December 4, 2009
MERC Committee Meeting

Committee Members Present:
Jim Davis, Dan Foley, Louis Ling, Dawn Ludwig, Deborah Mayland-Poyzer for Mary Edwards, Kathleen Meyerle (via teleconference), Jeff Ogden, Carl Patow, John Rodewald, and Marilyn Speedie.

Interested Parties Present:
Rena Garni, Carrie Gray, Frank Iossi (via teleconference), David Knowlan, Janet McCarthy, Jay Ness (via teleconference), Scott Nigon, Kathleen Radcliffe, Rick Roberts, Trisha Schirmers, Troy Taubenheim, and Amy Tepp.

Staff Present:
Diane Reger and Diane Rydrych – Minnesota Department of Health
Vicki Kunerth - Department of Human Services

I. Introductory Remarks from MERC Committee Chair –Louis Ling

Dr. Ling opened the meeting by welcoming both members and interested parties and thanking all for attending. All committee members and interested parties then introduced themselves.

II. MDH Staff Update - Diane Rydrych, MDH

Scott Leitz is no longer at the Minnesota Department of Health. He is now with Childrens Healthcare, serving as their director of public policy and child health advocacy. He was a valuable asset to MERC over the years, and he will be missed for his broad knowledge on MERC and a multitude of subjects. There have been a few committee member updates based on availability of the members. Jim Kohrt and Jim Koppel will no longer be serving on the committee. Jim Kohrt has noted that he may attend as an interested party.

III. PMAP/Encounter Data Update –Vicki Kunerth, DHS

Ms. Rydrych recapped past discussions surrounding PMAP claims, and reminded committee members about the multi-stakeholder meeting held in January. That meeting focused in part on how some claims data cannot be processed through the DHS FFS edit system. This can cause the claim to end up in a denied category on reports sent to MDH for MERC purposes; this does not actually mean the claim was denied, it means the system does not have ability to determine the estimated FFS reimbursement on the encounter claim because something was missing from the data that didn’t allow the claim information to fit the system properly, or because FFS edits operate based on assumptions that may not fit PMAP claims. A temporary process to address this was developed and implemented in 2009, where MERC staff would begin including a percentage of the denied claims category in the figures used for the MERC distribution formula. This was not meant to be a permanent solution, but rather a short-term fix until a longer-term solution could be found.

Ms. Kunerth told the committee that there was a new encounter data team at DHS whose first project is to work on ‘True Denials’ to help eliminate issues with FFS edits. They are scheduled to implement changes in March or April of 2010 that will turn off approximately 900 FFS edits, to help eliminate the problem of denied MCO claims being included in the data provided to MERC staff. The edits will still catch things that are out of place, such as a male giving birth or other out of the ordinary claims (i.e. Issues that focus on date of service, enrollee, provider, and diagnosis). Although the system will be implemented in 2010, this will not affect MERC reports until the 2012 MERC distribution since there is a two-year lag (2010 claims will be used for the 2012 MERC application).

Another project that is in process at DHS is the collection of expenditure data from MCOs. The 2008 and 2009 Legislature passed language authorizing DHS to collect this data directly from MCOs, to provide a much more robust estimate of the amount of money paid by each MCO to each site. However, since DHS is in the negotiation process with the MCOs, Ms. Kunerth could not provide any detail to the committee at this time. She did note that once this data was available from the MCOs, actual reimbursement amounts would be available, eliminating the need to use the current PMAP proxy measure. This would be very helpful with the MERC formula and would eliminate the need to estimate FFS reimbursement for PMAP claims. There may be a potential two-year lag on this data as well depending on how the details are worked out with the health plans. Ms. Kunerth will provide an update to MDH after the first of the year; MDH staff will share this information with committee members.

Rick Roberts from Regions suggested that DPA Audit materials should be used for hospitals. Trisha Schirmers from Allina said that data for the current application year is not available at this time since they are still working on 2005 and 2006 data. Once this data is available, it should match the expenditure data for those years, but there is no current timeline available related to whether or when this audit might expand beyond 2006.

Ms. Schirmers provided the committee with an update on a new workgroup that has been established by the Administrative Uniformity Committee (AUC) related to two-digit program codes. Two-digit program codes are used to identify the particular public program that a patient is enrolled in; currently, hospitals need to collect this data in response to a number of state requirements, including the annual MERC/PMAP verification process, but inconsistencies in the coding of this information makes this process arduous for hospitals. The AUC workgroup will develop recommendations to standardize the process for providing two-digit program codes, with an eye to easing the verification burden for hospitals. Committee members or interested parties who may want to participate in this process should contact Ms. Schirmers.

IV. Legislative Session Preview – Diane Rydrych, MDH

Ms. Rydrych briefly discussed the recently released state forecast, which indicated a deficit of $1.4B for the current biennium, growing to over $5B in FY2012-13. There is no information at this point about any actions that the Governor or legislature might take in response to this forecast; there is a possibility that the Governor will, at some point, unallot some portion of state General Fund dollars to address the deficit. If that occurs, there is a possibility that the state portion of the PMAP Carveout could be at risk; however, such a cut would involve a loss of federal matching funds as well. MERC staff could not speculate at this point about whether or not there is any risk to MERC.

V. Update on 2009 MERC/PMAP Distribution – Diane Reger, MDH

The 2009 funds were released in two separate distributions. The first was sent to sponsoring institutions mid-September, and the second, which was comprised of funding that required calculation of the hospital UPL, was released in mid-November. MDH has received confirmation that all funds from the first distribution were forwarded to training sites. The sponsoring institutions have until January 19, 2010, to forward the second distribution. The combined distribution totaled $60.6 million after $5.35 million in direct payments were paid to the Academic Health Center, School of Dentistry, and Fairview. No reduction to the federal match was necessary this year since the hospital upperpayment limit was not exceeded. At this time, Ms. Reger has been notified that there will be one site returning funds due to a site closure. This accounts for around $164. These funds will be rolled in the 2010 distribution.

In February, the annual report to the Legislature is due. Ms. Reger is working on the draft and hopes to have this information completed in the next few weeks and available on the MERC web site. With the distribution now calculated solely on relative Medicaid volume, she said comparing the distribution amounts at the teaching program level does not reflect an accurate picture any longer, since the grant is actually determined more on the provider type of the training site (for example, hospitals generally incur higher Medicaid volume than clinics). Hospitals received 89% of the distribution, followed by clinics receiving 7%. The grant per FTE for sites that train multiple FTEs is actually lower than sites that trained less than one FTE. There were 738 distinct training sites. Of these sites, there were 110 that received less than $50, and 605 received less than $20,000. The correlation between FTEs and grant was fairly even in Hennepin County which had 45% of the FTEs and received 47% of the distribution. This was not seen in other counties. Ramsey County received the next largest distribution and had 11% of the FTEs and received 21% of the distribution, Olmsted County followed with 33% of the FTEs and 6% of the distribution. More information will be available on the year-end report. Ms. Reger will notify the Committee and Interested Parties when the report is available.

The 2010 MERC application was submitted at the end of October.

Northwestern College of Chiropractic chose not to submit an application this fall based on the lack of funding available to their training facilities. In 2009, they received just over $5,000, which was shared among 96 training sites and 105 FTEs. Some sites received less than $1. They expressed how this can have a negative impact on the relationship between the program and the training site. A few members commented on how they were asked if there was a mistake in the grant calculation because their grant increased when they were not training additional FTEs. Others commented that they find it difficult to negotiate with training sites to take on additional trainees, as their grant amount will not increase with the additional student/trainee load.

Duluth Graduate Medical Education will no longer be listed on the application as a sponsoring institution. Their accreditation is now held by the University of Minnesota AHC; therefore, they are now considered a program of the University of Minnesota AHC rather than a sponsoring institution of their own program.

At this time, we are estimating the 2010 MERC distribution to be $62.4 million before direct payments, $57.1 Million after direct payments.

VI. Other Issues

Dr. Ling discussed the low attendance at meetings and asked if the Committee would prefer to either (a) have fewer meetings since the agenda centers on updates that could be communicated in a different manner, or (b) consider only meeting as a technical group for updates. Committee members felt that the committee was still an important opportunity for the GME community to get together to discuss issues, and that it should continue to meet even though the agendas have been light in the last year or two. One member noted that the committee’s workload has traditionally ebbed and flowed, and that this may be a low point but it does not mean there might not be more opportunities for input in the future. Another committee member noted that there might be a need for additional discussion after it becomes clear what will happen on the Federal level in terms of health reform.

Several committee members noted that it might be important for the group to come together to strategize about how to let the Legislature know the value of training providers and GME in Minnesota, and to advocate for the protection of MERC funding. MERC staff noted that they would be unable to participate in meetings focused on developing a legislative strategy/approach for MERC that is independent of MDH’s legislative strategy, but that staff would be available to provide technical assistance or information to the group if needed. Committee members agreed to convene themselves in January, with their legislative staff present, to talk about any steps that they may need to take to preserve MERC funding going forward.

VII. Upcoming meeting dates

The next regularly scheduled MERC meetings will be held on from 1 – 4 p.m. in the Red River Room at Snelling Office Park on Friday, June 11, 2010. For directions and further information, please visit:



Tuesday, 16-Nov-2010 12:25:23 CST