December 7, 2001
MERC Committee Meeting Minutes
Committee Members Present:
Louis Ling - Chair, John Abenstein, Gary Anderson, Kent Crossley, James R. Davis, Sandra Edwardson, Daniel Foley, Timothy Gaspar, Larry Kuusisto, Dawn Ludwig, Daniel Mareck, Kathy Meyerle, Jay Noren, Carol Backstrom (substitute for Carl Patow), Mary Edwards (substitute for Peter Rapp), Marilyn Speedie, Walter Swentko, Jim Toscano, and Cathy Wisner.
Interested Parties Present:
Roger Balagot, Ben Bornsztein, Jerry Collingham, Anna Geary, David Hagen, Frank Iossi, David Knowlan, Deb Mayland, Gerhardt Meier and Beth Murphy.
Scott Leitz, Tom Major, Diane Marty, Diane Rydrych, and Michelle Strangis.
The following new members were introduced to the committee:
Dr. Jay Noren - National Institute of Health Policy
Dr. Daniel Mareck - Director of Curriculum and Development, MN Rural Health School
Dr. Walter Swentko - Direct of Rural Physician Associate Program, U of MN Medical School
Since the committee last met, the following members have resigned:
Morris Davidman, Department of Medicine - HCMC
William Wustenberg, DVM
II. MERC Legislative Update - Scott Leitz, MDH
Mr. Leitz walked Advisory Committee members through the legislative summary that was mailed to all members on September 19, 2001, giving an overview of the outcome of the 2001 regular and special sessions.
On the issue of the PMAP carveout and the PMAP distribution formula, Mr. Leitz reminded committee members that the Ad Hoc Committee on Medicaid Financing of Medical Education, which met four times last fall and winter, made several recommendations regarding revisions to the current formula being used to distribute carved out PMAP/PGAMC funds. On the basis of those recommendations, the Department of Health, in a January 2001 report to the legislature, advocated for a revision to the distribution formula that would have increased the weight given to relative public program volume from the current 50% to 75%, with the weight given to relative education volume decreasing accordingly. While legislation that would make this change was introduced by Representative Goodno and by Senator Kiscaden, the new language ultimately failed to pass. As a result, PMAP/PGAMC funds will continue to be distributed using the current "50/50" formula. On a related issue, the exemption of Greater Minnesota counties from the PMAP carveout, which was slated to sunset in January 2002, was not extended. This means that the medical education carveout from PMAP capitation rates will be expanded to all counties beginning in January as originally intended.
During the special session, the legislature also passed into law mechanisms that would allow for intergovernmental transfers (IGTs) between local units of government and the State. Under this mechanism, counties transfer funds to the State to draw down federal share; the net increase is then returned in the form of higher medical assistance payments to government hospitals. The language calls for IGTs of $24 million annually from Hennepin County and $12 million annually from Ramsey County. A net of $10.08 million will ultimately be paid to HCMC and $5.04 to Regions Hospital. Fairview University Medical Center may also participate in the IGTs upon federal approval of their classification as a ‘government hospital.’
Mr. Leitz expressed some concern that new federal regulations related to upper payment limits would limit the length of time in which IGTs could operate. He stated that it was likely that once approval from CMS is received, transfers could be made retroactively from the date the waiver was applied for until the date the new rule was approved. Under such a scenario, Hennepin and Ramsey counties would be able to receive about eight months worth of funds or about three-quarters of the totals specified in the statutory language.
III. Medical Education Innovations Pool: Diane Rydrych
Ms. Rydrych announced that the 2001 special session also resulted in the creation of a new pool of funds under the MERC statute, the clinical medical education innovations pool. The newly added language reallocated $2.537 million in Health Care Access Fund dollars that had previously been received by the Academic Health Center to the Department of Human Services (DHS). These funds are to be added to the PMAP capitation rates in order to draw down federal share, contingent on approval from the Center for Medicare and Medicaid Services (CMS, formerly HCFA). Once matched, this pool would total $5.074 million per year.
Once matching payments are received by MDH, the pool is split three ways. Half of the fund, an amount equal to the original $2.537 million, would be returned to the Academic Health Center. The remainder would be split between Hennepin County Medical Center and the Department of Health, with HCMC receiving 24% of the total or approximately $1.2 million and MDH receiving 26% or $1.3 million. The MDH portion would be distributed using a competitive RFP process designed to reward programs or sites that use innovative methods to provide clinical dental training and/or dental services to underserved populations.
Ms. Rydrych stated that at this point, the timing of the distribution of innovations pool funds is uncertain. MDH will not begin receiving funds from DHS until early January, and the funds will come in monthly installments. MDH will need to work with both the Academic Health Center and HCMC to operationalize fund transfer timing, then determine the optimal time for issuing the RFP. Most likely, the RFP will be posted sometime in the spring of 2002. A review committee will be convened to review all concept papers and full proposals; this committee will likely consist of MDH and DHS representatives, with possible inclusion of other dental experts who do not represent any of the organizations applying for grants.
A member asked why the review committee would be made up only of internal MDH and DHS representatives rather than MERC Advisory Committee members, and noted that as the new language is in the MERC statute, the intention most likely was for there to be some MERC involvement. The member also questioned whether there were agreed-upon criteria for rating level of innovation. Ms. Rydrych responded that there would be a potential for conflicts of interest if MERC Advisory Committee members participated in the review and award process while representing organizations that might also be applying for grants. Mr. Leitz noted that the inclusion of the innovations language occurred very late in the special session and that not too much should be read into its placement in the MERC statute. The member then suggested that a subcommittee of the MERC Advisory Committee be appointed to review applications and establish criteria and make recommendations to the full committee, which would then recommend grantees to the Department. Another member suggested that the MERC Committee review and make recommendations on the award criteria. Another member suggested that the Advisory Committee establish the criteria but that MDH/State staff make the final determinations of the awards.
Ms. Rydrych provided an update on the 2001 trainee exit surveys, which were developed on the recommendation of the MERC workforce subcommittee last year. When the Advisory Committee last met, in March, the surveys were just beginning to be administered by sponsoring institutions. All surveys now being in, Ms. Rydrych provided an overview showing that the overall response rate was just over 68%, ranging from a low of roughly 60% for Advanced Practice Nurses, Pharmacists and Resident Physicians to a high of 80% - 100% for the other provider types. Ms. Rydrych stated that although 68% is a very good response rate for the first year, slight changes to the timing and method of survey administration should result in an increased response next year. She also stated that the 60% response for physicians may mean that specialty groups will not be able to be broken out in great detail, as the number of respondents may be too small for meaningful analysis, and that similar specialties may have to be grouped together.
There were a number of suggestions for additional data elements or approaches to analyzing and evaluating the data. The suggestions included breaking out the sample by the size of the community and/or the practice setting in which the respondent would be practicing, identifying how many students are in the U.S. on temporary visas for training and how this affects their practice plans, developing a web-based tool for survey administration, and examining the institutions that had greater success in administering the surveys and seeing if their methods could be adapted to improve the response rate for other institutions or provider types.
One member questioned whether we plan to use this data in the future for distributing MERC money based on certain criteria. For example, the medical resident programs receive a large amount of money for MERC; however, only a small percentage of graduating students remain in MN after graduation. Ms. Rydrych responded that such uses of the data might be something that either the MERC workforce committee or the Advisory Committee would want to explore in the future, but that she anticipated a fairly broad audience for the results.
The committee was asked to indicate if they were interested in being on a reconvened workforce subcommittee. The following committee members and interested parties indicated an interest: John Abenstein, Gary Anderson, Beth Murphy, Kent Crossley, James R. Davis, Sandra Edwardson, Daniel Foley, Timothy Gaspar, Larry Kuusisto, Louis Ling, Dawn Ludwig, Daniel Mareck, Jay Noren, Mary Edwards (substitute for Peter Rapp), Marilyn Speedie, Walter Swentko, and Cathy Wisner.
V. MERC 2001 Distribution and 2002 Application Process: Diane Marty
Ms. Marty discussed the 2001 MERC distribution which was distributed on June 29, 2001. The total amount distributed was $27.1 million dollars. The money went to a total of 18 institutions which submitted applications on behalf of 149 programs and 450 distinct sites. A report was distributed based on the 2001 Trust Fund. It is also available on the web at .
Over the summer months, testing of the web-based MERC application was completed by sponsoring institutions and programs. The 2002 application was sent out and, as of today, all applications have been received. The web application was used by approximately 30% of the institutions this year; however, this number understates the percentage of MERC programs that submitted data via the web, as the University of MN was one of the larger institutions submitting by that method this year. The other institutions which submitted an entire application via the web application included Augsburg, St. Catherine, St. Scholastica and Regions, with other institutions submitting partial applications using that method. Currently, Ms. Marty is working with the MDH programmer to enhance and further simplify the process. It is also her intention to survey the users for input regarding the application in the coming year.
For the first time with the 2002 application, the institutions were asked to submit a letter from their accrediting body to verify their accreditation status. This year, cost and revenue data were also required; cost and revenue data will not be required again until the 2004 application.
Planned Parenthood did not submit an application for the 2002 distribution, but plans to submit again in 2003. Additionally, Metro State University is a new institution this application period, submitting an application for their Advanced Practice Nursing Program.
Currently, the 2002 distribution is estimated to total roughly $28 million:
MERC Trust Fund (estimate)
$5.0 M General Fund
$9.2 M Tobacco Endowment
$14.2 M Federal Match
-$150,000 Administrative Costs
$28.2 M Total 2002 MERC Trust Fund (estimate)
Ms. Rydrych indicated the first PMAP distribution was sent out in June of 2001. This consisted of $4.4 million in funds carved out between October 1, 2000 and December 31, 2000. A distribution summary was handed out which provides further detail on the distribution.
The contracts for the second distribution, which includes funds carved out from January to June of 2001, are ready to send out. However, the current "freeze" on grants is putting a hold on this process. It is expected that it could be several weeks before the freeze is over. When the freeze is lifted, Ms. Rydrych expects to distribute these funds along with the funds carved out from June to December 2001. These two distributions are expected to total roughly $9.8 and $10.2 million.
A member commented that she was having significant difficulties working with her training sites to verify the public program revenue estimates provided by MDH for use in the PMAP distribution. She said it was very time consuming, and asked for suggestions from the committee. Ms. Rydrych responded that she has heard similar comments from other sponsoring institutions and smaller training sites, and that the Department will work to make this process less time-consuming in the future. She also commented that sponsoring institutions may have to determine for themselves in the future if the time spent making small changes in revenue estimates that will not result in significant changes in the distribution is time well spent.
A committee member questioned whether the public program revenue estimates used in the PMAP distribution are based on the relative proportions of PMAP funding (which is driven in part by an adjustment based on geographical location) regardless of actual cost of services. Ms. Rydrych responded that the DHS estimates are based on actual payments made for services delivered to MA/GA enrollees in a given year and an estimated PMAP/PGAMC revenue figures based on applying the fee-for-service Medicaid payment schedule to submitted PMAP/PGAMC claims, so if there are adjustments based on geography that are built into the MA rates, those differences could be reflected in the distribution.
A member suggested that money be forwarded to the programs, as he felt the programs have the best data/information with which to determine the appropriate PMAP allocation to each site, and have the programs decide how funds should be distributed among the training sites. Another member indicated that this change would require a policy statement or clarification. Another suggestion was to spend more time verifying the DHS encounter data.VII. Discussion of Advisory Committee’s Future Composition and Activities: Louis Ling
Dr. Ling described a recent discussion with MDH Commissioner Jan Malcolm, where the message was that the focus of the Advisory Committee should be on medical education funding and that a renewal of the debate on mechanisms for funding medical research would not be a priority during the upcoming session, nor would extensive work on attempting to find additional funding sources for MERC.
Dr. Ling and committee members identified five areas for advisory committee discussion and input (not in order of priority):
1.) Workforce planning
2.) Mission - State role in medical education. One member suggested exploring the possibility of expanding eligible providers to include nurses. Another member suggested discussing whether MERC grants should go to teaching programs instead of sites.
3.) Technical issues - Form a technical group to discuss questions related to data collection and distribution of funds.
4.) Evaluation of how MERC funds are helping teaching programs and sites.
5.) Defense strategies on tobacco funds and potential loss of funding.
A member suggested that MERC have a representative on the Joint Task Force on Healthcare Cost and Quality. Mr. Leitz informed the committee that he was already working with the Task Force and would represent the committee.
One member suggested that the committee first discuss the mission of MERC and the State’s role in medical education. That discussion would determine the direction of the rest of the discussions (data collection, evaluation, innovation, etc.). Another member suggested that the discussions begin with an evaluation of MERC funding and defense strategies for current funds, with input from institutions and programs to describe what MERC has done for them.
The committee decided to begin by discussing a mission regarding the state role in medical education and developing materials that would help legislators and others understand the importance of MERC and what its impact has been on health professions education in Minnesota. Dr Ling suggested the subcommittee think about ways to evaluate the use of MERC funds and suggested the following questions:
1.) What is the quality of medical education in Minnesota and does that draw people to Minnesota to train?
2.) What is the benefit to indigent care?
3.) How do these education programs improve the community.
4.) Do demographic trends support the need for a stable health care workforce?
The advisory committee will meet on January 25 to discuss answers to these questions and to begin developing strategies related to mission/defense. Before the meeting on January 25, 2002, Dr. Ling gave the committee some discussion points to think about:
What if MERC money didn’t exist?
What has been accomplished with this MERC money so far (i.e. data/numbers, demonstration of how MERC makes a difference to specific training programs, would programs exist without MERC funding, profile a program which shows where money goes and what it does, stories to share)?
The advisory committee also decided to form a subcommittee made up of financial staff and policy staff from sponsoring institutions to discuss technical issues associated with MERC. This group would look at issues such as methodologies for collecting cost and revenue data across institutions, eligibility issues, and other more detailed questions that have arisen over the past years as the sponsoring institution staff have experienced turnover and needed guidance on the application process.
The technical subcommittee will meet sometime early in 2002. Jim Toscano, Kathy Meyerle, and Dan Foley, Dawn Ludwig and Sandra Edwardson expressed an interest in serving on the subcommittee, and Department staff suggested that persons working on the application at the sponsoring institution and program level also participate in this work group. Interested parties which have come forward since the meeting are David Hagen, Sue Richards, and Margo Marko.
VIII. Nomination of potential new Advisory Committee members
Dr. Ling asked the committee to think about potential new members to add to the committee. No current members had someone specific in mind at this time; however, they made the following suggestions for the types of members which may use helpful to have on the committee: surgical specialties, lay members, members which could represent Western or Southwestern MN, and representatives from health plans. Meeting Dates for 2002: January 25, 2002 April 26, 2002 June 21, 2002 September 27, 2002 December 6, 2002
All meetings are held from 1- 4 p.m. in the Veterans’ Service Building on the fifth floor.