Senator Michelle Benson
95 University Ave. W.
Minnesota Senate Building, Room 3109
St. Paul, MN 55155

Representative Tina Liebling
100 Rev. Dr. Martin Luther King Jr. Blvd. 
477 State Office Building
St. Paul, MN 55155

Via email: sen.michelle.benson@senate.mn and rep.tina.liebling@house.mn   

Dear Sen. Benson and Rep. Liebling:    

The 141 hospital and health system members of the Minnesota Hospital Association (MHA) provide a range of services across the health care continuum for patients and communities throughout Minnesota. Because our members have strong interests in the state’s public and private health coverage markets, MHA is closely following discussions at the Legislature regarding proposed changes to the individual market. Rep. Liebling’s House File 3 and its expected DE1-2 amendment is one such proposal, and we are reviewing it closely.   

Given that the proposed changes would not go into effect for several years, MHA respectfully requests that you and your colleagues consider creating a forum and process for policymakers and stakeholders to have thoughtful, deliberate and well-informed discussions about reforms of this scope and significance.    

As reflected in the DE1-2 amendment, MHA has many questions about the various pieces of the proposal. For example, the proposal would establish a new methodology for calculating providers’ reimbursement rates from new state-sponsored health plans. In merely four lines of the bill, one can appreciate the amount of complexity and high stakes that are in play.

• The proposal would establish provider payment rates “targeted to the current rates” in state public programs (Line 13.26).
  • What degree of latitude does “targeted to” give state agencies when setting provider rates?
  • Will “current rates” be defined as the payment rates in place upon the date of enactment, the effective date, the date an enrollee receives a service, the date a provider submits a claim or some other point in time?
  • Because a large portion of state public programs are administered through Prepaid Medical Assistance Plans (PMAPs), how will the state determine “current rates”? 
  • Will it use only fee-for-service rates or some form of blended average of fee-for-service and all PMAPs’ provider payment rates?
• These four lines also state that provider payment rates will be enhanced by “the aggregate difference between those rates and Medicare rates” (Line 13.27)
  • What is the methodology for calculating the “aggregate difference”?
  • Is that calculation made on a service-by-service, code-by-code basis?
  • Is it risk adjusted?
  • Does this reference to “Medicare rates” mean Medicare fee-for-service rates?
  • Will critical access hospitals’ payments be based on their costs, as is the case with their Medicare payment rates, or will they be subject to the same rates as larger hospitals?
  • Will the Medicare rates used for this calculation include the portion of Medicare payment rates reflecting medical education costs or disproportionate share hospital payments?    

Again, these are examples of the number and range of extremely significant questions MHA has in only one small section of the bill. We raise them not as criticism of the bill drafting, but rather to highlight the importance of taking the time necessary to understand, analyze and evaluate the changes called for in the bill as well as the possibility of other options before making final decisions on what is in the best interest of our residents.   

MHA looks forward to working with you, your fellow committee members, your colleagues and the Senate and House staff experts, as well as leaders in the governor’s administration and our fellow stakeholders to explore and develop the best approaches to ensure affordable, comprehensive and meaningful health coverage for every Minnesotan.   

Sincerely,
Lawrence J. Massa, M.S., FACHE
President & CEO     

C: Rep. Rena Moran; Sen. Jim Abeler; and Commissioner Tony Lourey