June 5, 2009
MERC Committee Meeting
Committee Members Present: Louis Ling, Kathleen Meyerle (via teleconference), Carl Patow, Deb Mayland-Poyzer for Mary Edwards, and Marilyn Speedie.
Interested Parties Present: Lisa Benson, Karl Broderius, Diane Buschena-Brenna, Rod Carter, Gina Danyluk, Rena Garni, Shawntera Hardy, Mike Harristhal, Mike Mahoney, Merri Moody, Rick Roberts, John Rodewald, Joe Schindler, Trisha Schirmers, Amy Tepp, and Deb Vogt.
Staff Present: Barb Juelich, Diane Reger and Diane Rydrych – Minnesota Department of Health
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. Legislative Update – Barb Juelich, MDH Financial Management
Ms. Juelich discussed the $38M unallotment buyback by the Governor, as well as the cap that will be placed on future PMAP funding (see MERC Revenue and Expenditure Summary). Ms. Juelich noted that the various changes enacted during this session will not impact the timing of the distribution. With the deficit the State faces, the Governor has the authority to unallot MERC funds, but Ms. Juelich noted that such an unallotment would also entail the loss of federal matching funds, which might make such a cut unlikely. A member asked if contacting the Governor’s office would be helpful to maintain current funding. Ms. Juelich said that she was aware that the governor was accepting emails with suggestions regarding the deficit. At this point in time, the estimated distribution is roughly $59M. Another member asked about FY12 and beyond; Ms. Juelich noted that at this point, the size of the distribution and the potential for another cap is unknown.
[Update: The Governor has not proposed any further unallotments to MERC. We expect the distribution to be approximately $59 million.]
III. 2009 Report to Legislature, Final Report – Diane Rydrych, MDH
Ms. Rydrych provided a copy of the January 2009 report to the Legislature regarding the new formula’s affect on MERC training sites. Although MDH will not be able to determine the full effect of the 2007 legislative changes until several years after their implementation, MDH has heard both positive and negative feedback from sites regarding the new distribution formula. The Academic Health Center said they received calls from training sites that were afraid to cash their checks because their grant was so much higher than past years and their FTEs did not increase. The training sites were
concerned that there was a mistake. Other training sites could not understand why they received such a small grant (some under $1) when they trained multiple FTEs. In all cases, the new formula was the reason behind the fluctuation. While some interested parties expressed that the funding was for Medicaid and therefore should be solely based on Medicaid volume, others expressed their concern as training programs that under the new formula they had no incentive to offer training sites especially those in rural areas. They also had a hard time explaining why a site that provided less than 1 week of training received more funding than a site that hosted multiple full-time FTEs. Ms. Rydrych reminded members of the original discussions surrounding the carveout of medical education dollars from PMAP and how there will always be debate around whether MERC funding should be based on Medicaid volume or on training volume/costs. Any change in the formula would require both a change in Statute and in the State Plan Amendment. The committee agreed that at this point, it would be wise to wait before exploring any changes to the distribution formula.
IV. PMAP/Encounter Data January Meeting Recap – Diane Rydrych, MDH
Ms. Rydrych discussed the outcome of a meeting held in January with providers, payers, DHS and MDH to discuss the PMAP revenue estimates that are used in the MERC distribution. The Department of Health has been working with the Department of Human Services on the PMAP data used in the MERC process. In some cases, DHS cannot determine the estimated FFS reimbursement on encounter claims due to the way the claim was submitted. These claims are put into a denied category on the reports sent to MDH for MERC purposes. After discussion with DHS, it was determined that MERC staff would begin including a percentage of this category in the figures used for the MERC distribution formula. MDH staff are currently exploring options for inclusion of denied claims, and comparing results using multiple approaches. At present, MDH allows providers to submit suggested revisions to their PMAP estimates, as long as the methodology used mirrors the MDH/DHS approach. This methodology has been largely unchanged since 2001. Going forward, MDH will be requiring a CFO signature for all requested revisions, to verify that the revised figures are based on audited data and reflect a methodology that parallels the MDH/DHS approach. For any requests for a revision of greater than the lesser of $500,000 or 10%, the facility
must provide documentation showing how the revised numbers were derived. All data will need to be entered onto a worksheet provided by MERC staff so a comparison by healthplan can be completed. Several interested parties requested an update on MDH/DHS long-term plans for PMAP
data. Ms. Rydrych noted that she will be talking with her counterparts at DHS about options for the long term, including the use of encounter data directly collected by MDH and DHS to calculate actual Medicaid payments to training sites, and will keep the group posted on any developments. Ms. Rydrych will also check with DHS about the validation process that some sites are participating in to see whether anything useful might come
out of that process that could inform our PMAP estimates.
V. Update on 2009 MERC/PMAP Distribution – Diane Reger, MDH
Ms. Reger is currently working on putting together the PMAP encounter data from DHS in order to share this information with large providers. She hopes to have information out to providers within a few weeks so they can review the information. The day before the meeting, Ms. Reger contacted DHS to see when the UPL would be calculated. The UPL must be calculated before the distribution of tobacco funds can be made so DHS can determine the potential federal match that may be available. Due to timing issues, DHS has informed MERC staff that the UPL calculation will likely be
complete at the end of 2009. However, we are obligated, according to CMS, to issue the PMAP funds by October 31, 2009. Since the UPL will not be calculated in time for that deadline, this will potentially force two separate distributions. The first distribution would contain the PMAP carveout, and the second would be the lesser of the two pools, containing the tobacco funds and federal match on tobacco funds. This would only affect hospital sites.
Ms. Reger has asked DHS if the entire grant can be calculated, and the full grant amount released to those sites that are not affected by the UPL. Those affected by the UPL (hospitals) could receive their PMAP funds and have their tobacco funds and match withheld until the UPL is completed. At that time, she could then forward the remaining funds to the hospitals. If completed in this fashion, it may help alleviate some of the burden the sponsoring institutions would incur by doing two distributions to all training sites, and only a handful would be affected. The other option is that MDH could extend
the timeline for distributing funds to training sites, so that sponsoring institutions could hold the first grant until the second grant is received, and forward a single combined grant to their training sites. MDH will keep members informed on the timing of the distribution as this issue develops. At this time, we are estimating the entire grant to be approximately $59 million. This amount is after direct payments are made to the University of Minnesota, Academic
Health Center; University of Minnesota School of Dentistry; and University of Minnesota Medical Center, Fairview per the MERC statute. A member asked whether MDH is able to allow sponsoring institutions the discretion of returning any funding less than a certain dollar limit so they would not have to send checks that were of insignificant value to training sites. Based on the current statute, all funds that are originally distributed must be forwarded to the clinical training site that performed the training as long as they are still considered an eligible training site. Any change to this would require a change in statute and the State Plan Amendment. The next application period is fast approaching. The 2010 MERC Application has a statutory deadline of October 31, 2009. Once the application becomes available online, Ms. Reger will send a message to sponsoring institutions. She requested that
sponsoring institutions please begin preparing soon by collecting identification numbers from all FY2008 clinical training sites. Since the entire grant is now calculated based on revenue associated with the identification number of a clinical training site, it is extremely important to verify this information with the training sites themselves.
VI. 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, December 4, 2009. For directions and further information, please visit: http://www.health.state.mn.us/divs/hpsc/hep/merc/committee/index.html.