June 23, 2000
MERC Advisory Committee

Committee Members Present:
Louis J. Ling, Chair, John Abenstein, Michael Belzer (for Morris Davidman), Byron Crouse, James R. Davis, Sandra Edwardson, Tom Ehrlichman (for James Koppel), Daniel D. Foley, Robert Howe, Larry Kuusisto, Kirsten J. Libby, Dawn Ludwig, Donald Marsh, Kathleen Meyerle, Carl Patow, Peter Rapp, Michael Till, Jim Toscano, Donald Uden (for Marilyn Speedie), Cathy Wisner, William Wustenberg.

Interested Parties Present:
Numerous other visitors were present.

MDH Staff Present:
Scott Leitz, Tom Major, Diane Marty, Salman Mian, Diane Rydrych, Michelle Strangis.

I. Introductory remarks from MERC Advisory Committee Chair, Dr. Louis Ling

Dr. Ling opened the meeting at 1:10 p.m. and welcomed committee members and visitors.

II. Update on Staffing

Scott Leitz reintroduced Diane Rydrych who is the lead staff person for the MERC project. Diane previously worked for the Department of Economic Security. Mr. Leitz also introduced, Diane Marty, as MERC analyst, and Salman Mian as an intern who will work on MERC data base and web-page issues during the summer.

III. Recap of activity of the 2000 Legislature regarding MERC

Mr. Leitz reviewed the three main components of MERC legislation reviewed by the legislature during the 2000 legislative session; including discussion of the "carve-out" and distribution formula for PMAP/PGAMC/MA/GA medical education dollars, potential for the diversion of MERC trust fund dollars toward research on Juvenile Diabetes, and the allocation from the MERC trust fund to fund expenses incurred for the administration of the MERC trust fund.

Regarding the distribution of PMAP/PGAMC/MA/GA medical education dollars, Mr. Leitz reported that the legislature declined to modify the current distribution formula; The current statutory formula distributes half of these dollars based on medical education volume (average clinical training cost by provider type multiplied by the number of clinical FTEs at a training site) and half of these dollars based on public program volume (each site's total public program revenue divided by the grand total of all sites' public program revenue). However, through the omnibus Health and Human Services bill, the legislature mandated that the commissioner of health convene a group of stakeholders to evaluate the appropriateness of the current PMAP distribution formula and to consider alternative distribution formulas. This group is to report their recommendations to the legislature by January 15, 2001. Additionally, the omnibus legislation reduces the PMAP/PGAMC/MA/GA "carve-out" rates on a one time basis for calendar year 2001. The "carve-out" rates for Hennepin County, other metro counties and non-metro counties, is based upon the amount of medical education dollars included in the public program reimbursement rates for each of those entities. Prior legislation stipulated "carve-out" rates constituting 6.3% of the capitated PMAP rate for Hennepin County, 2.0% for other metro counties, and 1.6% for non-metro counties. For 2000 - 2001, the "carve-out" rate for non-metro counties is reduced to 0.0%, and will return to the initial rate of 1.6% beginning January 1, 2002.

Mr. Leitz also reported that the legislative proposal to redirect $10 million over two years (FY 2001 and FY 2002) from the medical education endowment toward Juvenile Diabetes research at the University of Minnesota failed to pass out of committee.

Dr. Ling suggested that perhaps the legislature's interest in funding Medical Research during the 2000 legislative session could be taken as a foundation upon which to build support for a separate allocation of state-based funding for Medical Research. Another member indicated that it is important to definitively state what the scope of State support of medical research should be.

IV. Commissioner's Remarks

Commissioner Jan Malcolm joined the discussion by stating that the Department and the medical education and research community successfully communicated to the legislature last session the message that medical research and medical education should not be competing for resources. Commissioner Malcolm stated that the proper role of the State is to make sure that Minnesota has strong research institutions, and it is especially important not to spread the current pot of money more sparsely than it already is, making it less effective in addressing the needs for which the funding is intended.

Commissioner Malcolm proceeded to present her general remarks to the committee. She discussed (1) the relationship between the MERC Advisory Committee and the Minnesota Department of Health and (2) the role of the MERC Advisory Committee in light of current issues. She noted in particular that issues have become increasingly complex over time and consequently we (the medical education community and MDH) have lost a lot of clarity with the legislature about the issues and needs surrounding medical education.

The Commissioner stated her respect for the expertise and process of the MERC Advisory Committee. She noted that MDH has a responsibility to keep the larger policy context in mind when determining which recommendations should be accepted and forwarded to the Governor and the Legislature as a recommendation of the Department, and it has the responsibility to ensure that its policy recommendations are relevant to the policy objectives the recommendations are intended to address. In the specific case of the decision not to accept the Advisory committee recommendation on revising the PMAP distribution formula, the Department felt that there was not a clear and compelling policy rationale that could be tracked back to the original purpose of the MERC legislation. In emphasizing the importance of clarity and connection to policy objectives, the Commissioner noted that many legislators will erroneously equate the funding of the shortfall at the University of Minnesota Academic Health Center with funding for the MERC trust fund, or will look at the PMAP formula as a source of funding to reinforce the rural health care infrastructure. She emphasized that it is important that the Department not exacerbate this problem. A committee member stated that the committee process is good because diverse groups come together and make a recommendation to the Commissioner that reflects the compromises of individual institutions. Without this process, institutions would pursue their own agendas independently and at odds. The committee needs to know their voice is heard and their time is well spent.

In regard to the specific issue of the PMAP carve-out distribution formula, a couple of suggestions came out of the discussion. A member remarked that the PMAP carve-out distribution formula issue should be taken away form the advisory committee, because despite repeated attempts, there has been no resolution of that issue. A committee member noted that sometimes rulemaking is used to make difficult distribution decisions and to keep the decisions out of the political process. Another option is to amend the statute to create a technical advisory committee to make recommendations on distribution decisions.

The commissioner stated that the legislature has lost track of the debate on medical education issues. She also suggested that we have lost track of what we are trying to achieve with the trust fund, in our own minds, as well as, in the minds of the legislature. The Commissioner stated that we need a better understanding of the size of the medical education problem and the appropriate fix.

A committee member noted that the question, "what is the scope of the problem?" was the very first question the MERC Task Force addressed. Now that money is being distributed, it is extremely difficult to get beyond our own bottom line.

The Commissioner would like the committee to broaden its inquiry, and raised the topic of medical workforce as an example of an issue that should be linked with broader policy discussions. The Commissioner indicated that the MERC workforce conversation needs to hook-up with other conversations occurring throughout the state regarding workforce concerns to broaden the overall policy perspective, because the compositions of the health care workforce today is much different from in the past. The Commissioner would also like to have a broader policy discussion about what is the role of the state in supporting medical education and research. The Commissioner suggested that the Committee continue their discussion of the role of the advisory committee and inform her of the best use of their time and expertise.

V. Workforce Subcommittee Report  

Dr. Byron Crouse, chair of the Workforce Subcommittee, reviewed the discussions of the Subcommittee to date. In particular, Dr. Crouse noted that the Subcommittee itself was struggling with the broader implications of the shortage of medical care providers and the connection of this problem to medical education, and the state's policy of supporting medical education training through the Medical Education Trust Fund. Dr. Crouse appealed to the Advisory Committee, but particularly Commissioner Malcolm on how to address this problem. Commissioner Malcolm noted that perhaps the charge of the Subcommittee should be broader rather than narrower. Commissioner Malcolm articulated that the issue of shortages and distribution of the health care work force, affects a larger segment of the health care work force (e.g., home health aides) which is beyond the traditional scope of the MERC Advisory Committee and the types of professionals of concern to the Advisory Committee.

Dr. Ling noted that the Work Force "issue" is generally thought of as a distribution issue (i.e., where are medical professionals located) rather than a composition issue (i.e., what types of professionals, and what proportions of professionals, make up the health care work force for a given community, or the state.). Dr. Crouse noted that the Advisory Committee discussion would be particularly of assistance in identifying how the Work Force subcommittee focus and recommendations are linked to the broader policy discussion, and that the Subcommittee wanted to ensure that their deliberations were thorough and thoughtful and did not reach premature conclusions regarding the appropriate policy approach. Many committee members cited ways in which the workforce issue impacts upon or is impacted by medical education issues, the costs of medical education and the trust fund distribution. In particular members are interested in examining ways that the medical education trust fund can most effectively be used to leverage an appropriate distribution of medical professionals within the state, and retention of medical professionals within the state. Some also noted the difficulty of creating some type of medical professional "trade barrier" with other states. Another member thought that it would be helpful for the Advisory Committee to have briefings regarding national or Federal policy developments on health care professional work force distribution, particularly from representatives of institutions that have a lot of involvement at the Federal level (i.e., the University of Minnesota and the Mayo Clinic). Another member noted that it was not only important to have well-trained medical professionals distributed appropriately throughout the state, but also that cultural diversity and cultural competency are important factors in providing adequate health care to Minnesota residents.

VI. Physician's Assistant Program Accreditation

Ms. Michelle Strangis of the Minnesota Department of Health presented the following information to the committee regarding the Augsburg Physician Assistant Program's accrediting body, the Commission on Accreditation of Allied Health Education Programs (CAAHEP), and the oversight agency, the Council for Higher Education Accreditation (CHEA).

In order for eligible providers to qualify for the MERC Trust Fund, Minnesota Statute section 62J.692, subdivision 1(a) requires that the clinical training provided by medical education programs are accredited through an organization recognized by the Department of Education, the Health Care Financing Administration or "another national body who reviews the accrediting organizations for multiple disciplines and whose standards for recognizing accrediting organizations are reviewed and approved by the commissioner of health in consultation with the medical education and research advisory committee."

The accrediting organization for Physician Assistant Programs, the Commission on Accreditation of Allied Health Education Programs (CAAHEP), recently withdrew from recognition by the Department of Education and is not recognized by the Health Care Financing Administration. In response to this situation, the Minnesota Department of Health supported new statutory language (underlined above), providing the Commissioner of Health authority to review the standards of other organizations that recognize accrediting bodies.

CAAHEP is recognized by the Council for Higher Education Accreditation (CHEA). Ms. Dawn Ludwig, Director of the Augsburg College Physician Assistant Program, wrote to the Department of Health and requested that the Commissioner of Health, in consultation with the MERC Advisory Committee, review and approve CHEA as a body eligible to recognize accrediting agencies for purposes of the MERC Trust Fund.

Advisory committee members were informed of this request in a memo from Scott Leitz, dated June 12, 2000, and were asked to review CHEA's website for information on CHEA's policies and procedures for recognition of accrediting organizations, a directory of accrediting associations, and board members.

Ms. Strangis explained that the purpose of oversight by the U.S. Department of Education and CHEA differs slightly. Institutions accredited by organizations recognized by the U.S. Department of Education are eligible for certain federal funds, such as student financial aid. Many specialized and professional training programs do not need to qualify for financial aid separate from their college or university institution, and therefore the accrediting bodies for some specialized and professional training programs do not seek recognition from the U.S. Department of Education.

In discussions with CHEA staff, Ms. Strangis was informed that the purpose of CHEA recognition is to assure quality and public accountability in institutions and programs through voluntary, non-governmental self regulation. In addition, CHEA acts as the national policy center and clearinghouse on accreditation for the higher education community. CHEA conducts the recognition process with standards developed by a national task force and accepted by the CHEA members at the time CHEA was established in 1996.

CHEA is temporarily recognizing accrediting agencies that were recognized by CHEA's predecessor organization, the Council on Post-secondary Accreditation (COPA). CAAHEP has temporary recognition under this provision. In addition, CAAHEP has completed the application for CHEA recognition, is in the process of conducting their self study, and CHEA is scheduled for onsite visits this summer and fall.

Ms. Strangis asked advisory council members for questions and comments. Ms. Kathy Meyerle asked staff if CHEA's standards for recognition are comparable to the U.S. Department of Education's standards. Staff agreed to compare CHEA' standards to the U.S. Department of Education's standards. After a brief discussion, Dr. John Abenstein moved that the advisory committee recommend to the Commissioner of Health that she approve CHEA as a body qualified to recognize accrediting organizations for purposes of the MERC Trust Fund, if staff determine that CHEA's standards for recognition are comparable to the U.S. Department of Education's standards. The motion was seconded by Dr. Michael Belzer and passed.

VII. Use of DHS Encounter Data for Determination of Public Program Volume at Medical Education Training Sites

Scott Leitz discussed his recommendation that the Department establish a small technical working group to examine the potential use of encounter data provided by the Minnesota Department of Human Services to determine the relative amounts of public program volume handled by each medical education training site. Because the distribution of PMAP/PGAMC/MA/GA "carve-out" dollars is determined, in part, by the total volume of public program revenue at each training site, the accuracy of public program revenue continues to be an issue of concern. Currently, public program volume is reported via the MERC Trust Fund application. However, MDH staff experience with this mechanism indicates that getting accurate and complete information on public program volume through the MERC application would be practically impossible and overly burdensome on applicant institutions and department staff, and unlikely to result in an accurate representation of the distribution of public program volume at training sites. Mr. Leitz recommended the establishment of a small technical working group to examine how to optimally use the encounter level data that would be obtained from DHS. This issue will become critical as the initial distribution of PMAP/PGAMC/MA/GA "carve-out" funds will be made in December 2000.

Subsequent to Mr. Leitz recommendation, the committee discussed generally the comparability of DHS encounter data versus data acquired through the MERC application process. MDH staff noted that the data collected through the MERC application are compiled from sources that vary amongst applicant institutions, programs and training sites, and that assumptions regarding the definitions of public program revenue also vary by institution. In contrast the DHS encounter data is based solely on public program revenues paid to each clinical site on a fee for service basis. While the fee for service revenue is a proxy for all public program revenue received at the clinical site, it can be assumed that the relatives (i.e., relative to the total of all public program volume) of total public program volume for each clinical site is accurately reflected in its fee for service public program revenue.

One member suggested that once a set of encounter data has been acquired from the DHS data base it could be compared with available information from training sites to identify discrepancies. The Advisory Committee was supportive of the recommendation to use DHS encounter data to determine the public program volume portion of the PMAP/PGAMC/MA/GA "carve-out" distribution and the recommendation establish a working group. Some members suggested that Finance staff from representative applicant institutions be included in the working group.

VIII. Update on HCFA 1115 Waiver Process for PMAP/PGAMC/MA/GA "carve-out" for Medical Education

Scott Leitz provided an update on the 1115 Waiver process in lieu of Kathleen Vanderwall (who was unable to attend the Advisory Committee meeting) of the Minnesota Department of Human Services which coordinates the waiver application to the Health Care Financing Administration of the U.S. Department of Health and Human Services. Mr. Leitz reported that DHS had received a "draft" waiver, and expected to receive the actual waiver in July 2000. The waiver will allow the State of Minnesota to "carve-out" the portion of the capitation payment to managed care plans in the state under the Prepaid Medical Assistance Program that should be directed toward medical education and claim Federal Financial Participation (FFP) for payments made to teaching entities. All FFP and "carve-out" funds will be paid directly to clinical medical training sites through the Medical Education trust fund. Mr. Leitz indicated that it was the intention of the department to distribute the PMAP "carve-out" funds biannually, in June and December of a given calendar year, beginning December 2000. The total amount of funds distributed will be determined by the funds collected through the "carve-out" process in the 6 month period proceeding the distribution. Half of the PMAP/PGAMC/MA/GA "carve-out" distribution formula is based upon the average cost of clinical training for a given provider type, and the total number of trainee FTE's of that provider type at a given training site; the other half of the distribution formula is based upon the public program volume at a given training site, as measured by the proportion of public program Fee for Service (FFS) revenue at a given training site, relative to the state total of public program FFS revenue reported through encounter level data from clinical sites in the state provided to DHS. The source year of encounter level data corresponds to the application data provided through the MERC Trust Fund application submitted in a given year.

IX. New Business

There was no new business.

The next meeting of the MERC Advisory Committee will be held at the Mayo Clinic Rochester on the Mayo Clinic Campus in Rochester, MN on September 29, 2000 from 12:30 - 3:30 p.m. Kathy Meyerle indicated that the Mayo Clinic representatives would like to offer an opportunity for Advisory Committee members to tour the facility, and that the Mayo Clinic Foundation would provide lunch for Committee members and staff.

The meeting was adjourned.

Tuesday, November 16, 2010 at 12:25PM