VAHHS Legislative Report

For the week ending April 7, 2006

Political Overview

More changes for the Administration this week – The Vermont Department of Health (VDH) Commissioner Paul Jarris announced on Wednesday that he would be resigning as Commissioner of Health at the end of May to become Executive Director of the Association of State and Territorial Health Officials in Washington DC. Given the Commissioner’s work on the Vermont Blueprint for Health and the Vermont State Hospital, efforts are already underway to fill this important position.

Overall, the legislature appears headed for a late April adjournment. Committees are moving bills out of committee to stay on target with the leadership’s call to pick up the pace. The only must pass bill is the Appropriations bill, but it is clear that they will not adjourn until something is completed on healthcare reform.

VAHHS Issues

Health Care Reform

The two major health care reform bills, H. 861 and S. 310, continue to change daily. It is still the intent of the House and Senate that the bills will be “combined” at some point.

H. 861

A swirl of commotion surrounded this bill as the Senate continued with numerous drafts this week, each time fine tuning additional components. The leadership of both the House and Senate were called to meetings with the Governor this week to work on possible compromises in areas of disagreement such as ESI mandatory coverage, employer surcharges and individual mandates. Since Massachusetts has just passed major health care reform, the Governor was asked about his willingness to press for the like in Vermont during his press conference. He remarked he was “cautiously optimistic” on the work done to date by the Senate, but there remains much work to be done.

The current version of the bill (Version 3.1) has removed the “Hospital Default Insurance Program” and instead has included a hospital uncompensated care standards reporting. The Commissioner of Banking, Insurance, Securities and Health Care Administration (BISHCA) will consult with VAHHS, payers, and consumers to review the uncompensated care and bad debt policies of Vermont’s hospitals and recommend a standard for a statewide uniform policy. The commissioner, in consultation with the group above, will determine a fair and thorough method for calculating and reporting information about uncompensated care and bad debt to BISHCA. VAHHS supports a study on minimum standards.

Included in the bill are Medicaid reimbursement increases to primary care specialties for services to a level equivalent to Medicare rates. The rate increases would go into effect on January 1, 2007 for fiscal year 2007 and July 1 for fiscal years 2008 through 2010. Medicaid reimbursement rates for inpatient hospital services is increased by 5% effective January 1, 2007 and annually thereafter on July.

The bill includes an individual mandate that will require every person who resides in Vermont to show proof of coverage and an Employer Sponsored Insurance (ESI) program. The Governor has stated that he is opposed to an individual mandate. First draft financials and Catamount Health enrollment numbers show a large decrease from 17,000 down to approximately 6000. The eligibility level dropped to 300 FPL and the benefit plan is equivalent to the Vermont Freedom Plan.

On Friday afternoon Bea Grause, President of VAHHS and Tom Huebner, President and CEO of Rutland Regional Medical Center, commended the Senate for the hard work and many improvements made to the bill. Grause and Huebner focused their comments on the following: matching benefits with the costs is a must; the bill needs to move further to end the Medicaid cost shift; and Catamount Health needs to be administered on the private market.

The Senate Health & Welfare Committee will meet on Monday afternoon to vote the bill out of committee. The Senate Finance committee will finish the finance portions of the bill on Tuesday and will immediately vote the bill out. Debate is expected on the Senate floor late next week.

S. 310 - Common Sense Initiatives

On Thursday, additional changes to the bill continued. In a swirl of confusion around final revisions and language in the bill, the committee voted out the bill on a 9-0-2 vote. Partisan politics undoubtedly played a role before final vote, with many Republicans expressing their frustration over the haste and ambiguity leading up to final vote of the bill.

The Committee continued taking testimony on S.310 during the course of the week. On Tuesday morning, Cassandra Edson, Legislative Council, provided a “plain English” explanation to the committee of the language around adverse event reporting so that the reporting structure and information sharing provisions between hospitals and the Vermont Department of Health could be better understood. Additional testimony was heard from Jill Olson, VAHHS, Paula DiStabile of VDH, and Linda Cohen of BISHCA, around sections of the bill modified in the new version of the bill. Questions from the committee focused on topics of Medicaid Outreach and funding to the Federally Qualified Health Centers. VAHHS continues to work collaboratively with the VDH and the Vermont Medical Society around the bill provisions and supports the current version of the bill.

Appropriations in the bill include: $700,000 for VITL; $200,000 for the adverse event reporting of which $40,000 will come from hospitals; $400,000 for the multi-payer database; $880,000 for loan repayment; $80,000 to VSAC for loan forgiveness programs; $50,000 for the establishment of an advance directive registry; $200,000 for FQHC look-alike uncompensated care; and $40,000 for Medicaid outreach.

The bill was referred to the Appropriations committee Friday morning for their review. The House plans to debate the bill on the floor Tuesday.

S. 90- Act Relating to Prescription Drugs and Substance Abuse

The House Human Services committee took testimony from Barbara Cimaglio, Deputy Commissioner of Drug and Alcohol Abuse at the Department of Health. Some stated desired outcomes of the legislation include providing for patient privacy and public safety, a focus upon prevention and intervention and making the Health Department (and not law enforcement) the lead agency in operation and enforcement. Ms. Cimaglio testified that any database would be fully HIPAA compliant and noted that grant money had already been approved for Vermont to develop such a program through the Department of Justice. Vermont would need to enact legislation authorizing the project to pull down the grant however. The Vermont program would be developed in context with federal guidelines and with the help of Maine, which has successfully implemented a monitoring program.

The bill proposes to provide for the electronic monitoring of prescriptions for Schedules II, III, and IV controlled substances. The House Human Services Committee heard testimony on Thursday morning from Jim Marmar, R.Ph., Executive Director of the Vermont Pharmacies Association, who voiced concern over the additional burdens (time, financial, potential liability, etc.) that such legislation could force onto pharmacists especially in terms of implementation of new software. He additionally commented that similar legislation as enacted into law in Massachusetts only covers Schedule II medications so a much greater volume of data would be tracked in the Vermont system. Allen Gilbert, ACLU, provided comments around law enforcement access to information and the possible negative repercussions of law enforcement misinterpreting or wrongfully accusing citizens. As currently drafted, the ACLU does not support the bill. Madeleine Mongan, Vermont Medical Society, testified on the need for language around limiting the powers of law enforcement and the need to have due process in accessing the information in the database. Note was made of the potential to disrupt physician practices and place additional burden on providers as have occurred in some states including California. Questions and discussion amongst the committee included concern around the cost and funding of the monitoring system, necessity for inclusion of various schedules and the need for additional information around IT infrastructure for such a system.

Senate Appropriations

The Committee will continue its review of the 2007 Appropriations bill. Individual committee members have been meeting with various organizations and stakeholders during the course of the week in preparation for budget review, including VAHHS.

Senate Finance

Senate Finance heard testimony on Wednesday afternoon from several representatives of the business community around financing of H. 861, including Jim Harrison of the Vermont Grocers Association, Gary Hatch of Newbury Village Store, Jim Pratt of Cabot Creamery, John Klesch of the Vermont Retail Association, and Mary Sprayregen of the Lake Champlain Regional Chamber of Commerce. Small retail businesses voiced a concern that their ability compete with large retailers and border retailers become increasingly difficult with new taxes or fees. Overall, large employers commented on an inability to absorb rising healthcare costs into the pricing structure of goods since the market dictates pricing. Response to components of H. 861 was mixed with some representatives from the large employer sector supporting provisions of the bill including ESI. Several employers urged the committee to address the cost-shift as a cost containment strategy instead of implementing new benefits plans that will eventually face the same risk of lack of financial sustainability.

State Hospital

The Senate Appropriations committee reviewed the FY2007 budget where they approved funding of $1,350,000 to the State Hospital futures project; an increase from the $1,000,000 allocated by House Appropriations. Also included was an additional $100,000 for safety enhancements as recommended by the Senate Institutions Committee.

The Mental Health Oversight Committee met Wednesday regarding the Certificate of Need and Futures Project for the Vermont State Hospital. Several members of state administration testified including Beth Tanzman, Director of Futures Division of Mental Health and Tasha Wallis, Commissioner, Buildings and General Services. A heated discussion ensued among the committee members on the lack of clear stance or direction from the Administration and the perceived need for exemption of the State Hospital from the Certificate of Need (CON) process. Several committee members voiced concern that the CON process would delay the planning process even further. A representative of the National Alliance on Mental Illness (NAMI) provided testimony on issues related to the planning and endorsed the CON process for the State Hospital stating that the hospital should not be exempt.

House Human Services

The House Human Services continued to hear testimony from the Division of Mental Health their concern that the CON requirements for the new state hospital may be duplicative of, and even contradictory to, other obligations through the Futures Advisory Committee and the Mental Health Oversight Committee. The Division also expressed concern that the construction of a new state hospital would be delayed by the CON process. Representatives for the Division testified the primary functions of the CON process to assess need and contain costs were being addressed through the regulatory, legislative and appropriation processes and were not necessary. The committee took additional testimony from the Vermont Association for Mental Health, the Vermont State Employees Association and the Public Oversight Commission.

H. 723 – An Act Relating to Home and Community-Based Care Workforce Issues

The House Appropriations Committee passed H. 723. The committee changed the title of the advisory council established by this bill from “Home-Based Personal Care Advisory Council” to “Direct Care Workforce Advisory Council” since the work of this 17-member council will involve more than home-based care. A representative from the Vermont Refugee Resettlement Program or similar organization was added to the advisory council.

Conference Committees

A number of conference committees have been appointed that VAHHS will be monitoring:

H. 404 – Access to Mental Health and Substance Abuse Providers: House members are Michael Fisher of Lincoln, Anne Donahue of Northfield, and Sandy Haas of Rochester. Senate members are Claire Ayer of Addison, Jeannette White of Windham, and Hull Maynard of Rutland.

H. 864 – Capital Construction and State Bonding. House members are Alice Emmons of Springfield, Gail Fallar of Tinmouth, and Linda Myers of Essex Junction. Senate members are Phil Scott of Washington, Richard Mazza of Grand Isle, and John Campbell of Windsor.

Bill of Interest Introduced

H. 890 - AN ACT RELATING TO EMERGENCY MANAGEMENT AND PUBLIC SAFETY (Committee on Government Operations): The bill proposes to amend emergency management procedures in Vermont. This includes the provisions for protections for volunteers.