MINNEAPOLIS, March 18, 2010 - The Senate Thursday passed General Assistance Medical Care legislation that would continue a significantly scaled down program.

The MMA testified this week that the plan was not realistic or sustainable, since it expects hospitals to provide GAMC enrollees outpatient and inpatient services, but at the same time severly cuts their payments.

If the bill becomes law, after May 31, hospitals and counties would join together to form care coordination organizations (CCOs) that would receive lump-sum payments to provide care to all the GAMC enrollees in a given geographic area. All GAMC care would be delivered through CCOs by December 1, 2010.
 

The bill would allow 17 hospitals, which care for about 80 percent of the 32,000 people enrolled in GAMC to voluntarily become CCOs starting June 1.
 

These hospitals would then be required to provide all of the enrollee’s inpatient and outpatient care and would have the option of subcontracting some services with external physicians and clinics. The state’s other 131 hospitals could become CCOs after November 1.
 

It is unclear whether any of the hospitals will want to assume the financial risk of being a CCO, however, since the state plans to reduce its funding to the program by at least 60 percent.
 

Administrators from SMDC Health System in Duluth testified against the bill saying that the current plan would result in them losing millions of dollars, as its hospital, St. Mary’s Medical Center, would be the only designated hospital in northeastern Minnesota for GAMC enrollees. The amount of money SMDC would receive to care for GAMC enrollees would shrink from $20 million to $2 million under the new arrangement. The new capitated arrangement would also compel SMDC to negotiate agreements with other providers to deliver care the hospital does not provide— a job leaders of SMDC do not want, according to news reports.
 

Under the proposal, Hennepin County Medical Center in Minneapolis would also have to provide outpatient and inpatient care for GAMC enrollees. But instead of the $49 million the hospital received last year for doing so, it would receive only $22 million, according to news reports.
 

“This is not real reform,” says Dave Renner, the MMA’s director of state and federal legislation. “This is just cutting payments drastically, giving a lump sum to hospitals, and saying ‘the risk is yours.’”
 

Ramifications for Clinics
According to the bill, clinics or providers that don’t have a contractual relationship with a CCO would not be reimbursed for providing care to GAMC enrollees. In addition, the legislation includes a provision that would allow clinics to decline to treat GAMC enrollees and still be reimbursed for care they provide to state employees. (Agreeing to care for patients enrolled in state-sponsored health plans such as GAMC had been a condition of being able to get reimbursed for care provided to state employees.)
 

“If you have a GAMC population you want to serve, you would either have to provide them uncompensated care or contract with a CCO, ” Renner says..
 

Renner testified on behalf of the MMA before the Senate Health and Human Services Budget Division and the House Health Care and Human Services Finance Division. He told lawmakers that despite the MMA’s concerns, it was not opposing the bill because it was still preferable to Gov. Pawlenty’s earlier proposal to transfer GAMC enrollees into the MinnesotaCare program.

“The plan does keep a GAMC program on the books in case lawmakers want to fund it in the future, and it does not result in the destruction of MinnesotaCare; but we still have a lot of concerns about its lack of funding,” Renner says.