Senate targets HMOs to fix health and human services budget

Democrats in the Minnesota Senate are proposing tapping a special health fund and proposing a surcharge on Health Maintenance Organizations and nursing homes.

Sen. Tony Lourey, DFL-Kerrick, said he’s making the changes because he was told by Senate DFL leaders to cut $150 million from his budget. He said health and human services programs have already been cut over the past decade, and the changes are designed not to hurt people who need help.

“It’s obvious that HHS is going to have to generate some revenue within our budget area. So we need to be thoughtful with how we do that. I think that having a few options on the table is incredibly valuable as we as a health care community try to get ready to make the right choices.”

The Senate plan would also require HMOs to negotiate better prices with the state for people on state subsidized insurance. It adds $20 million over the next two years for nursing homes.

The Senate HHS budget is different from the House plan – which increases a surcharge on hospitals and puts a cap on the amount of money HMOs can keep in reserve. Both plans would have to be reconciled with Gov. Dayton’s budget plan – which spends $320 million more than the House and Senate.

Update: The Senate bill would also keep the provider tax in place. Current law phases out that so-called sick tax by Dec. 31, 2019.

Here’s the breakdown for the Senate HHS bill:

1) $190 million transfer from the Health Care Access Fund to the General Fund to pay for “additional revenue.”

2) $216 million transfer from the Health Care Access Fund to the General Fund to help the state pay for MinnesotaCare recipients to enroll in MA.

3) $80 million one-time surcharge on HMOs.

4) $16 million surcharge on nursing facilities

5) $53 million to align Managed Care Organization rates to reflect recent experience.