Office of Rural Health and Primary Care, Health Policy Division
PO Box 64882
St. Paul, MN 55164-0882
651-201-3859
www.health.state.mn.us
2013 MERC Legislation
MDH distributes grants to clinical training sites to offset costs associated with providing clinical education to
medical, dental, pharmacy, advanced practice nursing, physician assistant, and chiropractic students and
residents.
2013 Changes
The changes adopted will strengthen the MERC
Summary
The 2013 legislation will support the workforce
program by addressing concerns related to
needs of a changing health system by increasing
distribution of funds at the high and low ends of the
funding for clinical education and updating the
scale, increasing accountability, and more closely
state’s financial support mechanism.
aligning the distribution formula with state
workforce goals. The changes will:
Background
• Increase funding by $12,808,000 ($6,404,000
The Medical Education and Research Cost (MERC)
each state funds and federal matching funds) to
program has helped support the hospitals, clinics
return the program to its 2011 level of
and other sites that perform this critical work since
$57,126,000.
1997.
• Reduce the 20% bonus to sites with Medicaid
revenue above an arbitrary level to 10% for two
In 2013, 604 hospitals, clinics and other clinical
years and then eliminate it. This will more
training sites trained more than 3,237 medical,
evenly distribute funds to small and rural sites
dental, pharmacy, advanced practice nursing and
important to meeting workforce goals statewide,
physician assistant students and residents with
while continuing to meet federal guidelines for
MERC program funds.
distribution of funds.
• Add important primary care providers
State and federal Medical Assistance funds and
(psychologists, clinical social workers,
cigarette tax proceeds fund the program. The
community paramedics, community health
program’s FY 14 – 15 base budget is $44,318,000.
workers, dental therapists and advanced dental
therapists).
The distribution formula has changed over the
• Limit funds awarded per trainee to no more than
years. Initially, it was based solely on the amount
the 95th percentile of the average award per
and cost of training provided at each site; over time,
trainee so sites that train a very small number of
some formulas balanced training and Medicaid
students or residents no longer receive
volume. Medicaid volume has been the sole factor
disproportionately large grants.
determining grant amounts since 2007, with a 20%
• Raise the minimum grant from $1,000 to $5,000
“bonus payment” to sites at the top of the
to ensure that grant size is meaningful and the
distribution.
program is administratively simpler.
• Limit eligibility to sites with more than 0.1
trainees, to ensure that funding is directed to
July 2013
2013 MERC Legislation – Page 2
•
•
•
sites that train at least a minimal amount of
trainees and to encourage sites to take on
additional trainees to stay above the minimum.
Establish a $1 million per year grant program
for family medicine residency programs outside
of the seven-county metropolitan area.
Add clearer accountability provisions to the
program, to make explicit that funds must be
used for costs associated with clinical training.
Seek federal approval for changes.
Benefits
Restoring the health professions program to its 2011
level, along with the other changes proposed, will
help stabilize health professions training in
Minnesota, and investing grants directly in rural
residency programs will further help address
shortages in rural Minnesota.
For more information, contact:
Health Policy, ORHPC
Email: [email protected]
651-201-3859
July 2013
MERCLegislation–2013session
217.15 Sec. 20. Minnesota Statutes 2012, section 256B.69, subdivision 5c, is amended to read:
217.16 Subd. 5c. Medical education and research fund. (a) The commissioner of human
217.17services shall transfer each year to the medical education and research fund established
217.18under section 62J.692, an amount specified in this subdivision. The commissioner shall
217.19calculate the following:
217.20(1) an amount equal to the reduction in the prepaid medical assistance payments as
217.21specified in this clause. Until January 1, 2002, the county medical assistance capitation
217.22base rate prior to plan specific adjustments and after the regional rate adjustments under
217.23subdivision 5b is reduced 6.3 percent for Hennepin County, two percent for the remaining
217.24metropolitan counties, and no reduction for nonmetropolitan Minnesota counties; and after
217.25January 1, 2002, the county medical assistance capitation base rate prior to plan specific
217.26adjustments is reduced 6.3 percent for Hennepin County, two percent for the remaining
217.27metropolitan counties, and 1.6 percent for nonmetropolitan Minnesota counties. Nursing
217.28facility and elderly waiver payments and demonstration project payments operating
217.29under subdivision 23 are excluded from this reduction. The amount calculated under
217.30this clause shall not be adjusted for periods already paid due to subsequent changes to
217.31the capitation payments;
217.32(2) beginning July 1, 2003, $4,314,000 from the capitation rates paid under this
217.33section;
217.34(3) beginning July 1, 2002, an additional $12,700,000 from the capitation rates
217.35paid under this section; and
218.1(4) beginning July 1, 2003, an additional $4,700,000 from the capitation rates paid
218.2under this section.
218.3(b) This subdivision shall be effective upon approval of a federal waiver which
218.4allows federal financial participation in the medical education and research fund. The
218.5amount specified under paragraph (a), clauses (1) to (4), shall not exceed the total amount
218.6transferred for fiscal year 2009. Any excess shall first reduce the amounts specified under
218.7paragraph (a), clauses (2) to (4). Any excess following this reduction shall proportionally
218.8reduce the amount specified under paragraph (a), clause (1).
218.9(c) Beginning September 1, 2011, of the amount in paragraph (a), the commissioner
218.10shall transfer $21,714,000 each fiscal year to the medical education and research fund.
218.11(d) Beginning September 1, 2011, of the amount in paragraph (a), following the
218.12transfer under paragraph (c), the commissioner shall transfer to the medical education
218.13research fund $23,936,000 in fiscal years 2012 and 2013 and $36,744,000 $49,552,000 in
218.14fiscal year 2014 and thereafter.
513.5 Section 1. Minnesota Statutes 2012, section 16A.724, subdivision 2, is amended to read:
513.6 Subd. 2. Transfers. (a) Notwithstanding section 295.581, to the extent available
513.7resources in the health care access fund exceed expenditures in that fund, effective for
513.8the biennium beginning July 1, 2007, the commissioner of management and budget shall
513.9transfer the excess funds from the health care access fund to the general fund on June 30
513.10of each year, provided that the amount transferred in any fiscal biennium shall not exceed
513.11$96,000,000. The purpose of this transfer is to meet the rate increase required under Laws
513.122003, First Special Session chapter 14, article 13C, section 2, subdivision 6.
513.13 (b) For fiscal years 2006 to 2011, MinnesotaCare shall be a forecasted program, and,
513.14if necessary, the commissioner shall reduce these transfers from the health care access
513.15fund to the general fund to meet annual MinnesotaCare expenditures or, if necessary,
513.16transfer sufficient funds from the general fund to the health care access fund to meet
513.17annual MinnesotaCare expenditures.
513.18(c) Notwithstanding section 295.581, to the extent available resources in the health
513.19care access fund exceed expenditures in that fund after the transfer required in paragraph
513.20(a), effective for the biennium beginning July 1, 2013, the commissioner of management
513.21and budget shall transfer $1,000,000 each fiscal year from the health access fund to
513.22the medical education and research costs fund established under section 62J.692, for
513.23distribution under section 62J.692, subdivision 4, paragraph (c).
515.12 Sec. 4. Minnesota Statutes 2012, section 62J.692, subdivision 1, is amended to read:
515.13 Subdivision 1. Definitions. For purposes of this section, the following definitions
515.14apply:
515.15 (a) "Accredited clinical training" means the clinical training provided by a medical
515.16education program that is accredited through an organization recognized by the Department
515.17of Education, the Centers for Medicare and Medicaid Services, or another national body
515.18who reviews the accrediting organizations for multiple disciplines and whose standards
515.19for recognizing accrediting organizations are reviewed and approved by the commissioner
515.20of health in consultation with the Medical Education and Research Advisory Committee.
515.21 (b) "Commissioner" means the commissioner of health.
515.22 (c) "Clinical medical education program" means the accredited clinical training of
515.23physicians (medical students and residents), doctor of pharmacy practitioners, doctors
515.24of chiropractic, dentists, advanced practice nurses (clinical nurse specialists, certified
515.25registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and
515.26physician assistants, dental therapists and advanced dental therapists, psychologists,
515.27clinical social workers, community paramedics, and community health workers.
515.28 (d) "Sponsoring institution" means a hospital, school, or consortium located in
515.29Minnesota that sponsors and maintains primary organizational and financial responsibility
515.30for a clinical medical education program in Minnesota and which is accountable to the
515.31accrediting body.
515.32 (e) "Teaching institution" means a hospital, medical center, clinic, or other
515.33organization that conducts a clinical medical education program in Minnesota.
515.34 (f) "Trainee" means a student or resident involved in a clinical medical education
515.35program.
516.1 (g) "Eligible trainee FTE's" means the number of trainees, as measured by full-time
516.2equivalent counts, that are at training sites located in Minnesota with currently active
516.3medical assistance enrollment status and a National Provider Identification (NPI) number
516.4where training occurs in either an inpatient or ambulatory patient care setting and where
516.5the training is funded, in part, by patient care revenues. Training that occurs in nursing
516.6facility settings is not eligible for funding under this section.
516.7
516.8
Sec. 5. Minnesota Statutes 2012, section 62J.692, subdivision 3, is amended to read:
Subd. 3. Application process. (a) A clinical medical education program conducted
516.9in Minnesota by a teaching institution to train physicians, doctor of pharmacy practitioners,
516.10dentists, chiropractors, or physician assistants is, dental therapists and advanced dental
516.11therapists, psychologists, clinical social workers, community paramedics, or community
516.12health workers are eligible for funds under subdivision 4 if the program:
516.13(1) is funded, in part, by patient care revenues;
516.14(2) occurs in patient care settings that face increased financial pressure as a result
516.15of competition with nonteaching patient care entities; and
516.16(3) emphasizes primary care or specialties that are in undersupply in Minnesota.
516.17(b) A clinical medical education program for advanced practice nursing is eligible for
516.18funds under subdivision 4 if the program meets the eligibility requirements in paragraph
516.19(a), clauses (1) to (3), and is sponsored by the University of Minnesota Academic Health
516.20Center, the Mayo Foundation, or institutions that are part of the Minnesota State Colleges
516.21and Universities system or members of the Minnesota Private College Council.
516.22(c) Applications must be submitted to the commissioner by a sponsoring institution
516.23on behalf of an eligible clinical medical education program and must be received by
516.24October 31 of each year for distribution in the following year. An application for funds
516.25must contain the following information:
516.26(1) the official name and address of the sponsoring institution and the official
516.27name and site address of the clinical medical education programs on whose behalf the
516.28sponsoring institution is applying;
516.29(2) the name, title, and business address of those persons responsible for
516.30administering the funds;
516.31(3) for each clinical medical education program for which funds are being sought;
516.32the type and specialty orientation of trainees in the program; the name, site address, and
516.33medical assistance provider number and national provider identification number of each
516.34training site used in the program; the federal tax identification number of each training site
517.1used in the program, where available; the total number of trainees at each training site; and
517.2the total number of eligible trainee FTEs at each site; and
517.3(4) other supporting information the commissioner deems necessary to determine
517.4program eligibility based on the criteria in paragraphs (a) and (b) and to ensure the
517.5equitable distribution of funds.
517.6(d) An application must include the information specified in clauses (1) to (3) for
517.7each clinical medical education program on an annual basis for three consecutive years.
517.8After that time, an application must include the information specified in clauses (1) to (3)
517.9when requested, at the discretion of the commissioner:
517.10(1) audited clinical training costs per trainee for each clinical medical education
517.11program when available or estimates of clinical training costs based on audited financial
517.12data;
517.13(2) a description of current sources of funding for clinical medical education costs,
517.14including a description and dollar amount of all state and federal financial support,
517.15including Medicare direct and indirect payments; and
517.16(3) other revenue received for the purposes of clinical training.
517.17(e) An applicant that does not provide information requested by the commissioner
517.18shall not be eligible for funds for the current funding cycle.
517.19
Sec. 6. Minnesota Statutes 2012, section 62J.692, subdivision 4, is amended to read:
517.20 Subd. 4. Distribution of funds. (a) The commissioner shall annually distribute the
517.21available medical education funds to all qualifying applicants based on a distribution
517.22formula that reflects a summation of two factors:
517.23 (1) a public program volume factor, which is determined by the total volume of
517.24public program revenue received by each training site as a percentage of all public
517.25program revenue received by all training sites in the fund pool; and
517.26 (2) a supplemental public program volume factor, which is determined by providing
517.27a supplemental payment of 20 percent of each training site's grant to training sites whose
517.28public program revenue accounted for at least 0.98 percent of the total public program
517.29revenue received by all eligible training sites. Grants to training sites whose public
517.30program revenue accounted for less than 0.98 percent of the total public program revenue
517.31received by all eligible training sites shall be reduced by an amount equal to the total
517.32value of the supplemental payment.
517.33 Public program revenue for the distribution formula includes revenue from medical
517.34assistance, prepaid medical assistance, general assistance medical care, and prepaid
517.35general assistance medical care. Training sites that receive no public program revenue
518.1are ineligible for funds available under this subdivision. For purposes of determining
518.2training-site level grants to be distributed under paragraph (a) this paragraph, total
518.3statewide average costs per trainee for medical residents is based on audited clinical
518.4training costs per trainee in primary care clinical medical education programs for medical
518.5residents. Total statewide average costs per trainee for dental residents is based on
518.6audited clinical training costs per trainee in clinical medical education programs for
518.7dental students. Total statewide average costs per trainee for pharmacy residents is based
518.8on audited clinical training costs per trainee in clinical medical education programs for
518.9pharmacy students. Training sites whose training site level grant is less than $1,000
518.10$5,000, based on the formula described in this paragraph, or that train fewer than 0.1 FTE
518.11eligible trainees, are ineligible for funds available under this subdivision. No training sites
518.12shall receive a grant per FTE trainee that is in excess of the 95th percentile grant per FTE
518.13across all eligible training sites; grants in excess of this amount will be redistributed to
518.14other eligible sites based on the formula described in this paragraph.
518.15(b) For funds distributed in fiscal years 2014 and 2015, the distribution formula shall
518.16include a supplemental public program volume factor, which is determined by providing
518.17a supplemental payment to training sites whose public program revenue accounted for
518.18at least 0.98 percent of the total public program revenue received by all eligible training
518.19sites. The supplemental public program volume factor shall be equal to ten percent of each
518.20training sites grant for funds distributed in fiscal year 2014 and for funds distributed in
518.21fiscal year 2015. Grants to training sites whose public program revenue accounted for less
518.22than 0.98 percent of the total public program revenue received by all eligible training sites
518.23shall be reduced by an amount equal to the total value of the supplemental payment. For
518.24fiscal year 2016 and beyond, the distribution of funds shall be based solely on the public
518.25program volume factor as described in paragraph (a).
518.26(c) Of available medical education funds, $1,000,000 shall be distributed each year
518.27for grants to family medicine residency programs located outside of the seven-county
518.28metropolitan area, as defined in section 473.121, subdivision 4, focused on eduction and
518.29training of family medicine physicians to serve communities outside the metropolitan area.
518.30To be eligible for a grant under this paragraph, a family medicine residency program must
518.31demonstrate that over the most recent three calendar years, at least 25 percent of its
residents
518.32practice in Minnesota communities outside of the metropolitan area. Grant funds must be
518.33allocated proportionally based on the number of residents per eligible residency program.
518.34 (b) (d) Funds distributed shall not be used to displace current funding appropriations
518.35from federal or state sources.
519.1 (c) (e) Funds shall be distributed to the sponsoring institutions indicating the amount
519.2to be distributed to each of the sponsor's clinical medical education programs based on
519.3the criteria in this subdivision and in accordance with the commissioner's approval letter.
519.4Each clinical medical education program must distribute funds allocated under paragraph
519.5paragraphs (a) and (b) to the training sites as specified in the commissioner's approval
519.6letter. Sponsoring institutions, which are accredited through an organization recognized
519.7by the Department of Education or the Centers for Medicare and Medicaid Services, may
519.8contract directly with training sites to provide clinical training. To ensure the quality of
519.9clinical training, those accredited sponsoring institutions must:
519.10 (1) develop contracts specifying the terms, expectations, and outcomes of the clinical
519.11training conducted at sites; and
519.12 (2) take necessary action if the contract requirements are not met. Action may include
519.13the withholding of payments under this section or the removal of students from the site.
519.14 (d) (f) Use of funds is limited to expenses related to clinical training program costs
519.15for eligible programs.
519.16 (g) Any funds not distributed in accordance with the commissioner's approval letter
519.17must be returned to the medical education and research fund within 30 days of receiving
519.18notice from the commissioner. The commissioner shall distribute returned funds to the
519.19appropriate training sites in accordance with the commissioner's approval letter.
519.20 (e) (h) A maximum of $150,000 of the funds dedicated to the commissioner
519.21under section 297F.10,subdivision1, clause (2), may be used by the commissioner for
519.22administrative expenses associated with implementing this section.
519.23 Sec. 7. Minnesota Statutes 2012, section 62J.692, subdivision 5, is amended to read:
519.24 Subd. 5. Report. (a) Sponsoring institutions receiving funds under this section
519.25must sign and submit a medical education grant verification report (GVR) to verify that
519.26the correct grant amount was forwarded to each eligible training site. If the sponsoring
519.27institution fails to submit the GVR by the stated deadline, or to request and meet
519.28the deadline for an extension, the sponsoring institution is required to return the full
519.29amount of funds received to the commissioner within 30 days of receiving notice from
519.30the commissioner. The commissioner shall distribute returned funds to the appropriate
519.31training sites in accordance with the commissioner's approval letter.
519.32 (b) The reports must provide verification of the distribution of the funds and must
519.33include:
519.34 (1) the total number of eligible trainee FTEs in each clinical medical education
519.35program;
520.1 (2) the name of each funded program and, for each program, the dollar amount
520.2distributed to each training site and a training site expenditure report;
520.3 (3) documentation of any discrepancies between the initial grant distribution notice
520.4included in the commissioner's approval letter and the actual distribution;
520.5 (4) a statement by the sponsoring institution stating that the completed grant
520.6verification report is valid and accurate; and
520.7 (5) other information the commissioner, with advice from the advisory committee,
520.8deems appropriate to evaluate the effectiveness of the use of funds for medical education.
520.9 (c) By February 15 of Each year, the commissioner, with advice from the
520.10advisory committee, shall provide an annual summary report to the legislature on the
520.11implementation of this section.
520.12 Sec. 8. Minnesota Statutes 2012, section 62J.692, subdivision 9, is amended to read:
520.13 Subd. 9. Review of eligible providers. The commissioner and the Medical
520.14Education and Research Costs Advisory Committee may review provider groups included
520.15in the definition of a clinical medical education program to assure that the distribution
520.16of the funds continue to be consistent with the purpose of this section. The results of
520.17any such reviews must be reported to the chairs and ranking minority members of the
520.18legislative committees with jurisdiction over health care policy and finance.
520.19 Sec. 9. Minnesota Statutes 2012, section 62J.692, is amended by adding a subdivision
520.20to read:
520.21 Subd. 11. Distribution of funds. If federal approval is not received for the formula
520.22described in subdivision 4, paragraphs (a) and (b), 100 percent of available medical
520.23education and research funds shall be distributed based on a distribution formula that
520.24reflects as summation of two factors:
520.25(1) a public program volume factor, that is determined by the total volume of public
520.26program revenue received by each training site as a percentage of all public program
520.27revenue received by all training sites in the fund pool; and
520.28(2) a supplemental public program volume factor, that is determined by providing a
520.29supplemental payment of 20 percent of each training site's grant to training sites whose
520.30public program revenue accounted for a least 0.98 percent of the total public program
520.31revenue received by all eligible training sites. Grants to training sites whose public
520.32program revenue accounted for less than 0.98 percent of the total public program revenue
520.33received by all eligible training sites shall be reduced by an amount equal to the total
520.34value of the supplemental payment.