December 5, 2008
MERC Committee Meeting
Committee Members Present: Diane Buschena-Brenna for Jim Davis, Deb Mayland-Poyzer for Mary Edwards, Daniel Foley, Larry Kuusisto, Mike Harristhal for Louis Ling, Dawn Ludwig, Jeff Ogden, Carl Patow, Curtis Savstrom, and Ron Hadsall for Marilyn Speedie.
Interested Parties Present: Lisa Benson, Ben Bornsztein, Gina Danyluk, Rena Garni, Margo Marko, Janet McCarthy, Gerhardt Meier, Jay Ness, Rick Roberts, Trisha Schirmers, and Amy Tepp.
Staff Present: Diane Reger and Diane Rydrych – Minnesota Department of Health Susan Hammersten – Minnesota Department of Human Services
Ms. Ludwig opened the meeting by welcoming and thanking members and interested parties for attending. All committee members and interested parties then introduced themselves.
Ms. Hammersten reminded the committee that the amount of federal match available for the MERC distribution is subject to the Medicare Upper Payment Limit (UPL), and discussed the affect the UPL had on the 2008 MERC distribution. Privately owned hospitals exceeded the UPL due to an increase in quarterly payments in 2008. Since this group of hospitals exceeded the UPL, the federal match going to these hospitals needed to be reduced. This did not affect non-state government owned hospitals or state-owned hospitals. This could be something that we see again in future years since the quarterly payments will continue and are taken into account before any MERC federal funding is calculated.
Committee members questioned whether there is a way to maximize federal matching funds beyond the current level. Ms. Hammersten explained the process for receiving approval from CMS. Currently, the State Plan Amendment, the approval from CMS for federal funding on MERC, is approved with no end date. To change the mechanism or requested match, DHS would need to request an amendment to the State Plan Amendment. This may open the MERC distribution formula to other changes we may not, as a state, agree with or move us away from the goals of MERC. This does not mean that we cannot seek a change; it just means that DHS and MDH would want to think very seriously about such an undertaking and its implications.
Ms. Reger said that approval to release 2008 funding has been received and funds had just been transferred to MDH. She sent Grant Agreements to each of the 22 sponsoring institutions prior to the meeting. She would like to have them returned to the Department of Health no later than Friday, December 12. If all contracts are received by this time, grants should be paid to sponsoring institutions before the holidays. After payment is made, the sponsoring institutions will have 60 days to forward funding to their training sites.
As Ms. Hammersten previously mentioned, the UPL was exceeded for certain providers. Ms. Reger adjusted the federal grant to these providers after applying the MERC/PMAP calculation governed by statute to proportionally reduce the grant to only those providers impacted by the UPL limit.
Total funds available for the MERC/PMAP grant totaled $50,277,791.71. This amount is after direct payments are made to the University of Minnesota, Academic Health Center in the amount of $1,800,000; University of Minnesota, School of Dentistry in the amount of $2,075,000; and University of Minnesota Medical Center, Fairview in the amount of $1,475,000.
Since this is the first year under a new formula that combines direct payments, puts all weight on Medicaid revenue and no weight on FTEs, and gives a 20% increase to training sites whose relative PMAP volume is .98% or greater and takes that increase from training sites under .98% relative PMAP volume, sponsoring institutions will see that some training sites will receive very small grant amounts this year, some less than $1.
Individuals present from sponsoring institutions questioned whether they could hold funding from sites that received less than a specified grant amount. They indicated that it would cost more for them to ‘cut-a-check’ than the grant amount is worth. MERC staff said that according to statute all funding must be passed along to the training sites in the year that it is received, which means that funds cannot be combined across years or held if they are below a certain amount. Any change to this approach would require a change in statute and the State Plan Amendment.
DHS has still not received approval from CMS to release federal funds from the 2006 and 2007 grant to nursing homes. Ms. Hammersten believes that CMS will hand down a decision on this soon. If and when approval is received, Ms. Reger said that she will process the funding as quickly as possible. She was uncertain if she would need to have the sponsoring institutions affected by the nursing home hold-back complete new grant agreements or if the agreements signed in 2006 and 2007 contained the information necessary to release funds without additional agreements. As a follow-up to this item: New grant agreements will not be necessary. The grant agreements signed in 2006 and 2007 referenced funding to nursing facilities being released when approval is received, so the original agreements can be used. MDH continues to wait for notice of an approval.
Ms. Rydrych gave a presentation on some of the preliminary data comparing 2007 and 2008 data and the new formula’s effect on MERC training sites. As she expected, an increase of funding went to hospitals since it is hospitals that receive the bulk of Medicaid revenue. The impact by provider type showed an increase to all provider types who primarily train in a hospital setting. Those provider types that train in smaller or rural settings saw a decrease in funding. The impact seen by county, again, contained no surprises. A shift in funds was seen from Olmsted County to Hennepin and Ramsey County. One of the biggest changes was seen when comparing the sites that would receive less than $1,000 in different years. Staff found that sites receiving less than $1,000 in 2007 were 56, compared to 207 sites in 2008. Most significantly, sites receiving less than $100 went from one site in 2007 to 115 sites in 2008. Ninety-two of these sites will be receiving less than $50. Another interesting note was in comparing sites that trained the same number of FTEs. The Department found that grants going to sites training the same number of FTEs varied significantly, with some receiving more than $1 million and some less than $1. Also noted was a comparison between a site training more than 100 FTEs received less funding than a site with less than 10 FTEs.
Members asked if they could give their input on the report. Ms. Rydrych said that the Department would discuss this internally since she did not expect any recommendations would be made based on this report at this point. She saw the report as an informational report to the legislature on how the distribution was impacted by the legislative decisions made the previous year, and that the true impact of the formula won’t be seen for several years, as training sites begin to make decisions about whether or not to accept trainees based on potential MERC funding. Members asked if there would be a meeting to go over the report before it was given to legislature. Since the timeframe is very short, she did not think that would be possible. She reminded the Committee that the report was due on January 15, 2009.
The Department of Health has been working with the Department of Human Services on issues related to the PMAP data used in the MERC process. Some questions relate to potentially low PMAP revenue estimates on encounter claims that may be rejected due to incorrect coding on claims submitted by health plans. Other questions relate to combined NPI numbers that make it difficult or impossible to calculate revenue for individual physical sites. Ms. Rydrych reminded committee members that no MERC recipients are harmed by potentially low estimates, as they are given an opportunity to see the DHS estimates prior to the calculation of the distribution and to provide alternate numbers if they feel the DHS estimates are too low and if they can show that they’ve used a comparable process to come up with the revised numbers. She also reminded committee members that the MERC distribution looks at relative volume across facilities, not absolute volume.
MDH is working with DHS to talk through these issues and to explore short-term and longer-term solutions to come up with more consistent and accurate estimates, including potentially revising the way that ‘denied’ claims are considered in the calculation of relative revenue. To foster discussion about these issues, MDH and DHS will be hosting a combined meeting with representatives from providers, health plans, MDH, DHS, and the Administrative Uniformity Committee. The group will discuss the current issues and the potential short and long-term solutions to address them in a consistent way across all facilities. The meeting is expected to take place in January.
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 5, 2009, and Friday, December 4, 2009. For directions and further information, please visit:http://www.health.state.mn.us/divs/hpsc/hep/merc/committee/index.html.