March 30, 2001
MERC Committee Meeting Minutes

Committee Members Present:
James Toscano - Alternate Chair, John Abenstein, James R. Davis, Sandra Edwardson, Elizabeth Murphy (for Daniel Foley), Timothy Gaspar, Larry Kuusisto, Dawn Ludwig, Carl Patow, Peter Polverini, Marilyn Speedie, and Catherine Wisner.

Interested Parties Present:
Ben Bornsztein, Mary Gannon, Anna Geary, Joe Heidkamp, Mark Huber, Daniel Malone, Gerhardt Meier.

Staff Present:
Scott Leitz, Tom Major, Diane Marty, Diane Rydrych, and Michelle Strangis.

I. Introductory Remarks from MERC Advisory Committee Chair Alternate, James Toscano:

Mr. Toscano opened the meeting at 1:15 p.m. and welcomed both committee members and visitors.

II. MERC 2001 Distribution Process Update: Diane Marty

Ms. Marty discussed the status of the 2001 MERC distribution. All applications have been entered into the database. Follow-up questions and amendments are being completed and are expected to be done by mid-April. Five of the 18 applications submitted this year are fully complete. When each application’s information is complete, copies of the database information will be sent to the institution for final data verification. The application process seems to be going much more smoothly and quickly this year than last year. Ms. Marty anticipates final sponsoring institution verification of data by the end of April. A preliminary spreadsheet showing the distribution should be completed in May so contracts can be mailed to sponsoring institutions for signature. The 2001 MERC distribution will occur as soon as the contracts are signed and returned and the federal match is received. Ms. Marty estimates that if all information is received in a timely matter, the grants will be distributed in June 2001.

As a recap from the last advisory committee meeting, the estimated 2001 Trust Fund is shown below:

MERC Trust Fund (estimate)

$5.0 M General Fund

$8.4 M Tobacco Endowment

$13.3 M Federal Match

-$150,000 Administrative Costs

$26.5 M Total MERC Trust Fund (estimate)

III. 2001 PMAP Distribution Update: Diane Rydrych

Ms. Rydrych gave an update on progress towards distribution of the funds carved out from Prepaid Medical Assistance Program (PMAP) and Prepaid General Assistance Medical Care (PGAMC) rates during October-December of last year. MERC staff have received public program revenue estimates from the Minnesota Department of Human Services, and have reports showing these revenue estimates for each clinical training site paired with the self-reported public program estimates MDH received in the 2000 MERC applications. In January 2001, sponsoring institutions received a copy of this report and instructions for requesting modifications to a site’s revenue estimate. MERC staff are still waiting to hear from some of the sponsoring institutions who are reviewing the revenue estimates. Staff are also working with some of the sponsoring institutions to verify data where a significant discrepancy exists between data sponsoring institutions submitted on the 2000 MERC application and the information received from the Department of Human Services. Ms. Rydrych estimated that the first distribution of PMAP funds will likely occur in May, but that the distribution date may again be pushed back if these discrepancies cannot be resolved.

IV. DHS Encounter Data: Diane Rydrych & Scott Leitz

Ms. Rydrych explained that certain ongoing questions regarding the encounter data that is used as a basis for the PMAP distribution will need to be addressed before the distribution can go out. One question relates to the use of encounter data as a measure of relative public program volume. The current statutory formula, which is being used for this distribution, equally weighs relative clinical education volume and relative public program revenue, and uses revenue data from both prepaid public programs (PMAP/PGAMC) and fee for service public programs (MA/GAMC). Ms. Rydrych reminded the committee that the Ad Hoc Committee on Medicaid Financing of Medical Education had recommended using only prepaid public program revenue in the distribution because, as providers continue to receive a medical education payment in the fee for service reimbursement rates, the inclusion of fee-for-service volume in the estimates would mean that sites were being, in effect, "paid twice" for fee-for-service clients. At this time, however, the Department feels that it is still necessary to use both fee-for-service and prepaid Medicaid revenue estimates to develop the PMAP distribution. A committee member noted that the PMAP/PGAMC encounter data the Department is using is two years old, so counties new to PMAP/PGAMC will need to report FFS data until such a time that the encounter data system is complete and will reflect their participation in PMAP/PGAMC.

Mr. Leitz informed committee members that the Department has proposed new statutory language that would address this issue in future years. In addition to modifying the PMAP distribution formula to increase the weight given to relative public program volume to 75%, the legislation would give the Commissioner of Health authority to evaluate the encounter data system and make a determination as to whether the data are sufficiently reliable and complete to allow the use of encounter data as the sole measure of relative Medicaid volume for the purpose of the PMAP distribution.

A committee member requested that MERC staff prepare a report showing what the impact would be if only the revenues from the prepaid public programs (PMAP/PGAMC) were used instead of current method of using revenues from both PMAP/PGAMC and fee-for-service MA/GAMC. A committee member requested that the legislature receive a copy of this information, aggregated to the sponsoring institution level.

The committee also discussed the issue of some health plans not submitting complete PMAP/PGAMC encounter data to the State Department of Human Services, which can lead to underestimates of public program revenue volume at sites that contract heavily with these plans. Mr. Toscano asked what the committee can do to help. Mr. Leitz stated that encounter claims are also used for risk adjustment rate setting and that this serves as an incentive for health plans and sites to assure that the health plans provide complete encounter data. A member asked if the health plans are required to report this data under statute or under the terms of their contract with the state. The department believes that they are required under statute.

Scott Leitz suggested that sponsoring institutions and sites carefully review the encounter data that Ms. Rydrych sent and determine whether this data is an accurate representation of Medicaid volume at each site. In addition committee members, sponsoring institutions and sites should communicate to health plans the need to submit complete encounter data to the State. It is the Department’s hope that pressure from sponsoring institutions or sites that might see their PMAP grants decrease due to missing or incomplete encounter claims will lead to increased compliance by health plans.

V. Legislative Update: Scott Leitz

PMAP Medical Education Funding

As discussed in the last Advisory Committee meeting, the Department of Health submitted a report to the Minnesota legislature in January 2001 with recommendations for a modified PMAP/PGAMC distribution formula. The recommendations in the report include the following:

1. The current formula for distribution of carved-out PMAP funds should be modified to give greater weight to public program volume while retaining medical education volume as a factor. Specifically, the Commissioner recommends revising the percentages in the current formula, so that 25% of the funds are distributed based on relative medical education volume and 75% are distributed based on relative public program revenue.

2. To the extent that the data permit, only prepaid public program (PMAP/PGAMC) revenues should be included in the measure of public program volume, rather than including both fee-for-service and prepaid revenues.

Representative Goodno and Senator Kiskaden have introduced bills that would revise the current statute to reflect the Department’s recommendations.

Uncommitted Tobacco Settlement Dollars

As discussed in the March advisory committee meeting, the Governor proposed that the uncommitted tobacco settlement dollars be added to the existing tobacco endowment, with the earnings used to fund a "Healthy Kids" initiative and graduate medical education. The proposal directs $165 million of these uncommitted tobacco settlement dollars to the Medical Education Endowment Fund, with the earnings from these additional funds being directed to the Academic Health Center. The interest earned on these dollars would be approximately $8 million per year beginning in FY 2003. This proposal has been introduced in the House and Senate. It was deleted in the House. Senator Moe is sponsoring the bill in the Senate and it has passed out of committee (Senate File 1431).

Intergovernmental Transfers

Mr. Leitz noted that the House (Rep. Goodno) and Senate (Senator Kiskaden) are considering a bill that would authorize intergovernmental transfer of dollars from certain hospitals in order to increase the state’s ability to collect Medicaid federal matching dollars. If the hospitals using this provision are those that are currently participating in the MERC federal draw down, and if the amount of the intergovernmental transfers is sufficient to significantly decrease or eliminate any available space under those hospitals’ Medicaid upper payment limits, it might affect MERC’s ability to get federal matching dollars for MERC at the level it has in the past without seeking out new hospitals to participate in the matching process.

The committee members briefly discussed whether the current intergovernmental transfer proposal would use the same hospitals as MERC. An interested party in attendance stated that there may be as many as 50 hospitals who could participate in IGT’s. One member stated that intergovernmental transfers can not go to state-owned hospitals, but can go to county facilities, and that federal facilities cannot participate.

The Chair asked that staff express to the legislative committees the MERC Advisory Committee’s desire that this proposal not jeopardize MERC dollars, and that staff provide an update at the next meeting.

VI. MERC Trainee Exit Survey Update: Diane Rydrych

Ms. Rydrych is about to begin the process of mailing out exit surveys to all participating programs. Both the Chiropractic program at Northwestern Health Sciences University and the Advanced Practice Nursing program at Minnesota State University - Mankato have received their surveys for distribution to graduates, and the remaining programs will receive their surveys in late April or early May. There are a total of approximately 1,300 surveys which will be sent out for completion. The surveys will be passed out to graduating students in each program by program directors or coordinators at each institution rather than being mailed en masse by MDH, with the hope that this method of distribution will promote a higher response rate. Ms. Rydrych noted that the return rate on a similar survey based in New York state in 1999 was 75%.

VII. Discussion of Future Advisory Committee Activities: James Toscano

Mr. Toscano opened the discussion with the question: What should we do to promote medical education and research in Minnesota? What issues should this advisory committee work on? He asked that each committee member take a few minutes to think about the questions and then give a response. A summary of Advisory Committee members’ responses is below:

- Study healthcare workforce shortages in Minnesota, particularly physicians, nurses and allied health practitioners.

- Study how we will address emerging health care professions and their eligibility for MERC. Are there too many obstacles for new professions to qualify for MERC?

- Look at what has been happening to medical research since the implementation of healthcare reform.

- Develop ways to attract people to investigative/research careers. For example, we need seed money for setting up research and funding for mentoring programs (mentoring is low because physician time is limited). Maybe we need to look at funding individuals. Look at a similar program set up at the University of Wisconsin.

- Look at programs for high schools to encourage students to go into the medical profession.

- Look at professions that receive nominal MERC grants because they have lower training costs. Committee members that represent nursing programs expressed concern that MERC is having little impact on nursing training sites’ willingness to provide clinical education because grants are so small, and noted that it is particularly important to look at this in light of shortage concerns related to the nursing workforce.

- Look at new models of care delivery (e.g. nursing) and use incentives to encourage the development of new models and tie into research.

- Consider looking at the monetary "benefit" trainees provide to the sites and not just the training costs involved.

- Study the workforce projections for academicians/teachers. Many states are experiencing a shortage in these areas and concern was expressed that we may not have the faculty required to staff our schools. For example, the U of MN is looking at ways to place dentists in the community for part of their education.

- Develop a vision of medical education for the state.

- Consider ways to reduce health care costs.

- Look at ways of increasing the number of specialists in Northeastern Minnesota.

- Evaluate whether there are measurable benefits to MERC funding, e.g. assessment of not how many we need in a certain area of medical workforce, but how many trainees we’ve retained in Minnesota and haven’t lost to out of state or out of the US after training is complete.

- Study the impact of MERC on training sites’ willingness to provide clinical medical education.

- Provide education on MERC at the site level. Some sites don’t know money will be distributed to them or don’t actually see it.

- Expand access to care in rural Minnesota.

VIII. Other Items

Byron Crouse is leaving the University of Minnesota, Duluth School of Medicine and the MERC Advisory Committee to take a position with the University of Wisconsin Medical School. The Advisory Committee and MERC staff members wish to thank Byron for his expertise on the MERC Advisory Committee, as well as on the Workforce Committee.

The Advisory Committee recommended that staff look for a replacement that will serve as a representative for rural health on the committee.

Adjourned at 2:30 p.m.

The next MERC Advisory Committee Meeting will be held on Friday, June 22, from 1 - 4 p.m. in the Veteran’s Service Building.

Tuesday, November 16, 2010 at 12:25PM