Legislative Update
March 9, 2009

Health Care Reform

HB 2009 – New provider tax proposal unveiled
The Health Care Leadership Task Force (Regence, Providence, ODS, Kaiser, Legacy, PacificSource and the hospital association) released an alternative provider tax to fund Medicaid expansion.
The premise of the plan is that paying for Medicaid is a social responsibility to which everyone should contribute. The proposal includes:
· A 1 percent claims assessment to be paid by commercial insurers, self pay plans or third party administrators, Medicare Advantage and Medicaid managed care plans,
· A continuation of the current hospital tax (though technically it would be a new tax).
These assessments would raise about $800 million per biennium. That’s enough to cover 65,000 kids and 40,000 low-income adults on OHP.
It’s assumed ratepayers would pay for the 1 percent claims assessment. Everyone’s rates would go up a little bit for the public good.
Legislators were briefed on the plan. They listened and asked questions, but it’s too early to know how legislators will respond other than to say it’s a starting place for negotiations.
The Governor’s staff reportedly still prefers their plan: a 4 percent tax on hospitals and a 1.5 percent tax on insurance premiums (primarily individuals and small groups). The Governor’s plan would cover more people: 185,000 compared to about 105,000.
There are still a lot of questions. Among them:
Could the new tax be expanded to cover more people? That could happen in two ways. The 1 percent tax could be increased to 1.5 or 2 percent. The issue is whether businesses that would ultimately pay the increased premiums are willing to absorb that tax. Or the hospital tax could be increased if the state could figure out a way to directly reimburse hospitals through Medicaid managed care rates.
Do all the payers support the broad-based 1 percent claims tax? Insurance carriers are on board. Business groups (AOI, OBA & OBC) are cautiously supportive, though they view it as one of a number of potential tax increases and they want to see the full package before making a commitment. Large businesses that are self-insured and the union trusts have not weighed in yet.

SB 454 - Oregon Health Fund cost containment
This is one of the Oregon Health Fund Board’s bills designed to contain healthcare costs.
Insurers would be required to disclose administrative expenses on a per-member-per-month basis, and an explanation of administrative cost increases as part of rate filings. The Insurance Division could deny these increases.
Regence testified that there is a lot of misunderstanding about insurance administrative costs. The Insurance Division’s annual report shows that 90 cents of every dollar paid in insurance premiums is paid out in claims.
The bill would also authorize the Office of Health Policy and Research (OHPR) to collect and report changes in contracted prices for services by health benefit plans and third-party administrators (TPAs).
Capital projects by hospitals and ambulatory surgery centers would be subject to reporting requirements and community input, and the bill calls for “full disclosure” about the impact of capital projects.
Providence testified against this section of the bill saying Certificate of Need has not been shown to hold down costs.
Ambulatory Surgery Centers said requiring them to hold community meetings to determine whether it’s prudent for them to spend $100,000 on an anesthesia machine adds a level of administrative burden that does not serve the public good. The ASC’s asked to be removed from this bill.
SEIU testified about what it calls “the race to corner the most profitable segments of the market” and supports the bill. SEIU wants a much lower threshold for triggering the new CON process and much earlier public input.
A construction company that specializes in health care objected to the new CON process outlined in the bill because it would slow down health care construction and harm jobs.
This bill calls for more community meetings about proposed hospital capital construction projects. Other legislation being introduced this session would make the CON process much more restrictive.

SB 452 – Health Information Technology Oversight Council
This bill would establish an 11-member Health Information Technology Oversight Council within Department of Human Services. This board would take the place of the existing Health Information Advisory Council and help Oregon take full advantage of the electronic medial records provisions of the federal stimulus bill.
The federal stimulus package will provide reimbursement for 65 to 85 percent of costs for the acquisition, installation and maintenance of healthcare IT.

OTHER ISSUES

HB 2581 – Moves loan repayment program to Office of Rural Health
The Rural Health Services loan repayment program is no longer a good fit for the Oregon Student Assistance Commission (OSAC). Almost all of OSAC’s other programs are help students with scholarships while they are in school.
HB 2581 would move the program to the Office of Rural Health. Scott Ekblad, director of the Office of Rural Health says he’s talked with foundations that may be interested in supporting the loan repayment program, but not if it is in a state agency, and while OSAC is a state agency, the Office of Rural Health is not.
Ekblad also testified about the need for more health professionals in rural Oregon. In urban Oregon there is one physician for every 327 people, while in rural Oregon the ratio is 1:819.
The House Health Committee is supportive and says it will move the bill.

HB 2631 – Increases funding for the Rural Health Services loan repayment program
Funding for the Rural Health Services loan repayment program has been stuck at $400,000 per biennium since the program began in 1989. HB 2631 would increase the funding to $3 million.
Scott Ekblad, director of the Office of Rural Health, says Oregon is competing with other states for young physicians who are willing to work in rural areas. Last year, there was only enough money for four awards: one physician, one dentist, a nurse practitioner and one physician assistant. The State of Washington, our nearest competitor, funds its program at $9 million per year.
Testifying on behalf of OAFP, Evan Saulino, MD, said the loan repayment program is a short-term fix to attract physicians to rural areas. Nick Gideonse, MD submitted testimony saying, “We annually have many more qualified candidates and communities than we can fund at current levels.”
The House Health Committee says it will hold onto this bill until later in the session when it decides which spending bills are its top priorities. Those bills will be ranked and sent to Ways and Means.

SB 37 – Prompt pay for rural clinics runs into fiscal land mine
When the Senate Rural Health Policy Committee first heard SB 37, they were told it would take $50,000 to speed up Oregon Health Plan payments to rural health clinics. The committee was ready to move the bill forward when all of a sudden the price tag jumped to $200,000 General Fund, $500,000 Total Funds, plus one FTE at DHS for an additional $77,000.
Sen. Joanne Verger (D-Coos Bay) said, “We were told this was just a timing issue.”
Sen. Chris Telfer (R-Bend) said, “I’m perplexed at the cost of doing this. Why does it cost $77,000 in personnel just to change the timing of these payments?”
Jim Edge, Director of the Division of Medical Assistance Programs (DMAP) says it would require them to first make an estimated payment and then make a final settlement payment. He said the real delay comes from Medicare, which often takes six to eight months to pay its share.
Sen. Laurie Monnes Anderson (D-Gresham) said, “It’s not really DHS’s fault.”
Committee Chair Sen. Bill Morrisette, (D-Springfield) said, “This is a very important bill that would keep some clinics from closing.” But he did not have the votes to move the bill out of committee. One option is to delay implementation from this biennium to next biennium to delay the budget impact. For now, the bill is on hold.

SB 39 – Cigarette tax for rural safety net
This bill would not increase the cigarette tax. It would simple reallocate the existing tax to help support rural hospitals and clinics.
Scott Ekblad, director of the Office of Rural Health, suggested some amendments to clean up language in the bill and gave the Senate Rural Health Policy Committee a map so they could see where the rural hospitals and isolated rural health facilities are located.
The committee took no action on the bill.

SB 605 – Nonjudgmental Rx dispensing for Nurse Practitioners
Nurse practitioners say a glitch in the law requires them to be physically present to hand some prescriptions to a patient, when the same drug prescribed by a physician can be handed to the patient by any staff in the office.
Legislators on the Senate Health Care Committee say this bill simply clarifies what they thought they passed in a previous session.
There was no opposition to the bill. The Senate committee passed the bill and forwarded it to the Senate.

UPCOMING HEARINGS

Monday, March 9
3 pm – HB 2468 & HB 2376, pharmaceutical gift and compensation reporting, in House Human Services Committee.

Tuesday, March 10
8 am – SB 456, Integrated Health Homes, in Senate Health Care Committee

Wednesday, March 11
8 am – SB 355, Electronic Rx Database, in Senate Rural Health Policy Committee.

Friday, March 13
8 am – HB 2794, Human papillomavirus vaccine mandate, in House Human Services Committee.

OAFP’s bill tracking Website: http://www.capitolonramp.com/lts/guests/1477220/
For more information contact Doug Barber at doug@lobbyoregon.com or 541-221-3072.