Legislative Update: Gloom and Doom Day

Legislative Update: Gloom and Doom Day

December 1, 2016

Rep. Anne Donahue

In the past decade, the state’s Joint Fiscal Office has begun holding a one-day “preview” in the late fall so that legislators don’t get taken off guard about Vermont’s financial situation when they arrive at the statehouse in January. Some have begun to call it “gloom and doom” day, since it is never about good news.

This year, the state revenue forecast indicators that were presented looked pretty decent, but our fiscal experts said they “are worse than they look.”

Part of that is due to the huge uncertainty that comes with a new federal administration. Vermont’s highest risk factor in this area was a surprise to me: Exports are more important to Vermont’s economy than many other states. It’s 10.7 percent of our gross state product.

The national average is 8.4 percent, but for our immediate neighbors in New England, it’s 5.4 percent. So the share of our economy that is dependent on exports is nearly twice that of the rest of New England, and we were told that this puts us at higher risk if new federal economic policy includes increased tariffs that lead to wider trade wars. 

Rising exchange rates have already resulted in a 33 percent decline in our exports in the past four years. The strengthening dollar compared to a weak Canadian economy has hammered our exports to Canada, which have dropped from around 45 percent to 35 percent of our shrinking overall export market.

Our demographics also paint a scary longer-term issue. This is not a surprise, but it is getting worse. Our fertility rate has dropped to lowest in the nation, and our rate of change in the percentage of the working age population continues to drop.

Our aging “baby boom” bubble has a particular risk impact, because highest income years (i.e., income-tax-paying-years) are between ages 47 and 61; our big population drop-off begins to hit below age 55 and goes pretty straight downhill from there.

Meanwhile, our home price index has not yet returned to pre-recession levels (though it’s inching up and very close to that return.) That means it will continue to be education property tax rates – rather than increased grand lists resulting from increased home values – that will assume the brunt of increased education costs.

In some ways, that is a more legitimate indicator of the effect of larger school budgets. When I first came to the legislature, I used to point out that our comfortable position of being able to routinely reduce the tax rate created a fiction. Property taxes were skyrocketing because home values were increasing rapidly – rapidly enough that the rate could be reduced because the increases were covered by the inflation in values.

Ever since that ended with the recession, we have had to increase the statewide property tax rate, which is a more transparent reflection of the impact of increases in school budgets.

The fiscal presentation also reminded us of how heavily we rely on federal funds for our state budget (it makes up 35 percent of the total). Vermont is number four among the 50 states in the amount of federal funds received per capita, at close to $3,000 per capita compared to a national average of less than $2,000.

 That significantly increases our budget risk if federal policies change on funding of health care and social programs.

In terms of the immediate budget future, our annual structural gap between maintaining current state services and our projected revenues is $40 to $50 million this coming year. That is the pressure point that has resulted in new taxes being imposed every year in recent history. Closing the gap requires cutting spending, raising taxes, or supporting economic growth to increase the base for tax revenues (or some combination of those).

Increasing the base has been Governor-Elect Phil Scott’s mantra, but that isn’t something that can produce results instantly, so it will be a real challenge to avoid both major program cuts or new taxes or fees. We’ll receive his budget proposal in January.

There are other big budget pressures. We face a $68 million gap between current revenues (state and federal) and the costs required to clean up our state waters.  The needed investment is $120 million annually to meet federal requirements for a 34 percent phosphorus reduction over 20 years.

Not enough gloom and doom for you yet?

In January we are also being hit with a $5 million loss in federal funds for the current year budget plus another $6.2 million in the upcoming budget because of disallowed programs under our Medicaid waiver,  That waiver is our special deal (called the Global Commitment) that allows us greater flexibility in the uses of federal Medicaid money.

The feds have changed some rules, but we’ve also stretched the rules and gotten caught. The changes will amount to $64 million in lost funding for existing programs over the next 10 years.

The biggest chunk of that is for money we’re spending on psychiatric hospitals – the Brattleboro Retreat and our own new Vermont Psychiatric Care Hospital in Berlin – that are not integrated into a medical center, which is the usual requirement for federal funding.

The “good news” that was presented regarding the renewal of our Global Commitment was an increase in the federal funding we can access for investment in new health care programs over the next two years.

The increase from the current $127 million to $148 million is aimed specifically at Medicaid’s share of the start-up costs for health care reform under the All Payer waiver.

More federal money may sound good… but the catch is always that it is matching fund money, in other words, we only get more from the feds if we also spend more in new state money to meet our 46 percent share.

I look forward to providing my regular updates again after we convene in January. Please feel free to contact me at any time with questions or concerns. You can reach me at 485-6431 or by email at counterp@tds.net.

Legislative Update on the All Payer Model

Legislative Update on Health Care Payment Reform: the All Payer Model

Rep. Anne Donahue

October 27, 2016

There is so much discussion and focus on the agreement that Vermont has just signed with the federal government for an “All Payer Model” for health care reform that – having sat through a lot of testimony before the House Health Care Committee – I thought I should share some comment and clarification.

For those who followed my legislative updates last spring, this is not something being sprung on the public out of nowhere, and it has not happened without involvement of the legislature.

That doesn’t mean it is good, or will work as intended; it just means that there was some process behind it.

So here are the clarifying points:

In terms of Medicare, Act 113, as passed by the legislature last spring, says that a condition of the authority of the Green Mountain Care Board and governor to sign was that the agreement cannot reduce Medicare covered services, increase Medicare patient cost sharing, or alter Medicare appeals processes.

In terms of the money, the language is that there can be no “conversion, appropriation, or aggregation” of Medicare money by the State of Vermont – Medicare money still must go directly to providers or provider organizations (Accountable Care Organizations), as it does now.

These organizations were created by the federal government, already exist and will continue to exist regardless of the “All Payer Model.” What the state is doing is including the ability for Medicaid and private insurance to come under an ACO.

We will end up with only one ACO because of the size of our state. An ACO takes on the risk of losing money, and a smaller pool of providers cannot take on that risk. The federal government recognizes that, which is why the agreement requires working to recruit the majority of doctors in the state to participate (and ergo, their patients.)

Having only one ACO does not mean (as some are saying) that the ACO is going to be controlled by UVM or the hospitals. The governance of the new ACO was negotiated over many months, includes community partners, and gives non-hospital members veto powers.

The legislature vetted the All Payer Model proposal in a number of committee hearings. Act 113 allowed for the process to move forward (and for it to be signed, once negotiated) only if it met a number of conditions, and with a long list of requirements for how it would be implemented.

If the “only if” terms are not met by the agreement, it is not legally binding, because the GMCB and governor do not have the authority to sign it.

All of the stakeholders who testified supported the wording of the detailed requirements that are a condition of implementation. The legislature passed Act 113 on an overwhelming, tri-partisan vote (quarto-partisan, if you include independents.)  

The consumer protection part of the bill was originally introduced by the Democratic Chair and Progressive Vice-Chair of our Health Care Committee. A separate bill that created conditions for any All Payer Model was introduced by the Independent on the committee jointly with the Republican raking member (me). The two were merged into the final bill.

The “devil of the details” will need to be developed through compliance with Act 113 and its oversight mechanisms. Unfortunately, there was very little news media coverage of Act 113 last spring, thus little public awareness of these discussions and requirements.

So is this new model – the idea of making the federal Medicare ACO plan much bigger, and including a majority of the state -- a good thing or a bad thing?

We don’t know. It has risks.

That worries a lot of people, legitimately, and is why the legislature placed so many restrictions on it, including requirements for ACO investments into primary care and community health care partners, and much more patient involvement in care decisions. (You can see the whole list by going to http://legislature.vermont.gov/, clicking on “bills and resolutions,” and looking up Act 113.)

I think that there are two big risks – first, of loss of quality, and second, of raising costs instead of saving costs.

 There is a fear that care will be rationed because of the incentive for doctors to provide fewer services, since they will get the same payments for patients whether there is a lot, or much less, care given.

The “counter” is that the system will be motivated to do more prevention (such as annual check-ups) and community-based care (such as home health) to prevent higher end costs when patients get sick from things that would have been preventable. This is because doctors would no longer be getting added reimbursement for those added costs.

The second major risk is that the whole new bureaucratic layer of the ACO will cost more than any of the savings. The savings theoretically come from better care outcomes, and the reduced bureaucratic burdens of answering differently to different payers.

My own opinion has been, and remains, that this whole thing is being over-sold on BOTH the potential benefits and the potential risks. I don’t think it is going to produce major change.

It assumes that the big cost drivers are unnecessary tests and unnecessary care being done just to make more money under “fee for service”, and I don’t think Vermont doctors do much of that.  It also assumes that we are losing a lot of money from bad care coordination, and I think that though far from perfect, we’ve already made a lot of progress on that.

There are many, much bigger cost drivers that will not be touched by these changes.

But I also think the risks are being over-stated. I don’t think our doctors will tolerate restriction on giving what they think is best patient care. I also don’t think we/ the state will tolerate this experiment if the administrative costs start skyrocketing.

There are not a lot of solid, viable alternatives being offered. The cost of doing nothing is placing a huge burden on all of us, including the tax burden of Medicaid, the economic burden on businesses paying for health care, and the burden of unaffordable premiums for individuals.

So with some reluctance, and some trepidation, I think it is appropriate to proceed, continuing one step at a time. Signing the agreement is just the first step.

But we can’t put our health reform eggs all in this basket. We need to be doing much more. My biggest single fear is that in portraying this as a big “solution,” we will avoid tackling other key issues, and that will contribute to the risk of failure.

Legilative Update, May 1 2016

Legislative Update

Representative Anne Donahue

May 1, 2016

 

Perhaps the best way of demonstrating the chaos of the final week of the legislature is to share the calendar for Monday, May 2, even though those issues will be wrapped up by the time the Northfield News version of this column appears.

We are still, for now, mostly on the schedule that allows for three days of review of a bill. It is on notice for a day, is presented and debated at “second reading” the next day, and has a “third reading” the following day to give a chance for thorough consideration, plus any final amendments.

However we did expedite one day by having a “mock session” on Saturday. That means no one needed to be there, but the calendar moved ahead a day because bills on notice for Saturday will now be up for second reading on Monday. In addition, Monday is an added day to the schedule since we usually meet only Tuesday through Friday to allow time for those catching up on maintaining their full-time job responsibilities.

The big bills that need to pass will come at the end of the week, and will determine the actual closing day. They must pass because they include the general fund (operating budget) and the capital budget, plus the new tax and fee bills to pay for budget increases.

Anything else, including these Monday calendar items, will die if they are not finished when the money bills reach the finish line.

***

From Friday’s calendar:

Bills up for third reading:

Montpelier charter change: no controversy (the Berlin Pond section was struck), but it is a House bill, so it will still need to complete the Senate process. Because of the late date, we will likely “message our actions” to the Senate so that another day will not be lost.

Estate tax revisions: changes in the law that the Senate made that will generally reduce estate taxes, but includes the increase to the telecommunications fee that the House already passed but was not taken up by the Senate. The fee increase was controversial, but opposition was voted down (again) on Friday. It was added to the estate tax bill that the Senate sent over and wants, in order to force the Senate to address it, since the Senate will have to either accept the change or ask for a conference committee to resolve differences with the House. This is a common tactic.

Standardizing of some parts of environmental permits: no controversy, but it came from the Senate and the House made changes; the Senate will have to decide whether to accept the changes.

Permanency for children: no controversy, but from the Senate, and some changes made which will need Senate consideration. In addition, I have a proposed amendment. For long term guardianships, the bill permits a successor guardian to be appointed at the same time as the guardian, and an automatic change in custody then occurs if the guardian dies. I think that at that future time, there should be a new review by the court in case there are any changes in circumstances. (That kind of court review always happens in case of death of natural parents, even if they appointed a guardian in their wills.)

Approved absences from home detention: no controversy, Senate will need to approve House revisions.

Alcoholic beverage license changes: no controversy, Senate will need to approve House revisions.

Rental agreements if there is an unauthorized sub-lessee: no controversy, Senate will need to approve House revisions.

Bills up for second reading:

Bridport charter changes: no controversy, but will still need to complete the Senate process. Because of the late date, we will likely “suspend the rules” to move immediately to third reading and to “message our actions” to the Senate.

Drones, cell phones and license plate readers: this is a very big one, and rewritten from the Senate version. There will be lots of debate and potential amendments about the balance between citizen privacy protections and law enforcement needs. The Senate will undoubtedly want a conference committee, and if there is no agreement before the money bills finish their process, it will die.

Farm to school program: not likely to be controversial, Senate will need to approve House revisions.

Winooski charter changes: no controversy, but will need Senate action.

Barton charter changes: no controversy, but will need Senate action.

Government accountability committee revisions: no controversy and House is accepting the Senate bill without changes, so it will go straight to the governor.

Changes to the law defining independent contractors compared to employees. A major House bill that is coming to the House floor under a rarely used procedure. The Commerce Committee voted on it unanimously in March but it was sent back to the committee to hold pending input from a second committee. Others had major objections, and it stalled and was proclaimed “dead.” The unusual procedure was a motion and vote on the floor to “relieve the committee” of the bill and bring it to the House floor to proceed with second reading. It will be fiercely debated and may or may not pass. If it passes, it is highly unlikely that it will be taken up by the Senate since it is well beyond deadline with no time for Senate committee review. Nonetheless, many members felt it was important to hold a House vote.

Consideration of Senate changes to a House-passed bill:

Miscellaneous changes to criminal laws: no controversy or significant changes to the underlying House bill, and likely would have been accepted by the House. But! The Senate attached a bill that was stalled in the House (see process, estate bill, above) – the marijuana legalization bill, which sets up a major infrastructure for state oversight of sales. This will force the House to debate and vote on the Senate bill (or vote as a whole to send it to a House committee). Yes, expect a very extended debate, with an uncertain outcome. Most pundits believe it is highly unlikely to pass, in particular with no changes from this original Senate version. If a changed version does pass the House at some point, the Senate will have to decide whether to accept it as sent, or to ask for a conference committee where there are good chances it would die – if for no other reason than running out of time.

From Saturday’s Calendar:

Bills Up for Second Reading:

Pay Act for State Employees: likely to engender controversy, since fully funding the newly established contract would either require a further budget increase or – as the bill proposes -- partial cuts (through attrition) of the state workforce. The Senate had the contract information in time to include it in its version of the budget; the budget is currently back under House review.

Revisions to existing law for labelling of marijuana used for medical symptom relief: possibly some controversy, and the Senate will need to approve House revisions.

Combatting opiod abuse: a major bill that will likely raise questions and discussion, the Senate will need to review significant House revisions and it will likely request a conference committee.

Notifying patients about doctor office changes: no controversy, but Senate will need to accept House changes.

Consideration of Senate changes to a House-passed bill:

Hunting, fishing and trapping law revisions: no controversy, but House committee may ask for time to review Senate changes.

Transportation construction budget: House committee will ask for conference committee on multiple Senate changes.

Capital budget: House committee will ask for conference committee on multiple Senate changes.

Conference Committee Report:

Police body camera rules: Senate and House disagreed on differences in bills passed, so a conference committee was appointed and has come to agreement. Both bodies must approve the agreement, but these are usually always approved.

The Rest of the Week

There will be more and more pressure to suspend the usual rules of process to speed bills through. That will happen for anything non-controversial.

It used to also happen for major bills that the majority party (the Democrats) wanted passed, even extremely lengthy bills, including the budget itself. There was often no time to even actually read a bill before it was voted on.

Eight years ago I provoke a rebellion over this process, which does a serious disservice to our constituents. Thus was born the unofficial “24 hour rule.”

It requires a three-quarter vote to suspend the rules, so a minority party (the Republicans, though not the Progressives) can block a rules suspension. At the start of that next session, Republican leadership notified the Speaker that we would no longer go along with suspending rules without at least 24 hours to review any controversial bill, unless there we had internal consensus that we had had enough time to read and understand it. We extend that courtesy on behalf of the Progressives and any Independent if they feel they needed the full 24 hours.

It has spawned its own new opportunity for political gamesmanship. The Democrats will tell the press that Republicans are the cause of delaying adjournment. The Republicans, in turn, sometimes use the rule to its benefit by negotiating the timeline in exchange for a bill it wants to see pass.

But there is a bottom line: we should never be passing bills before legislators have enough time to read and understand them, and 24 hours is a reasonable standard to insist upon.

***

Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.

 

 

Legislative Update April 16, 2016

Legislative Update

Representative Anne Donahue

April 16, 2016

 

Our target closing date for the session is May 6, which means we are finishing our House committee work on bills sent by the Senate in anticipation of several busy weeks in conference committees with the Senate working out differences. Politics will be at its highest levels in these final works, since it will be the last chance for various priorities to make it across the finish line.

Already, the marijuana legalization bill is taking strange courses on its likely path to a conference committee. It’s anyone’s guess what will emerge for final House and Senate votes.

A bill reforming the labor laws regarding independent contractors will likely fall to a political death. It was the product of extensive bipartisan work in the House Commerce Committee. This has long been a tricky area of law, trying to protect workers from being exploited and losing access to employer-paid worker’s comp and unemployment insurance, without being a barrier to individuals who are truly working for themselves. Emerging new technology fields require evolution of old standards, and the committee worked for many weeks to craft a bill that won unanimous support across its political spectrum. It is the most important economic development work of the House this year.

It was derailed from reaching the House floor for a vote in an almost unprecedented way. After the labor lobby objected to changes from current law, some powerful liberal legislators pushed to get the bill sent back to the Commerce Committee for “more work.” There it sits, well past the deadline for crossing over to the Senate and unlikely to be permitted out of committee despite the committee’s own vote to move it forward.

***

In my Health Care Committee, we are addressing Senate bills that deal with updating managed care and hospital regulation; creating better prescription cost transparency for health plans; blocking vision care plans from limiting the suppliers that optometrists can access; and requiring notice to patients when their provider practice is bought by a hospital. Each has its own labyrinth of detail to unravel, and presents opportunities to add last-minute new proposals. Late session bills are sometimes called “Christmas trees” because so many add-on “decorations” are placed on the underlying bill. The process keeps lobbyists hopping as they try to track issues for their clients.

A piece I tried to add to the hospital regulation bill this past week gives a good snapshot into the role of lobbyists: a role that, at least in Vermont, usually is not the nefarious one that is often assumed.

I’ve long been more than a little annoyed about the way our non-profit hospitals conduct their business behind closed doors. They receive huge amounts of public money as well as the health care resource dollars that we pay in insurance, but develop their policies in private board meeting. More than a decade ago I led a battle to require that meetings be open unless confidential or proprietary information was being discussed. It a political hot potato – hospitals are powerful political players – and the effort failed.

We did get a requirement through back then that hospitals list on their websites the names of board members and the means for “obtaining a schedule of meetings of the hospital's governing body, including times scheduled for public participation.” Unfortunately with a few notable exceptions – the University of Vermont Medical Center as the shining example – most have no times scheduled for any such public participation.

The Senate bill we were working on includes updating some of the information reporting requirements, creating the opportunity for me to propose an new open board meeting clause. It rapidly gained positive traction among some members of my committee.

And panic from the hospital association’s lobbyist.

Unlike a regular bill that provides for lots of advance notice and discussion, this amendment to an existing bill could be on a fast track, and she had concerns on behalf of her client members. She articulated them rapidly: would this create a chilling effect on recruitment for these volunteer board positions? Block open discussion of tricky policy matters? How would “confidential” be defined? What about emergency meetings?

She proposed an alternative. She offered her commitment to work with her members and in particular to discuss with and learn from how UVMMC has been successfully achieving its open meeting process. She would then come back next year with a concrete proposal for how to create a hospital governing process that is more transparent and welcoming of public participation. In exchange, we would agree to hold off on rushing anything into a bill this year, in favor of it receiving full vetting.

My proposed amendment might, or might not, have made it through the committee process, House floor debate, and Senate approval. The hospitals would have been fighting vigorously. Next year, there will be turnover in the legislature, and the issue may well lay dormant.

But I have worked with this lobbyist for many years now, and I know she is a person of her word. We have collaborated on issues of shared concerns, debated vigorously on others, and agreed to disagree on some, and but always with mutual respect. With my agreement to withdraw my proposal, she has protected her clients from a potentially not-well-thought out and disruptive new mandate. However I have gained a commitment for development of an approach that will have a far greater prospect of consensus, and thus, of actually becoming law next year.

The product will be better. The public will be better served. The process will have worked, through the help of a lobbyist during her job. 

***

My committee is also continuing its work on trying to craft a bill that will force disclosures from pharmaceutical manufacturers about how they create – and justify – cost structures and cost increases. The concept is simple. Drug companies defend high prices based on the costs of developing and testing new drugs. We want to say, “Prove it. Put up or shut up. Show us the money trail.”

Some drugs that have been on the market for years suddenly spike in price. Why? We can’t try to protect consumers and build cost containment without knowing what actually drives the costs. There are efforts in multiple states to try to push for this information, and it is likely that these very profitable businesses will fight back with lawsuits.

We have long passed the deadline to get this bill to the Senate. It thus has little chance of actually passing this year. It would remain as only an expression of intent of the Vermont House. But I think it’s a conversation worth trying to force, and a public challenge to pharmaceutical companies worth making. It’s a battle that needs to be fought one step at a time.

***

Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.

 

 

 

Anne B. Donahue

 

April 2, 2016 Legislative Update

Legislative Update

Representative Anne Donahue

April 2, 2016

 

What counts as a tax increase? In fact, what counts as a tax?

We grappled at least indirectly with those questions in the past two weeks.

Fees are defined as not being taxes, because they come only from those who use a particular service, and pay only for the cost of that service.

For example: You want to be licensed in a certain profession. That profession is regulated in order to ensure your qualifications. Since you are the one benefiting by becoming licensed, your fee pays for the state’s cost in oversight of the licensing process.

It could be argued in the opposite direction. The reason for professional oversight is for public protection, so why isn’t the public at large paying for it, through taxes?

That is the policy decision that is made each time we, as a state, decides to pay for services through either a tax or a fee.

Every year, a third of all of the fees charged by the state are reviewed to ensure they are keeping up with inflation and still covering the costs of the service. This year, it was the Department of Motor Vehicles’ turn for increases.

Motor vehicle fees have a broader reach than just paying for the services of the DMV itself. We pay for our entire state portion of the transportation budget through contributions (mandatory ones) from those who use the roads, rather than from taxpayers as a whole.

There are three sources: the gas tax, the motor vehicle purchase and use tax, and motor vehicle fees.

These fee increases are nickel and diming us to death: a lot of items only going up a dollar a two, but all adding up to real money. It totaled about $10 million in fee increases, many of them in the range of a 20 percent increase.

That would be a whopping amount for a one year increase but in fact, most of these fees were last raised in either 2002 or 2012. Spread over the amount of time, they were in the range of two to three percent increases, very much in line with inflation.

For that reason, I voted for the transportation funding bill this past week. The increases made sense, and the DMV money raised goes directly into maintaining the roads we drive on.

***

I did not look kindly, on the other hand, on this year’s general fee bill. It included one whopping fee increase (by 233 percent) that was not remotely related to the actual cost of regulating the business at issue: mutual funds.

We raised it for one reason only: there was a deficit in the state budget, and someone noticed that our fee was much lower than other states around us.

So how did we get away with calling this tax a “fee”?  We simply changed the law, and passed language that exempted that specific fee from the statutory definition of a fee.

It always sounds easy to raise a tax (or supposedly, a “fee”) on a faceless big business. The fact is, businesses don’t pay taxes. Only individual people pay taxes… because one way or another, the money being raised is going to be passed on down through to the consumer.

***

Speaking of taxes, after getting through with this year’s big tax bill the week before (including an increase in the tax on your heating fuel), last week we also addressed education and the property tax.

The rate increase will be small this year, but regrettably and unnecessarily, it will still be an increase. Last year, we promised relief by requiring towns to come up with their own local money if they went above a pre-set growth percentage. Earlier this year, the legislature wimped out and mostly repealed it. That drove everyone else’s share of the property tax back up again.

So we will be finishing up yet another legislative session without reforming the education taxation system that has vexed us all for so many years.

***

There are times when the competing values in a piece of legislation leave one in a no-win situation, and those are the votes that can leave you second-guessing yourself long after the roll call is over and done.

So it was for me on a small amendment to the annual state budget.

Ambulance services around our state are mostly run by local communities, and they don’t break even on the reimbursement from health insurance. Towns often pick up the deficit (meaning, of course, your local property tax.)

The recent increase in the number of Vermonters on Medicaid has had a really negative impact on these services, because Medicaid (that is, the state) reimburses at about 40 percent of the cost of services. In effect, this is a cost shift from a state obligation (general fund taxes) to local property taxes.

Our general fund budget, however, is already outpacing our economic growth rate, and we can’t sustain further increases. While we ought to have stepped back and re-prioritized the state’s overall spending, that wouldn’t solve the immediate problem that was before us as we voted on the budget.

Some creative financing had been done to propose a fix. It’s something that actually is well known by its nickname, Medi-scam, as a way to artificially get federal money to pump up our budget.

It works by increasing the Medicaid rates paid by a medical service, a cost that is shared by the state and the feds. We pull in the federal money, but we don’t actually pay the state share. We create the state share by raising the money through a tax on that medical service provider (called a “provider tax.”)

For example: Say an ambulance ride is currently reimbursed by Medicaid at $100. The state increases the rate to $150. Of the extra $50, $25 comes from the feds and $25 has to come from the state. So we set a service tax of $25 for the ambulance, and use the tax to pay our $25 share.

End result: the ambulance “nets” an increase of $25 thanks to the federal share (minus some administrative overhead, of course.)

We do it for hospitals and nursing homes… why not ambulances?

From a policy perspective, it’s a really bad way to raise money. Sooner or later, the feds are going to cut off this spigot. And even if it is revenue neutral, it does increase the size of the state’s budget as a whole.

Finally, we have to remember that “federal” money is just another source of funds that ultimately comes from our pockets.

On the other hand, as a member of the Health Care Committee, I’ve been getting pleas from ambulance services around the state about the desperate state of their budgets, and the pressure being put on towns.

So I voted in support of the ambulance amendment (despite not supporting the budget as a whole.) But I’m still not sure it was the right decision.

***

I was pleased and grateful to see the Transportation Committee include a bill I introduced, within its larger annual transportation budget policy bill. It requires the Department of Transportation to develop short and long term measures to address safety at the Quechee Gorge bridge.

The bridge has become a suicide “hot spot.” Contrary to common assumptions, if a suicide is prevented, 90 percent of the time the individual does not simply turn to another means of death. Creating obstacles to suicide literally does mean saving lives.

If we had a particular traffic intersection or stretch of road where 10 deaths had occurred over the past ten years, we wouldn’t question the need to evaluate safety protections. We have lost 10 Vermonters since 2006, mostly young people, to the easy access and “no turning back” risks presented at the Quequee Gorge bridge. There are easy and low cost ways to intervene, and we need to take those steps.

***

Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.

March 19, 2016 Legislative Update

Legislative Update

Rep. Anne Donahue

March 19, 2016

 

The House passed some 29 bills last week to get them over to the Senate in time for action this session, but they ranged widely in importance. Some were clarification of existing law and some set out study committees to research more tangled questions of law.

This coming week will be the heavy lifting: the state budget (with increases), the tax bill (with increases), and the fee bill (with increases.)  Amongst House committees, many eyes will be on Judiciary, which is beginning to take testimony on marijuana legalization.

I sympathize when people say we pass too many laws, so I’ll offer one example of a minor bill that nonetheless made sense to act on. Sports teams on the college level or above often travel with their own team doctor. When our teams go out of state, their doctors are usually permitted to practice in that state, as long as they only treat their own team players or staff.

We don’t offer the same courtesy to those coming here, simply because we never passed a law authorizing that exception from medical practice laws. That was one of last week’s 29 bills.

A sampling of others:

Health Care Reform

My bill establishing limitations on the governor’s proposal for a federal waiver for health care payment reform passed on a 124-2 vote of the House. For the first time, we have laid out in law that reform agreements must bar the state from touching any Medicare money.

The bill – described in detail in my previous update – also would establish state regulation of the federally-created “accountable care organizations” that are gaining an increasing role in coordinating, and paying for, health care in the state.

Suspended Licenses

Many Vermont drivers are so overwhelmed by accumulated motor vehicle fines that, unable to pay them, they drive with a suspended license, and then get sucked further down by new fines. This bill proposes an amnesty period with reduced fines, and a new system that will allow for payment plans and fewer suspensions.

There is a fundamental inequity about offering amnesty when thousands of other Vermonters have faithfully paid their fines in the past, even if it was a huge financial struggle for them.

Unfortunately, two counties in Vermont already ran amnesty programs for their own unpaid tickets. That meant relief from old tickets was based purely on what part of Vermont you live in. To me, that is an even greater injustice, and it led me to support the bill.

By rebuilding the system to help people to avoid losing their licenses for failure to pay fines, we will raise less money in the future for the transportation fund in “driving while suspended” fines. That lost revenue will cost each of us a dollar a year in increased vehicle registration fees.

E-Cigarettes

Electronic cigarettes are getting more and more kids hooked on nicotine, and many of them move on to smoke tobacco. Although sale is already banned to those under 18, they are being widely marketed as though they were not dangerous to health.

This bill had two parts: extending the requirement that e-cigarettes be sold out-of-reach of customers along with tobacco products, and extending “no smoking area” bans to e-cigarettes.

I asked that the bill be divided in order to vote in favor of the store restrictions but against the public smoking bans. Such bans are based on protecting persons from the actions of others, and there is not clear evidence that the vapor that e-cigarettes produce have the “second hand smoke” risks of tobacco. Both sections passed, so I did vote for the final bill.

A surprise developed in the form of a proposed amendment to raise the smoking age to 21, on the grounds that it would protect thousands of younger teens from ever starting to smoke.

It is a rare moment on the House floor to see a roll call where there is no predictable outcome, and no party-line voting.  The amendment failed to get a majority, stalling at a 71-71 vote.

I did not support it. I think rights and responsibilities go hand in hand, and our rights as adults include the right to make bad decisions. We have chosen as a society to deem 18-year-olds able to make decisions to shoot others and be shot at war, and to be accountable for criminal actions even to the point of the death penalty. It is hypocrisy to deem them too immature to make decisions about unhealthy activities.

Ban the Box

The goal of this bill is to help persons with a past criminal record to “get through the front door” for job interviews. It doesn’t stop employers from asking about criminal involvement, or doing background checks, but it bans asking the question on a first-round written application.

Timber Trespass

This bill would create civil penalties for cutting timber on another’s property, and was one of several that promoted the importance of our forests as a resource, and as worthy of similar designations as our farm lands.

Corrections

Another bill addressed our aging prisoner population, focusing on system costs, public safety, and compassionate release. It would make persons eligible to be considered for parole at age 65 after serving at least five years, or at age 55 after serving at least 10 years, even if the minimum jail term had not been served, as long there are no public safety issues.

Impaired Driving

This bill would extend the length of license suspensions for impaired driving, and expand the use of ignition lock systems that require breath testing before and while a car is being driven.

Potable Water

We have drinking water standards for well systems, but not for surface water. As a result, water systems were not receiving permits if they used surface water as a source. This bill sets up standards to allow the use of surface water for drinking water systems for private homes.

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Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.

 

March 6, 2016 Legislative Update

Legislative Update

Rep. Anne Donahue

March 6, 2016

 

The pace will begin to speed up as we near the end of the first half of the second year of this legislative session. This Friday is “crossover” – the deadline for bills to be voted out of a policy committee if a House bill is even to be considered by the Senate, and vice-versa.

So, what to expect from the House Health Care Committee, where I sit?

I have drafted a bill that we are taking up this week to set parameters for any agreement with the federal government about an alignment between Medicare, Medicaid and private insurers.

Most important of all is this language:

“The Green Mountain Care Board and the Agency of Administration shall only enter into an agreement with the Centers for Medicare and Medicaid Services if the agreement… continues to provide payments from Medicare directly to health care providers without conversion, appropriation, aggregation, or any other involvement by the State of Vermont.”

The talk about Vermont entering into an “all payer” model has worrisome overtones.  I have heard unequivocally from Vermonters: “hands off our Medicare.”

The administration has said that no such agreement would involve the state controlling Medicare money.

There is no state law, however, preventing Vermont from doing that, and I think we should put it into law: no agreement permitted unless the agreement itself guarantees that the state doesn’t touch Medicare money.

It isn’t just about the money, either. So the bill includes other requirements. The agreement would be allowed only if it:

-- preserves all existing the consumer protections (including not reducing Medicare covered services, not increasing Medicare patient cost sharing, and not altering Medicare appeals processes), and

--  allows Medicare patients to choose their providers.

The federal government is already deeply involved in pushing for health care reform through new ways of paying for Medicare. One route is through contracting with organizations made up of health care providers that agree to be accountable for all services for its patients for a single lump sum.

These groups of providers are called Accountable Care Organizations, and there are three that already operate in Vermont. A Medicare patient who sees a primary care doctor who is a part of an ACO is “attributed” to that ACO. The ACO coordinates all of the patient’s care.

If you are on Medicare, you may already be attributed to an ACO. Apart from having received a letter about it two or three years ago, you wouldn’t notice anything different, and your doctors have not been paid any differently.

The coming change from Medicare is through paying via that agreed-upon lump sum, instead of paying through the traditional fees for each service you receive.

The biggest difference in the arrangement that Vermont is proposing to the federal government is that we make it possible for our Medicaid program and private insurance plans in the state to align into the same model.

All the major payers in Vermont (thus, the “all payer model”) could establish contracts with an ACO, creating a unified method of payment. Having more payers involved creates economies of scale, both in administrative costs and in managing good coordination of care.

A participating doctor wouldn’t need to worry about which insurance you had or how much each particular procedure costs, and could concentrate on best care.

But if the ACO does not meet its target for costs, it is the ACO that loses money. Perhaps the biggest fear for many is, how can we be assured that the ACO won’t scrimp on care in order to meet its budget targets?

In addition, for an ACO to function successfully and survive financially under the new lump-sum model, it must be made up of a very large network of providers, including hospital and physician services. As a result, the three Vermont ACOs are planning to fold into one.

That brings other worrisome features. If there is only one ACO, will it create too much of a monopoly? How do we ensure that the big hospital partners don’t control the decisions, and keep most of the money?

That brings us to other parts of the oversight bill my committee is working on.

Although Medicare allows ACOs to operate fairly independently as long as they meet budget and quality of care targets, we want stronger oversight of what will be Vermont’s single ACO.

The bill would require that the all-payer model allow providers to choose whether to participate in an ACO or remain independent. The ACO would be required to contract with non-ACO members to ensure their patients can access the providers they need and choose.

The ACO would be required to invest in primary care and other parts of the health care system that help prevent expensive hospital use. It would also require shared decision-making between doctors and their patients.

Under the bill, the Green Mountain Care Board would monitor quality of care and patient protections, including the right to appeal denials of care. It would require that the ACO governing body represents its participants equitably.

The ACO would not be permitted to “diminish access to any health care service for the population and area it serves.”

The Board would also review and approve the ACO’s annual budget, in the same way it currently reviews hospital budgets.

I think this oversight is crucial if this new model of payment is to be successful in helping to make the most efficient use of health care resources while also protecting the highest quality of care.

The “all payer model” is intended to help make the system pay greater attention to the full spectrum of patient health care needs instead of separate pieces, through changing the way providers are paid.

That alone is not going to radically alter the trajectory of increases in health care costs. But it may “bend the curve” of increases, and that bending is a necessity if we are to keep health care even remotely accessible.

What must come next? Greater equity in access.

Right now, if you are very low income, your access to health care is well protected. If you have a good health care plan through your job, your access to health care is also well protected; it is affordable mostly because the costs are hidden through the employer contribution.

Neither of those routes is sustainable. We are seeing that now in a state budget that is being crushed by the expansion of Medicaid access, and employers are seeing it in the impact on the costs of doing business. It only takes looking at the effect on school budgets this year to know that we can’t keep on this course.

But those in the worst situation are those who are not covered by their jobs, yet are over the limit for state-sponsored Medicaid coverage. Insurance on the health care exchange still leaves health care inaccessible for many: the cost-sharing on top of high premiums is too expensive.

We have to do better.

The all-payer model, if done right, is likely a good step, but it is only a baby step in the big picture of achieving access to quality health care.

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Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.