2009 Legislative Report
MONDAY UPDATE
Prepared for OAFP
May 25, 2009

PRIORITY BILLS

HB 2067 – Rural health tax credit gets sunset but with 10 year extension
It’s not what we asked for, but it’s a creative solution that works.
The Senate Finance and Revenue Committee revised the House plan to add sunsets to 51 tax credits including the rural health tax credit. The new plan moves up the sunset dates to 2012, 2014 and 2016. The Rural Health Tax Credit would have a 2014 sunset.
But Sen. Ginny Burdick (D-Portland) and Sen. Frank Morse (R-Albany) added another provision. “In the unlikely event the rural health tax credit sunsets,” Sen. Burdick said, “anyone who qualified for the credit in 2013 would continue receiving the credit for 10 years as long as they continue to practice in a rural area.”
Sen. Morse said, “Certainty for those who make a commitment to practice in rural area is very important.”
The Oregon Academy of Family Physicians and the Oregon Rural Health Association worked hard to get the sunset removed on the rural health tax credit. Though we did not get the solution we requested, our voices were heard and the bill was modified to meet our needs.
The bill now heads to the Senate floor.

HEALTH CARE REFORM

HB 2116 – Provider taxes
Hospitals have reached agreement on a new hospital tax to fund expansion of the Oregon Health Plan pending agreement on an insurance premium tax.
The hospital tax would generate enough money, with federal matching funds, to double the number of adults covered by OHP Standard to 50,000.
The insurance carriers are still working out final language on their agreement but it will reportedly include a one-percent tax that can, and will, be passed on to ratepayers. It will be used to fund Healthy Kids, though it’s unclear how many kids can be covered by a tax at that rate.
Expect a formal announcement of an agreement sometime this week.

HB 2009 – Health care reform
Amendments are being drafted to pare down the cost of HB 2009, the omnibus health care reform bill, and to fold in some components of SB 856, the alternative health reform proposal.
The co-chairs’ budget includes $3 million for health care reform, and DHS says it can absorb some of the costs of creating a Health Authority. But the price tag for HB 2009 was $11.3 million, so something has to give. Some of the seven bills proposed by the Oregon Health Fund Board, that are all included in HB 2009, will need to be scaled back to make the plan more affordable.
The Ways and Means Subcommittee on Human Services has scheduled a hearing on HB 2009 for May 26. If amendments are ready, we may learn more then about what’s in and what’s out.

BUDGETS

Co-chairs’ budget zeroes out Rural Health Services Loan Repayment
The Rural Health Services Loan Repayment Fund was zeroed out in the 2009 – 11 budget unveiled by Ways and Means co-chairs, Sen. Margaret Carter (D-Portland) and Rep. Peter Buckley (D-Ashland).
Otherwise, medical services did remarkably well in the budget. It includes:
· Full funding for the Trauma System ($1.5 million)
· No cuts to acute care and outpatient mental health
· Continued funding for Graduate Medical Education
Last week’s revenue forecast told legislators they have $4.2 billion less than they would need to pay for everything the state is now doing.
To balance the budget their plan uses:
· $941 million in federal stimulus funds
· $361 million in state reserves
· $800 million in new taxes.
It also includes more than $2 billion in cuts to state services.
The key will be their ability to raise $800 million in new taxes, which will be very challenging (see Lottery Tax below).

HB 3405 – New corporate minimum may tax gross receipts
The House Revenue Committee is moving quickly on a plan to increase corporate minimum taxes. Amendments proposed to HB 3405 amounted to a gross receipts tax, though the chair says they are “incorrect” and are being redrafted.
As proposed, the new alternative minimum tax proposal a C corporation with Oregon sales under $500,000 will pay $100.  One with Oregon sales above $500,000 will pay $100 plus .15% of [Oregon sales minus $500,000] to a maximum of $60,000.  If the corporation is an S corporation, the minimum tax is $100.  The rate of the tax is changed as well, though that part of the bill is being rewritten.
The Revenue Chairs did release a proposed 2009-11 revenue statement for the bill, which is more general in nature:

New Corporate Minimum Tax
· $100 minimum for all C-corporations and S-corporations.
· For C-corps with gross receipts above $500,000, a marginal tax rate of .15% (.0015)is applied up to a cap of $60,000.
· Starts with 2009 corporate tax year.
· Estimated 2009-11 revenue impact: $135 million.

  New Corporate Income Tax Rate Structure
· Retain 6.6%rate on first $250,000 of net income.
· Apply new marginal rate of 8.2% to corporate net income above $250,000.
· Starts with 2009 corporate tax year.
· Estimated 2009-11 revenue impact: $122 million.

More details should be available Tuesday or when the new amendments are ready.

HB 2749 – Lottery tax increase fails on House floor
Depending on your perspective, it wasn’t that much money. The proposal would have increased the tax a retailer pays for a video lottery game terminal from $10 to $20 (though that is a 100 percent tax increase). It would have raised $123,000 in 2009-11 to fund the Youth Conservation Corp.
During the debate, speakers objected to piling more costs onto businesses.
The vote was 31 – 27, less than the 36 votes needed to pass a tax increase. House Majority Leader Mary Nolan (D-Portland) said she may bring the bill back at some point in the next few weeks, but this may give an indication of the difficulties they may have raising the revenue they need to balance the budget.

HB 2001 – Deal announced on transportation package
The same day the House voted down a video lottery tax increase, legislators announced a bipartisan agreement on $300 million per year increase in transportation taxes. The plan includes:
· $16 per year increase in vehicle registration fees (currently $27 per year)
· $22 per year increase in title fees (currently $55)
· 6¢ per gallon gas tax increase (currently 24¢)
· $10 per plate surcharge for new license plates
Half of the money raised would be used for state highway maintenance and construction projects, 30 percent would go to counties and 20 percent goes to cities. The bill also includes $100 million for Connect Oregon III that funds rail, air, marine and transit projects. It also includes funding for elderly and disabled transportation.
Legislative leaders say Oregon needs the jobs this bill will create.
The package now heads to the House floor for a vote.

OTHER HEALTH CARE ISSUES

SB 39 – Cigarette tax for rural health
Given the budget crisis, it’s puzzling why the Human Services Subcommittee of Ways and Means even heard this bill. SB 39 would take about $7 million of the existing tobacco tax money and allocate it to help rural health clinics. “We can’t afford to lose existing clinics,” said Sen. Bill Morrisette (D-Springfield). “They may never come back.”
The bill would allow the Office of Rural Health to use the money for:
1. EMS training,
2. Improvements at isolated rural health clinics and
3. Grants for rural hospitals to replace or remodel their facilities.
Ways and Means asked supporters which of those three would be their top priority if they can only fund one. Sen. Morrisette said he thinks the rural clinics are the most critical to fund.
The real issue is that passing this bill means someone else receives less money from the tobacco tax. “Who’s going to tell the cities, counties and Oregon Health Plan that they have less money?” asked Sen. Alan Bates (D-Medford).

SB 37 – Rural clinic prompt pay
The Human Services Subcommittee of Ways and Means strongly encouraged DMAP to find a way to pay rural clinics more quickly for their Oregon Health Plan services. “You are putting rural clinics at risk here and we might lose a few,” said committee co-chair Sen. Alan Bates (D-Medford).
Rural clinics receive partial payment for OHP services from the managed care organizations (MCO) but it usually takes 9 to 12 months for them to receive final payment.
There are 50 certified rural health clinics in Oregon. Some — in places such as LaPine, Jordan Valley, Christmas Valley and Halfway — are the only health care provider in their community. “Many of them are already operating in the red,” Rep. Ron Maurer (R-Grants Pass) testified. “They can’t afford to wait a year to get paid.”
To avoid any fiscal impact on the 2009-11 budget, SB 37 would not take effect until May 2011. The Ways and Means Committee appreciated the budget concern but they want DMAP to take action right away. “I’d like you to solve it right away,” Bates said.
No action was taken on the bill.

HB 2702 – Psychologist Rx bill receives more complete hearing
The Senate Health Care Committee is spending more time listening to both sides of the debate about whether psychologists should be allowed to prescribe psychotropic drugs.
Prescribing psychologists from New Mexico and Louisiana testified that there have been no complaints about prescribing psychologists in either state. “We are safe. We are competent. We are ethical,” one of them said. They emphasized that the right to prescribe is also the right not to prescribe or to unprescribe. They said they’ve been able to help some patients by taking them off medications.
Sen. Alan Bates (D-Medford) said he’s gone back and forth, supporting and opposing this bill about five times in the last two weeks. “I keep getting hung up on whether psychologists are adequately trained to make an accurate diagnosis,” especially in complicated cases, he said.
Opponents were given more time in this hearing to detail why they believe the proposed training for prescribing psychologists is inadequate. To protect the public, these psychologists would need “increased supervision, training and regulatory oversight,” they said. Others noted psychologists’ lack of training in basic sciences.
Both sides talked about the Department of Defense model for training prescribing psychologists. Opponents say the DOD calls for 250 more hours of training that what this bill requires.
The committee says it will continue working on this bill to see if they can reach agreement.

HB 2589 – Hearing aids for children mandate
There was no opposition to the proposed insurance mandate to cover hearing aids for children. Rep. Ben Cannon (D-Portland) told the Senate Health Care Committee that a survey of insurance carriers indicates that this mandate would increase premiums by .07 percent or 70¢ per $1,000. Rep. Cannon said while some mandates promise long-term health care savings, the savings from this bill will likely come in education and other areas.
A number of parents and families presented emotional testimony about the challenges they face when their children can’t hear.
Most individual, small group and large group insurance plans do not cover hearing aids for children. Families describe these hearing aids as a vital necessity for children with hearing loss.
The committee did not take action on the bill but is expected to pass it soon.

Rep. Cannon plans a broader look at insurance mandates
During debated about the hearing aid mandate for children (HB 2589) Rep. Ben Cannon (D-Portland) said the legislature should take a comprehensive look at all insurance mandates. Cannon said they consider insurance mandates individually without looking at the overall costs and benefits these mandates impose.
Cannon said he wants to set up an interim process to see if the mandates on the books bring value, whether mandates should be added or dropped from the list.

HB 3236 – Pharmacists administering vaccines for children 11+
Currently, pharmacists administer 85 percent of the flu shots. Pharmacists can administer flu shots for children and adults 15 and older and other vaccines to anyone age 18 and older. HB 3236 would allow pharmacists to administer all vaccines to those 11 years old or older. “We are trying to increase immunization rates by increasing the number of access points, particularly in more rural areas,” said Rep. Jim Thompson (R-Dallas).
Implementation of the bill would be delayed until 2011 so the immunization registry can be updated to allow pharmacists to report to the registry.
The debate in the Senate Rural Health and Human Services Committee was about the Vaccines for Children program that serves 38 percent of the population that is eligible for Medicaid. The question was whether pharmacists should be required to participate in that program. Pharmacists say most pharmacists would choose to participate but they objected to the requirement since other health professionals are not required to take part in the program.
Sen. Bill Morrisette (D-Springfield) says he will keep tabs on pharmacies to make certain they participate in the program. The committee approved the bill 4 – 1. It now goes to the Senate floor.

HB 3103 – Rx vending machine rules
Pharmacists are currently beta testing dispensing pharmaceuticals by vending machines in physicians’ offices. At this point it’s being used for samples and matches the drug with a patient’s credit card. HB 3103 gives the Board of Pharmacy rulemaking authority for dispensing by vending machine.
Otherwise, this is a housekeeping bill fort he Board of Pharmacy.
The Senate Human Services and Rural Health Committee unanimously approved the bill and sent it to the Senate floor.

SB 891 & SB 892 – Expand breast cancer screenings
These bills address the same problem in complimentary but different ways. Currently the Breast and Cervical Cancer Program (BCCP) only serves about 7,000 women each year of the 40,000 who are eligible.
SB 892 would provide funding so they can screen more women. SB 891 would commit the state to paying for treatment even if a provider who is not part of the state-screening program does the cancer screening.
SB 891 would cost the state about $1.5 million that would leverage nearly $4 million in federal funds. SB 892 would cost more than $2.8 million General Fund. Ways and Means will need to decide if this is where they want to invest $4+ million.

HB 3021 A – State tort cap protection for emergency volunteers and hospitals
This bill is the product of an Oregon Law Commission workgroup designed to address two disincentives to volunteers helping during an emergency: claims against the volunteer, and what happens if the volunteer is injured?
The tort claims act provides that agents are covered, but it’s not clear when a volunteer is an agent. HB 3021 makes it clear that qualified emergency service volunteers, and search and rescue volunteers are agents of a public body under the Oregon Tort Claims Act for the purposes of acts and omissions of the volunteer during a state of emergency or public health emergency.
In order to be covered as an agent, either the individual or an organization must be registered with the public body in advance or be acknowledged in writing at the scene.
Existing law already provides that hospitals fall under the state tort cap when acting in a governor-declared emergency, but only for uncompensated care. HB 3021 would clarify that hospitals providing services “pursuant to directions from a public body” during an emergency fall under the state tort cap without regard to whether the health care provider is compensated for the services. The Oregon Law Commission said this would apply to situations like “swine flu” or a similar situation where DHS is providing specific direction or protocols to a hospital.
Expect this bill to be passed out of committee and signed into law after an unrelated provision applying to search and rescue teams is decided.

HB 2194 – OMIP assessment continues to stir debate
Senate Health Committee chair Sen. Laurie Monnes Anderson (D-Gresham) opened the work session by saying, “I’m going to have this discussion because we are putting the burden on small business and this is the right thing to do. Unfortunately, politics is getting in the way of it.”
She was referring to the amendment I brought forward to expand the groups that pay the OMIP assessment for the high-risk pool to include union trusts and self-insured plans. (The amendment is identical to HB 2192 introduced by the OMIP Board and supported by the Governor.) OMIP administrator Rocky King said, “We believe it’s the right thing to do. It’s good policy.”
Currently, union trusts and self-insured plans are exempt from the OMIP assessment. Individuals, small employers and some large groups that purchase commercial insurance shoulder all the burden. Jonathan Eames speaking on behalf of the unions and third-party administrators said, “I understand the intent but I don’t think this is the solution.” He argued that the problem is businesses that don’t provide insurance for their employees.
Sen. Alan Bates (D-Medford) agreed. “Sooner or later we have to get to a single pool with a broad-based tax to bring costs down and take the burden off small business.”
The chair planned to have the discussion but not move the amendment. But Sen. Bill Morrisette (D-Springfield) said, “I think we ought to move it and force the decision.” He added, “We shouldn’t keep putting this off.” Then Sen. Jeff Kruse (R-Roseburg) made a motion to move the amendment. Sen. Monnes Anderson said, “I know you have the votes to pass it so we will close the work session.”
The bill is on the Senate Health Committee’s schedule for Tuesday.

OTHER ISSUES

SB 786 A – Bill protecting religious observance at work moves forward
House Speaker Dave Hunt (D-Gladstone) is the main proponent of Senate Bill 786, which would require employers to provide a “reasonable accommodation” for religious observance or practices of employees unless providing an accommodation would impose an “undue hardship” on the employer. Specifically, the bill would allow employees to: (1) use vacation leave for religious observance; (2) wear religious clothing; and (3) take time off for a holy day. The bill establishes criteria for whether an accommodation requires “significant difficulty or expense.”
Labor Commissioner Brad Avakian (D) testified in favor of the bill when the House Judiciary Committee considered it last week. Committee members had lots of questions: Can we require state troopers to work 24/7? How does this bill affect the common law on “reasonable accommodation?” And what’s a “bona-fide” religion?
AOI’s J.L. Wilson and NFIB’s Jenna Kaluza raised concerns about whether some religious dress may violate employer standards, how employers should handle requests that violate a collective bargaining agreement, and whether the bill should apply to employers with fewer than 15 employees.
The committee sent the bill to the House floor on a party line vote. In a delicious moment for Democrats, two Republicans who are listed as co-sponsors of the bill based on their religious convictions ended up voting no when they learned of the industry opposition.

Policy committees close Thursday
The next big deadline on the Legislative schedule comes on May 28. That’s the day most policy committees close. After that only the Revenue, Judiciary and Rules committees will stay open, as well as Ways and Means.
Ways and Means is tentatively scheduled to close on June 8, so bills and budgets will need to move quickly now.

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.