I am vetoing this provision because I object to this earmark that circumvents the normal approval process. The department evaluates traffic signal needs throughout the state, including the town of Beloit.
C. HEALTH AND PUBLIC SAFETY
CORRECTIONS
1. New Lisbon Reimbursement of Costs
Section 9110 (1x)
This provision allows the city of New Lisbon to apply to the Department of Corrections for reimbursement of costs associated with extending utility service to the New Lisbon Correctional Institution for costs incurred between May 1, 2002, and March 31, 2004. Under the provision, the Department of Corrections is required to pay at least $215,000 of those costs no later than June 30, 2004.
I am vetoing this provision because it is unnecessary. The department already has an agreement to reimburse the city for costs associated with extending utility service to the prison. Since the facility is scheduled to open in April 2004, payments for water and sewer will begin at that time.
2. Highview Correctional Institution Alternative to Revocation Beds
Section 2490d
This provision converts Highview to a minimum security correctional institution and requires the Department of Corrections to designate 50 beds for programming for offenders in prison as an alternative to revocation.
I am partially vetoing this provision because I object to the limitations it imposes on the department's use of prison beds. The effect of the veto is to eliminate the requirement that the department designate a specific number of beds for alternative to revocation placements in order to maintain flexibility in the use of prison beds. I am also requesting that the department use some beds at Highview for alternative to revocation placements, as well as continue to use beds for this purpose at other institutions.
3. Pilot Program for Nonviolent Offender Community Reintegration
Section 2485g
This section requires the Department of Corrections to request proposals for the establishment of two 25-bed halfway houses for nonviolent offenders, one located in an urban area and one located in a rural area, and specifies that a proposal may not be accepted unless the daily cost is less than or equal to the highest daily cost of out-of-state contract beds. It also requires a study to be submitted to the Governor and the Legislature by January 1, 2007, evaluating the cost effectiveness, administration, public opinion and success of the program in accomplishing community reintegration of nonviolent offenders.
I am partially vetoing this section because I object to the limits it imposes on the department's ability to provide effective offender treatment and community protection. I am vetoing the provision that would require establishment of one rural and one urban halfway house because it would limit the department's ability to find suitable locations for halfway house beds. I am vetoing the provision that would require the cost to be less than or equal to the highest daily rate provided for out-of-state contract beds because it would limit the department's ability to provide appropriate treatment to offenders and provide community protection. I am vetoing the reporting requirement because it imposes a burdensome work load at a time when agency budgets are limited.
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The effect of this veto will be to require the Department of Corrections to request proposals to create a pilot program for nonviolent offenders to spend the last six months of incarceration at one of two 25-bed halfway houses. The pilot program will sunset July 1, 2008.
4. Contracting with County Sheriffs for Beds
Section 2491g
This provision requires the Department of Corrections to accept proposals from county sheriffs to place state inmates in county jails by July 1 of each year if there is an existing contract with a private provider for placement of inmates in out-of-state facilities. The department must evaluate the proposals by October 1 of each year and notify a county if state inmates can be placed in the county's jail beginning the following January 1. The department must also give such counties priority over out-of-state contractors if the department determines that inmates may be placed in a county's jail.
The provision specifies that the daily cost for placing an inmate in a county jail must be determined by the Department of Corrections and the county, but requires the daily cost to be no higher than the highest daily rate provided to out-of-state contractors.
I am vetoing this provision because I object to the limits it places on the department's ability to negotiate contracts with county sheriffs. I support working with counties to house state inmates and the department is already pursuing agreements with counties to reduce reliance on out-of-state contract beds. Given the department's current authority in this area, this provision is unnecessary.
5. Juvenile Correctional Services Program Revenue Deficit
Sections 441d, 2493m, 9130 (2f) and 9430 (2f)
These provisions require the Department of Corrections to do all of the following:
Estimate unexpended revenues, less encumbrances, on or before March 15 of each odd-numbered year, that will remain in the juvenile correctional services appropriation on June 30 of that year, and provide the estimate to the Department of Administration and the Joint Committee on Finance.
Require that 50 percent of any deficit projected by the Joint Committee on Finance be included in the cost basis for calculation of secured correctional facility daily rates for each year of the subsequent biennium, and require that the share of daily rate revenue proportionate to the share of the increased cost basis be reserved for retiring the deficit. Any revenue reserved for this purpose that exceeds the amount of the deficit must be reimbursed to the counties and the state in a manner proportionate to the total number of days of juvenile placements at the facilities for each county and the state. Specify that $569,300 be added to the cost basis for the calculation of daily rates in the 2003-05 biennium.
Submit quarterly reports to the Joint Committee on Finance detailing year-to-date revenues and expenditures and projecting the unexpended revenues, less encumbrances, that will remain in the appropriation on June 30 of that year. Require the department to report on efforts to reduce operating costs to minimize any potential deficit.
I am partially vetoing section 441d as it relates to the juvenile correctional services deficit and the other sections entirely to maintain the department's flexibility to effectively manage juvenile programs. I object to the reporting requirements and deadlines because they impose a burdensome work load at a time when agency budgets are limited. Further, these provisions would place an undue burden on counties by requiring the Department of Corrections to charge counties to recover deficits in the appropriation.
DISTRICT ATTORNEYS
6. Byrne and Penalty Assessment Funded Assistant District Attorneys
This provision allocates $165,000 PR-O annually in penalty assessment matching funds and associated Byrne funding of $495,000 PR-F annually to fund 11.0 FTE PR-O assistant district attorney positions. To provide the remaining match funding necessary to fully fund 11.0 FTE PR-O assistant district attorney positions, the provision directs the Office of Justice Assistance to determine a reduction in penalty assessment matching funds of $22,300 PR-O annually and associated Byrne funds of $66,900 PR-F annually from among the following programs: (a) antidrug task forces; (b) Governor's Law Enforcement and Crime Commission special projects; (c) truancy and supervision programs; (d) Wisconsin Incident Based Reporting System program; and (e) children's community grants.
I am vetoing this provision because I object to exempting the district attorneys from spending reductions. I am lining out the appropriation under s.
20.475 (1) (h) and writing in a smaller amount that deletes $660,000 PR-O funding in each fiscal year. I am also requesting the Department of Administration secretary not to allot these funds. The effect of this veto will be to delete the funding increase and position authority added by the Legislature and instead implement my recommendation to reduce the district attorneys GPR salaries and fringe benefits appropriation by $900,000 GPR and 15.0 FTE GPR positions annually.
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Further, I object to the allocation of scarce penalty assessment and Byrne funds for assistant district attorney positions. Diverting these funds to assistant district attorney positions reduces the ability of the state to fund a variety of programs and does not provide a long-term solution for funding the positions. During fiscal year 2002-03, my administration facilitated the Joint Committee on Finance approval of 11.0 FTE PR-F assistant district attorney positions. As more federal funding is made available in the future, the State Prosecutors Office will forward similar position requests to the Department of Administration.
Since federal requirements mandate that Byrne funding for assistant district attorney positions be limited to four years, the Legislature's proposal would have created a long-term GPR commitment for the state. Vetoing this provision will give the Office of Justice Assistance more flexibility to use these penalty assessment matching funds and associated Byrne funding for other crime prevention and law enforcement programs and initiatives.
HEALTH AND FAMILY SERVICES
7. Medical Assistance – Revenue Report
Sections 9124 (10f) and 9124 (11f)
These sections require the Department of Administration secretary to submit to the Joint Committee on Finance by December 1, 2003, a report detailing projected expenditures in the Medical Assistance program, federal funding available to the state and recommendations for reductions to the Medical Assistance program if expenditures are projected to outpace revenues. These sections also create session law requiring the Department of Health and Family Services to submit a proposal to the Legislature to fund expanded services or increase rates for home- and community-based waiver services, programs to reduce the use of nursing homes, increased rates for noninstitutional providers, and expansion of Family Care or additional services under the Community Support program, if there are sufficient federal Medical Assistance program revenues available.
I am vetoing these sections because they are unnecessary. I strongly support the concept of expanding the availability of community-based care, but the expenditure eporting requirement is unneeded. Under current law, the Department of Health and Family Services has the authority to reallocate Medical Assistance resources and could, if funding is available, create new slots administratively. I also object to this provision because it imposes an unnecessary and burdensome reporting requirement and interferes with agency discretion regarding the submittal of proposals to the Legislature.
8. Graduate Medical Education
These provisions, compared to my original budget, partially restore funding for supplemental payments to hospitals for graduate medical education and specify that, of the GPR funding allocated for these payments, $2,000,000 per year shall be expended on indirect graduate medical education.
I am partially vetoing section 286 [as it relates to s.
20.435 (4) (b)] because the Medical Assistance program cannot afford this level of payment. I am lining out the s.
20.435 (4) (b) appropriation and writing in a smaller amount that deletes $3,033,700 in fiscal year 2003-04. I am also requesting the Department of Administration secretary not to allot these funds. With this veto I am reflecting my intent to eliminate all but $1,000,000 GPR in fiscal year 2003-04 funding for graduate medical education, while maintaining the fiscal year 2004-05 funding level of $4,037,900. I am also vetoing section 9124 (12q) because limited resources should be focused on direct medical education. The state cannot afford the level of payment included in the Legislature's budget due to the failure of the Legislature to transfer funding from the Patients Compensation Fund, leaving a deficit in excess of $200 million in the Medical Assistance program.
I support reviewing the funding level for these payments in the 2005-07 biennium. Our teaching hospitals play an important role in preparing and training Wisconsin's future physicians, and I am committed to maintaining this support now and in the future.
9. Nursing Home Bed Assessment
Sections 286 [as it relates to s.
20.435 (4) (b)], 1333d, 9124 (11k), 9124 (11p) and 9424 (7)
These sections make three changes to my proposal to provide a 3.3 percent rate increase for nursing home providers under the Medical Assistance program through increasing the assessment on nursing home beds from $32 per occupied bed per month to $116 per licensed bed per month. First, the sections provide for a 3.2 percent rate increase by appropriating $2,729,500 GPR in fiscal year 2003-04 and $5,229,700 GPR in fiscal year 2004-05, supplementing revenue generated from the Legislature's assessment level of $75 per licensed bed per month. Second, the provision alters the formula for nursing home reimbursement under Medical Assistance by specifying that the same proportionate share of funding allocated for direct care services in fiscal year 2002-03 will be maintained in all future fiscal year nursing home allocations. Third, the sections require the Department of Health and Family Services to submit a waiver to exempt facilities with a high proportion of private-pay residents from the assessment, as well as to report to the Joint Committee on Finance on the feasibility of exempting all private-pay beds from the bed assessment.
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I am lining out the appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $2,729,500 GPR in fiscal year 2003-04 and $5,229,700 GP in fiscal year 2004-05 because I object to using GPR funds to pay for rate increases to nursing homes, when the Legislature deleted funding for rate increases to community-based, long-term care providers. In my budget proposal, I identified a mechanism to provide the rate increase for nursing homes by leveraging additional federal dollars through the $116 per bed assessment instead of using GPR funds. While I support a rate increase for nursing homes, the deficit in the Medical Assistance program included in the budget passed by the Legislature makes this rate increase unaffordable. By lining out the appropriation under s.
20.435 (4) (b) and writing in a smaller amount, I am vetoing the additional GPR in the bill that was added by the Legislature. I am also requesting the Department of Administration secretary not to allot these funds. This veto will effectively reduce the rate increase for nursing homes to an estimated 2.6 percent per year.
I am also vetoing section 1333d because it constrains the Department of Health and Family Services' authority to administer reimbursement for nursing homes through earmarked allocations of Medical Assistance resources. The department currently uses a formula that allocates nursing home funding between six cost centers. This section arbitrarily freezes the proportion of nursing home funding that would be used for the direct care cost center at the level provided in fiscal year 2002-03, which fails to recognize that in future years, a different allocation of resources may be needed to address changing conditions in the nursing home marketplace.
Finally, I am vetoing sections 9124 (11k) and 9124 (11p) and partially vetoing section 9424 (7) because waivers and proposals to exempt private-pay beds and facilities with high proportions of private-pay beds from the bed assessment would by definition reduce the amount of revenue that would be collected through the bed assessment. These provisions provide no mechanism to offset the lost revenue. If implemented, these sections would either require the department to reduce funding for all other nursing homes or to fund nursing homes at the same level, thus creating a larger deficit in the Medical Assistance program.
10. Nursing Home Bed Assessment Credit
Sections 286 [as it relates to s.
20.835 (2) (e)], 666m, 1580r, 1580s, 1580w, 9345 (4f) and 9445 (3f)
These provisions create a sum sufficient appropriation to provide a refundable income tax credit for nursing home residents who pay an assessment levied by the Department of Health and Family Services on licensed nursing home beds that generates revenue for the Medical Assistance program. The tax credit would be in an amount up to $43 for each month the assessment is paid by the individual, which is equal to the new $75 assessment on licensed nursing home beds less the existing $32 assessment.
I am partially vetoing section 286 to delete the appropriation under s.
20.835 (2) (e) and am vetoing sections 666m, 1580r, 1580s, 1580w, 9345 (4f) and 9445 (3f) because this tax credit is likely in violation of federal Medicaid regulations. States may implement assessments on providers as a financing mechanism for Medical Assistance programs, but federal rules require that the assessment be uniform, broad based and that it not contain provisions that hold the payers of the assessment harmless. The federal rule under
42 CFR 433.68 (f) indicates that provider assessments violate the hold harmless provision if ". . . the tax provides, directly or indirectly, for any payment, offset, or waiver that guarantees to hold taxpayers harmless for all or a portion of the tax." A tax credit which reduces the impact of the assessment on an individual clearly could be challenged on this premise. I also object to spending additional GPR given the state's fiscal condition.
11. Prescription Drug Reimbursement Rates
This provision partially restores funding for reimbursement to pharmacies for prescription drugs purchased under the Medical Assistance, BadgerCare and SeniorCare programs. This additional funding provides for a reimbursement rate for brand name drugs at the average wholesale price (AWP) minus 12 percent. I originally recommended a rate of AWP minus 15 percent as a form of cost containment in these programs and as a measure to avoid large across-the-board cuts in provider rates and participant eligibility.
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I am partially vetoing this provision because I object to the limited increase in the average wholesale price discounted reimbursement rate, which the Medical Assistance program cannot afford. By lining out the Department of Health and Family Services appropriation under s.
20.435 (4) (b) and writing in a smaller amount to delete $2,244,200 GPR in fiscal year 2004-05, I am reducing Medical Assistance funding related to this provision. By lining out the appropriation under s.
20.435 (4) (bc) and writing in a lower amount to delete $64,300 GPR in fiscal year 2004-05, I am reducing funding for the BadgerCare program related to this provision. By lining out the appropriation under s.
20.435 (4) (bv) and writing in a lower amount to delete $735,700 GPR in fiscal year 2004-05, I am reducing funding for the SeniorCare program related to this provision. These reductions will produce total savings across the Medical Assistance, BadgerCare and SeniorCare programs of $3,044,200 GPR in fiscal year 2004-05 and reflect my intent to partially veto this provision to establish a reimbursement rate of AWP-13 percent in fiscal year 2004-05. Furthermore, I am requesting the Department of Administration secretary not to allot these funds.
These savings will be set aside in the general fund balance, to be requested in the event that actual state tax revenues or federal Medicaid revenues fall short of the Legislature's estimates. This veto would not have been necessary if the Legislature had included my recommendations to use a surplus in the Patients Compensation Fund and more of the federal fiscal relief funding to support health care services for the elderly, disabled and low-income families under these programs.
12. Prescription Drugs – Prior Authorization Advisory Committee
Sections 286 [as it relates to s.
20.435 (4) (b)], 1392p, 1392q, 1392r, 1392rj, 1392s, 1392t, 1393 [as it relates to s.
49.45 (49m) (cg) and
(cr)] , 9124 (8w) and 9424 (8w)
These sections prohibit the department from requiring prior authorization for mental health drugs other than certain antidepressants, and delay the implementation of prior authorization for selective serotonin reuptake inhibiters (SSRIs) until March 15, 2004. To reflect the increased cost to the Medical Assistance program of delaying implementation, the Legislature increased funding by $2,000,000 GPR in fiscal year 2003-04. The provisions also establish numerous requirements on the structure and operations of a committee which advises the Department of Health and Family Services on decisions regarding the use of prior authorization for prescription drugs in the Medical Assistance program. The sections further add requirements as to the committee's membership, specify a meeting schedule, establish new reporting requirements and direct the committee to advise the department on the creation of a preferred drug list.
I am vetoing sections 1392p, 1392q, 1392r, 1392rj, 1392s, 1392t, 9124 (8w) and 9424 (8w) and am partially vetoing section 1393 as it relates to s.
49.45 (49m) (cg) because I object to this broad expansion of legislative oversight, which does not belong in a budget bill, and to the unnecessary reporting requirements it creates. I am also partially vetoing section 286 [as it relates to s.
20.435 (4) (b)] and partially vetoing section 1393 [as it relates to s.
49.45 (49m) (cr)] because I object to the statutory mandates that will restrict the well thought-out and reasonable use of prior authorization for mental health drugs. I am lining out the appropriation under s.
20.435 (4) (b) and writing in a smaller amount that deletes $2,000,000 in fiscal year 2003-04. I am also requesting the Department of Administration secretary not to allot these funds.
I understand and appreciate the intent of the Legislature in making these changes. We all share the goal of making sure that people with mental illness get the medications they need. However, I believe that taken together, the legislative changes are unnecessary permanent statutory restrictions that may limit the potential to achieve our mutual goals of assuring the practice of sound medicine while saving money.
Prior authorization is a vital tool in our efforts to control the skyrocketing costs of prescription drugs in the Medical Assistance program. I am committed to implementing prior authorization in a way that will ensure that people with mental illness receive the mediations they need. I am confident that the Department of Health and Family Services secretary will implement the prior authorization of mental health drugs in a sound fashion, taking the time needed to carefully consider the decisions and meaningfully include consumers in the process.
With respect to mental health drugs, the department is currently moving forward with a prior authorization policy solely for SSRIs. There are no plans to extend prior authorization to other mental health drugs. However, a permanent statutory prohibition on considering prior authorization for other medications ignores the potential changes in the marketplace for medications including future advancement in drug therapies and the availability of therapeutically equivalent and more cost-effective medications in the future.
With this veto I am reflecting my intent to eliminate funding added to delay the implementation of prior authorization for antidepressants until March 15, 2004, as well as the policy provisions on the structure and membership of the prior authorization advisory committee. The state needs to be positioned to take advantage of savings as soon as
sound prior authorization policy can be established.
13. Mental Health Medication Review Committee
Section 1392u
This section requires the Department of Health and Family Services secretary to create a new Mental Health Medication Review Committee to advise the department on the implementation of prior authorization for antidepressant drugs, specifically selective serotonin reuptake inhibiters (SSRIs), as well as any other proposals to use prior authorization for prescription drugs for the treatment of individuals with mental illness. The secretary would be required to ensure that at least 50 percent of the committee's membership consists of advocates and consumers.
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I am vetoing this section because I object to this additional restriction on the secretary's authority to administer the Medical Assistance program. Current law concerning a prescription drug prior authorization advisory committee does not need to be revised in order for the secretary to create a special mental health medication review committee that includes effective consumer and advocate participation.
14. SeniorCare – Copayments for Brand Name Prescription Drugs
Sections 1446g and 9424 (11g)
These sections increase from $15 to $20 per prescription the copayment for brand name drugs charged to all participants in the SeniorCare program.
I am vetoing these sections because I object to this additional change to the SeniorCare program, and this legislative proposal adds yet another reduction in benefits for Wisconsin's low-income seniors. The SeniorCare program has been crucial in controlling the skyrocketing costs of prescription drugs for more than 91,000 seniors enrolled in the program. Based on current caseload projections, this veto will increase costs in the SeniorCare program above currently appropriated amounts. I am, consequently, requesting the Department of Health and Family Services secretary to develop a plan to address this concern by July 1, 2004.
15. SeniorCare – Long-Term Care Insurance and Spend-Down Requirements
Sections 1438h, 1445h, 1446h and 9324 (13d)
This provision permits individuals enrolled in SeniorCare who have "spend-down" requirements to apply the cost of long-term care insurance premiums to their spend-down amount. Currently, individuals are eligible for SeniorCare if their income is below 240 percent of the federal poverty line, and those with incomes between 160 percent and 240 percent of poverty face a deductible requirement before being eligible for full SeniorCare benefits. If individuals or couples have income over 240 percent of the federal poverty line, they may be eligible for SeniorCare benefits if they meet an additional deductible requirement equal to the difference between their annual income and the income eligibility threshold at 240 percent of the poverty level. State law specifies that only prescription drug expenses may be applied to this spend-down requirement.
I am vetoing this provision because I object to using a prescription drug benefit program as an incentive for the purchase of long-term care insurance. The intent in creating deductible requirements in SeniorCare was to allow individuals with higher levels of income who also have high drug costs to benefit from the program. It is unclear to me why long-term care insurance costs merit special exception from this intent and not other expenses, such as premiums for health insurance or for supplemental prescription drug insurance. This provision could increase costs in the SeniorCare program and benefits only higher income individuals. This new policy represents a significant change in the nature of the program and should be thoroughly analyzed and discussed through separate legislation.
This veto will maintain the current program structure of allowing only prescription drug costs to apply to the spend-down requirement.
16. Managed Care for Recipients of Supplemental Security Income
Section 1312n
This section requires the Department of Health and Family Services to submit proposed contracts with managed care organizations, which provide services under Medical Assistance to recipients of supplemental security income (SSI), to the appropria te legislative standing committees for review. It also requires the department work with advocacy organizations and managed care organizations to determine the service needs of SSI recipients.
I am vetoing this section because legislative review is unnecessary and the department is already engaged in the critical task of working with interested parties. No other contracts with Medical Assistance providers are subject to legislative review, and I see no reason why such a requirement should be created for these specific managed care contracts. While I support the goal of having the department work with managed care organizations and advocacy groups, I object to legislative mandates directing an agency to conduct tasks already being performed.
17. Drug Savings and Funding for Health Maintenance Organizations
Section 9124 (7c)
This section requires the Department of Health and Family Services to develop a plan to provide increases in capitation rates paid to managed care organizations serving Medical Assistance and BadgerCare recipients, using any unanticipated savings in prescription drug expenditures in these programs. This plan would be subject to review and approval by both the Department of Administration secretary and the Joint Committee on Finance under 14-day passive review.
