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Revised GAMC bill cuts funding for hospitals

The significantly scaled back General Assistance Medical Care bill that earned legislative approval last week is raising questions and concerns at St. Joseph's Area Health Services.

"Overall, it's a bad bill," St. Joseph's CEO Ben Koppelman said. "It represents significant cuts for hospitals and other providers. And as it stands now, there are a lot of unanswered questions as to how hospitals will administer this."

Gov. Tim Pawlenty signed the bill that will preserve coverage for about 30,000 low-income Minnesotans and stop the program's elimination, which was scheduled for April 1.

Hospitals and providers did not oppose the final plan, but told lawmakers it was neither realistic nor sustainable.

    In total, hospitals will receive approximately $91 million in payments for the total cost of all care for this population, compared to the $219 million they would have received under the former GAMC program for just the hospital-provided care, Koppelman said.

"I was all set to vote against it," Rep. Brita Sailer, DFL-Park Rapids, said of the bill shifting costs to medical providers.

The original bill, vetoed by Pawlenty at the end of February, would have provided St. Joseph's with $465,053 in GAMC funding, she said, as opposed to the $221,375 to be allocated now.

The initial bill covered more people for less money because it was coordinated with other programs, she explained. All but nine House members voted in favor of it.

"One of the greatest concerns is this population has a lot of health issues," Koppelman said of those eligible for GAMC. "They are expensive to care for because of a higher prevalence of substance abuse and mental health issues.

"But the governor made it clear he would not accept any other proposal," he said. The program would face elimination.

Under the new law, after May 31 hospitals and counties would join to form care coordination delivery systems (CCDS) that would receive lump sum payments to provide care to all GAMC enrollees in a given geographic area.

Payments for GAMC business in April and May will be at 37 percent of the current GAMC fee for service rates.

All GAMC care will be delivered through CCDSs by Dec. 1.

"Essentially, the bill requires patients to be referred to a CCDS," Koppelman said.

But the CCDSs will be assuming financial risk, he said. A hospital choosing to become a CCDS will be responsible for the total cost of care for GAMC recipients and will be required to contract with "essential community providers" to offer a full set of benefits and services defined in the legislation.

"The governor is putting all the risk on hospitals and providers to manage care and cost," he said.

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

Bemidji's North Country Regional Hospital is among the facilities that could choose to become a CCDS.

The bill sets the eligibility criteria as hospitals receiving more than 1.3 percent of their total net patient revenue from GAMC fee for service payments in 2007.

Koppelman said 1.1 percent of St. Joseph's annual net revenue is from GAMC, which is one of the highest percentages among rural facilities in the state.

The Hennepin County Medical Center, he said, is a "poster child" regarding the impact of the legislation because of the hospital's large number of GAMC cases.

A physician will now have to contract with a CCDS to be reimbursed, Koppelman said, as opposed to receiving payment from the state.

A hospital that's not in the CCDS would be reimbursed through a through an uncompensated care pool, he said, with a state "pot" of $20 million available through Nov. 30.

After that, he said, there would be no payment for services for this population except at CCDSs.

"The bill keeps the program," Koppelman said. "But it will be very challenging for hospitals and doctors."