Political Overview

Legislative committees continued to work hard this week to complete their work on the major "money bills." The House Ways and Means Committee approved a bill to reform Act 60 that proposes to reduce property taxes by increasing the sales tax from 5 to 6 percent and expanding it to beer and soda, raising the telecommunications tax and raising the property transfer tax on non-residential property. Senate Committees worked on the transportation capital bill, the capital bill and the FY 04 budget bill. By the first week of May, conference committees consisting of three House members and three Senators will be appointed to work out the differences on these major money bills. This is a clear signal that the end of the session is getting closer.

One surprise announcement came from Governor Jim Douglas on Thursday, April 24th, when he proposed to increase Medicaid reimbursement rates for hospitals in a way that would result in a 10 percent system-wide increase in Medicaid rates paid by the state. The plan is to increase the hospital provider tax (based on net patient revenues less chronic, skilled and swing bed revenues) by one percentage point and to use the resulting approximate $8.6 million in tax revenue, match it with federal dollars, to increase rates to hospitals and eliminate all Medicaid deductibles and co-payments. Approximately $4.6 million of the total tax revenue (along with $7.5 million in federal matching funds) would go toward increased rates to hospitals. Increased rates to hospitals above the tax would be $4 million. The remaining approximately $3.8 to 4 million from the provider tax, along with federal matching funds, would be used to eliminate over time all Medicaid deductibles and co-payments, and to replace them with a system of premiums. The agency has estimated that elimination of all deductibles and co-payments would result in a net increase of payments to hospitals of approximately $10 million. The total package proposed by the governor would result in total increases in Medicaid payments to hospitals of about $14 million, according to agency officials. To date, the details regarding this proposal have yet to be released. The Governor's entire proposal requires legislative approval. Legislators responded positively to this proposal, especially since they are strapped for cash and looking for additional funds to fill a hole in the FY 04 budget.

In other news, on Friday, April 25, 2003, Commissioner John Crowley, of the Department of Banking, Insurance, Securities and Health Care Administration, released his report to the Governor detailing the role of the Department in the initial certificate of need process for the Fletcher Allen Health Care Renaissance Project. Many of the recommendations in the report, such as authorizing the Department to retain experts to review certificate of need applications and "bill back" the cost to applicants, as well as enhancing criminal and administrative sanctions available to the Department, are already included in H.128, the hospital regulation bill that passed the House earlier this month.

Issues of interest to VAHHS addressed this week include:

FY04 Budget Bill (H.464)

The Senate Appropriations Committee continued working on H.464, the FY 04 budget bill. The committee is proposing to increase the budget in some areas including Medicaid, substance abuse programs, human services caseload and the Housing and Conservation Trust Fund, as well as proposing to open the Springfield prison on time. To fund these budget increases, the committee is going to use some one-time revenue and increase the provider tax on hospitals. There is likely to be a gap of $6 million that must be funded with new revenues. Taxes under consideration include taxes on beer, telecommunications services, nonprescription drugs, income, rooms and meals, tobacco products, banks and a tax applied to Vermont Yankee, among other things.

The Senate Appropriations Committee is in favor of the House-passed proposal to replace all existing co-payments and deductibles paid by Medicaid recipients with premiums. However, the committee is tinkering with the premium amounts. One recent proposal would have significantly reduced the premiums for programs involving children, including SCHIP, Dr. Dynasaur and Underinsured children, as compared to the House-passed proposal.

The Committee also unanimous accepted a proposal to change Medicaid eligibility for long term care offered by the Agency of Human Services. The proposal closes a current loophole in the law that prevents bonds from being counted toward a person's total resources before they qualify for Medicaid to pay for their long term care needs. The proposal will count US Savings Bonds as available assets for Medicaid eligibility purposes beginning on the date of purchase. VAHHS supports this proposal.

Hospital Regulation, Certificate of Need (H.128)

The Senate Health and Welfare Committee heard several hours of testimony concerning H.128 on Wednesday, April 23rd, but still have not had a focused committee discussion about what changes should be made in the House-passed bill. A very brief hearing on Friday to hear from proponents of eliminating all CON regulation yielded no progress either.

On Wednesday, the committee heard first from private citizen Jeanne Keller, who offered the committee twenty-one specific changes that she would like to see in the House-passed bill. Most of her proposals are aimed at beefing up regulatory authority and capacity. State Health Commissioner Paul Jarris testified briefly following Ms. Keller. He asked the committee to require the State Health Plan required by current law to be "more quantitative" and also asked for $60,000 to $90,000 to do what is required to update the plan and to cover the cost to the health department of implementing the rest of the bill. He spoke briefly about quality measures, saying that he liked the idea of comparing all hospitals for procedures that they all perform. He said that charges should be related to cost and then used as a surrogate for cost for public information purposes. When asked what he thought of Ms. Keller's proposals, Commissioner Jarris said he would have to get back to the committee in writing. The next witness was Peter Youngbaer of the Vermont Coalition for Disability Rights. He strongly supported the House-passed bill, particularly with respect to reconnecting the regulatory process to a specific state health plan. Ken Libertoff of the Vermont Association for Mental Health testified very briefly and asked only that the committee amend the bill by requiring hospitals to comply with the state's open meeting and public documents laws.

In the afternoon session, the committee heard from Jill Olson, VAHHS' Vice President for Quality and Long Term Care, who told the committee about VAHHS' ongoing work to make community report cards a reality by bringing information to consumers in a way that is thoughtful, meaningful, accurate and helpful. Bruce Specter and Mike Davis of BISHCA were the next witnesses. Bruce simply offered to bring an expert to the committee who could testify about the cost of producing the Health Resource Allocation Plan called for the House-passed bill. Davis explained the hospital budget process to the committee, but had no specific recommendations about the bill before the committee. Next the committee heard for nearly ninety minutes from two nurses who urged the committee to add whistleblower protection language to the bill. The House removed that language before passing the bill. Committee Chair James Leddy, D-Chittenden, told these witnesses that their request would not likely be granted because their requested addition would require the bill to be reviewed by the Senate Judiciary Committee and there is not enough time left in the session to do that. Steve Kimbell, representing VAHHS, was the next scheduled witness, but the clock ran out and he was rescheduled for this week. He did leave VAHHS' written testimony with the committee.

The prospects for H.128 are uncertain. There is some real desire on the part of some committee members to "do something" in reaction to regulatory events of the past couple of years, but there is little in the way of consensus at this point about what that something should be. As of late on Monday, April 28, the hearing schedule for the Senate Health and Welfare Committee for this week had not been posted.

Anesthesiologist Assistants (S.144)

On Wednesday, April 23th, the House Government Operations Committee took testimony regarding S.144, a bill that proposes to establish a system for certifying Anesthesiologist Assistants (AAs) in Vermont. Witnesses included Stuart Fause, a retired hospital administrator from New York, and his wife, Susan Fause, an operating room trauma nurse. The Fauses strongly opposed S.144, believing it will undermine patient care. Dr. Howard Shapiro from Fletcher Allen Health Care offered a different perspective of AAs, based on his use of AAs for the past 20 years in Vermont.

On the procedural front, the full House agreed to transfer the bill from the House Health and Welfare Committee to the House Government Operations Committee. This is a positive development since the House Government Operations Committee is interested in acting on this bill this session.

The House Government Operations Committee will take the bill up again on Wednesday, April 30th. At that time they will hear from Dr. Libby Turner, the chair of the Medical Practice Board, a representative from the Department of Health, and Anthony Otis a lobbyist for the Vermont Association of Nurse Anesthetists who will offer a number of amendments to the bill. Text of the bill as it passed the Senate.

Agency of Human Services Reorganization (H.450)

This week the Senate Health and Welfare Committee held a public hearing and started marking up H.450, a bill that authorizes the Secretary of the Agency of Human Services to restructure the agency. The committee will likely complete its work on the bill during the week of April 28th. This bill is likely to pass this year. The bill as it passed the House.

House Health and Welfare Committee

The House Health and Welfare Committee took testimony this week on two bills that already passed the Senate, namely, S.159, An Act Relating to a Birth Information Network and S.170, An Act Relating to a Statewide Needs Assessment of Dialysis Treatment. The committee will continue marking up these bills during the week of April 28th. The committee also took some brief testimony regarding the recent violations at the Vermont state hospital.

S.25, Safety Seats

The House Transportation Committee briefly took testimony regarding S.25, the bill that proposes to require all occupants in a motor vehicle under the age of 18 to be properly retrained, including the use of booster seats, among other things. VAHHS supports this bill. The Committee will be taking the bill up again during the week of April 28th. The bill as it passed the Senate.

Agency Designation Rules Approved by LCAR

On Wednesday, April 23, 2003, the Legislative Committee on Administrative Rules (LCAR) approved Proposed Rule 02-P045 submitted by the Department of Developmental and Mental Health Services (DDMHS). The rule modifies the existing rules that set forth standards and procedures for designation, redesignation and loss of designation for community mental health/developmental services agencies, as well as an agency appeals process. This rule affects agencies contracted by DDMHS to oversee provision of services to people with developmental disabilities or mental health needs.

H.196, Health Care Access and Affordability

On Wednesday, April 30th, the House Commerce Committee will be hearing from Herb Olson, general counsel at BISHCA, regarding H.196, a bill that is sponsored by Rep. Frank Mazur, R-So. Burlington, that proposes to reform the commercial health insurance market in numerous ways including authorizing the creation of a high risk health insurance pool or reinsurance mechanism for individuals with extraordinary health care risks, permitting the commissioner of BISHCA to exempt small group and individual health benefit plans from one or more benefit mandates if the exemption will promote affordable coverage, and permitting carriers to use nonsmoking and other healthy lifestyle factors in their community rating method, among other things.