June 14, 2014

Overview of 2014 Legislative Session

Minnesota received excellent news in June.  Several sources reported that Minnesota has seen its uninsured rate plunge by more than 40% since the implementation of the Affordable Care Act.

The study, released by researchers at the University of Minnesota, provided the first look at Obamacare’s effect on a single state’s insured rate. It found that the number of uninsured in Minnesota fell from 445,000 (about 8.2% of the population) to about 264,500 (about 4.9% of the population).

The decrease is similar to the effects in Massachusetts after similar healthcare reforms were implemented there in 2006. It’s a larger increase than the Congressional Budget Office has projected for the entire United States — a drop from 54 million under previous law to 42 million under the Affordable Care Act.

Medicaid expansion was the main driver of the plunge in Minnesota’s uninsured rate. Enrollment in Medicaid and MinnesotaCare, a state healthcare program for the working poor, was responsible for 20.6% of the growth in coverage, or about 155,000 Minnesotans. Meanwhile, enrollment by individuals in private plans jumped by 36,000.

This news reflects some of the work that CHA Minnesota has been doing in the past two legislative sessions. As previously outlined in anticipation of the legislative session, two of CHA Minnesota top priorities for 2014 were:

  1. Enhancing Medicaid and Ensuring a Strong Safety Net with our commitment to serving those in need, young and old, throughout every stage of life, and to advocating on their behalf.
  2. Implementing and Improving the Affordable Care Act by advocating for a health care system that serves everyone. The Affordable Care Act takes a significant step toward expanding access to health insurance coverage and improving our delivery system.

This new report signals that we are heading in the right direction when it comes to enhancing the safety net and improving the affordable care act.

Some of the other “key” issues CHA Minnesota followed this year were very provider specific including:

For Long Term Care

5% for elderly waiver (and other waivers) – included in the Omnibus Budget Bill – effective July 1, 2014.  Providers will have to fill out a form on DHS website on how they will improve quality.  The funds are 80% encumbered to pay for staff wages and benefits.

Moratorium Exceptions process – included in the Omnibus Budget Bill. Allows for up to $1 million in projects to be approved.

Minimum Wage for Nursing Homes – included in the Omnibus Budget Bill – after submitting facility-specific reports, nursing homes will receive a rate increase for each of the next three years to comply with the incremental increases in the minimum wage law.  For future years, the rate increases will coincide with the indexed increases required in the minimum wage law.

Critical Access Nursing Homes – those nursing homes who meet the criteria and apply will receive a rate increase.

For Acute Care

Below you will find a quick summary of the key issues of interest to hospitals. 

1.       Budget Update:

Health and Human Services spending was part of the budget bill, HF 3172.  It includes a new Medicaid payment methodology for inpatient fee for service rates, and the implementation of budget neutral rebasing as was previously called for in the budget balancing legislation of 2011.   

 ·         Beginning November 1, 2014, Minnesota’s inpatient fee-for-service Medicaid rates will now be based on an APR-DRG methodology for all PPS hospitals.  Critical Access Hospitals will maintain a cost-based system based on Medicare, minus a percentage, within budget neutral rebasing.  For the first two years, the law provides a plus 5%/minus 5% mitigation threshold, guaranteeing that no hospital experience a swing greater than this magnitude.  In addition, rates for key services such as pediatrics, behavioral health and trauma may be increased if the Commissioner is concerned about any negative impact of the rebasing process. 

 ·         Also beginning November 1, 2014, this year’s budget bill includes the elimination of the most recent 10% rate cut (also passed in 2011), eight months earlier than is current law.  This is $7.2 million in state funding this biennium and $2.4 million in state fiscal year 2016.  This money will leverage federal matching funds.