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For the week ending March 19, 2004
This week the Senate passed S.288, a bill to reduce the cost of prescription drugs. The bill contains a controversial five member board to set maximum prices for prescription drugs sold in Vermont. An attempt to strike the price setting provision from the bill on the Senate floor failed by a vote of 16-14. This price setting mechanism sets the stage for a political showdown between the Senate and the House that for many long time State House observers feels like a good case of déjà vu. In 2000, the Senate sent a prescription drug bill containing a similar provision to the House only to drag out the session and have the entire bill die over price controls. There are many provisions in the bill that just passed the Senate that are not controversial and could help reduce the cost of prescription drugs. The challenge will be for lawmakers to put aside election year politics and work out a compromise on price controls so the bill can move forward.
The House Appropriations Committee also finished its work on the FY05 budget bill (H.768) this week. The bill contains $946 million in general fund spending. There were remarkably few changes made to the Medicaid portion of the budget from what Governor Douglas recommended. The only significant change being that dentists received a one percent increase in their Medicaid payments. The bill will be up for action on the House floor starting Monday, March 22nd.
FY05 Budget (H.768)
The House Appropriations Committee voted to advance H.768, the FY05 budget
bill this week. There are two health care studies of interest to VAHHS proposed
in the budget bill. The first establishes a "sustainable health care
study committee" consisting of lawmakers, administration officials,
and representatives of VAHHS and the Vermont Medical Society. The committee
is directed to review activities in other states and other sources of information
on sustainable financing of health care programs and submit a report to the
General Assembly. (See Sec. 290). The second study directs the Department
of Banking, Insurance, Securities and Health Care Administration, working
with interested parties, to propose the development of a self-insurance pool
for small businesses in Vermont. (See Sec. 287).
As reported before, the bill contains a $1.5 million increase in FY05 for hospital inpatient rates. The bill also proposes that Disproportionate Share (DSH) payments to hospitals be increased by approximately $5.2 million in FY05. This $5.2 million consists of a projected $4.386 million from the DSH cap being increased by 16 percent under the federal Medicare bill and the approximate remaining $800,000 coming from a slight increase in the base to reach the 6 percent cap that exists under the present federal DSH law. The provider tax on hospitals will be revised in FY05 to draw down these funds.
With regard to nursing homes, rebasing, inflation and the provider tax are all in play in FY05. First, the cost to rebase is $13 million annualized. Only 5 months of this cost, or $5.4 million, is in the bill because rebasing starts on January 1, 2005, and nursing home cost reports for January 2005 are not filed until February 2005 so the state will only pay the increased rate due to rebasing for five months (February, March, April, May and June) in FY05. There is also approximately $1 million budgeted for inflation. Here is a link to the bill as introduced.
Nursing Home Provider Tax (fee bill, no number yet)
Commissioner John Michael Hall of the Department of Prevention, Assistance, Transition and Health Access (PATH) testified before the House Ways and Means Committee this week regarding the nursing home bed tax that will likely be increased as part of the fee bill. The one impediment to increasing the bed tax was that three facilities pay the bed tax but do not take Medicaid patients so they have no way to offset the tax. The state is proposing that the three non-Medicaid facilities (Wake Robin, Merten's House and the Arbors) be reclassified as assisted living facilities which will exempt them from the tax. Commissioner Hall proposed that the nursing home provider tax be increased from $3,388.25 to $3,676.06 per bed starting July 1, 2004. The committee seemed supportive of the proposal.
Health Insurance Reform (H.759)
The House Ways and Means Committee took testimony regarding the small market health insurance reform bill, H.759, which contains the $15 million provider tax on hospitals. Daria Mason, CEO, and Steve Moss, CFO, both of Central Vermont Hospital, testified this week against the proposed annual 1.4 percent tax on hospital net operating revenue. The committee also heard from the Vermont Retail Association and Vermont Grocers' Association in opposition to both the provider tax on hospitals and the premium tax (as Governor Douglas had proposed). These associations oppose the provider tax because their members who are in their associations' plans will pay the tax through increased hospital rates but receive none of the benefits since the money is used to fund a reinsurance pool for the small group and non-group (individual) markets, and not association plans. The committee will continue to take testimony on the bill next week. Here is a link to the bill as introduced.
Pain Management/Advance Directives (H.752)
The House Health and Welfare Committee merged the two bills they were previously considering on the topics of pain management and advance directives into a single bill this week (H.752). The committee also significantly scaled back the scope of both bills. The bill now proposes that there be legislative representation on the existing attorney general's end-of-life initiative. The bill also requires the Department of Health to develop a plan to create and maintain a registry identifying Vermonters who have executed advance directives, among other things. Finally, the Department of Health, in collaboration with interested parties, is directed to investigate and evaluate methods for improving pain management, and report their findings to the general assembly by January 15, 2005. The nursing home bill of rights statute is amended to require nursing homes to inform residents in writing about eligibility for hospice services. Of particular interest to health care providers and facilities is the requirement that they develop systems to ensure that a patient's advance directive is properly available when the patient is receiving services from the provider, including methods for prominently noting the existence of such documents in paper and electronic records. The bill is in draft form and not on the web at this time.
Mental Health (no bill)
The House Health and Welfare committee took lengthy testimony this week regarding Vermont's mental health system from advocates and others. The committee heard from Peter Thomashow, M.D., Central Vermont Medical Center, Jean Faunt LeRoy, M.D., Rutland Regional Medical Center, Fritz Engstrom, M.D., Retreat Healthcare, and James Walsh R.N. Springfield Hospital, regarding the strengths and weaknesses of Vermont's mental health system from their perspective. The committee was very interested in their testimony and heard from them for over two hours. The committee will continue taking testimony on this subject for the next few weeks. They don't have a specific bill they are considering at this time.
Prescription Drugs (S.288)
After a long debate regarding a price fixing provision, the Senate passed S.288, a prescription drug bill, this week by a voice vote. This is a comprehensive prescription drug reform bill that includes provisions related to prescription drug disclosure, pharmaceutical marketer disclosure, pharmacy benefit manager regulation and the prescription drug fair pricing program, among others. Here is a link to the bill as it passed the Senate.
Capital Bill (H.767)
This week the House Institutions Committee voted to introduce H.767, the so-called "capital construction bill," a bill that funds capital projects for state government. The bill has a section related to human services that contains funds for renovations to the State Hospital and a small appropriation to the department of buildings and general services to assist with the capital costs associated with created a dialysis center in the Northeast Kingdom (see section 3). Here is a link to the bill as introduced.
Whistleblower (S.154)
This week the House General, Housing and Military Affairs Committee was "relieved" of S.154, the whistleblower bill, and it was referred to the House Judiciary Committee. The House Judiciary Committee will likely take the bill up within the next two weeks. Here is a link to the bill as it passed the Senate.
Medical Malpractice Study Committee (S.156)
The House Judiciary Committee took preliminary testimony this week regarding S.156, a bill that proposes to establish a study committee related to medical malpractice actions and insurance. The House Judiciary Committee does not have the bill yet. The bill is still pending in the Senate Appropriations Committee. Here is a link to the Senate Calendar for March 9, 2004, with the text of S.156.
Civil Monetary Penalties (H.566)
H.566, a bill that proposes to impose civil monetary penalties for provider fraud, will be taken up by the Senate Judiciary Committee on March 24, 2004. Here is a link to the bill as it passed the House.
Public Hearing on FY 2005 Budget - Vermont Interactive Television
The Senate Appropriations Committee will hold a public hearing on Vermont Interactive Television on Monday, March 29, 2004, from 5 to 7 pm. The purpose of the hearing is to give Vermont citizens throughout the State an opportunity to express their views about the State's fiscal year 2005 budget. Thirteen (13) V.I.T. site locations across the state will be used for the hearing.