On March 16, Rep. Jim Abeler (R-Anoka), chair of the House Health and Human Services Finance Committee, released pieces of his omnibus budget bill to a standing room only audience. As a reminder, this session the Republican majority set committee deadlines a bit “backwards,” with the finance committee deadline for their budget bills coming first—March 25—before the policy bills. The pieces of his budget bill will be eventually amended into H.F. 927, which is the vehicle for his budget bill. The spreadsheet for the bill (where we will be able to better quantify the implications of the bill language) is not yet completed—and plans are to release that document next week. In addition, the chair mentioned to us that there are several provisions in the bill yet to be amended further; and there are provisions that have not yet been added in. Keeping all of these caveats in mind, here are the major highlights (and lowlights) of the provisions we care most about:

1. Nursing Facility Rate Changes:
     a. suspension of the automatic property rate increases for the biennium.
     b. cut to high rate facilities (at the 95th percentile) and redistribution of these funds to the lowest rate facilities (this language will likely have some changes to cap the reduction at 5% and to remove specialized facilities from this reduction).
     c. private room rate reduction (while the language was not included on the 16th, we believe it will be added).
     d. the commissioner of human services shall report recommendations for developing and implementing a pay-for-performance reimbursement system with a quality add-on by January 15, 2012.
2. Caps on Home and Community-Based Waiver Appropriations: each waiver program, including the elderly waiver, is capped at current expenditures. Each program must serve the same number as were served on March 22, 2010, and the Department of Human Services (DHS) and counties are prohibited from reducing provider rates to implement this provision. In addition, upon federal approval, DHS shall implement a co-payment schedule for individuals receiving home and community-based services.
3. Home and Community-Based Attendant Services: a new “level” of home and community-based services is established—a “lesser” level with services that include mainly assistance with activities of daily living and expenditures for transition costs. Staff (attendants) must meet the requirements for personal care attendants.
4. Health Care Homes are emphasized throughout the bill, with many incentives built in for them to expand coverage and collaborations. For example, one provision is: “A health care home shall receive the highest care coordination payment for providing services to an enrollee receiving home and community-based waiver services.”
5. Medical Assistance applications: DHS shall provide technical assistance to county agencies in processing complex medical assistance applications, including but not limited to applications for long-term care services. In addition, there are new obligations for local agencies to process medical assistance applications within prescribed timelines and if they can’t, the county is responsible for the entire state cost of medical assistance services.
6. Cost-Sharing or Co-Payments increase dramatically for many services (doctor visits, emergency room, prescriptions) with the amount of the co-payments and deductibles varying based on the provider’s rates.
7. Long-Term Care Consultation: 75% of the total payment for each county must be paid by nursing facilities—we are assuming we keep the remaining 25% since we do most of the work anyway!
8. Managed Care: managed care capitation rates are reduced 10 percent; there are provisions on a progressive payment withhold for providers—we are assuming at this point that elderly waiver/nursing facilities are not included in this.
9. Nursing Facility Property rate increase: believe it or not, even with a budget reduction target of $1.6 billion, the omnibus bill includes a facility-specific property rate increase for Martin Luther Manor in Bloomington retroactive to November 1, 2010.
10. Regulatory Relief:
     a. certified boarding care homes and certified nursing homes are exempt from state licensure requirements;
     b. the department of health must accept electronic transmissions of applications and supporting documentation for interstate endorsement for the nursing assistant registry;
     c. the duties of the commissioner of health related to licensing and regulation of health facilities is transferred to the commissioner of human services;
     d. there is an extension for compliance with elevator code changes—generally if a compliance plan is submitted by December 30, 2011, the owner has three years after submission of the plan to come into compliance.

In addition to the items noted above, there are significant changes to current managed care payments, extension of health care homes, and alternatives to managed care such as establishment of a service delivery authority. Once the spreadsheet and the “matching” Senate health and human services omnibus budget bill are released next week, we will be developing a side-by-side analysis and customized impact sheets for our members.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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