MINNEAPOLIS, March 26, 2008 - Minnesota’s health care reform efforts hit a road block Tuesday, as wary Republican lawmakers convinced Gov. Tim Pawlenty to withdraw support for reform ideas recommended by his own task force.

The MMA has quickly responded to the new political reality by proposing amendments that would hopefully alleviate concerns among physicians and lawmakers about the reform effort, which is the best chance to state has seen in years to change Minnesota’s health care system. 

Human Services Commissioner Cal Ludeman recently told DFL leaders about Pawlenty’s opposition to the bill in its current form, according to a Star Tribune article. Ludeman said there was no support for the bill among the Republican caucus, according to the article.

Lawmakers’ concerns
The article did not lay out what parts of the bill the Governor and some lawmakers opposed.

But according to Dave Renner, the MMA director of state and federal legislation, lawmakers are most troubled by the payment reform measure in the bill known as Level 3.

Under Level 3, providers would submit a bid for the total cost of care for a particular population of patients. They would then be required to honor that bid as part of their commitment to manage the costs of care for those patients. Critics of the proposal, such as the MMA, say that there are too many unanswered questions about how Level 3 would work and it seems like the failed capitated payment schemes of the past.

Initially, the scheme would be voluntary; but as early as January 2010, it would be required of providers who care for state employees and enrollees in public programs. Private plans would also start using it.

Renner said that “the biggest concern we are hearing from lawmakers is not so much that they oppose the reform bill, but that they don’t understand how it would work.”

Lawmakers basically share the MMA’s concerns that the Level 3 scheme lacks sufficient clarity to rule out negative unintended consequences, he said. “Lawmakers are nervous about how the reform plan will affect rural providers, about the prospect of providers sharing insurance risk, and that it might result in more consolidation among providers.”

MMA solution
Given the political landscape, the MMA has been working with the Rep. Thomas Huntley, DFL-Duluth, to amend the bill to alleviate concerns, Renner said.

The MMA has suggested changing the Level 3 plan so physicians would no longer bid for the total cost of care or assume insurance risk. Instead, providers would put forward pricing packages for episodes of care related to chronic diseases, such as asthma, diabetes, depression, heart disease, and pulmonary disease.

The MMA proposal would also slow down the timeline for implementation of Level 3 payment reform. Finally, it would require the Health Care Transformation Commission, which would be created by the bill, to further define the plan for comprehensive payment reform before implementing it. Right now, the bill gives the commission the authority to enact changes without further legislative review.

“There is so much good work in this bill that it would be a real shame if it didn’t pass this session. We believe that if the amendments supported by the MMA pass, the concerns of physicians and lawmakers could be alleviated,” Renner said.

Pawlenty’s spokesman Brian McClung did leave an opening for such a possibility. McClung said in the Star Tribune article that “with a little bit of work and compromise, we could still achieve significant health reforms this year."