December 12, 2003
MERC Advisory Committee Meeting Minutes
Gary Anderson, Jim Davis, Sandra Edwardson, Dan Foley, Tim Gaspar, Robert Howe, Jim Kohrt, Larry Kuusisto, Louis Ling, Dawn Ludwig, Kathy Meyerle, Carl Patow, Charles Sawyer, Marilyn Speedie, Jim Toscano.
Interested Parties Present:
Carol Backstrom, Ben Boornstein, Deborah Mayland-Poyzer, Gerhardt Meier, Anna Thompson, Edward Todd.
Department of Health Staff Present:
Scott Leitz, Diane Reger, Diane Rydrych.
I. Introductory Remarks – Louis Ling, MERC Advisory Committee Chair
Dr. Ling started the meeting by noting that there are two new members on the committee: Dr. Charles Sawyer, representing Northwestern Health Sciences University College of Chiropractic, and Dr. Barbara Brandt, representing the University of Minnesota. The committee members introduced themselves to the new parties attending.
II. Review and Discussion of 2003 Legislative Session Outcomes – Diane Rydrych, Health Economics Program
Ms. Rydrych summarized the 2003 legislative session, where there were several significant changes to the MERC distribution formula. Changes included the establishment of a 0.5 FTE cutoff below which sites are not eligible for funding through MERC/PMAP, the establishment of a ‘10% holdback’ fund within MERC that sponsoring institutions can use to fund any eligible site or site with fewer than 0.5 FTEs based on their own methodology, a revision to the process of calculating per-trainee costs for medical residents, and consolidation of the MERC and PMAP/PGAMC distributions into one annual distribution with a combined 67%/33% distribution formula.
Several members expressed concerns related to the elimination of funding for training sites with fewer than 0.5 FTEs. One member worried that the cutoff might lead smaller sites to discontinue clinical training in the absence of MERC/PMAP funding to offset their costs, and several members confirmed that this has already occurred for their programs. Ms. Ludwig, of the Augsburg physician assistant program, indicated having already noticed that smaller sites are declining students. Ms. Ludwig also noted that Augsburg has already lost clinical training sites in the Duluth Clinic system due to the cutoff. The nursing program at the University of Minnesota also noted a decline, as did Winona State, which indicated that 78% of their sites are no longer eligible for MERC/PMAP funding due to the cutoff.
Another member stated that the new policy serves to undermine other state policies that are designed to promote access to health care in rural areas. While several members stated that they will be able to use revenues from the ‘10% holdback fund’ to cover small sites, they remain concerned about their ability to encourage smaller sites to accept students going forward.
A member from the Academic Health Center suggested that the cutoff be applied at the site level rather than at the program level. Under such a revision, sites would be able to include FTE’s from multiple programs in their overall FTE count rather than counting FTE’s from each program separately and, in effect, being potentially forced to choose which FTE’s to continue to train.
Mr. Toscano made a motion to write an appeal to the Commissioner of Health that would ask the Department to eliminate the 0.5 FTE cutoff. The motion was unanimously approved. A member from the Academic Health Center made a second motion, that the committee ask the Department to revise the cutoff so that it could be applied at the site level rather than at the program level. This motion was also unanimously approved. Dr. Ling will work with members on a letter to the Commissioner of Health that summarizes the committee’s discussion and requests revision or elimination of the cutoff.
Dean Speedie questioned whether the 10% holdback fund could be used for current year training sites rather than just for those from the application year. Diane Rydrych and Diane Reger both replied that the sites should be based on the same fiscal year as the application; however, staff will look into this question and other technical questions related to the implementation of new statutory requirements during the spring of 2004.
The forecast for MERC cigarette tax revenues is $9 million for fiscal year 2004, before federal matching money is added. However, due to a lag between when the cigarette tax revenues are received by the Department of Finance and when they are transferred to MDH, only $5.6 million will have been received by the time the federal matching process begins, decreasing the amount that will be transferred to DHS for match. The remaining cigarette tax revenues will be rolled forward into the next fiscal year.
These cigarette tax revenues, together with federal matching funds, revenues from the PMAP carveout, and the annual $4.85 million loan from the Academic Health Center, will mean a MERC/PMAP pool of approximately $46 million for distribution in the summer of 2004. However, Ms. Rydrych also noted that this figure might be lower depending on the timing of the distribution and MDH’s receipt of PMAP payments.
IV. Preparation for Upcoming 2004 Legislative Session – Diane Rydrych
Ms. Rydrych informed the committee that at this point, the Department does not anticipate more cuts to MERC/PMAP funding in the 2004 Legislative session, but that she would inform the committee if anything appeared likely to be introduced that would effect MERC. The Department also does not currently have any plans to introduce legislation related to medical education or to MERC.
V. Update on 2004 MERC Distribution Process – Diane Reger, Health Economics Program
Ms. Reger updated members on the 2004 MERC application process. Nineteen sponsoring institutions submitted applications for 2004, with all but one using the web-based application. In the future, staff will be working with the institution that did not use the web application to look for ways to electronically integrate their current database into the web-based application.
Ms. Reger informed the committee that additional information has already been requested from the majority of institutions, and comparisons of 2002 and 2004 cost data are underway. Cost comparisons for provider types across sponsoring institutions will take place in early 2004. Staff are also attempting to have consistent billing addresses for the training sites, and will do extensive site data cleaning in early 2004 as well.
One member asked about the practice of having sponsoring institutions include costs for all training sites where clinical training occurred, rather than just for eligible sites. Ms. Reger and Ms. Rydrych responded that all costs associated with clinical training should be submitted and that this has always been the case since the inception of MERC. The decision to ask for all costs, rather than just costs for eligible sites, was made during the initial planning process for MERC in order to ensure that complete data on clinical training costs in the state would be available for research purposes. However, while comparing 2002 and 2004 cost data, staff have discovered inconsistencies within programs. In previous application years, some programs appear to have submitted only costs associated with eligible FTEs and not those listed under the ‘other non-eligible’ or ‘outside MN’ FTEs.
Several members asked whether MERC staff could change the cost data-reporting requirement so that only costs for eligible training sites would have to be included. Ms. Rydrych responded that such a change would be possible without a revision to the statute, although it would result in a change in the comprehensiveness of the resulting cost data and would create a break in the data series that would make comparing costs across years difficult. Staff will consider making the change for the next application year in which cost data are required.
Once all data have been cleaned and verified, the PMAP data provided by DHS will be verified with sponsoring institutions or, in the case of large clinic/hospital networks, with the providers themselves. Currently, MERC staff estimate that the distribution of the first combined MERC/PMAP fund will take place in late July or early August.
VI. Fiscal Year 2004 Dental Innovations Grants Update – Diane Rydrych
Ms. Rydrych handed out an overview of the organizations that were awarded Dental Innovations grants in the first two funding cycles (2002 and 2003). Ms. Rydrych noted that there have been relatively few organizations that have responded to the Dental Innovations grant RFP in each of the first two years, and that in each year, the Department was unable to award all available funds. Unawarded funds are rolled forward into the next fiscal year. Ms. Rydrych reminded the members of the continuing availability of the grant, and requested that they publicize the availability of these grant funds to potential applicants.
One member asked if the grant could be used for programs that provide interdisciplinary training for multiple provider types. Ms. Rydrych indicated that the statute as currently written is exclusive to dental training programs, but that programs that included both dental training and training for another provider type would most likely also be eligible for funding.
The next meeting will be held at the Snelling Office Park from 1 – 4 p.m. on Friday, June 25, 2004. Directions can be found on the MERC Advisory Committee Web site.