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.
S312
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.
S313
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.
S314
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.
I am vetoing this section because it restricts the department's administrative authority to reallocate resources within the Medical Assistance and BadgerCare programs for such needs. If there are additional savings in either prescription drug expenditures or other Medical Assistance budget items, the department needs the authority to best decide how to allocate these resources, taking into consideration the entire context of the Medical Assistance budget.
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18. Supplemental Nursing Home Payment Pilot Demonstration
Section 9124 (13k)
This section requires the Department of Health and Family Services to earmark $405,500 GPR in each year of the biennium from the Medical Assistance benefits appropriation for Milwaukee County to support a two-year demonstration project involving a facility with between 80 and 90 beds and with a population of residents of which 90 percent are Medical Assistance recipients. It is expected that the only facility meeting these requirements is the Kilbourn Care Center in Milwaukee.
I am vetoing this section because this pilot project has not been subject to the normal review of the Legislature nor been adequately justified. Earmarking these funds for this one facility would either mean that all other nursing homes throughout the state would receive less funding or the deficit in the Medical Assistance program would increase.
19. Food Stamp Retailer Transaction Fee
These sections restore funding for a $0.08 fee paid to grocers by the food stamp program for every electronic benefit transfer (EBT) transaction processed on grocers' own point-of-sale terminals. These sections also amend current law to make this fee, which was originally established to aid in the transition of a coupon-based food stamp system to an electronic benefits system, permanent.
I am partially vetoing section 286 [as it relates to s.
20.435 (4) (bm)] and am vetoing section 1450m because I object to the continuation of this fee, which was originally authorized to temporarily reward grocers who use their own point-of-sale terminals (as opposed to terminals purchased and maintained by the state) to process EBT benefits. By lining out the appropriation under s.
20.435 (4) (bm) and writing in a smaller amount that deletes $250,000 GPR per fiscal year, I am vetoing the part of the bill that funds this provision. I am also requesting the Department of Administration secretary not to allot these funds.
Only seven other states pay such a transaction fee and, of the seven, Wisconsin's fee is the highest. Grocers incur transaction costs with every sale, regardless of whether the purchase is made using cash, credit cards or checks. Grocers do not get reimbursed for these transaction costs which, with the exception of cash, are more expensive than processing an EBT transaction. While I support efforts to ensure grocers offer access to EBT-based food stamps, I feel the benefits grocers receive from this fee are small compared to the over $200 million paid annually to grocers for the actual cost of food purchased through food stamps.
This veto maintains the Department of Health and Family Services' ability to eliminate the fee administratively, and will delete funding for this subsidy.
20. Hospital Data Collection
Sections 2092c, 2092e, 2092f, 2092i, 2092j, 2093bg, 2093bh, 2094c, 2094d, 2094e, 2094f, 2094g, 2094L, 2094x, 2095re, 2095rn and 9124 (10k)
These sections require that the Department of Administration enter into a contract with the Wisconsin Hospital Association to collect health care information from hospitals and ambulatory surgery centers.
I am partially vetoing this provision because I object to the composition of the oversight board, the time frame for the data transfer, the ability of the Wisconsin Hospital Association to approve requests to waive the data requirements and certain limitations placed on the Department of Health and Family Services relating to data collection analysis and distribution. The result of these vetoes will be provisions that more closely resemble the compromise agreement reached by the Department of Health and Family Services and the Wisconsin Hospital Association. That agreement was designed to make the contract process more workable and ensure full public access to timely, quality data.
Since the language was introduced by the Joint Committee on Finance, the department, which currently collects such data, has been negotiating with the Wisconsin Hospital Association to make the proposal more workable. For example, it was agreed to use the existing Board on Health Care Information as the oversight body rather than creating a new board as required in the bill. The Department of Health and Family Services and the Wisconsin Hospital Association also agreed to move the start date back six months. However, the compromise package did not get incorporated into the budget. The effect of this veto will be to have the Department of Administration contract with the Wisconsin Hospital Association for the collection of health care data. The timeframe for the transfer is improved and the Department of Health and Family Services will continue to provide some oversight of the data. The veto will also provide more flexibility in the types of data collected and allow the Department of Health and Family Services to continue sharing data with other state agencies.
21. Chronic Disease Program
Sections 1424, 1425, 1426, 1429, 1430, 1433 and 9324 (2)
S316
These sections require that people with renal disease or adult cystic fibrosis apply to all other existing governmental health care programs, specified by the Department of Health and Family Services by rule, before they can apply for assistance under the chronic disease program, but it exempts people with hemophilia from this application requirement.
I am partially vetoing these sections to eliminate this exemption because it is too broad. In order to maximize the use of scarce GPR funding, it is essential to require that the maximum possible number of participants apply to programs partially funded by federal funds and to have those participants use those federally funded programs if found to be eligible.
Section 1426 requires the Department of Health and Family Services to pay claims in this program at the lower of the Medicare or Medical Assistance rate. I am partially vetoing this section because it would be a very expensive undertaking to completely redo the claims processing system used by the fiscal agent and there is no estimate of potential savings associated with this action.
22. Tobacco Control Advisory Committee
Sections 2459x and 9124 (5x)
These sections require the Department of Health and Family Services to establish a tobacco control advisory committee, which would essentially recreate a Tobacco Control Board, with duties similar to that board, within the department. These sections also require external, independent evaluations of the success of tobacco control projects.
I am vetoing these sections because they are unnecessary. Public health staff, through their current tobacco prevention and control efforts, are already consulting with an extensive network of people and agencies to assist the department in its future efforts to control the use of tobacco. In addition, the department is already committed to using both internal and external evaluations, using existing resources, to evaluate the effectiveness of these projects.
23. Health Insurance Risk Sharing Plan
Section 9124 (10h)
This section requires the Department of Health and Family Services to prepare a request for proposal for bids to become the fiscal agent for the Health Insurance Risk Sharing Plan. It further specifies that the proposal should be ready to issue six months after the effective date of passage of the biennial budget and that the proposal be reviewed by the Joint Committee on Finance subject to the 14-day passive approval process.
I am vetoing this section because I object to the requirements it imposes on the department. These requirements are burdensome and unnecessary. The budget bill includes a provision allowing the department to prepare a request for proposal for bids to be the fiscal agent for the Health Insurance Risk Sharing Plan. Based on this provision, I request the Department of Health and Family Services secretary to prepare a request for proposal.
24. Multiple Sclerosis Screening
Section 2455r
This section requires that the Well-Woman Program earmark $60,000 GPR annually of its current appropriation for multiple sclerosis screening.
I am partially vetoing this section because the earmark is arbitrary and could reduce the Department of Health Family Services' ability to fund other needed services, such as breast and cervical cancer screening. This veto will remove the reference to "each fiscal year" and delete the word "screening" so that the department can use the $60,000 as needed to cover the actual annual costs of providing referrals to appropriate health care providers and for multiple sclerosis education. My intent is to give the department the flexibility to determine the level of spending needed in each fiscal year until a total of $60,000 has been expended for these services. If the level of multiple sclerosis spending over the biennium is insufficient to fully expend the $60,000 earmark, the commitment will carry forward into future fiscal years until it is fulfilled.
25. Northern Wisconsin Center
Sections 1490c and 1496c
These sections prohibit the Northern Wisconsin Center for the Developmentally Disabled from transferring residents and staff to other centers on an involuntary basis. I am vetoing section 1490c and partially vetoing section 1496c because they limit the center's flexibility in best meeting resident treatment needs and in best allocating staff to meet workload demands. Current law already provides adequate protection because residents may only be transferred to another center with the permission of the legally responsible county, or by court order. Transfers are done in consultation with residents' guardians, and are based on the best interests of the residents. The Department of Health and Family Services also requires flexibility to deploy positions to areas of need, consistent with current bargaining agreements. I am vetoing these sections to retain this flexibility and to ensure that individuals with developmental disabilities are placed in appropriate facilities.
26. Daily Rate for Community Placements
Section 1320
S317
This section identifies the daily placement rate for people moved from the centers for the developmentally disabled to placements in the community. The rate would increase from $225 per day to $325 per day beginning in fiscal year 2004-05. I am partially vetoing this section so that the new rate takes effect in fiscal year 2003-04 because the higher rate enables individuals to be placed in the community where they can be served well and in a cost-effective manner.
27. Bureau of Quality Assurance Surveyors
