VAHHS Legislative Report

For the week ending April 6, 2007

Political Overview

Political battles continued this week after the House Appropriations Committee voted out the FY2008 Appropriations Bill. In a letter sent to legislative leaders, the Administration detailed a number of concerns related to the budget. The Governor proposed tax incentives for individuals who drive fuel efficient cars and use bio-fuels for heating oil. Lawmakers included language to tax minivans, trucks and sport utility vehicles. The bill transfers $3 million to the Education Fund from the Global Commitment Fund. The Administration supports contingency base spending to fund this transfer and wait until revenues are upgraded in order to avoid negatively affecting the State’s bond rating. Lawmakers slashed appropriations slated for mentoring programs believing that the funds would be made up in the Americorps/Vista mentoring program funding. The Administration disagrees. The budget also calls for the elimination of a number of communications positions in the executive branch, another point of disagreement given the complexity of state government. Lawmakers included the deliberative process privilege for lawmakers last year and the Administration strongly believes that exempting legislative requests for information and assistance from Vermont’s Public Records Acts is wrong. The Governor also proposed a budget cap at an increase of no more than inflation plus population growth to ensure the appropriations do not exceed the ability of taxpayers to pay the bill. Lawmakers removed the cap from the budget.

Areas of concern for the Administration in the budget also related to health care. The Governor believes using one-time funds to fund the Blueprint sends a message that this is not a priority for lawmakers. The Governor also voiced concern on the committee’s reduction of provider increases and under funding his targeted relief for the individual insurance market. The Governor also has concerns that lawmakers did not reserve any funds for building a new state hospital.

FY 2008 Budget Bill

The House passed a $5.375 billion (state and federal dollars) FY 2008 Appropriations bill on Friday on a vote of 131 to 4. As stated in last week’s report, the Medicaid section of the bill appropriated an increase of $1 million for hospitals ($400,000 general funds and $600,000 federal matching funds). The proposed $1 million increase would go into effect on January 1, 2008. This six month delay is a similar strategy utilized last year. The physician increase is also $1 million with the same allocation and effective date.

Global commitment funds of $2,150,000 appropriated to the Area Health Education Centers will be allocated as follows: $950,000 to primary care physicians and health care professionals; $250,000 for dentists; $700,000 for nurses; $100,000 for nurse educators; and $150,000 for news disciplines based on emerging health care needs and workforce shortages. This is a $1,650,000 increase from last year’s appropriation.

The Governor was able to sustain his veto on the 2007 Budget Adjustment Act this week by a mere three votes. A two-thirds vote (99 votes) was needed to override to the Governor’s veto (final vote was 96-52). The Governor stated the measure was vetoed because lawmakers did not include funds for scholarships for Vermont students, funds that would become available immediately on passage. Speaker of the House Gaye Symington countered the 2008 Appropriations Bill includes lawmakers’ commitment to scholarships and that the provision did not belong in the budget adjustment bill.

Health Care Reform
H. 531: The Senate Health & Welfare committee took testimony on H. 531, An Act Relating to Ensuring Success in Health Care Reform. The committee started by looking at bills introduced by members of the Senate to allow farmers and small businesses with less than three employees become eligible for Catamount Health. The Chair of the committee asked Joint Fiscal to determine the cost of this. Senator Jeannette White (D-Windham) also asked that all non-profits and self-insured businesses be considered as well.

The Committee heard from the Administration on their remaining areas of concerns in H. 531. Director of Health Care Implementation Susan Besio testified that the online enrollment form will not be available on October 1 (enrolling individuals will not be delayed). Besio stated the Administration is opposed to having the Director of the Health Care Commission as a member of the Blueprint Executive Committee. She also expressed concern on the appropriation for the Rural Health Alliance. It was not in the Governor’s recommended budget and will need to be funded with existing Vermont Department of Health (VDH) funds.

The committee spent Friday afternoon on the Health Care Provider Bargaining Group section of the bill. Assistant Attorney General David Borsykowsky stated he believes including the commissioner of human resources as part of the group could violate antitrust laws by possibly allowing providers to bargain with the commissioner of human resources and the state health benefits plan. The attorney general’s office does not feel the language is necessary and actually may cause more harm.

Paul Harrington from the Vermont Medical Society stated that the House Health Care Committee heard testimony from primary care physicians that they are under duress because they are not adequately reimbursed. Many primary care physicians are experiencing decreased reimbursement by private insurance companies and the catalyst is the expanded market share of CIGNA. VMS believes CIGNA contracts with employer groups at a lower premium because their fee schedule is less. The House Health Care Committee tried to address this concern with the section of the bill.

David Herlihey, General Counsel for the Vermont Department of Human Resources, said state employees are happy with the cost and services of CIGNA. The state of Vermont is a book of business for CIGNA. He expressed concern that the language in the bill would allow physicians to negotiate rates with the state and this is not something the state has ever done.

The committee asked that all parties get together to work out language.

H. 229: The House passed H. 229, the technical amendments bill for the Health Care Affordability Act of 2006. The bill states payments for hospital services shall be calculated using a hospital-specific-cost-to-charge ratio approved by the Commissioner, adjusted for each hospital to ensure payments are at 110 percent of the hospital’s actual cost for services. The commissioner may use individual hospital budgets to determine approved ratios. The commissioner may approve adjustments to the amounts paid in accordance with a carrier’s pay for performance or quality improvement program. It requires insurance carriers to pay health care professionals, such as physicians, using the Medicare fee schedule, at an amount ten percent greater than fee schedule amounts paid under the Medicare program in 2006. Payments will be indexed to the Medicare economic index developed annually by the Centers for Medicare and Medicaid Services.

The bill amends the section on the Vermont Information Technology Leaders (VITL). It moves VITL oversight from the Commissioner of BISHCA to the Commissioner of the Department of Innovation and Information (DII).

The committee had extensive discussion on the prohibition of health coverage status discrimination. It includes language on the prohibition of health coverage status discrimination that no employer or employment agency shall inquire about the health coverage status of a job applicant or discriminate among applicants on the basis of health coverage status. The employer may inform an applicant about the employer’s health coverage benefits. Employers may inquire about the health coverage status of an employee to enable the employer to determine the number of uncovered employees. The section also allows an aggrieved applicant to bring action in the superior court of the county where the violation occurred. If the court finds the employer has violated this section, the court can order any of the following: payment of lost wages, benefits, and other remuneration; any appropriate injunctive relief; compensatory damages; punitive damages; attorney fees; or any other appropriate relief.

The bill includes language on the uniform provider credentialing form that would allow a hospital to request an extension from BISHCA for the full implementation of the Council for Affordable Quality Healthcare form for up to one year from the January 1, 2007 implementation date.

It provides for VDH to provide payments for any Vermont resident to receive immunizations without cost to the individual. State health programs will receive coverage under those programs.

The bill exempts from the Catamount Health employer assessment, seasonal and part-time employees who have health insurance through some other means. In addition to the exemptions, the amendment directs the Governor’s office to come back to the Legislature before December 2007 with a plan to address the budget shortfall the exemptions create in the Catamount Health Plan fund.

Both bills will be referred to the Senate Health & Welfare Committee.

H. 137 – An Act Relating to the Restoration of a Department of Mental Health and Commissioner of Mental Health

The Senate Government Operations voted out of committee H. 137 on a vote of 5-0 this week. An amendment proposed by the Vermont Medical Society on increased coordination and integration with physical health, mental health and substance abuse was accepted by the committee. The committee also accepted the House language on the qualifications of the Commissioner of Mental Health to be a mental health care professional and not necessarily a physician.

H. 112 – An Act Relating to Protection of Health Care and Public Safety Personnel from Communicable Disease

The House Human Services Committee heard testimony from Anne Cramer, VAHHS Legal Counsel, on her preliminary review of the bill and whether there were privacy law issues. Cramer stated Vermont Patient Privacy Law preempts Health Insurance Portability and Accountability Act (HIPAA) related to the relevant disclosures. If expressly required by law, information can be released as the law requires. Outside of the privacy law area, Cramer advised that there are a number of pieces that need further consideration. Cramer warned that unanticipated consequences might flow from having a temporary record kept apart from the patient’s medical record of the patient’s blood borne disease status. For instance, would a duty to warn exist where a health care provider was concerned that the patient might be infecting others. Additional areas that need further clarification center on workers compensation and the penalties addressed in the bill. VAHHS will meet with the Vermont Medical Society and the lead sponsor of the bill to discussion possible changes.

S. 122/H.433 – Workforce Development and Future Economic Needs

Dr. Melinda Estes, President and CEO of Fletcher Allen Health Care, testified in front of the Senate Economic Development, Housing and General Affairs Committee in support of the proposed workforce development, scholarship and loan repayment bills. Dr. Estes focused her testimony on the parts of the legislation that would increase funding for workforce development, stating that enhancing existing grant programs and establishing new grant programs is critical for economic development, to increase the number of quality jobs in the state and to have the best education and training for the workforce in Vermont. Dr. Estes spoke in detail about Fletcher Allen's experience in workforce development collaborations with the Vermont Healthcare and Information Technology Education Center (Vermont HITEC), which recently graduated 15 newly trained health care support personnel through a grant program who are now working at Fletcher Allen Health Care.

Bills of interest introduced this week:
H. 537 - AN ACT RELATING TO MAKING APPROPRIATIONS FOR THE SUPPORT OF GOVERNMENT: This bill proposes to make appropriations in support of government for the fiscal year beginning July 1, 2007.

S. 205 - AN ACT RELATING TO ELIMINATING SAFETY NET COVERAGE AND REFORMING THE NONGROUP HEALTH INSURANCE MARKET: This bill proposes to: (1) eliminate the 15 percent cap on annual premium rate increases for safety net products; (2) eliminate safety net health coverage, either immediately or through a three‑year phase‑down governed by BISHCA; (3) eliminate the 20 percent cap on annual premium rate increases for nongroup products; (4) move sole proprietors from the small group market to the nongroup market; (5) allow Blue Cross Blue Shield of Vermont and HMOs to use risk classifications to charge rates for nongroup products that vary from the community rate by up to 20 percent; (6) limit enrollment in nongroup plans to an annual open enrollment period in November and December or within 30 to 60 days following loss of insurance under specified circumstances; and (7) impose a mandate for all individuals to have health insurance, effective 2010.