Policymakers reach agreement on General Assistance Medical Care

After months of negotiations, the Governor and legislature have reached an agreement that would preserve access to General Assistance Medical Care (GAMC) – which provides health care for thousands of very low-income Minnesotans. Both the Senate and House health and human services committees held hearings on the bill on Thursday.

Here is the backbone of how the compromise works:

Initially, there will be a temporary bridge program that will basically extend the current GAMC program for two months (through April and May), at a cost of $28 million. Payments to health care providers would be at 37 percent of current reimbursement rates (except for prescription drugs, which are maintained at current levels).

Starting June 1st, the bill creates two “tiers” of hospitals. The first tier consists of hospitals that currently serve a substantial share of the GAMC population (about 17 hospitals). These hospitals could develop a “coordinated care delivery system” to serve the GAMC population in their area. These delivery systems are intended to coordinate all aspects of the health care needs of enrollees, helping patients receive preventative services and avoid costly emergency services. To create the delivery system, hospitals would negotiate contracts with local providers and clinics to ensure that GAMC recipients have access to all necessary care. The goal is to ensure that 80 percent of the GAMC population has access to one of these coordinated care delivery system. GAMC recipients would have to enroll in one of the available delivery systems (or be assigned to one) and receive all non-emergency care through that system. Hospitals would be paid through a lump sum reimbursement determined by the hospital’s recent share of GAMC business. Non-hospital health care providers would negotiate their reimbursement rates with the hospital implementing the coordinated care delivery system. In all, there is $71 million available in FY 2010-11 (and $131 million in FY 2012-13) to reimburse these coordinated care organizations.

The second tier consists of all other hospitals, currently serving about 20 percent of the GAMC population. For the first six months (June through November), these hospitals would be reimbursed for providing hospital care to GAMC enrollees out of a $20 million uncompensated care pool. It is hoped that during these six months, these smaller hospitals would work to develop coordinated care delivery systems within their area. After those initial six months, the uncompensated care pool would end, and reimbursement for GAMC services could only be obtained if a health care provider was part of a coordinated care delivery system.

The total cost of the program for FY 2010-11 is $164 million ($28 million for the two-month bridge program, $71 million for the coordinated care pool, $20 million for the uncompensated care pool and $45 million for prescription drugs). The bill is funded through a number of sources, including transfers from the Health Care Access Fund, drug rebate money, operating reductions to the Department of Human Services, reductions in adult mental health grants to counties, and reducing special payments to hospitals serving a large share of low-income patients.

The positives. It seems almost everybody agrees on a few things:

• The bill will maintain eligibility for the people it was intended to help – very low-income adults without dependent children.
• The bill preserves accessible and affordable prescription drug coverage. This is extremely important because many of these folks have mental health issues and chronic health conditions.
• The bill will protect the financial integrity of the Health Care Access Fund (HCAF) in the current biennium. 
• Passing something is better than passing nothing.

The challenges. Unfortunately, there are also some very significant concerns.

• Although eligibility for the program is maintained, it is not clear what kinds of health care services will be included. With the exception of prescription drug coverage, coordinated care organizations can adopt a pre-defined benefit set, or create their own (subject to approval by the Department of Human Services).
• This program is severely underfunded. The reimbursement rates for hospitals and other providers will only be a fraction of what they are receiving under the current GAMC program. Hospitals will be asked to assume a significant amount of the financial responsibility for delivering GAMC services. The state’s costs are capped, the hospitals’ costs are not.
• Due to the lack of funding and the administrative challenges, there is a lot of uncertainty over whether hospitals will choose to become coordinated care organizations. That means access to services for GAMC recipients could vary significantly throughout the state.
• The new program is funded, in part, by reductions to mental health grants. Advocates are concerned that this could undermine the progress that has been made in this area since the mental health reform initiative in 2007 .

Many people worked very hard for the last several months to find a way to ensure continued health care coverage for this extremely vulnerable population. This nine-month discussion has been an example of how policymakers and the public can work together to develop a solution that reforms the system instead of just reducing funding. Unfortunately, many feel that the final bill falls short of real reform. However, this is an important time to celebrate the grassroots efforts to get this bill passed – it was the input from thousands of ordinary Minnesotans that kept the pressure on policymakers to reach an agreement and maintain health care coverage.

-Christina Wessel