 23, 2007 and will stress fiscal restraint.

This week Speaker Gaye Symington (D-Jericho) announced that projected enrollment numbers for Catamount Health are below what was anticipated.   A Vermont-specific study was conducted and analysis indicates that the original projection of 4800 individuals enrolled by fiscal year 2008 is now expected to be 2600.   The Administration states that the study indicates lower estimates are the result of who qualifies and who would likely buy into the plan.  Coverage under Catamount Health Plan is not scheduled to begin until October 2007; however, the implementation date for the employer charge is April 1, 2007, with payment due to the Department of Labor thirty days after the close of that quarter. 

Health Care Reform
The Senate and House Health Care committees continued to receive updates on the legislation passed last year and Catamount Health.  The Joint Fiscal Office gave an overview of Medicaid, Director of Health Care Reform Susan Besio gave an update on the implementation of Catamount Health, Dr. Dana Kraus from St. Johnsbury gave an overview of the chronic care project, and an overview was given of the Vermont Information Technology Leaders (VITL) by President Greg Farnum and Vice President Paul Forlenza and Hans Kastensmith, consultant to the Health Care Commission. 

VITL serves multiple stakeholders, including patients, health care providers, payers, employers, and state agencies.  It has a 19-member board of directors that includes representatives of health care practitioners, state government officials, insurers, hospitals, patients and consumers, employers and more than 30 volunteers from various organizations are advising VITL and working on projects. VITL acts as a community utility, a neutral convener of health care organizations. Hosting health care software for clients and providing comprehensive data services are two other functions of VITL. Funding has come from three main sources: $1.4 million from the Vermont General Assembly; grants; and fees from providing hosting and data services.   VITL is engaged in five major activities: writing the Vermont Health Information Technology Plan due July 1; launching a medication history pilot project at two hospitals (Rutland Regional Medical Center and Northeastern Vermont Regional Hospital in St. Johnsbury); providing comprehensive data services to the Vermont Department of Health’s (VDH) Blueprint for Health Chronic Care Information System; assessing privacy and security issues under a federal grant; and building a statewide health information exchange.   A five year contract to work on the Blueprint with VDH was signed in October 2006. GE Healthcare is the prime contractor, Orion Health is the subcontractor. The first user (Mt. Ascutney Hospital and Health Center) will be online by the end of June 2007. Data will be gathered from physician electronic medical records, labs, and other sources. The data will be held in a central data repository maintained by GE Healthcare. Aggregated information will be fed to participating physicians and viewed using Orion Health’s disease management application.   The medication history pilot will be the beginning of a statewide health information exchange. With patient consent, data will be retrieved from pharmacy benefit managers on paid medications. The benefits include: time saved in reconciling medications; more complete and accurate data; gives practitioners better information to make clinical decisions; less chance for adverse drug events; better quality care and a more efficient system.  The exchange links hospitals, physicians, labs and other ancillary services, payers, consumers, government, and other stakeholders. It is being built to national standards, and allows practitioners using different brands of electronic medical records to share data.

Hans Kastensmith also presented to the Senate Appropriations committee.   Kastensmith stated that there have been delays on data submission and that VDH, VAHHS, VITL and the hospitals will be meeting to work out some of the issues.  Kastensmith stated that he feels it may be necessary for legislation to be introduced that will mandate the contribution of data to an electronic master provider index.   The Appropriations Committee has made the request to legislative counsel to begin drafting this.   Kastensmith stated that there seems to be a sentiment that providers do not support the implementation of an electronic medical record (EMR) and that is inaccurate.  It is the overhead expense that is burdensome.  Discussions are beginning on the possibility of a surcharge being assessed on each medical claim of fifty cents to two dollars to host an EMR for those who cannot afford it.     

The House Health Care Committee also received testimony and a copy of the report from the Department of Labor on the employers’ health care premium contribution and the treatment of seasonal workers.   The workgroup identified three options for the legislature to consider:  1) exempt all short-term employees from the employer contribution, 2) exempt short-term employees who have private insurance coverage from any source, and 3) include short-term employees in the employers’ contribution assessment.  The workgroup recommended that option 2 be adopted.   The group feels that it assesses jobs of workers who are truly not insured; will lessen pressure to reduce jobs and/or wages of short-term workers; and has relatively small impact upon estimated revenues for the Catamount Fund.

Mental Health
House Human Services received an introduction to adult and child mental health this week.  The committee heard from a number of individuals from VDH as well as advocacy groups.   The committee wanted information on what services are provided and what services are missing.  The committee will continue to take testimony on this.

The House and Senate Institutions and Government Operations Committees met in the Well of the House this week to discuss the Vermont State Hospital.   A growing number of legislators began questioning the financial feasibility of locating a new specialized psychiatric unit on the campus of Fletcher Allen Health Care in Burlington.  State officials and many mental health advocates have favored affiliating a new unit with a general medical hospital to reduce stigma, guarantee patients easy access to medical services and ensure care would be eligible for federal reimbursement.   Some lawmakers now say the state can't afford the $100 million estimated cost of building on the Fletcher Allen Health Care campus. VDH, charged with coordinating planning for the replacement of the state hospital, has leaned toward Fletcher Allen Health Care because of a federal rule that prevents stand-alone psychiatric hospitals from receiving Medicaid reimbursement.   The state hospital had a waiver that allowed the hospital to collect Medicaid payments until its decertification.   

Budget Adjustment
The House Appropriations Committee continued to take testimony on budget adjustments for state fiscal year 2007.   Joshua Slen, Director of the Office of Vermont Health Access (OVHA), is requesting a budget adjustment of approximately $8.7 million in administration and a decrease in programs of just over $5 million.  Slen stated that there are many issues impacting the SFY 07 administrative budget adjustment request.  OVHA has a $5.6 million carry forward need and $3 million of new SFY 07 needs due to:  the National Provider Identifier mandate, outstanding payables on SFY 06 contracts, increased call volume to member services related to the citizenship requirement under the Medicare Modernization Act and the ability for Coordination of Benefits unit to data match with commercial carriers, administrative movement of funds within the agency, and marketing and outreach for Catamount Health and Employer Sponsored Insurance.  Related to programs Slen stated that when comparing OVHA’s spending pattern for services to the original budget request, it became apparent that trends in certain major categories was dropping.   Significant dollar decreases are occurring in hospital inpatient service and nursing homes   Inpatient services is decreasing 14.9 percent resulting in an expenditure impact of $9.7 million and nursing home decrease of 4.3% resulting in an expenditure impact of $4.89 million.  Other areas include an increase in cost settlements from hospitals of $4.272 million.

Fee Bill
The House Ways and Means Committee began work on the executive branch fees.  The fee bill addresses monetary charges by an agency for a service or product provided to, or the regulation of, specified classes of individuals or entities.    Fees are created and set by the legislature and not by rule.   The fees reviewed are done on a three year cycle and this year’s bill will have health-related items.  

Nursing homes:  Beginning on July 1, 2007, the nursing home per bed assessment will be $4322.90 to bring the tax to the 6% allowable limit through December 31, 2007.   Beginning on January 1, 2008, the per-bed tax will decrease to $3,962.66 to bring the tax to the 5.5% of gross revenues.   This is due to the passage of HR 6111, which caps nursing home provider taxes at 5.5% until federal fiscal year 2011.   There is also a provision to amend the current law to allow the Office of Vermont Health Access (OVHA) the option to secure payment from claims paid to the provider in default. 

The Vermont Department of Health is proposing the following: 

Ø      VDH is proposing a $300 fee per X-ray inspection by radiological health staff.  It is expected that fees of $58,100 will be collected.  

Ø      Language needs to be included to continue the current hospital baseline fee of $7,667, unless a hospital is accredited by the Joint Commission on Accreditation of Health Care Organization, which reduces the fee to $2,750

Ø      Hospital per bed fee of $25 through FY 2010

Ø      Increase in fees for the following providers:

o       Podiatrists:

§         2006:  Current fee of $500 to proposed fee of $565

§         2007:  Fee of $565 increased to $600

§         2006:  Biennial renewal fee of $450 increased to $525

o       Physicians:

§         2006:  Current fee of $500 to proposed fee of $565

§         2007:  Fee of $565 increased to $600

§         2006:  Biennial renewal fee of $450 increased to $525

o       Limited temporary licenses – Current fee of $50 to proposed fee of $70

o       Anesthesiologist Assistants certification fee – Current fee of $100 to proposed fee of $115

o       Anesthesiologist Assistants biennial renewal fee – Current fee of $100 to proposed fee of $115

o       Physician Assistants certification fee – Current fee of $100 to proposed fee of $115

o       Physician Assistants biennial renewal fee – Current fee of $100 to proposed fee of $115

The Board of Medical Practice issues licenses and certificates to physicians, podiatrists, physician assistants, anesthesiologist assistants and physicians in training.  The Board also issues license verifications, investigates complaints and takes disciplinary action when needed.  The Board is required by law to create and maintain individual profiles on all health care professionals licenses, registered or certified by VDH, and make the profiles available to the public.   The proposed increase in fees will help support the Board of Medical Practice will their statutory requirements.

Advance Directives
The House Human Services committee took testimony on advance directives Friday.  Ann Pugh, Chair of the committee, expressed her surprise and dismay that the registry is not operational.  VDH, Legislative Counsel and Madeleine Mongan of the Vermont Medical Society gave an overview for the committee on the legislation that was passed.   VDH testified that the final rules and forms were approved by the Legislative Committee on Administrative Rules in December 2006 and became effective on January 8, 2007.   The registry has been delayed because the rules were delayed. Stakeholders testified that they would like to phase in the registry in one hospital service area because of the technical details that need to be answered and to work out any issues that may arise.  During this phase in period, education will be given to providers based on what we have learned in the one hospital service area and the public web site will be activated. Complete implementation of the registry will happen within 120 days of the VDH announcement that the registry is available. The committee requested that VDH submit in writing the proposed timeline by the end of next week.  

Medical Marijuana
The Senate Judiciary Committee recommended today modifications to the state’s existing medical marijuana law.  The changes include expanding eligibility, allowing out-of-state doctors to decide patient eligibility, allowing more plants and cutting the annual registration fee.  The bill goes to the Senate Health and Welfare Committee before going to the full Senate.

Legislative Committee on Administrative Rules
The Legislative Committee on Administrative Rules this week adopted the rules for the new federal requirements applicable to determining financial eligibility for Medicaid payment of long term care services.    

Bills of interest that were introduced this week:

H. 82 - AN ACT RELATING TO HEALTH INSURANCE PLAN REIMBURSEMENT FOR COVERED SERVICES PROVIDED BY NATUROPATHIC PHYSICIANS:  This bill would allow naturopathic physicians providing treatment within their scope of practice to be reimbursed for providing medically necessary health care services that are covered by a health insurance plan.

S. 39 - AN ACT RELATING TO HEALTH INSURANCE PLAN REIMBURSEMENT FOR COVERED SERVICES PROVIDED BY NATUROPATHIC PHYSICIANS:  This bill would allow naturopathic physicians providing treatment within their scope of practice to be reimbursed for providing medically necessary health care services that are covered by a health insurance plan.

Governors Budget Address:   Tuesday, January 23, 2007 at 2 p.m. 

Public Hearing:  Fiscal Year 2008 state budget by Vermont Interactive Television Monday, February 5, 2007 from 4:15 p.m. – 5:45 p.m.