MERC Committee Meeting
December 1, 2006
Committee Members Present:
John Abenstein, Stewart McMullan for Gary Anderson, Rena Garni for Mary Edwards, Tim
Gaspar, Larry Kryzaniak for Lee Greenfield, Larry Kuusisto, Ray Gensinger for Louis Ling,
Dawn Ludwig, Kathy Meyerle, Neal Nylander for Curtis Savstrom, and Ronald Hadsall for
Marilyn Speedie.
Interested Parties Present:
Carol Backstrom, Ben Bornsztein, Gina Danyluk, David Hagen, Rick Roberts, John Rodewald,
Linda Sandvig, Trisha Schirmers, and Peggy Veilleux.
Staff Present:
Scott Leitz, Diane Reger and Diane Rydrych – MN Department of Health
I.
Introductory Remarks from MERC Committee Chair Substitute – Tim Gaspar
Dr. Ling was out of town and was unavailable to chair the meeting. Tim Gaspar served
as his substitute.
Mr. Gaspar opened the meeting by welcoming and thanking members and interested
parties for attending. All committee members and interested parties then introduced
themselves.
II.
Fiscal Year 2006 and 2007 Distribution – Diane Reger, MDH
Ms. Reger reminded the committee that the 2006 distribution was delayed this year due
to the timing of federal match process. The distribution was made to sponsoring
institutions at the beginning of October. Since CMS had not approved the release of
federal funding to nursing homes at the time of the distribution, $321,571 that was slated
for nursing homes was withheld. At this time, MDH still has not received approval from
DHS to release these funds. Once we do, MERC staff will forward the remaining federal
funds to the sponsoring institutions that had nursing home training sites and they will
send those funds to their nursing home sites.
Ms. Reger noted that there have been quite a few more phone calls from training sites
this year than average. Information is provided to the training sites explaining the grant
and the amount of funding they should expect to receive; however, they are either not
reading it or it may not be straightforward enough. We are looking at the process and
may have a new way of informing training sites of their expected grants in the future. But
along with those changes, sponsoring institutions will need to make sure that they are
communicating with their sites about pending MERC/PMAP grants.
Recently, MDH was informed that the distribution was calculated based on a few sites
that were incorrectly submitted on the application. (For example, one site’s FTEs were
inflated, some had the wrong site name/MA number, and some sites should not have
qualified because they terminated their agreement with the program to provide future
training.) Based on these various situations, there will be between $150 - 160,000 in
funding returned to the Department of Health. These funds will roll into the amount
available for next year, as is the practice with any returned funds. Since these funds
were already matched, they will be added to the distribution amount available in 2007
after the match takes place.
MERC staff reminded everyone of the importance of verifying data prior to submitting the
application. When incorrect site MAID numbers are submitted, the wrong revenue is
used to calculate the distribution. If an MAID number changes, the entire distribution is
affected as well as discretionary funding available to the sponsoring institution. We are
asking that programs communicate with the training sites to verify their site data before
the application is submitted. The site name, address, billing address (where checks are
mailed), MAID number, and FTEs should be verified to avoid future problems.
This fall, the University of MN AHC requested that a report be available on the web
application that allows programs to print off their sites on individual data sheets. These
can then be sent to the training sites along with a letter asking them to verify their data.
The letter can also explain that this information is vital to their potential eligibility of the
MERC/PMAP grant that the program is applying for on their behalf. This tool is available
to all sponsoring institutions on the web application prior to submitting the application.
The site reports can be run after the programs enter their site’s FTEs or it can be run
before FTE information is entered. If a new site is on the application for the first time,
you can request similar data in this format. MERC staff will look into programming a
blank page for this purpose.
Ms. Reger reminded the committee that Sponsoring Institutions must distribute 2006
grants no later than December 9, 2006, to comply with the 60-day timeframe set in
statute. Since the 9th is on a weekend, the grant verifications (GVRs) for the 2006
distribution are due on December 11, 2006. If you are required to return funds, please
submit them to the Department of Health along with your GVR.
As a reminder, all statutory deadlines must be met unless an extension has been
approved in writing by MERC staff before the deadline date. Going forward, if the
deadline is not met, you may be disqualified from receiving funds.
Beginning with the 2008 application, National Provider Identification Numbers (NPI) will
be required. Please make note of this information when collecting data from your
training sites. At the meeting one of the sponsoring institution contacts mentioned that
we cannot ask for MAID numbers when requesting information after the NPI numbers go
into affect. We must use only NPI numbers. Since the meeting, MERC staff confirmed
with the Department of Human Services (DHS) that they would be able to provide the
PMAP revenue data needed to calculate the PMAP portion of the grant by using the new
NPI numbers and matching them to previous MA ID numbers. Based on this information,
we will be requesting only NPI numbers on the 2008 MERC application.
III. Update on Fiscal Year 2007 Dental Grants – Diane Rydrych, MDH
Ms. Rydrych provided an update on the MERC dental innovations grants, which are now
administered by MDH’s Office of Rural Health and Primary Care. A total of $2,036,700
was awarded in SFY07 to 11 sites throughout the state. Ms. Rydrych noted that this
amount included funds that had been unawarded in previous years and rolled forward. A
committee member asked whether staff could put together a report showing the
outcomes of grants that have been awarded over the last several years; Ms. Rydrych
responded that it should be possible to put together such a report, working with ORHPC,
in the future.
IV. Legislative Proposal for Fiscal Year 2008 – Diane Rydrych, MDH
Ms. Rydrych provided a handout for the committee providing an overview of the
legislative proposal that the Department is working on to cover the MERC distribution in
FY08 and beyond. Ms. Rydrych reminded the committee of issues that have been raised
in the past by CMS related to our distribution methodology, and that both MDH and the
Department of Human Services have a sense that CMS will only approve federal
matching funds if the distribution moves towards a model that is based solely on MA
volume and does not exceed an institution’s Medicaid share of education costs.
The proposal that the Department is developing involves splitting the distribution into
multiple pools governed by different distribution formulas. The portion of the pool
comprised of PMAP dollars, roughly $40M in FY08, would continue to be distributed
based on the current 67%/33% formula, with 10% of PMAP dollars continuing to be
distributed as discretionary funds. To bring this ‘formula-based’ pool up to a minimum of
$45M per year, $2.5M of cigarette tax funds would be matched, and the resulting $5M
dollars ($2.5M in cigarette tax funds plus $2.5M in federal matching funds) would be
distributed based on a formula that includes only relative Medicaid revenues. To offset
that change, the remaining $6M in unmatched cigarette tax funds would be distributed
based on a formula including only relative education costs. The Department is aware
that the decision to not seek federal matching funds on a portion of the cigarette tax
revenues will result in a smaller overall pool, and they are exploring options to obtain
additional funds for MERC.
A committee member asked whether the $4.85M that is currently transferred from the
Academic Health Center would continue to be part of the distribution under the proposed
scenario. Ms. Rydrych responded that the Department’s proposal assumed,
conservatively, that the $4.85M would no longer be available, although that point has not
yet been settled. CMS has not directly questioned those dollars specifically, although
there are strong indications that they will do so in the future. The committee member
then asked whether $4.85 is still the ‘right’ amount for this mechanism. Ms. Rydrych and
Mr. Leitz responded that that particular amount is a reflection of the general fund backfill
that was enacted several years ago, and is as such arbitrary. It is possible that, if CMS
continues to approve the transfer mechanism, or if the transfer was modified so that
these funds came directly to MDH instead of through a more circuitous route, that
amount could be increased. The Department will be talking with both DHS and the AHC
in the coming days to discuss this.
A committee member suggested that the Department explore possible non-governmental
sources of funding to replace potentially lost federal matching funds, including health
plans and health-related foundations.
Another committee member pointed out that the potential changes to the distribution,
when combined with changes related to Medicare Part D, will hit ambulatory sites
especially hard, as dual-eligibles will no longer show up in revenue figures: this will have
a significant impact on pharmacy sites, as well as on smaller ambulatory sites overall.
The committee discussed the merits and drawbacks of pursuing federal funds if their
receipt means changing the way that the distribution is awarded, and whether it’s
possible to continue to meet the goals of MERC while also continuing to receive full
federal funds. Some committee members questioned whether it is worth the potential
change in the distribution to obtain only $2.5M in federal matching funds, while others
questioned why the State should choose to forego a portion of federal funds before they
are forced to do so. A committee member asked whether there is a way to keep
ambulatory sites funded in a way that is consistent with current levels while funding
hospitals separately with federally matched funds. Department staff noted that they are
continuing to work with DHS to explore options related to obtaining federal match, as well
as options for obtaining additional state funds.
A committee member pointed out that it will be important, given the number of funding
sources and CMS decisions that are uncertain at this point, to build contingencies into
the proposed MERC statute. In that way, the Department would have a backup plan for
how funds will be distributed in the event that federal matching funds aren’t received.
The Department will build such contingency language into the proposal.
Although the discussion about the FY08 legislative proposal did not reach a point of
consensus, the committee confirmed that they still share the goal of supporting GME in
multiple settings, and wanting to ensure that ambulatory sites are still supported at a
level that is as consistent as possible with current practice. A committee member noted
the need to remind new and returning legislators about the goal of MERC to educate
providers, and how the current proposal fits with those goals.
V.
Upcoming meeting dates
The next regularly scheduled MERC meetings will be held on from 1 – 4 p.m. in the Red
River Room at Snelling Office Park on Friday, June 15, 2007 and Friday, November 30,
2007. For directions, please visit our web site
http://www.health.state.mn.us/divs/hpsc/hep/merc/committee/index.html for further
information.