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Health bill heads to questionable future

St. Joseph's Area Health Services in Park Rapids would see significant funding cuts if Governor Pawlenty's proposed bill were to pass. (Anna Erickson / Enterprise)

Minnesota lawmakers passed a massive health-care spending bill that favors nursing homes and programs for the poor, but may be short-lived.

The Democratic-Farmer-Labor Party-led Legislature on Monday advanced the health and human services budget bill that Republican Gov. Tim Pawlenty's administration says spends more than the state can afford.

It faces a likely veto with less than a week remaining before the Legislature's constitutional deadline.

The House approved the bill 80-51, the Senate 47-18.

For St. Joseph's Area Health Services in Park Rapids, the bill would mean approximately $209,000 less in funding over the next biennium.

Under Governor Pawlenty's proposed bill, the cuts to St. Joseph's would be about $5.3 million over the next biennium, according to Charlene Briner, DFL media/communications specialist. That doesn't include federal matching dollars, which are about $1.50 per dollar, she said.

St. Joseph's employs 292 people, Briner said. The Governor's cuts would severely impact jobs.

The House and Senate bill protects government-subsidized health insurance programs for low-income Minnesotans and cuts state payments to some health-care providers. It would spend $10.7 billion in state tax funds during the next two-year budget period, an increase of about $850 million over current spending.

State health-care spending was predicted to increase to $11.3 billion in the budget period beginning July 1, if left unchanged, so Democrats say their bill cuts spending increases by around $500 million.

"Every one of those cuts is painful," said Rep. Tom Huntley, House health-care finance chairman. "Every one of those $500 million in cuts will hurt somebody, but what we did was try to minimize the damage we could."

Huntley, DFL-Duluth, acknowledged that the spending package relies on revenue from a tax-raising plan that Pawlenty vetoed Saturday. The nearly $1 billion tax-increase plan would have spent about $400 million on nursing homes and hospitals.

Human Services Commissioner Cal Ludeman said the health-care funding bill spends more than the Pawlenty administration proposes and relies on federal dollars that will not be available in future years.

"It's just not sized right to get us to a balanced budget," Ludeman said.

Pawlenty wants to see less spending and more health-care reform, spokesman Brian McClung said.

"This is not a bill the governor supports," he said.

The DFL budget proposal does not make direct cuts to nursing home reimbursement rates - as an earlier Senate plan proposed - but does delay a rate increase many nursing homes had anticipated.

The bill proposes cutting reimbursement rates by nearly 2.6 percent paid to other long-term care providers.

There are 33,000 nursing home beds in Minnesota and about the same number of people treated in other long-term care settings.

Health and human services spending is the second-largest state budget area, behind public school education, but is the fastest-growing part of the budget.

"We are slowing the growth slightly," said House Minority Leader Marty Seifert, R-Marshall. "We need to slow the growth more."

Other Republican lawmakers said the bill short-changes nursing homes in rural Minnesota.

"When are we ever going to positively address the disparity between our rural and metropolitan nursing home funding?" Rep. Dean Urdahl, R-Grove City, asked.

Huntley said the proposal was drafted with two priorities - to protect nursing homes as much as possible and to minimize payment cuts to hospitals.

Democrats said hospitals and nursing homes would be in worse shape under Pawlenty's spending plan.

Assistant Senate Majority Leader Tarryl Clark, DFL-St. Paul, criticized Pawlenty's health and human services proposal.

"He is cutting health care deeply," said Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud. "We believe that is fiscally imprudent."

The bill also:

n Scales back dental services offered to adults on government health programs. Pawlenty proposed eliminating the services.

n Cuts state reimbursements to pharmacists who serve government health-care programs for the poor.

n Reduces state reimbursements to hospitals for inpatient services by 1 percent and to medical specialists by 5 percent.

n Expands MinnesotaCare eligibility or lowers premium costs for about 2,100 farmers.

Scott Wente works for Forum Communications Co., which owns the Park Rapids Enterprise. He can be reached at