Minnesota Hospital Association


January 28, 2013

MHA Newsline

In this issue:

Governor’s budget proposes increase in spending for Health and Human Services

Gov. Dayton last week released his recommendations for the state’s 2014-15 biennial budget, beginning July 1, 2013. The governor’s budget is based on the November forecast, which forecast a $1.1 billion projected shortfall. For the first time in nearly 10 years the governor’s budget includes an increase in spending for the Health and Human Services budget. It also includes spending for several of MHA’s top priorities, including restoration of Medical Education and Research Costs (MERC) to FY2011 levels and expansion of Medicaid eligibility to 138 percent of federal poverty guidelines. Other highlights include:

General Provisions:

The governor’s proposal calls for $37.892 billion in General Fund expenditures for the 2014-15 biennium. Health and Human Services spending is allocated at $11.5 billion, about 30.5 percent of the budget. The governor's budget includes various tax increases, raising approximately $2.1 billion in net new revenues. (This addresses the $1.1 billion shortfall and adds revenues for various spending priorities.) Raise income taxes on top 2 percent of wage earners Tobacco tax increase of $0.94 per pack Expand sales tax base to include services and clothing greater than $100; reduce the rate to 5.5 percent Property tax refunds of $500

Gov. Dayton’s Proposed Spending:

Gov. Dayton's proposed spending chart

HealthCare Related Provisions:

Health and Human Services is slated for an increase of $128 million; $93 million for “health care eligibility and accessibility,” $29 million for IT system modernization and $12.8 million for MERC. This is great news and our collective advocacy efforts have helped. While it is not full restoration, it restores spending to FY11 levels. MHA will work hard to protect MERC spending in the budget.

  • $40 million is allocated for the Statewide Health Improvement Program (SHIP).
  • $48 million is aimed at improving health care outcomes for children, which appears to involve several initiatives including mental health.

Two proposed cuts would impact hospitals:

  • $59 million in savings through the Department’s continued “negotiated lower payment rates with managed care providers.” It is difficult to know exactly how this impacts all hospitals across the state, but for simplistic purposes, if hospitals receive approximately one-third of Prepaid Medical Assistance Program (PMAP) payments, which would be $20 million and then double that amount with the federal matching Medicaid funds — potentially a $40 million cut to hospitals.
  • The second proposed cut that could have some impact to providers is “reform” of the state’s pharmacy bulk purchasing structure, saving the state $6 million.

The Legislature will begin work on its budget proposals, which will be based on the February Budget Forecast to be released on Feb. 28.^top of page

MHA testifies in strong support of Medicaid expansion

MHA testified last week to the Health and Human Services Policy Committee, chaired by Rep. Tina Liebling (DFL-Rochester), in strong support of expanding Medicaid eligibility in Minnesota up to 138 percent of federal poverty guidelines. Medicaid expansion is one of MHA’s top legislative priorities. In her comments to the committee, MHA Vice President of Government Relations Mary Krinkie noted that Medicaid expansion is the right thing to do on many fronts:

First and foremost, from a patient’s perspective, the Medicaid program provides a comprehensive benefit set with access to providers and services across the state. For example, an uninsured person would no longer feel like they have to access their care in the emergency room, but could make a clinic appointment and get a prescription filled.

From a provider’s perspective, Medicaid coverage is likely to reduce uncompensated care and if the individual had been enrolled in MinnesotaCare, hospitals would no longer face the annual $10,000 inpatient payment cap.

From the state’s perspective, currently the state is paying 50 percent of the costs for the Medicaid population below 75 percent of the federal poverty limit, and at least 50 percent of the costs for this population in MinnesotaCare. The Medicaid expansion leverages additional federal monies and saves provider tax dollars in the Health Care Access Fund.

Following testimony, House File 9 passed out of committee with bipartisan support and moves next to the finance committee for consideration. For questions about MHA’s testimony or the bill, contact Mary Krinkie, 651-659-1465. ^top of page

MHA receives grant from AHA to promote health coverage enrollment

MHA has been awarded a grant from the American Hospital Association (AHA) to help educate Minnesotans about and enroll them in health coverage options. MHA intends to focus its efforts under the grant on informing low-income residents about Medicaid coverage or subsidized health plans that will be available through the health insurance exchange in 2014.

According to Lawrence Massa, MHA’s president and CEO, “MHA wants our residents to fully benefit from the new offerings that we expect to be available next year. Most important, we want to make sure that those who already have coverage through MinnesotaCare or other programs don’t lose coverage due to a lack of information during the transition in state public programs.”

AHA made grant funding available to interested state hospital associations in a manner intended to reduce the number of uninsured people throughout the country. Massa applauded the AHA’s approach: “This is a clear demonstration of hospitals’ commitment to expanding coverage and, at the same time, a sign of AHA’s recognition that each state has its own dynamics and needs." ^top of page

National safety alert issued regarding glacial acetic acid

The Institute for Safe Medication Practices (ISMP), which operates the National Medication Errors Reporting Program, is warning health care providers about repeated incidents of accidental application of “glacial” acetic acid (≥ 99.5%) to skin or mucous membranes instead of a much more diluted form. Glacial acetic acid is the most concentrated form of acetic acid available. Inadvertent application of this corrosive chemical has led to severe burns, scarring, and other permanent damage to skin or mucous membranes. The following steps are recommended to prevent this painful and harmful event from occurring:

  • Remove product from stock
  • Restrict purchasing
  • Restrict choices when purchasing
  • Ensure correct strength is ordered
  • Educate staff
  • Order 5% as “vinegar”
  • Verify product

The safety alert was issued by ISMP and is being shared with members at the request of MHA’s Vice President for Patient Safety Tania Daniels. For more information or to read the entire safety alert, click here.^top of page

“Reality-based leadership” featured topic at MHA Healthcare Executives’ Institute

Author, speaker and consultant Cy Wakeman will present the opening session on Thursday, March 7 at MHA’s Healthcare Executives’ Institute. Her presentation, “Reality-Based Leadership: Ditch the Drama, Restore Sanity to the Workplace and Turn Excuses into Results,” will provide participants with a basis to quickly see and radically accept the reality of each situation and change into a reality-based leadership mode.

Wakeman describes a reality-based leader as one who is able to quickly see and radically accept the reality of the situation, conserve precious team energy, and use that energy instead to impact reality. Better yet, a great reality-based leader anticipates the upcoming changes and capitalizes on the opportunity inherent in the situation without drama or defense.

The Healthcare Executives’ Institute will also feature sessions on health care reform, workforce issues, and physician integration. The conference will take place March 6-8 at the Crowne Plaza Minneapolis West in Plymouth.

For information on institute programs and sessions, download the brochure here.^top of page