Before departing, the House and Senate set their tax and spending targets, which include approximately $150 million less spending in health and human services compared to current law. In contrast, the governor’s budget increased health and human services spending by about $210 million.
Please pay attention and act on ARRM Alerts in our efforts to reverse those reductions. And join us on Tuesday, April 2nd to welcome legislators back to the capitol. Download Invitation to the Capitol!
When the legislature reconvenes April 2ndthe focus will shift to money issues as the policy committees have finished their work. Other purely policy bills will increasingly be brought to the full House and Senate for consideration. Funding bills for each portion of the budget must be passed out of finance committees by April 19th.
Here’s an update on the key bills and issues ARRM is working on or responding to:
Rate Methodologies: Negotiations between DHS and our coalition began last Friday, and we’ll be meeting throughout this week. Legislators have urged both sides to work through differences and develop a compromise in the next few weeks. The coalition rate methodology bills are H.F. 1586 and S.F. 1400 (identical). The DHS bills are H.F.1448 and S.F.1315; (also identical).
COLA: The COLA bill H.F. 777, which asks for a five percent increase in each of the next two years, was heard in the House Health and Human Services (HHS) Finance Committee and should get a hearing soon the Senate HHS Finance Committee. Clearly, the low HHS funding target makes getting new money problematic even though leaders like Rep. Tom Huntley, who chairs the House HHS Finance Committee, have mentioned a COLA as one of his priorities.
1.67 Percent Reduction Buy Back: Gov. Dayton’s supplemental budget calls for buying back the six-month reduction, which otherwise starts July 1, 2013. Included in the original proposal was a shift of provider payments from June 2013 into July 2013. Because of complications related to the school aid payment shift, removing that the 1.67 percent shift is unlikely. As a result, some providers will have their June payment paid in July to allow the state to book “savings” in this biennium. This allows the state to “save” in the current biennium by pushing that obligation into the next. DHS has yet to determine which providers will have to cash flow how much and or how long.
245D: Provisions in the governor’s budget bill build on the 245D standards created in the 2012 legislative session and would replace 245B for DD services and DT&H’s and includes unlicensed services. ARRM has been meeting with DHS making recommendations for the new standards and legislative language for several months. ARRM staff, committees, and task forces have reviewed drafts and brought recommendations to DHS. Last week ARRM asked the membership for feedback and the Board reviewed current bill language and made suggestions we will bring to the next round of talks with DHS on Thursday.
Licensing Fees: Gov. Dayton’s budget proposes a new formula for calculating licensing fees resulting in a net increase in revenue. Some providers now regulated by 245B would see a decrease in their fees and some an increase. All unlicensed services would start paying fees and most DT&H would see large increases. We’ve been telling legislators that an increase in fees is equivalent to a rate cut. This issue will become more prominent as the legislature shifts focus to money matters.
Minimum Wage: The House (H.F. 92) and Senate (S.F. 3) increase the minimum wage, but at different levels – higher in the House than the Senate. For example large employers (more than $625,000 of annual business) the wage goes from $6.15 per hour to $9.57 in the House bill and to $7.85 in the Senate. Both bills increase the amount in the next two years and then after 2015 provide increases based on the CPI. ARRM is completing an analysis of how much it will cost providers in increased pay to sleep time staff, and explaining the impact it will have on our capacity to provide quality services given our revenue is almost exclusively from government programs. We’ll bring that analysis to legislators to increase rates to offset the additional cost and it could be part of our discussions concerning payment methodologies.
Ten Percent Congregate Care/Low Need Reduction: ARRM testified in support of legislation to buy this back. The House version narrowed the scope of its bill to those with a primary diagnosis of mental illness, while the Senate bill would apply to all those affected in the CADI and DD waivers. Even before the low HHS targets were released, finding enough money to enact either bill would be difficult.
Family Deductible: ARRM is talking to legislators and other stakeholders about repealing this $2.55 charge. The cost of repeal is relatively small, but with the legislative targets, any item with a cost becomes a hard sell. Our fallback, if needed, is to require DHS to allow providers to simply pay the deductible without trying to collect it.
Union Bills: Bills to allow the SEIU to organized PCAs and AFSCME to organize childcare workers have been merged into single bills in the House (H.F.950) and Senate (S.F. 778). Among our concerns is the loss of flexibility families and individuals in CDCS would experience should the PCA provisions get adopted. We’re bringing those concerns to legislators and support individuals, families and providers who described the impact before House and Senate committees. So far all Republicans have voted against the bill and some DFLers have either voiced concerns or voted against the measure. We will reassess what the bill’s chances of passage are after legislators return from their break – and take needed action.
Size and Setting Restrictions: Bills to repeal the 25 percent threshold for people receiving services to live in an apartment or similar building are now in the HHS finance committees. Last year ARRM advanced legislation to increase the cap from four persons and settled on 25 percent because going higher added a cost to the state and would have killed the measure. Some providers (including ARRM members), however, had been allowed to set up programs exceeding the 25 percent standard, while others were limited to four people. ARRM supports opening up the allowance for people to live where they want, but not if repeal means going back to four persons.
DHS Licensing and Policy Bills: There are a plethora of DHS bills, all moving simultaneously and often doing the same things. ARRM is tracking them all and finding little controversy in any of them. As the bills get merged, will stay on top of them to make sure they hold onto things we want and don’t get amended with provisions we oppose.
Other Issues: We are monitoring many other bills with both wide and narrow scopes. They include parental fees, quality assurance, false claims, access to dental services, durable medical equipment and, of course, taxes and health care related to the Affordable Care Act.
We will provide continual updates as the speed picks up and issues evolve.
-- Bruce Nelson, CEO