Back to Table of Contents | March 2011

MMA News

Dayton Budget Avoids Clinic Payment Cuts

Gov. Mark Dayton’s proposed budget, released in February, cuts payments to hospitals, nursing homes, and managed care plans but maintains current MinnesotaCare and Medical Assistance reimbursement levels for clinics. The budget plan relies heavily on tax increases to minimize the cuts and preserve programs and services.

The MMA commended Dayton for proposing a budget that took a balanced approach to resolving the state’s $6.2 billion deficit. “The governor’s proposal seeks to balance the state budget by using a combination of new revenues and cuts—an approach that the MMA believes is preferable to a cuts-only budget fix,” says President Patricia Lindholm, M.D.

The MMA is concerned, however, that Dayton’s budget plan disproportionately cuts spending on health care compared with other areas. The governor’s proposal includes $12 billion for health and human services in fiscal year 2012-13, which is about 3 percent or $350 million less than what was forecast in November. Health and human services account for about 30 percent of the state’s general fund expenditures.

The budget plan also eliminates access to MinnesotaCare for 7,200 adults with incomes above 200 percent of poverty or an annual income of $21,780.

“It is disappointing the governor did not do more to protect the health care safety net, since his proposal is the starting point for the budget discussion,” says Dave Renner, the MMA’s director of state and federal legislation.

“It is likely that Republican lawmakers will propose even larger cuts to health and human services.”

Indirect Effects
Although physician reimbursements were not directly affected in the budget outline, reductions in other areas could result in lower payments for doctors who provide care to people enrolled in public health insurance programs.

Specifically, the budget proposes reforms to the Medical Assistance and MinnesotaCare managed care programs that would generate savings of $115 million over the biennium. It also includes a 2.75 percent cut in payments to health plans starting in 2012 with the assumption that the plans can recoup their losses by implementing provider payment reforms. The proposed budget also would withhold some money from health plans that would be returned to them if they reduce hospital readmissions. It is not clear whether health plans would ultimately pass along those cuts to providers.

In addition, the governor’s budget would reduce payments to hospitals and nursing homes. Nursing facilities would see payment rates reduced by 2 percent. Home and community-based services would face a 4.5 percent rate cut. Hospitals would lose about $130 million due to a delay of the rebasing of payment rates in 2013-2015. The state also would cut hospitals’ current outpatient service payments by 0.5 percent.

Hospitals, nursing facilities, and health plans also would face increased Medical Assistance surcharges that would generate $627 million for the state. Providers would recoup some, but not all, of those surcharges through higher Medical Assistance reimbursement rates.

MMA Releases Review of Medica’s Associate Clinic Participation Agreement

A review of Medica’s associate clinic participation agreement is now available to MMA members online at www.mnmed.org/medicacontract. Medica requires providers to accept the agreement as a condition of joining its network. The agreement automatically renews every two years unless it is otherwise terminated.

The agreement encompasses all of Medica’s fully insured group and individual products and some self-insured group products.

The MMA worked with the Twin Cities Medical Society and the Minnesota Medical Group Management Association to review the agreement. They found several items of concern:

• Language saying providers must refer members to other providers within the network;
• A prohibition against clinics contracting with or employing individuals or entities excluded from participating in Medicaid and Medicare;
• Medica’s having access to patient records 10 years after the contract is terminated; and
• A requirement that clinics wanting to renegotiate or terminate their contract notify Medica at least 125 days prior to the end of the contract.

Board Approves Physician Wellness Recommendations

The MMA Board of Trustees approved a recommendation at its January meeting that the MMA develop a plan for promoting physician wellness. The recommendation was made by the 20-member Physician Well-Being Task Force, which was charged with exploring the topics of physician burnout, unsupportive or abusive work environments, work-life balance, and resilience, and developing recommendations on how the MMA can support, foster, and promote health and well-being among Minnesota physicians.

The plan will likely include:

• Work to improve the culture of medicine and prevent breakdowns in collegiality among medical students, residents, and physicians;
• Efforts to promote awareness of the prevalence of physician burnout and ways to prevent it and help physicians cope; and
• Educational programs for members about the importance of physician well-being.

MMA President Patricia Lindholm, M.D., who has made promoting physician health and wellness a focus of her presidency, says now that the board has taken action, the next step is to figure out the specifics of the plan.

“For me, this means that physician well-being is going to be an ongoing focus and activity of the MMA, and people who are looking for resources and help can go to the MMA,” she says.

Lawmakers Learn About the MMA

MMA Director of Health Policy Janet Silversmith testified before the House Health and Human Services Finance Committee last month about the MMA’s twin goals of making Minnesota the healthiest state in the nation and the best place in the country to practice medicine.

In an effort to educate lawmakers, Silversmith shared a brief overview of physician demographics in the state and the MMA’s history and mission. She also described the MMA’s goals of reforming the care delivery system, promoting access to care by ensuring the financial viability of public health programs, and creating a payment system that rewards value rather than volume.