Minnesota Hospital Association


April 15, 2013

MHA Newsline

In this issue:

Legislature proposes hospital Medicaid surcharge to fill budget holes

The Minnesota House of Representatives has developed a plan to fund its other spending priorities on the backs of hospitals. The omnibus Health and Human Services bill (H.F. 1233) includes an increase in the Medicaid surcharge assessed on hospital net revenues, excluding Medicare revenue and provision for bad debts. MHA has testified in opposition to the surcharge increase.

Below is a summary of the surcharge provision proposed by Health and Human Services Finance Committee Chair Tom Huntley (DFL-Duluth). MHA has not provided any technical assistance or input to Rep. Huntley or others, and we are still studying the proposal to try to understand it more fully. Our summary is based on the fiscal note prepared by the Department of Human Services.

  • The bill would increase the surcharge from 1.56 percent under current law to 2.68 percent beginning July 1, 2013 for non-governmental hospitals. This surcharge increase would raise $202.3 million in new money during the biennium.
  • The bill would increase non-governmental hospital inpatient fee-for-service payment rates by 30 percent. Assuming this increase could be paid to hospitals without hitting Medicaid’s upper payment limit, which prevents Medicaid payments calculated on a group basis from exceeding those by Medicare, this would “pay back” $193.9 million to hospitals, including the federal match. However, we believe that hospitals may hit their upper payment limit and, consequently, the actual “pay back” amount will be less than $193.9 million.

MHA has developed an estimate of individual hospital impacts from this proposal, which represents a best case scenario. If the upper payment limits are reached the net gains on the spreadsheet would be reduced or the net losses would be increased.

MHA sent an advocacy alert on Friday urging members to contact your representatives to oppose this surcharge increase. In doing so, consider not just the impact on your hospital, but also on others around the state.

There are discussions in the Senate about an alternative surcharge proposal. The omnibus Health and Human Services bill is heard this week, and MHA will provide more information as it is available. If you have questions about the impact to your hospital, contact Joe Schindler, MHA vice president of finance, 651-659-1415.^top of page

Discussion on staffing legislation turns to study requirement

Fiscal note includes prescriptive language of data to be collected from hospitals

The discussion about the legislation requiring hospitals to submit staffing plans and for the Minnesota Department of Health to study the correlation between staffing levels and patient outcomes continued last week with a hearing in the House Ways and Means Committee (H.F. 588) and the Senate Health and Human Services Finance Division (S.F. 471).

In both hearings MHA expressed concern over the level of specificity included in the fiscal note and encouraged legislators to let the work group outlined in H.F. 588 determine the direction of the study and what data is needed. With nearly 600,000 inpatients per year in Minnesota hospitals and the fact that patient acuity is constantly changing, the collection of this information would be very cumbersome for hospitals and there is concern over the collection of “patient specific acuity level per shift.” In addition, hospitals already report more than 65 quality measures through the Statewide Quality and Reporting Measurement System that we believe could contribute to this conversation.

H.F. 588, which MHA continues to support, was referred to the House floor, while the Senate HHS Finance Division referred S.F. 471 to the full Senate Finance Committee. MHA will continue to work with legislators to have a fiscal note that reflects what is in the legislation, and to not let it become overly prescriptive.

MHA members are encouraged to voice support for HF 588 in conversations with your legislators and to urge legislators to oppose any attempts to amend the bill. ^top of page

Members advocate for protection of grant to serve patients with mental illnesses

MHA member Paula Pennington, patient care manager for behavioral health at Fairview Range Hospital in Hibbing, testified last Wednesday before the Minnesota Senate Health and Human Services Finance Division in St. Paul. Ms. Pennington spoke of the need to keep, not eliminate, the Minnesota Operating Subsidy Grant. This grant provides a small subsidy for certain inpatient mental health patients who are not eligible to receive other health care coverage for their stay. Statewide in 2011, 494 individuals — for a total of 5,632 days and a cost of $2.3 million — were served in hospitals with a contract for the Operating Subsidy Grant.

The governor and House both eliminate this $5 million grant to nine rural Minnesota hospitals in their budget. The Senate has yet to unveil their proposal. MHA opposes eliminating this grant and encourages members to continue contacting their legislators about the importance of preserving this funding. A draft letter can be found here.

For more information contact Jen McNertney, MHA policy analyst, 651-659-1405.^top of page

HCAM volunteers advocate for HHS to be a budget priority

photo of HCAM repsGov. Dayton issued a proclamation deeming April 10 Healthcare Volunteer Day. Minnesota Department of Health Deputy Commissioner Jim Koppel (far left) presented the proclamation to Gayle Kvenvold, president and CEO, Aging Services of Minnesota; Lorry Massa, president and CEO, MHA; and LaDean Moen, president of Health Care Auxiliary of Minnesota. Nearly 100 volunteers from hospitals and aging services communities met with their legislators last Wednesday and urged them to ensure providers can provide the level of services to meet the needs of Minnesotans by making Health and Human Services a budget priority.^top of page

April is National Donate Life Month

Currently, nearly 120,000 men, women and children are awaiting organ transplants in the U.S. During the month of April, individuals, organizations and communities are encouraged to support National Donate Life Month and consider the need for organ, tissue and eye donations. Organ and tissue donation saves thousands of lives per year. MHA has worked closely with LifeSource, a federally-designated organization that manages organ and tissue donation in the Upper Midwest, to increase the number of registered donors in the state and to strengthen the culture of donation in Minnesota. As a result, more than 3 million people have registered to be an organ and tissue donor in Minnesota, North Dakota and South Dakota. In addition, hospitals have had great success partnering with LifeSource to honor patients’ end-of-life decisions to donate.

To learn more about organ and tissue donation, visit www.life-source.org. You can also learn more in this letter from Rich Umbdenstock, president and CEO of the American Hospital Association.^top of page

Feedback needed to prepare for future needs of health care workforce

HealthForce Minnesota is preparing for a Clinical Education Summit to examine challenges and solutions for educational and clinical partners. In advance of the summit they are collecting surveys of educational and clinical partners and the results will be reviewed at the summit.

MHA is proud of the commitment our members have to training the next generation of health care professionals and we know you are being asked to stretch in this area each year. Completing the survey below is a key opportunity to share our challenges when working with students from various educational programs.

If you are involved in the scheduling/accepting of students into clinical experiences your feedback is extremely important to this process.

Please complete the following survey by April 17:

https://www.surveymonkey.com/s/SummitSites ^top of page