Minnesota Hospital Association


November 13, 2017

MHA Newsline: Nov. 13, 2017

In this issue 

Mental Health Innovation Grant Program RFP forthcoming from MDH

The Minnesota Department of Health (MDH) will publish a competitive Request for Proposal (RFP) process for the state’s new Mental Health Innovation Grant Program before the end of 2017. To receive updates on the RFP, subscribe to the Mental Health News mailing list.   

The development of this grant program was one of MHA’s top priorities during the 2017 legislative session. The program is designed to improve access to and the quality of community-based, outpatient mental health services and reduce the number of people admitted to regional treatment centers (RTCs) and Community Behavioral Health Hospitals (CBHHs). Funds of $2.171 million will be made available for fiscal years 2018-19. Grantees will be challenged to begin implementation immediately.   

Eligible applicants include counties, tribes, mental health service providers, hospitals or community partnerships. Half of all grants will be awarded to eligible applicants in the metropolitan area and half to eligible applicants outside the metropolitan area.   

Awards will be based upon a demonstrable commitment to equity, underserved communities, multidisciplinary collaborations and visionary ways of helping all adults with mental illnesses reduce psychiatric emergencies and entrance into RTCs and CBHHs. Awardees will develop and/or enhance mental health services, which promote access, inclusion, improve quality and the overall experience of service-users and their families.   

Sample grant projects may include: 

  • Intensive Residential Treatment Services (IRTS) providing time-limited mental health services in a residential setting 
  • Short-term and critical access centers and/or supportive living environments 
  • Collaborative efforts between crisis teams and hospitals 
  • Community support programs and services that integrate multidisciplinary practitioners 

To learn more, view the MDH update bulletin or contact Amanda Calmbacher, Mental Health Division, DHS, 651-503-4050. return to top   

Final MACRA payment rule includes MHA-requested changes

CMS released the final rule for the second payment year of its Quality Payment Program (QPP), which was created by the Medicare Access and CHIP Reauthorization Act (MACRA). The final rule contains a wide range of changes to the QPP for 2018 and beyond. Some of those changes reflect policies that the Minnesota Hospital Association (MHA) encouraged the agency to adopt.   

The proposed rule issued by CMS earlier this year would have delayed giving any weight to clinicians’ scores on cost-of-care measures in the QPP formula used to adjust providers’ Medicare reimbursement rates. For years, MHA has advocated for payment methodologies that take providers’ costs and efficiency of care into account. MHA’s comment letter regarding the proposed rule urged CMS to abandon its proposed delay and, instead, move forward with its original plan to phase in the use of efficiency scores in the QPP formula. Ultimately, CMS reverted to its original plan as requested by MHA and will weigh providers’ efficiency scores as 10 percent of their total QPP score in 2018, and then as 30 percent in 2019 and subsequent years.   

In its comment letter, MHA also advocated for including providers’ risk-bearing agreements with Medicare Advantage plans in the criteria CMS uses to determine whether clinicians will receive financial incentives for participating in a qualified Advanced Alternative Payment Model (APM). Because Minnesota has a disproportionately large number of people enrolled in Medicare Advantage plans compared to other states, it is statistically harder for our providers to meet the Advanced APM thresholds when the criteria are based solely on Medicare fee-for-service beneficiaries. MHA is pleased that the final rule will allow providers to include enrollees in Medicare Advantage plans with whom the provider has a risk-bearing agreement for purposes of qualifying as an Advanced APM beginning in 2019.   

For more information about the final rule, see the CMS QPP Final Rule Fact Sheetreturn to top   

House committee approves tax bill; Senate releases its tax reform proposal

On Nov. 9, the House Ways and Means Committee approved the Tax Cuts and Jobs Act (HR 1) and Senate Republicans released their initial tax reform proposal. Both include provisions impacting hospitals.   

The House bill would limit hospitals’ ability to access low-cost capital financing through private activity bonds (PABs) by eliminating the tax exemption for PABs. Access to tax-exempt PABs is estimated to save nonprofit hospitals 2 percentage points on their borrowing compared to taxable bonds or bank financing. Some experts project that interest rates for borrowers would increase by 1.5 percent to 2.5 percent under the House provision, which translates to an increase of 25 percent to 35 percent in the cost of borrowing over the term of the financing. The ability to obtain tax-exempt financing is a key benefit of hospital tax-exemption that supports providing access to vital hospital services. The Senate Republicans’ proposal does not include this provision.   

Both the House bill and Senate proposal would eliminate advance refunding of bonds.   

MHA has expressed strong concerns with these provisions to House Ways and Means Committee member Rep. Erik Paulsen and the rest of the Minnesota House delegation, as well as to Sens. Amy Klobuchar and Al Franken.   

The House bill would repeal the itemized deduction of medical expenses beginning next year and eliminate the deduction for contributions to Archer medical savings accounts. These provisions are not included in the Senate proposal.   

Currently, neither the House bill nor Senate proposal would make changes to federal tax exemption for not-for-profit hospitals or modify an individual’s ability to itemize deductions for charitable giving.   

Neither bill includes repeal of the Affordable Care Act’s individual mandate; however, repeal of the individual mandate could be added as a way to offset the cost of the bill or to garner support needed to pass legislation.   

Tax reform legislation is expected to move quickly through Congress and be on President Trump’s desk by the end of the year.   

MHA will continue to work closely with the Minnesota delegation and Sens. Klobuchar and Franken to oppose the provisions negatively impacting hospitals and patients. return to top