state policy update

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State Policy Update

MNACHC Annual ConferenceOctober 12, 2006

Jonathan WatsonAssociate Director/Public Policy

Director

21. Trends in the health care market-place for

safety-net providers.2. Review 2006 Minnesota legislative session.3. Impact of Election 2006.4. Preview 2007 Minnesota legislative session.5. Current policy developments

• QCare• Deficit Reduction Act implementation

Goals/Objectives

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CURRENT HEALTHCURRENT HEALTH

CARE TRENDS IN CARE TRENDS IN

MINNESOTAMINNESOTAPart One

4

Uninsured, 5.7% Uninsured, 7.4%

Individual, 4.7%Individual, 4.6%

Group, 68.4%

Group, 62.9%

Public, 25.1%

Public, 21.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2001 2004

Trends#1 – Loss of Group

Coverage

• Number of Minnesotans with group-sponsored coverage dropped 8% or roughly 172,000 people from 2001 to 2004.

Chart 1: MN Insurance Coverage, 2001 to 2004

5

Trends#1 – Loss of Group

Coverage

• Latinos realized the greatest drop in group health care coverage – nearly a 40% drop.

• All ethnicities realized a decline group coverage from 2002 to 2004.

Chart 2: MN Change in Group Insurance Coverage, 2002 to 2004,

By Race/Ethnicity69.9%

47.9%41.5%

68.6%

58.4%65.5%

35.5%

58.7%

40.5%41.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

White AfricanAmerican

Amer.Indian

AsianAmerican

Latino

2002 2004

6

12.2%

9.8%9.0%

11.2%

4.5%

2.3%2.9% 3.4%

1.6%2.4%

3.4%

4.7%

3.1%2.3%

1.0%0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2001 2002 2003 2004 2005

Premiums Inflation Avg. Weekly Wage

• Since 2001, health care premiums have increased 3 times the increase in the average weekly wage in Minnesota and almost 4 times the inflation rate in MN.

Trends#2 – Growth in Health

Care PremiumsChart 3: MN Change in Health Care

Premiums vs. Weekly Wages & Inflation, 2001-2005

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88.2% 88.3% 88.1% 87.5% 86.9%

11.8% 11.7% 11.9% 12.5% 13.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005

Health Plan Cost Enrollee Cost

Trends#3 – Increased Out of

Pocket Costs For Enrollees

• From 2001 to 2005, the average out of pocket cost for health plan enrollees increased 65% -- from $297 to $489.

• Enrollees are “picking up” a greater share of their health care costs.

Chart 4: Enrollee vs. Plan Share of Cost, 2001-2004

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5.9% 5.6% 5.4% 5.6% 5.7%6.2%

6.7%7.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1997 1998 1999 2000 2001 2002 2003 2004

Uninsured

• While still one of the lowest in the US, MN’s uninsured rate increased nearly 30% -- or by 96,000 Minnesotans --since 2001.

Trends#4 – Increasing

UninsuredChart 5 – MN Percent Uninsured,

1997-2004

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33,163 34,623 36,385

42,378 43,14548,396

52,774

0

10,000

20,000

30,000

40,000

50,000

60,000

1999 2000 2001 2002 2003 2004 2005

Uninsured at CHCs

• The number of uninsured at Minnesota’s CHCs has increased 45% from 2001 to 2005.

Trends#5 – Increasing

Uninsured at CHCsChart 6 – MNACHC Uninsured, 1999-

2005

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Trends#5- Increasing Uninsured

at CHCs

37% 41% 42%

17%17%19%

35%39% 37%

6% 5% 6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2003 2004 2005

% o

f MNACHCPa

tien

ts

• Since 2003, the Medicare and uninsured populations are the two fastest growing segments of CHCs patient base.

• Medicare grew by 12% or 700 patients, while the uninsured grew by 8% or 9,700 patients.

Chart 7 – MNACHC Insurance Status, 2003-2005

Uninsured

Medicare

MA/MNCare

Private

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138,809

117,793

115,000

125,000

135,000

J ul-

05

Aug-

05

Sep-

05

Oct-

05

Nov-

05

Dec-

05

Jan-

06

Feb-

06

Mar-

06

Apr-

06

May-

06

Jun-

06

Jul-

06

Aug-

06

Trends#6- Declining MNCare

Enrollment

• MinnesotaCare enrollment has decreased 15.1% over the past 14 months.

Chart 8 – MNCare Enrollment, 7/05 – 8/06

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Trends#7- Increasing GAMC

Enrollment

41,448

38,533

35,000

40,000

45,000

Jul-05

Aug-05

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

• Despite previous projections forecasting a 13% decline in 2006, GAMC enrollment is up 7.6%

Chart 9 – GAMC Enrollment, 7/06 – 8/06

131. Loss of group coverage – 8% drop since 2001,

lower-income residents & Latino population realize greatest loss.

2. Rising uninsured – overall 30% increase since 2001, lower income & Latinos realize significant increases.

3. Health care premiums - outpacing inflation by a factor of 3 and wages by a factor of 4.

4. Increasing out-of-pocket costs for enrollees – 65% increase since 2001.

5. CHC growth in uninsured and Medicare populations – 8% and 12% growth respectively since 2003.

6. Recent (14 month) growth in GAMC – 8% increase despite earlier projections; decline in MNCare - 16%

Trend Summary

141. Pay-for-Performance/Quality

• Payments, reporting requirements, adjusting for case mix, patient “dumping”

2. Consumer-Driven Health Care• HSAs, health care “report-cards,” patient shopping

3. Digital Health• E-health care, electronic medical record, online appointments/records,

cost of systems

4. Retail Clinics• Convenience

5. Workforce• Rural health, underserved, dental providers

Other Trends

15 Minnesota CHCs serve…– 1 out of every 7 uninsured Minnesotan – 1 out of every 11 Medicaid enrollees

– 1 out of every 10 Minnesotan below poverty

– 1 out of every 7 “non-white” Minnesotan • 2 out of every 5 “non white” resident of Mpls/St. Paul

– 1 out of every 7 Latinos • nearly 1 out of every 2 Latinos in Mpls./St. Paul

CHC Statistics

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2006 LEGISLATIVE2006 LEGISLATIVE

REVIEWREVIEWPart Two

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2006 Legislative Review

• Highlights– State budget surplus FY2006-07 = $88 million

• Higher corporate tax revenue• Health impact “fee” deemed legal• $57 million less spending

– $19.2 million less in health and human services

– Traditionally a “bonding year” – yet “policy” items considered in light of surplus

– Stadiums for Minnesota Twins and U of MN football• $800 million

– Bonding for biosciences at U of MN, Northstar commuter rail, state universities and colleges

• $1 billion

– New Funds for incarcerating and treating sex offenders

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HOUSE

Consumer-Driven Reforms

HSAs, Cost Containment,

Combat Fraud

SENATE

“Undoing” P

revious

Cuts to M

HCP,

Universal Health

Care

GOVERNOR

Mental HealthInitiative, DRA

Implementation

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• HEALTH CARE-RELATED– $9 million for mental health services (Governor requested

$50 million)

– MNCare dental copayments eliminated for parents and adults with children below 175% FPL

– $5 million for pandemic flu response

– Pay-for-performance for diabetics on Medicaid

– Community health center study• DHS study the adequacy of CHCs and community clinics in state• Use of grants to expand the number of clinics• Increase use of physician assistants, nurse practitioners, medical

residents and other allied health professionals to expand access

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What Didn’t Pass in 2006…what to expect in 2007?

1. Expansion of MNCare for adults without children up to 200% of FPL ($15.5M over the 2006-09 period)• Currently at 175% of FPL.

2. Restoring family planning grants ($3.8M)3. TB treatment/case management for

immigrants ($500,000)4. Eliminating scheduled 8% increase in

MNCare premiums ($4.3M)5. Reinstate MNCare outreach grants ($1.7M)

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What Didn’t Pass in 2006…what to expect in 2007?

7. Allowing small employers to “buy-into” MNCare ($4.6M)

8. Increase MNCare inpatient hospitalization cap to $20,000 ($7.6M)• Currently at $10,000

9. Permit MNCare coverage for undocumented children ($1.4M)

10.Constitutional amendment for universal health coverage

11.“De-privatize” MHCP – eliminate PMAP, all Fee-For-Service

12.“Wal-Mart/Fair Share” legislation13.Fraud provisions

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2006 2006

ELECTIONSELECTIONSPart Three

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1 30 7 2 26 1

DFL Unopposed DFL Incumbent DFL OpenR Open R Incumbent R Unopposed

DFL 38

Repub.29

2006 Minnesota ElectionSenate

DFL=38 R=29TOTAL = 67

Key Retirements

• Senator Lourey (DFL) – Chair of Health & Family Security Committee

• Senator Kiscaden (DFL) – member of HFS Committee

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1 53 12 11 57

DFL Unopposed DFL Incumbent DFL OpenR Open R Incumbent R Unopposed

Repub. 68

DFL 66

2006 Minnesota Election

House

DFL=66 R=68TOTAL = 134

Key Retirements

• Rep. Bradley (R) – Chair of Health Policy & Finance

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2006 Minnesota Elections

• Key Developments– If House changes to DFL…

• New committee chairs• One or two committees?

– If House remains Republican controlled• Rep. Fran Bradley retired in 2006

– Assuming Senate remains DFL…• New Health & Family Security Chair (Lourey ran for

Governor)• Berglin remain as chair of Health/Human Services

Finance

– Governor’s Race• New state agency commissioners

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2006 Minnesota Elections

• Motor Vehicle Sales Tax (MVST) Referendum– Currently 54% of the MVST revenue is used for

transportation purposes with 46% contributed to the general fund.

– If approved, 100% of MVST for transportation (roads, public transit)

– Impact on the projected $1.1 billion surplus for the next biennium (FY08-09):

• Reduce surplus to $918 million or by $172 million/16%• February forecast accuracy and economic conditions

FY2008 FY2009 TOTAL

Revenue $16,341 $16,974

$33,315

Spending 15,967 16,257 32,224

Difference 374 717 1,090

MVST (56) (116) (172)

Balance 318 601 918Dollars in millions

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2007 LEGISLATIVE2007 LEGISLATIVE

PREVIEWPREVIEWPart Four

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Odd-Year Session

(January 2007)FY2007 & FY2008

Budgets

July 2007Fiscal Year 2008

Begins

Even-Year Session

January 2008“Bonding” Session“Tweak” FY2009

Budget

July 2008Fiscal Year 2009

Begins

2007 Legislative Preview

Chart 10 – The Biennial Budget Process, FY2008-2009

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11.5%

4.8%

2.9% 2.7% 2.5%

0.9% 0.6% 0.2% -2.1%-0.1%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

DebtService

HHS PublicSafety

K-12 TOTAL HigherEd.

StateGovt.

Env. &Agr.

Prop.Tax Aid

Transp.

Chart 11 – Change in State Spending, By Program Area, 2003-2009 (FY2007-2009 Projected)

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Chart 12 – State Spending as Percent of Total, By Program Area

Prop. Tax, 7%

Higher Ed, 6%

Safety, 4%

Govt., 2%

Debt, 2%

K-12, 27%

Other, 3%

Transp., 12%

Env. & Ag., 6%

HHS, 35%

Prop. Tax, 6%

Higher Ed, 5%

Safety, 4%

Govt., 2%

Debt, 2%

K-12, 27%

Other, 1%

Transp., 9%

Env. & Ag., 5%

HHS, 40%

2003 2009

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• Health Care Access Fund– 2% Provider tax

$176,994

$136,774

$53,938

$116,270

$167,404

$124,809$116,469

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

2003 2004 2005 2006 2007 2008 2009

Revenue Spending Difference

FY06

$531,871 $415,601 $116,270

FY07

$635,463 $518,994 $116,469

06-07

$1,167,337

$934,595 $232,739

FY08

$670,843 $546,034 $124,809

FY09

$715,283 $547,879 $167,404

08-09

$1,385,766

$1,093,913

$292,213Dollars in thousands

Chart 13: HCAF Surplus, 2003-07,

2008-2009 Projected

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• Key Issues– Election results

• Control of Senate, House and Governorship– State economic growth – budget surplus vs.

deficit• July revenue forecast 3% ($447 million) higher than Feb.

forecast• Economy expected to slow in 2nd half of 2006

– 2007 Session is a “Budget” year • “Piggybacking proposals” – insurance for children in their

20s• Fraud provisions/improper Medicaid payments (both

participants and providers)• “Fair Share” proposals on large companies (Wal-Mart

legislation)• Universal health care/constitutional amendment• Mental health and primary care

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• Key Issues (continued)– Deficit Reduction Act implementation

• Increased copayments for MA enrollees• Medicaid benefit changes

– Expanding programs vs. consumer driven approaches to health care “reform”

• Massachusetts model– Expanding existing programs– Subsidize lower-income premiums– Health Connector

– CHC Issues• Results of CHC study• HCAF surplus

– Key Dates:• November 6, 2006 - Election Day• October Economic Forecast• January 3, 2007 - Legislature convenes• January/February - Governor’s budget to Legislature

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CURRENT DEVELOPMENTSCURRENT DEVELOPMENTS• QCareQCare

• DRA DRA

ImplementationImplementation

Part Five

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Current Policy QCare

• QCare– Announced by Governor Pawlenty on July 31, 2006

• Shift from reimbursing on “cost” to “quality”• “The right care at the right price”

– Initially will focus on four areas of care where much of Minnesota’s health care dollars are spent.

• Diabetes• Hospital stays• Preventative care for adults and children• Cardiac care

– If standards were met, state projects $153 million in savings for the entire health care system in Minnesota

36• QCare

MEASURE BASELINE 2010 QCARE GOAL

DIABETES

• A1c blood sugar < 7.0%• LDL < 100 mg/dl• Blood Pressure <

130/80• Daily aspirin use over

40 years old• No tobacco use

6% 80%

HOSPITAL STAYS

• Heart Attack Care 91.6% 100%

• Heart Failure Care 84.7% 100%

• Pneumonia Care 67.7% 100%

• Leapfrog Reporting 42.0% 100.0%

• Adverse Events 105 events/year 50 event/year


37• QCare

MEASURE BASELINE 2010 QCARE GOAL

CARDIOVASCULAR

• LDL < 100 mg/dl• Blood Pressure <140/90• Daily aspirin use • No tobacco use

38% 90%

PREVENTIVE CARE

• Child Immunizations 68%

90%

• Adolescent Immunizations

39%

• Well Child Visits 59%

• Breast Cancer Screening

74%

• Cervical Cancer Screening

78%

• Chlamydia Screening Women

32%


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Current PolicyQCare

• QCare– Applied to the MN Health Care Programs

(MHCPs): No new line item/money• “Reward” will be from program savings

– DHS amend PMAP contracts this fall to incorporate QCare philosophy

– 2007 SESSION – MONITOR ANY DEVELOPMENTS THAT THREATEN/MODIFY CHC PAYMENTS

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Current PolicyDeficit Reduction Act

• Provisions that could affect CHCs:

– Citizenship documentation

– Increased beneficiary cost-sharing amounts

– State false claims and compliance programs

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Current PolicyCitizenship Verification

• Citizenship Verification– Effective August 1, 2006:

• All Medicaid enrollees must prove:

1. IDENTITY, AND2. CITIZENSHIP

• Both current enrollees and new applicants• Tiered levels of acceptable documents to

prove identity and citizenship• DHS 2006 Bulletin - #06-21-09• Impact on CHC patients

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Current PolicyCitizen Verification

Programs Required to Document Citizenship and Identity

Programs NOT Required to Document Citizenship and Identity

1. MNCare for families with children (including pregnant women)

2. MA for: families with children (including pregnant women); people 65 and older; and people with disabilities.

3. MA for women with breast or cervical cancer.

4. MA enrollees in an Institution for Mental Disease (IMD)

5. MA for Employed persons with disabilities

6. MA Long Term Care and home and community-based waivers

7. TEFRA8. MN Family Planning

Program

1. Medicare enrollees applying for/enrolled in:

a. Medicaidb. Qualified Medicare

Beneficiaries (QMBs)c. Service Limited Medicare

Benef. (SLMBs)d. Qualified Individuals (Q-1s)e. Qualified Working Disabled

(QWD)2. General Assistance Medical

Care (GAMC)3. MNCare for adults without

children4. HIV/AIDS Program5. Non-citizens enrolled in Emergency

MA, state-funded MA or victims of torture

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Current PolicyCitizen Verification

• Citizen Verification– Once citizenship is proven, it does not

have to be documented again, unless later evidence raises questions

– Rules require that individuals be given a “reasonable opportunity” to submit documentation• Minnesota = six months• Current eligible will maintain MA eligibility• New applicants not eligible (no interim

benefits)

43

Current PolicyIncrease Cost Sharing

• Previous law limited to $3 and no denial of care for failure to pay co-payment– DRA: Copay = up to

10% for persons with incomes between 100-150%; 20% for person with incomes above 150% FPL

• Health Centers may experience:– Lower revenue– Decrease in Medicaid

patients

• Legislative Session 2007

$3.00

$14.00

$28.00

$0

$5

$10

$15

$20

$25

$30

Current Co-pay PotentialCopay 100-

150%

PotentialCopay 150%+

A typical CHC encounters costs $140. Under DRA provisions, Medicaid copayments could increase…

44

Current PolicyFraud

• Any entity that receives more than $5 million in Medicaid payments annually, must:– Establish written policies for employees and

contractors regarding:• Federal and State False Claims Act• Whistleblower protections• Role of such laws in preventing fraud, waste, and abuse

in Federal health care programs– Include in employee handbooks, a discussion of

• Federal and State False Claims Act• Rights of employees to be protected as whistleblowers• Entity’s procedures for detecting and preventing fraud,

abuse and waste.– States are permitted to retain 10% any recoveries provided

their guideline/law is at least as stringent as federal law.

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MNACHC Day on the HillJanuary 2006

CHC Staff, Patients Board Members

Visit www.mnachc.org for more information

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Jonathan Watson612.253.4715, ext 11

[email protected]

Contact Information

Visit www.mnachc.org

state policy update

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