Legislative Update

April 6, 2009

Evan Saulino MD testifies on Oregon Health Plan
In testimony before the Human Services Subcommittee of Ways and Means, Evan Saulino MD emphasized the importance of strengthening primary care as the state expands the Oregon Health Plan on the way to universal coverage.
“Family docs are undersupplied and overwhelmed,” he told the committee. “Through the use of integrated health homes, as found in SB 456, we can provide more efficient, higher value care.”
Dr. Saulino told the committee that access problems are even more acute in rural Oregon. Strengthening the rural health profession loan repayment program, through HB 2632, and increasing the number of students going into primary care, in HB 3258, would be positive steps.
The Oregon Academy of Family Physicians was invited by the co-chairs of the to testify about the Oregon Health Plan.

HB 2581 – Add tax exemption for loan repayment?
Recipients of loan repayment from the Rural Health Scholars program are often surprised to find out that their award is taxable income. Scott Ekblad and I met with Rep. Phil Barnhart (D-Eugene) who chairs the House Revenue Committee, to explore options for tax exemption for this program.
Rep. Barnhart recommends that we don’t add tax exemption to HB 2581, as it would hurt the chances for a bill that might pass. He also noted that a physician is probably paying 28% to 35% in federal taxes, while the state tax rate is 9%. So our real concern is federal tax exemption. Scott is tracking federal legislation, supported by Sen. Wyden, that would make these loan repayments tax exempt. Rep. Barnhart says the state connects with the federal definition of income.
We will continue working with Rep. Barnhart on this issue.

HEALTH CARE REFORM

HB 2009 – Greenlick announces new timeline and plan
The omnibus health reform bill is getting bigger. House Health Committee chair Rep. Mitch Greenlick (D-Portland) announced that the new 1102-page amendment completely replaces the existing bill. The substantive proposal is in the first 40 pages. All of the other pages are conforming amendments.
In addition, Rep. Greenlick says he is waiting for workforce amendments from Rep. Michael Dembrow (D-Portland), primary care amendments from Rep. Chris Harker (D-Beaverton) and cost containment amendments from Rep. Tina Kotek (D-Portland). He plans to fold all of them into HB 2009 and pass the bill out of committee by April 15.
Other bills, including the Healthy Kids bill, the provider taxes, and all seven of the Oregon Health Fund Board bills, may also be wrapped into HB 2009.
Depending on what’s in the final package, the bill may go next to the House Revenue Committee. If not, it will head straight to Ways and Means.

HB 2009 – Insurance taxes
A two-and-a-half hour hearing on competing insurance taxes to help fund OHP expansion can best be summarized as certainty vs. fairness.
A 1.5 percent insurance premium tax, proposed by the Governor, would be paid by individuals and those businesses that purchase commercial insurance. CMS has approved similar taxes in other states and insurers know how it works, so it’s considered more certain.
The alternative proposal is a 1 percent claims tax that would be paid by insurers, third party administrators (TPAs) and Medicaid. By including TPAs it brings in an additional 600,000 people insured by union trusts and self-insured plans, so it is more broad-based and fair.
Individuals and businesses would ultimately pay either tax in their premiums.
Unions are pushing the premium tax, running radio ads saying we need to “get” big hospitals and big insurance companies. Some of the union reps at the hearing said they don’t like either tax. They say the problem is those businesses that don’t provide any health insurance for their employees. One said a small payroll tax would be preferable to either of these taxes.
The claims tax is modeled after a new tax in Vermont. Because everyone who has insurance would pay, it’s more broad-based, the rate can be kept lower and, with federal funds, would actually raise $16 million more in the upcoming biennium.
Kerry Barnett from Regence said the problem with the premium tax is that a small manufacturer would have to pay it while a large manufacturer that can self insure would not. A gas station would pay while a large oil company would not. A convenience store would pay while a large supermarket chain would not. “Insurers and small to medium sized businesses won’t support the premium tax,” he said.
Opponents of the claims tax say it’s unproven. They say it may have federal ERISA problems and may not be completely matchable with federal funds. They say it’s not worth taking the risk when Oregon wants to expand OHP for children and adults right away.
Legislative leaders need to decide which insurance tax to support and how that fits with proposed hospital taxes.

SB 355 – Electronic Rx database needed for federal grants
Karen Wheeler from DHS told the Senate Human Services and Rural Health Care Committee that new federal grant opportunities are contingent on having an electronic drug monitoring system in place. She says Oregon would be in a position to receive grants related to drug abuse treatment and prevention worth $3 million to $7 million per year but we need the drug monitoring system to be competitive.
The committee is waiting for new amendments about funding for the program before moving the bill.

BUDGET

30% budget cut list out; hearings around the state to begin
Budget co-chairs Sen. Margaret Carter (D-Portland) and Rep. Peter Buckley (D- Ashland) released a list of potential cuts to balance the budget. The list can be found at http://www.leg.state.or.us/budget/.
Legislators are expected to pick and choose from this list. For planning purposes, legislators are expecting a budget deficit of $4.4 billion in 2009-11. About $2 billion of that could be filled using federal stimulus dollars and reserve funds.
Hearings on the impact of proposed cuts are being scheduled around the state. The tentative list so far includes:
April 20 – Lincoln City
April 21 – Portland
April 23 – Salem (Capital)
April ? – Ashland
April ? – Bend
May 1 – Eugene
Following the public hearings in late April, Ways and Means subcommittees will begin public hearings on various agency budgets as they work to prioritize the cuts list. When the revenue forecast is delivered in mid-May, legislative budget writers will issue the “co-chairs budget,” hold additional hearings and begin sending budget bills to the floors of the House and Senate.

OTHER HEALTH CARE ISSUES

HB 3243 – MD’s can’t drop Medicare patients
The House Health Care Committee heard stories from people who were about to turn 65 receiving a letter from their physician saying, “I’m sorry, I can no longer be your doctor because you will be going on to Medicare.”
Committee chair Rep. Mitch Greenlick (D-Portland) said, “This is about patient abandonment and professional responsibility.”
There was a lot of discussion about low reimbursement rates from Medicare and Medicaid. Statistics as of 2006 show that:
· 22 percent of primary care offices are closed to new Medicare patients
· 24 percent restrict the number of new Medicare patients
· 21 percent are closed to Medicaid and
· 27 percent restrict the number of new Medicaid patients.
Dr. Peter Bernardo, president-elect of the OMA, says this issue doesn’t really affect him directly because he’s a specialist. “But I defend the right of my primary care colleagues who need to do this to stay in business.”
Bernardo says the OMA passed a resolution discouraging the practice of letting patients go when they reach Medicare age, but the OMA opposes the bill. “This is the wrong approach,” he said. “It’s punitive and won’t help.”
The bill sparked quite a debate among the committee.
Rep. Bill Kennemer (R-Clackamas) said, “I’m having a hard time with the social policy of forcing people to see patients for less than it costs.”
Rep. Tina Kotek (D-Portland) said, “This isn’t about new patients. This is about continuity of care.”
No action was taken on the bill.

HB 2468 & HB 2376 – Reporting gifts from pharmaceutical companies
The House Health Committee spent an hour and a half debating which plan they should pass to require reporting of gifts from pharmaceutical companies. In the end, they passed both bills on straight party-line votes.
HB 2468 is based on Minnesota’s pharmaceutical gifting law. It would require reporting of gifts in excess of $100 to the Board of Pharmacy. That information would be available to the public but the bill has no specific mechanism to make it public.
HB 2376 is modeled after proposed federal legislation and is supported by the Attorney General. It requires reporting of gifts valued at more than $100 to the Department of Justice. It gives DOJ enforcement power through the unlawful trade practices act. DOJ would create a Web site to make public the gifts.
Both bills now head to Ways and Means.

SB 575 – PA’s authorizing mental health holds
Physician assistants say too often they are the only medical professional on duty when faced with a mentally ill patient who is at risk to themselves or others. They say this is particularly true in rural clinics. PA’s want the legal authority to put a hold on such a patient. They testified before the Senate Health Care Committee that the OMA agrees this is just an extension of what they already do.
Disability Rights of Oregon (formerly the Oregon Advocacy Center), ACLU and one person with mental illness who testified all have strong reservations about the bill. Bob Joondef said, “the profound power to take away a person’s freedom” should be limited to trained physicians.
Sen. Bill Morrisette (D-Springfield) said, “I think some of these objections are ridiculous and absurd. I think it would be immoral for someone to stand by and watch someone commit suicide.”
The committee asked for more information from the OMA and the Oregon Medical Board before deciding how to proceed.

HB 2435 – Limited licenses for MDs
Rep. Cliff Bentz (R-Ontario) says rural hospitals have worked with the Oregon Medical Board (OMB) to try to streamline the credentialing process for physicians moving to Oregon, “but that hasn’t worked out.” So he’s pushing for limited licenses. “If we don’t move quickly, other states or urban hospitals steal our good recruits,” he said.
Proposed amendments to HB 2435 would require the OMB to issue a 90-day temporary license once a physician with a clean practice history has filed an application and cleared a criminal background check.
OMB told a work group on this bill that only five or six applicants out of 1,000 raise red flags during the application process. If it becomes law, HB 2435 would sunset in 2012, so if the OMB succeeds in streamlining its operation, the temporary license law would go away.
The House Health Committee is waiting for amendments before moving the bill.

SB 701 – Nurse faculty loan repayment program
Amendments to SB 701 will clarify that this new loan repayment program for nurse faculty is in addition to the existing programs for nurses working in critical shortage areas
The goal is to reimburse nurse faculty $10,000 per year for three years with a Masters degree and five years with a Doctorate degree.
The Senate Health Care Committee likes the idea of the program but don’t think it has much chance of receiving the estimated $800,000 they want from the General Fund. Sen. Frank Morse (R-Albany) said if nurses really want it, they should find a way to pay for it. He suggested they consider a $20 per year surcharge on nurse license fees to pay for the program. There are 40,000 registered nurses and 4,000 licensed practical nurses in Oregon.
Sen. Alan Bates (D-Ashland) says he’ll work with the nurses on an alternate financing plan.

SB 735 – OPDP expansion
This bill is designed to allow the Oregon Prescription Drug Program to expand to all state purchasing groups. It would also allow OPDP to use a Pharmacy Benefit Manager. That would allow them to negotiate different prices for rural pharmacies. Currently, OPDP requires all participating pharmacies to take the same price. That price is below cost for some low-volume rural pharmacies.
Additional amendments are expected on this bill.

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.