On March 5th, an agreement was made between Gov. Tim Pawlenty and DFL leaders to extend the GAMC program that was set to end on March 31st, 2010 and would have transitioned tens of thousands of low-income Minnesotans to a more expensive MinnesotaCare plan. Although the plan will continue coverage for many, the payments are slim from the state, instead shifting much of the costs to hospitals. According to MPR and Sen. Linda Berglin (DFL), 77% of the program’s funding from the state is being cut. Hospitals such as HCMC will still need to deal with picking up the cost to ensure all their patients receive the appropriate care. From an RN that works at HCMC, staff have already been facing cuts that affect patient care. Patient to nurse ratios have now increased on medical/surgical units up to 8:1 on nights. With less reimbursement to hospitals and a shifting of costs such as this GAMC deal, patient care will still negatively be affected until legislators pass safe patient handling bills, or increase funding to programs for the uninsured. This will be an interesting topic to continue following in the coming months.
From Minnesota Public Radio (MPR):
GAMC deal shifts costs to hospitals, health providers
by Madeleine Baran, Minnesota Public Radio, Tom Scheck, Minnesota Public Radio
March 5, 2010
St. Paul, Minn. — Gov. Tim Pawlenty and DFL legislators have reached a deal over funding for a health insurance program for the poor.
The deal will preserve coverage for most current General Assistance Medical Care recipients, but will shift costs onto medical providers.
GAMC provides health insurance for more than 30,000 of the state’s poorest residents. The program was scheduled to end on March 31, after Pawlenty cut its funding last year to balance the state budget.
The new plan will extend GAMC for two months. Starting June 1, a new system, funded with block grants, will replace it.
Instead of paying providers for each service provided, the new plan will provide hospital-based coordinated care systems with capped block grants to provide health care to eligible residents. Most former GAMC recipients will be eligible under the new plan.
“The hope will be this will be a more efficient, comprehensive, and continuous care,” Pawlenty said in a press conference this afternoon.
DFL legislators said they’re glad to have reached an agreement, but said the plan will hurt medical providers. Sen. Linda Berglin, DFL-Minneapolis, said the plan cuts the program’s funding by 77 percent.
“The health care providers are taking a huge cut,” said Rep. Thomas Huntley, DFL-Duluth. “That makes the state budget look good, but some hospitals may collapse, and other hospitals may just raise their rates to everybody else to make up for the loss of this money, and that will be put on your insurance bill.”
The state’s General Fund will provide $71 million in capped block grants to hospital-based Coordinating Care Organizations in the current 2010-2011 budget, and $131 million in 2012-2013.
The plan also establishes a separate method to reimburse CCOs for prescription drug costs. The deal caps drug reimbursements at $45 million from the General Fund in the 2010-2011 fiscal years, and $83 million in the 2012-2013 fiscal years.
GAMC recipient Robert Fischer expressed relief that he won’t lose his coverage. Fischer, who is 51, has sleep apnea, depression, and a degenerative back condition. His only income is $203 a month from the state’s General Assistance program.
“From what I’ve heard, I’m very, very happy,” Fischer said.
Negotiators have been working on a solution for GAMC for about nine months. The plan was set to expire later this month.
“We knew when we began this endeavor nine months ago that we were going to be putting together legislation that was going to be less than lovely,” said Rep. Erin Murphy, DFL-St. Paul. “We were working very hard to protect the safety net for those who get their care in GAMC, and we’ve protected that commitment.”
Murphy added, “I think the safety net is a little thinner. It may be a little bit more like a lifeboat.”
The state had planned to transfer many current GAMC enrollees into another state health insurance program, called MinnesotaCare, once the program ended.
But many recipients say they would not be able to afford MinnesotaCare’s monthly premiums and higher co-payments.
Issue background:
The General Assistance Medical Care (GAMC) fund is a MN healthcare program run by our Minnesota Department of Human Services (MDHS, 2009) that covers “low-income adults, ages 21-64, who have no dependent children under age 18 and who do not qualify for federal healthcare programs” (para. 1). The services offered include a comprehensive benefits package focused on preventative care and one for those who want coverage in case of an emergency hospital visit with a specific co-pay amount. A recent veto and line-item cut from MN’s budget by Gov. Tim Pawlenty took away $381 million from the GAMC (Perry, 2009). According to Share (2009), these “cuts to GAMC will leave 33,000 low-income Minnesotans without healthcare” as the labor review editor quoted the MNA.
One of the major hospitals in the Twin Cities, the Hennepin County Medical Center (HCMC) is one of the most affected by the line-item cut to GAMC as they will lose “$43 million in 2010 and $50 million in 2011” (Newmarker, 2009, para. 5). This has forced the one in only four Level 1 trauma center’s in the state to face many program cuts as they deal with a $550 million budget compared to a $600 million one in 2009 (Newmarker, 2009). Protesting nurses do not want to be a part of potential cuts, or see vulnerable patients turned away especially as we already face issues regarding safe staffing. HCMC’s major cuts highlight how payment increases to insurers must happen in order for healthcare organizations to stay afloat. Payment increases to insurers means payment increases to their customers, the ones who pay for health insurance. This is one element of the greater healthcare reform issue that needs to be addressed as the national debate continues.
Minnesota Department of Human Services. (2009). General assistance medical care. Retrieved
on October 15, 2009, from http://www.dhs.state.mn.us/main/idcplg?IdcService
=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=id_006257
Newmarker, C. (2009, September 25). HCMC lists programs facing cuts. American City
Business Journals, Inc. Retrieved on October 15, 2009, from http://twincities.bizjournals.com/twincities/stories/2009/09/28/story4.html?b=1254110400%5E2162231
Perry, S. (2009, October 1). Employment stimulus will dominate session, as well as bonding bill.
Finance & Commerce, Inc. Retrieved on October 15, 2009, from http://legal-ledger.com/item.cfm?recID=12318
Share, S. (2009, October 12). Nurses march on capitol, call on governor to restore general
assistance medical care. Workday Minnesota. Retrieved on October 15, 2009, from http://www.workdayminnesota.org/index.php?news_6_4205

