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State officials only beginning to understand federal health care reform

Sen. Mary Olson, DFL-Bemidji, holds a briefing Friday at North Country Regional Hospital for health care providers on the recently passed federal health care reform package. Her Senate health care panel had an extensive briefing on the bill, and Olson shared highlights of that briefing and asked for provider concerns. Also attending were Rep. John Persell, DFL-Bemidji, left, and Rep. Brita Sailer, DFL-Park Rapids. Pioneer Photo/Monte Draper

At first blush, the massive federal health care reform package seems beyond comprehension to most people. But policy experts in St. Paul are unraveling it to find opportunities for Minnesota.

Legislators struggled earlier this year to reinstitute a health care program for the state's poorest single adults -- General Assistance Medical Care -- which had been unallotted by Gov. Tim Pawlenty.

The program finally adopted by lawmakers, pushed by Pawlenty, will allow patient care but has parameters that make it extremely difficult for rural hospitals with high numbers of public assistance patients to collect reimbursements to cover costs.

The new federal legislation may offer a transitional program with a 50 percent federal match for the former GAMC patients and a much higher reimbursement to hospitals.

It's one of many fixes in the federal bill that may aid Minnesota, says Sen. Mary Olson, DFL-Bemidji, who held a briefing on the bill for local medical providers Friday at North County Regional Hospital. She showed an hour-long video of a briefing on the bill given to a Senate health care panel to which she's a member.

Then the Bemidji Democrat took questions and asked for opinions on the bill from the 35 medical providers who attended.

"There are other populations too - the Medicare payments, MinnesotaCare payments, the Medicaid program as a whole" Olson said. "The big advantage for Minnesota is because, whether it's the politics, because there were some states getting higher reimbursement rates under reasons no one can figure out, other than who might be representing that state, or whether it was because the formula was implemented, they were actually giving more money to places with more uninsured people, but that's because they weren't doing a very good job with their health insurance programs.

"Minnesota has been getting a lower reimbursement rate overall," Olson added. "That's going to be greatly improved through federal health care reform so that Minnesota's going to be in a much better condition in terms of our overall reimbursement rate. Some of these other things we're doing are going to mean we're not going to have a lot of uninsured people because they're going to be covered under these new programs. We don't need the money to offset uninsured people when we don't have uninsured people, or very few uninsured people."

She told of provisions under the new reform package that will allow states to participate early in an Expanded Medicaid program that will allow former GAMC patients to enroll, saving the state because of a 50 percent federal match. The problem, Olson said, is finding the match.

"GAMC was our program for people with chronic illness, such as chronic mental illness, and are people who earn maybe as much as $8,000," Olson said. "The governor administratively would have enrolled those people starting April 1 into the MinnesotaCare program ... which is already underfunded, so the people who are utilizing that program now, the program for low-income working people and who are paying premiums, there wouldn't have been the money there for their care. That program would have been bankrupt."

Instead, Pawlenty and lawmakers agreed to a plan which sets up a pool of money for hospitals to share in providing care to GAMC patients. "They didn't know how much they were going to get paid on the front-end caring for that person and assume the risk for providing all that person's care for an unknown amount of money on the front end, including dental care and coordinating with social services."

Hospitals are saying that doesn't work, Olson said. "There probably won't be any hospitals that will be able to participate in this other than one or two in the metro area. They'll do it simply because they'll get all the money in this pool and there won't be anything for anyone else."

Better, she said, is to seek early entrance in the federal health care bill's Expanded Medicaid. "The advantages of doing that are we get better reimbursement rates for our hospitals and they actually can participate without the rules from this other program. ... We have expanded care, it pays better for the patient and have more things covered, including it doesn't have the $10,000 cutoff for medical care as does MinnesotaCare."

And, some current MinnesotaCare enrollees will be able to join the new program, she said.

The federal government would pay 50 percent of the costs now, but 90 percent starting 2014.

"The downside of this ... in order to move people into this who are in MinnesotaCare now, we have to have the money on the table to pay for it." Olson said. The Health Care Access Fund is being depleted and the state suffers a budget crisis, she added.

An option, she believes, is to phase in the care with the Health Care Access Fund until 2014 when the federal government pays nearly all the bill.

"With GAMC being such a concern, problem, for all Minnesota hospitals, it's pretty clear that we want to provide care for these people but we also need to be somewhat compensated for that care," said Craig Boyer, North Country Health Services vice president of finance. "If there's a way to early adopt into Medicaid to provide the coverage and receive some reimbursement for services we're providing, I know there is money that has to be put on the table, but really encourage you and your colleagues to try to find a way to a make that happen."

It would also be important that the care is extended to clinics, so some sort of preventive care can be provided and avoid more costly emergency room visits, Boyer said.

Olson came with a sheaf of documents about the federal bill which is now law, formally called the Patient Protection and Affordable Care Act. Included were summaries of the bill and a timeline for implementing the various facets of the bill, most of which are around 2014.

It provides for a temporary high-risk pool to provide coverage for people who have been unable to obtain insurance coverage because of a pre-existing condition, prior to 2014when health plans will no longer be able to deny coverage to that group.

States will be able to set up insurance exchanges which must be self-sustaining by 2015. Four benefit levels must be made available, with catastrophic coverage available to individuals under age 30.

Premium subsidies will be available for through tax credits to small employers with fewer than 25 workers and average annual salary below $40,000. Employers will be able to offer a voucher to workers who would rather join a plan through the exchange.

It provides increased Medicare physician payment rates in areas with below average practice expense payment rates. It would increase payments to hospitals in counties in the bottom ranking of risk-adjusted spending per Medicare enrollee.

Olson said she would hold more briefings for local medical providers when more details are available..