Healthcare reform, or rush to rationing

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Mary Mayhew, Vice President Maine Hospital
Association June 2009
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124th Maine Legislature

• Maine House 96 Democrats
• 54 Republicans
• 1 Independent
• Maine Senate 20 Democrats
• 15 Republicans

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123rd Maine LegislatureSenate Leadership
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President Elizabeth Mitchell (D-Kennebec County)
Asst. Majority Leader Lisa Marrache (D-Kennebec)
Majority Leader Phil Bartlett (D-Cumberland)
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123rd Maine LegislatureSenate Leadership
Senate Minority Leader Kevin Raye (R-Washington)
Senate Asst. Minority Leader Jonathan Courtney
(R-York)
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123rd Maine LegislatureHouse Leadership

House Speaker Hannah Pingree (D North Haven)
Majority Whip Seth Berry
(D-Bowdoinham)
Majority Floor Leader John Piotti
(D-Unity)
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123rd Maine LegislatureHouse Leadership
House Minority Leader Josh Tardy (R-Newport)
House Assistant Minority Leader Phil Curtis
(R-Madison)
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MaineCare Hospital Payments

• MaineCare Debt Owed to Hospitals
• 2005 104,259,703
• 2006 116,024,703
• 2007 131,909,928
• 2008 90,921,235
• Total 443,115,165
• Per agreement with Governor, half of settlements
  for '05, '06, 07 would
• be paid no later than October 2009 and the
  remaining half no later than October
• 2010. All amounts are state and federal

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The Impact of the Economic Crisis on Maine
Hospitals

• 4th Quarter 2008
• Average Net Operating Margin .6
• 20 Hospitals Had Negative Operating Margin
• 200 Jobs Eliminated

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The Impact of the Economic Crisis on Maine
Hospitals
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State Budget

• State Budget Shortfalls
• SFY 09
• January Supplemental 200 million
• Additional 09 Shortfall 195 million
• SFYs 10 11
• Governors Biennial Budget 850 million
• Revenue Reprojections 470 million

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State Budget/Hospital Settlements

• FMAP Stimulus
• Supplemental Budget Language Hospital
  Settlements
• 45 million state 168 million state and federal
• Biennial Budget
• Governors Original Proposal 52 million/Revised
  Proposal 36 million/15 million cascade
• Final Budget
• 37.5 million SFY 09 (June 2009)
• 155 million SFY 10 (October 2009)
• 20 million in cascade
• Total Settlement Payments 360 Million

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State Budget

• General Fund Spending
• U.S. Maine
• K-12 34 37
• Higher Ed 11 8
• Medicaid 16 24
• Source Kaiser Family Foundation/State Health
  Facts - SFY 06

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State Budget

• Distribution of Medicaid Spending
• U.S. Maine
• Inpatient 24 19
• Physician 6 7
• Outpatient 11 28
• Drugs 9 8
• Other Services 11 30
• Other Services include dental, other
  practitioners, transportation, physical and
  occupational therapy, services for
• individuals with speech, hearing and language
  disorders, programs of all-inclusive care for the
  elderly (PACE),
• dentures, eyeglasses, prosthetic devices, other
  diagnostic and rehabilitative services, and other
  uncategorized
• services.. Source Kaiser Family Foundation/State
  Health Facts - U.S. FY 2005 ME FY 2004

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State Budget

• Growth in Medicaid Spending
• U.S. Maine
• 1990 2001 10.9 10.8
• 2001 2004 9.4 14.8
• Current MaineCare Enrollment 270,000
• Kaiser Family Foundation State Health Facts

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State Budget

• Physician Cuts
• General Issues
• Federal Rule
• Level Playing Field
• Role of Hospitals 45 of all Physicians/78 of
  Primary Care Physicians
• Supplemental
• Federal Rule/Governors Proposal 57 of Medicare
• 70 of Medicare Rates 45 of costs
• Biennial Budget
• Hospital-based Outpatient Services 89.7
  to  83.8 - 9.6 mill.
• Hospital-based Inpatient Services 100 to 93.3
  -1.1 million
• ED Outpatient Services   100 to 93.4 -
  750,466
•  

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State Budget

• Critical Access Hospitals
• Biennial Budget
• 16 Cut to Critical Access Hospitals 10.5
  million
• McKinsey Report/Tax Match
• Inappropriate Services/Outpatient Clinic
• Ignoring Impact of MaineCare Debt
• Final Budget 109 4.9 million
• Delay DRG/APCs April 2011
• 3 PIP Increase

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State Budget

• Hospital Budget Provision
• NonCAH Hospitals   6.7  Rate Reduction - 8.7
  million
• Hospital PIPs           3 Increase in SFY 10
   - 6.3 million 
• DRGs/APCs
• DRGs Starting April 2010
• APCs ?
• Budget Neutral?
• Payment Delays

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State Budget

• State Budget Outlook
• January 2010 Supplemental
• January 2011 SFY 12 13 Biennial Budget
• New Administration
• End of Stimulus
• Education
• Hospital Settlements (08, 09, 10)
• DRGs/APCs?

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124th Maine Legislature

• 1,490 Pieces of Legislation Introduced
• MHA Tracked 240

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124th Maine Legislature

• An Act To Prohibit the Force-feeding of Birds
  Ban Fois Gras.
• An Act To Amend the Laws Regarding Public Rest
  Rooms Disposable Toilet Seat Covers
• An Act To Amend the Laws Regarding Overnight
  Parking of Recreational Vehicles Walmart RVs
• An Act Regarding Nuisance Beaver

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124th Maine LegislatureHospital Legislative
Issues

• Charity Care/Community Benefit
• LD 1444 An Act To Protect Consumers and Small
  Business Owners from Rising Health Care Costs
• Original bill mandated hospitals provide free
  care 5 of GPSR or value of all state and
  local tax exemptions.
• Compromise Committee deleted 5 requirement
  Requires DHHS to post a link on their website to
  the 990s and all schedules.
• The final bill also directs the Advisory Council
  on Health Systems Development to develop
  recommendations on payment reform.

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124th Maine LegislatureHospital Legislative
Issues

• Certificate of Need
• LD 1395 An Act To Amend the Maine Certificate of
  Need Act of 2002 Passed
• Final bill as amended sets threshold for a
  simplified CON review for major medical equipment
  at 2 million.  Department proposed full CON
  review for all replacement equipment over 1.2
  million
• Retains current exemption from CON for medical
  office buildings owned or subsidized by a
  hospital or a hospitals parent company the
  department had proposed expanded CON to include
  these buildings
• Brings threshold amounts up to current levels,
  which brings thresholds for major medical
  equipment and new technology to 1,600,000 and
  threshold for capital expenditures to 3,100,000
  Dept proposed reducing threshold for capital
  expentditures to 2 million
• Lowering the proposed increase in penalty for
  violations from 50,000 to 10,000

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124th Maine LegislatureHospital Legislative
Issues

• Tax Exempt Status/Service Fees
• LD 545 An Act To Amend the Tax Exemption
  Regarding Leased Property
• Enacted Repeals exemption for leased real
  property April 2012
• LD 1146 An Act To Authorize Municipalities To
  Impose Service Charges to Tax-exempt Property
  Owned by Certain Organizations Whose Primary
  Activities Are Not Charitable Dead
• LD 1290 An Act To Amend the Law Authorizing the
  Application of Service Charges to the Owners of
  Certain Real Property Exempt from Property
  Taxation Dead
• LD 1314 An Act To Reform and Lower Maine Taxes
  Dead
• Tax Reform

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124th Maine LegislatureHospital Legislative
Issues

• Infections
• LD 960 Chapter 82 Resolve, Requiring Rulemaking
  by the Maine Quality Forum Regarding Clostridium
  Difficile and Methicillin-resistant
  Staphylococcus Aureus
• Reporting on rates of surveillance of high risk
  patients and reporting on hospitals adoption of
  prevention strategies and environmental
  precautions the metrics for reporting of this
  information will be recommended through the
  infection collaborative
• LD 1038 An Act Regarding the Prevention and
  Reporting of Methicillin-resistant Staphylococcus
  Aureus
• Original bill testing of every patient
  prescriptive isolation requirements and other
  precautions
• Compromise requires targeted surveillance of
  high risk patients to be defined by the infection
  collaborative and MQF

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124th Maine LegislatureHospital Legislative
Issues

• Financial Transparency
• LD 724 An Act To Provide Transparency Concerning
  Operating Expenses for Hospitals Passed Chapter
  66
• Directs MHDO and GOHPF to convene a working
  group, including MHA, MHDO and GOHPF and other
  stakeholders, to examine make recommendations
  for hospital data reporting that will provide
  transparency concerning operating expenses,
  including, but not limited to, annual operating
  budgets and other financial information.
• MHDO and GOHPF to report to HHS Committee by
  January 1, 2010.
• LD 757 An Act To Improve the Transparency of
  Certain Hospitals CO
• Subjects Hospital Board Meetings to Freedom of
  Access Requirements
• Right to Know Advisory Committee

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124th Maine LegislatureHospital Legislative
Issues

• Financial Transparency
• LD 1057 An Act To Require Hospitals To Make
  Publicly Available the Cost of Medical
  Procedures Dead
• Voluntary requirement to post link to MHDO
  pricing website
• LD 359 An Act To Ensure That MaineCare
  Reimbursements to Hospitals Do Not Pay For
  Hospital Advertisements Dead
• LD 502 An Act To Require Additional Information
  in the Annual Reports of Nonprofit Corporations
  Dead

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124th Maine LegislatureGeneral Legislative
Issues

• Coverage
• LD 257 An Act To Establish the Health Technology
  Clinical Committee CO
• LD 1365 An Act To Establish a Single-payer Health
  Care System CO
• LD 1264 An Act To Stabilize Funding and Enable
  DirigoChoice To Reach More Uninsured Passed
• Bill replaces SOP, currently assessed at up to 4
  of paid claims based on savings, with a fixed
  2.14 access payment on paid claims paid monthly.
  The fixed assessment is estimated to generate
  42 million the current SOP is 38 million.
• 9,630 enrolled
• Owe General Fund 17 million

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124th Maine LegislatureHospital Legislative
Issues

• Health IT
• LD 563 An Act To Pay a State Share into the
  HealthInfoNet System 1.7 million
• Physicians
• LD 853 An Act To Encourage Maine Residents To
  Attend Medical School and Practice in Maine 3
  million
• LD 1167 An Act To Limit the Work Week of Doctors
  and Medical Residents Dead

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124th Maine LegislatureGeneral Legislative Issues

• Employment
• LD 1464 An Act To Amend Licensing, Certification
  and Registration Requirements for Health Care
  Providers and Other Facilities Passed
•  LD 962, An Act to Protect Family Caregivers
• Amends the Maine Human Rights Act to expand
  protections against discrimination in employment
  to include family caregivers. "Family caregiver"
  means a person who cares for that person's child,
  parent, spouse, domestic partner or sibling.
• LD 1185, An Act To Require Cause for Employment
  Termination - Dead