MINNEAPOLIS, March 10, 2010 – The compromise that the governor and lawmakers have agreed to essentially turns the General Assistance Medical Care program into a significantly underfunded program managed by hospitals – with a stand alone prescription drug benefit – with no clear assurances that enrollees’ costs will be covered.

The revamped bill that was released Thursday calls for the current GAMC program to continue until the end of May at a 63 percent reduction in current payment rates. MinnesotaCare would provide some gap coverage for those who become eligible for GAMC between April 1 and May 31. After that, the state will convert the program into one where hospitals receive capitated payments for treating GAMC enrollees in a given geographic area.

The bill calls for the state to provide lump-sum payments to hospitals that choose to become coordinated care delivery systems. These hospitals would then be required to provide all of the enrollee’s inpatient and outpatient services. However, it is unclear whether hospitals will want to assume the financial risk of being a coordinated care system, particularly since the state plans to reduce its total outlay for caring for this population by 77 percent.

“This is not reform,” said 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.’”

According to the bill, clinics that do not have contractual relationships with coordinated care delivery systems would not be able to bill the state government for caring for GAMC enrollees, as all care to GAMC enrollees would need to be delivered through coordinate care systems by December 1, 2010. But the bill also removes current provisions in law that required providers to serve GAMC enrollees as a condition of participation in other state health insurance plans or programs.

"If you have a GAMC population you want to serve, you would either have to provide them uncompensated care, contract with a CCO, or transfer them somewhere else," Renner said.

Renner testified on behalf of the MMA Thursday before two committees that were considering the bill the Senate Health and Human Services Budget Division and the House Health Care and Human Services Finance Division. The MMA is not opposing the bill because it still appears to be preferable to Gov. Tim Pawlenty’s plan of transferring GAMC enrollees into MinnesotaCare.

“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 said.