This provision increases reimbursement rates for nursing home services by an estimated 1.4 percent in each year of the biennium. I had recommended the same rate increase in my budget proposal, but funded this rate increase with an increased assessment on licensed nursing home beds. The assessment would have generated over $67 million in new federal funding over the biennium. This new federal funding made such a rate increase affordable, but the Legislature's budget instead diverts scarce GPR dollars from property tax relief.
I am lining out the appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $5,141,700 GPR in fiscal year 2005-06 and $10,118,000 GPR in fiscal year 2006-07. 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.
I continue to favor a $50 increase in the monthly assessment levied on licensed nursing home beds and would support separate legislation that implemented a $50 increase in the assessment. Such a proposal would provide for a larger rate increase than funded by this provision, and capture additional federal funds.
5.
Community Relocations Initiative
Sections 869 and 9121 (12r)
Section 869 specifies that the Department of Health and Family Services can only relocate a Medical Assistance eligible individual from a nursing home to a community care setting in cases where the individual has resided in a nursing home for at least 100 days. Section 9121 (12r) requires the department to submit a report to the Joint Committee on Finance by January 1, 2007, identifying the effects of the Governor's Community Relocations Initiative.
I am partially vetoing section 869 to delete the 100-day stay requirement because it would force individuals in need of long-term care services to remain in a nursing home for at least three months, even in cases when they could be placed in a community care setting long before the 100-day waiting period has expired. Since the intent of the Community Relocations Initiative is to prevent long-term institutional stays, I am directing the department to develop policies which will prevent individuals from entering a nursing home for the sole purpose of obtaining a community placement.
I am vetoing section 9121 (12r) because the department already has to meet significant reporting requirements related to the Community Integration Program II as part of its statutory obligations. Information about the Community Relocations Initiative can be included in existing reporting requirements and does not require a separate report.
6.
Functional Screen
Sections 1132f and 1217r
These provisions restrict the Department of Health and Family Services from using the long-term care functional screen to determine levels of care for nursing home residents and to set Medical Assistance reimbursement rates for nursing homes.
I am vetoing these provisions because I object to a permanent statutory ban on the use of the functional screen to determine levels of care for nursing home residents and to set reimbursement rates for nursing homes. The department will initially use the federal Minimum Data Set for data for level of care determinations rather than the functional screen. However, as the state continues to develop innovative ways to deliver long-term care services in a cost-effective manner, the functional screen could prove to be an important tool in establishing a single standard for measuring levels of care and determining reimbursement rates across all service delivery models in the future.
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7.
Nursing Home Reimbursement Rates
Section 1128m [as it relates to identifying payments to nursing homes]
This section directs the Department of Health and Family Services to identify the extent to which payments are made to nursing homes for direct care nursing services.
I am partially vetoing this section because there is no need for a permanent statutory requirement of this sort. The department can provide this information as part of its regular communications with the nursing home industry.
8.
Pharmacy Reimbursement – Rates for Brand Name Prescription Drugs
This provision maintains funding for a pharmacy reimbursement rate for brand name drugs at the average wholesale price (AWP) minus 13 percent. I had proposed a rate more aligned with prices paid by other insurers and purchasers of prescription drugs, at AWP minus 16 percent. The Legislature restored the funding and thus increased pharmacy reimbursement in the Medical Assistance, BadgerCare and SeniorCare programs.
Numerous independent reports have highlighted two problems with Wisconsin's reimbursement system for brand name drugs. First, the rate Wisconsin pays pharmacies for these drugs is significantly higher than pharmacies' acquisition costs. A 2004 report by the U.S. Office of the Inspector General found the average acquisition cost to pharmacies for single source innovator drugs is AWP minus 17.2 percent, 4.2 percentage points higher than what Wisconsin reimburses pharmacies for these drugs.
Second, the AWP-based system has been repeatedly shown to be an ineffective tool, easily manipulated by manufacturers. Wisconsin needs to eliminate the use of an AWP-based reimbursement rate and develop a methodology that is not only fair to pharmacies, but also provides the Medical Assistance program with a reasonable price. I am, therefore, directing the Department of Health and Family Services secretary to develop a new reimbursement system for consideration in the 2007-09 biennial budget.
I am lining out the Medical Assistance benefits appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $2,270,300 GPR in fiscal year 2005-06 and $3,430,900 GPR in fiscal year 2006-07. I am also lining out the BadgerCare benefits appropriation under s.
20.435 (4) (bc) and am writing in a smaller amount that deletes $234,100 GPR in fiscal year 2005-06 and $386,400 GPR in fiscal year 2006-07. Finally, I am lining out the SeniorCare benefits appropriation under s.
20.435 (4) (bv) and am writing in a smaller amount that deletes $1,416,900 GPR in fiscal year 2005-06 and $2,202,700 GPR in fiscal year 2006-07. By lining out the appropriations under s.
20.435 (4) (b),
(bc) and
(bv) and writing in smaller amounts, I am vetoing the additional GPR in the bill that was added by the Legislature to increase the reimbursement for brand name drugs to AWP minus 13 percent. I am also requesting the Department of Administration secretary not to allot these funds. This veto will reduce the reimbursement rate for prescription drugs to AWP minus 16 percent.
9.
Pharmacy Reimbursement – Dispensing Fees
This provision maintains funding for a pharmacy dispensing fee of $4.38 per prescription. As with the reimbursement rate for brand name drugs, I had proposed a dispensing fee more aligned with prices paid by other purchasers of prescription drugs. My budget reduced the fee to $3.88 per prescription. The Legislature restored the funding and thus reversed the decrease in the dispensing fee paid under the Medical Assistance, BadgerCare and SeniorCare programs.
I am lining out the Medical Assistance benefits appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $613,100 GPR in fiscal year 2005-06 and $865,900 GPR in fiscal year 2006-07. I am also lining out the BadgerCare benefits appropriation under s.
20.435 (4) (bc) and am writing in a smaller amount that deletes $57,800 GPR in fiscal year 2005-06 and $89,200 GPR in fiscal year 2006-07. Finally, I am lining out the SeniorCare benefits appropriation under s.
20.435 (4) (bv) and am writing in a smaller amount that deletes $648,900 GPR in fiscal year 2005-06 and $925,400 GPR in fiscal year 2006-07. By lining out the appropriations under s.
20.435 (4) (b),
(bc) and
(bv) and writing in smaller amounts, I am vetoing the additional GPR in the bill that was added by the Legislature to restore the dispensing fee to $4.38 per prescription. I am also requesting the Department of Administration secretary not to allot these funds. This veto will reduce the dispensing fee paid to pharmacies by $0.50 from $4.38 to $3.88 per prescription.
10.
Prohibition Against Limitations on Reimbursement for Psychotropic Medications
Section 9121 (14k)
This section prohibits the Department of Health and Family Services from imposing any limitations on reimbursement under the Medical Assistance, BadgerCare or SeniorCare programs for psychotropic medications, other than stimulants and related agents or selective serotonin reuptake inhibitors, which are prescribed to treat a mental illness. I am vetoing this section because I object to this limitation on the department's ability to manage costs, particularly with respect to managing use of the most expensive class of drugs available under these programs.
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The department, through its new Prior Authorization Advisory Committee, has taken great care in establishing an open, evidence-based process through which all prescription drugs can be evaluated for the implementation of reasonable, cost-saving policies. Moreover, in prohibiting any new limitation on reimbursement, the language would prevent the application of a lower average wholesale price discount as directed by the veto on the reimbursement rate for brand name prescription drugs (see Item #8). If this section were retained, it would increase costs in these programs by millions of dollars, diminishing the ability of the state to finance other vital health care services under Medical Assistance.
11.
Report on Physician Prescribing Practices
Section 9121 (14p)
This section requires the Department of Health and Family Services to submit by January 1, 2006, to the Joint Committee on Finance and appropriate standing committees of the Legislature, a report detailing the prescribing practices of every physician who is a certified Medical Assistance provider. The report specifically should identify: (a) the percentage of prescriptions written for generic drugs and for brand name drugs; (b) the number and percentage of prescriptions requiring prior authorization; and (c) the number of prescriptions for brand name drugs when there is a generic available.
I am vetoing this section because it creates an onerous reporting requirement and will not result in interpretable data that could be used for meaningful policymaking purposes. Some physicians may simply work in specialties where there are not many generic drugs available to treat their patients. The department already collects data, which is used both in prospective and retrospective drug utilization review, to ensure that prescriptions are appropriate and cost-effective. Given the unclear need for this additional data, I am vetoing the reporting requirement.
12.
Report on Capping the Number of Brand Name Prescription Drugs
Section 9121 (13n)
This section requires the Department of Health and Family Services to deliver a report to the Joint Committee on Finance by July 1, 2006, which analyzes the fiscal impacts of restricting the number of brand name drugs a Medical Assistance, BadgerCare or SeniorCare recipient receives in a given month. The report would identify both savings to the state and costs incurred by the department in implementing this policy. I am vetoing this section because it creates an unnecessary reporting requirement.
More importantly, I do not wish to have the department spending its time analyzing proposals that are poor fiscal and bad public policy. Such arbitrary restrictions to the access of medical services would have a disproportionate impact on those persons who are most vulnerable and most in need of services from the Medical Assistance program – persons with cancer, acquired immunodeficiency syndrome or mental health issues. States that have implemented similar caps have not demonstrated these policies generate any significant savings and may actually increase costs by exacerbating medical problems experienced by the chronically ill.
13.
Generic Drug Copayments
Sections 1144p, 1184c, 9321 (9w) and 9421 (11w)
These sections increase the copayment charged to recipients under Medical Assistance and BadgerCare for generic prescription drugs from $1 to $3, the maximum allowed under federal law. This copayment level is also the same as the copayment required for brand name prescriptions. This section was passed with the intention of reducing expenditures under Medical Assistance and BadgerCare by $1,807,600 in fiscal year 2005-06 and $2,530,600 in fiscal year 2006-07.
I am vetoing this section because it will actually increase, not decrease costs. The bedrock of the pharmacy program is the department's efforts to encourage the use of generic drugs, which save the state tens of millions of dollars every year. However, if recipients are required to pay the same copayment for generic drugs as for brand name drugs, they will have no incentive to use the less costly prescriptions. The department projects that this policy shift would increase the use of brand name medications, causing Medical Assistance and BadgerCare expenditures to rise by over an estimated $9 million in fiscal year 2005-06 alone.
14.
Outpatient Hospital Reimbursement Rates
This provision increases reimbursement rates for hospital services provided on an outpatient basis by $2,500,000 GPR in each fiscal year, an estimated five percent increase. I am lining out the appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $2,500,000 in each year of the biennium. The state cannot afford this level of rate increase. Furthermore, providing hospitals a rate increase while all other providers have gone without increases for years is simply not fair. 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.
15.
Essential Access City Hospital Payments
Sections 1135c, 1135d and 1135e
These sections modify current law provisions that govern the distribution of the essential access city hospital (EACH) supplemental hospital payment under Medical Assistance effective July 1, 2007. The intent of this provision is to expand the number of hospitals that qualify for this supplemental payment. Under current law and the existing Medical Assistance state plan, only one hospital qualifies for this supplemental payment.
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While I support the intent of helping inner city hospitals with a large volume of Medical Assistance recipients, I am vetoing these sections because they create an unfunded, advance commitment for the 2007-09 biennium. If the Legislature wants to change the qualifying criteria for this supplement to increase the number of hospitals that qualify, it should provide the funding to do so. Otherwise, this provision would either exacerbate the structural deficit going into the next biennium or it would result in a cut to the hospital currently receiving this supplemental payment. Therefore, I am removing this advance commitment. I support reviewing this item in a thoughtful and comprehensive manner which includes funding options that can be best addressed as part of the next biennial budget.
16.
Bariatric Surgery Prohibition
Sections 1146j, 1157j and 9321 (9q)
These sections eliminate the coverage of bariatric surgery under the Medical Assistance and BadgerCare programs.
I am vetoing these sections because current state law strictly limits the availability of this service to a medical emergency. Prior authorization requirements recently enacted by the Department of Health and Family Services make certain that the service is only used when there is a direct and immediate medical threat to the patient, ensuring the procedure is truly a treatment of last resort. Coverage of the surgery is limited to participants who are morbidly obese, have failed with other weight loss treatments, have a documented commitment to adhere to a weight management program, and are diagnosed with comorbidity medical conditions that have not responded to treatment and threaten the patient's life. Further, medical professionals should decide what is a medically necessary procedure. It is not surprising that the only physician, in the Legislature voted against this provision.
I am directing the Department of Health and Family Services secretary to strictly adhere to the existing statutory limitation of only providing this service in the case of a documented medical emergency.
17.
Actuarial Soundness of Health Maintenance Organization Reimbursement Rates
Section 1124g
This section requires the Department of Health and Family Services to provide reimbursement for services provided by health maintenance organizations to Medical Assistance or BadgerCare recipients through capitation rates that are actuarially sound.
I am vetoing this section because it unnecessarily duplicates federal law in state law. The redundant requirements would not change the contracting process the department uses to establish reasonable reimbursement rates for prepaid health providers, a process already required in order to qualify for federal Medical Assistance funding. Furthermore, the provisions could create confusion in the future if federal laws were to change, but corresponding changes to state law were not enacted.
18.
Family Planning Funding Preference
Sections 2133c, 2133f, 2133i, 2133L, 2133n and 2133p
These sections require the Department of Health and Family Services to give preference to local public health departments and tribal health centers in awarding state and federal family planning funds. These funds are currently distributed through a competitive process.
I am vetoing these sections because this method of procurement will politicize the distribution of these funds and increase the likelihood that access to vital family planning services will be restricted. Thousands of low-income women rely on these services for their health care. This provision risks compromising the health status of these women and their families.
19.
Foster Care Rates
Section 951d
This section reduces my proposed increase in monthly foster care rates by 50 percent in fiscal years 2005-06 and 2006-07.
I am partially vetoing this section because I object to the rate increase provided by the Legislature. Wisconsin has the lowest basic foster care rate in the Midwest. Monthly foster care rates have not been increased since 2001 making it difficult to recruit and retain foster families to provide care for our state's most vulnerable children. The effect of this partial veto will be to create a five percent increase in monthly foster care rates beginning January 1, 2006. The five percent increase will remain in effect for the remainder of the biennium to enhance the recruitment and retention of quality foster families.
20.
Termination of Parental Rights Warning in Subsidized Guardianships
Section 926
This section requires the juvenile court to verbally notify parents of the grounds for termination of their parental rights, as well as the conditions necessary for their child to be returned home when the court appoints a subsidized guardian for the child. The section also permits the court to terminate the parental rights of a parent who has been so notified if the parent fails to visit or communicate with the child for at least a three month period.
I am vetoing this section because it is unnecessary and burdensome on the juvenile court and may discourage prospective guardians and parents from pursuing guardianship. Current law will still permit courts to terminate parental rights in guardianship cases if a parent has had no contact with the child for six months or longer and termination of parental rights is in the best interests of the child.
21.
Bureau of Milwaukee Child Welfare Report on Caseworker Retention
Section 9121 (12d)
This provision requires the Department of Health and Family Services to submit a report to the Joint Committee on Finance by January 1, 2006, concerning caseworker retention activities conducted by the Bureau of Milwaukee Child Welfare. The report must include results of a review of caseworker turnover conducted by the Child Welfare League of America.
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I am vetoing this section because an additional report on caseworker retention is unnecessary. Two reports have already been completed on caseworker retention indicating the need for salary adjustments and additional training. The Joint Committee on Finance removed the $841,500 funding per fiscal year I provided to support these recommendations and, instead, substituted a requirement for an additional report. The removal of funding is a setback for children who endure longer stays in out-of-home care when their caseworkers leave.
22.
Study of Funding Options for Refugee Family Strengthening Project
Section 9121 (13f)
This provision requires the Department of Health and Family Services, in consultation with project funding recipients, to submit a report by January 1, 2006, to the Joint Committee on Finance. The report is to identify alternative funding sources for the Refugee Family Strengthening Project.
I am vetoing this section because a report on funding alternatives is unnecessary. I support the goal of identifying alternative funding sources for the Refugee Family Strengthening Project and am requesting the department to develop such options.
23.
Study of Evidence-Based Practices
Section 9121 (13g)
This section directs the Department of Health and Family Services to submit a report to the Legislature by December 31, 2006, regarding how evidenced-based practices in substance abuse and mental health treatment are determined for the purposes of awarding grants for county substance abuse and mental health treatment programs.
I am vetoing this section because requiring the report is unnecessary. I support the goal of identifying sound evidenced-based practices for substance abuse and mental health treatment and am requesting the department continue its work in this area.
24.
Supplemental Security Income Benefits Appropriation
Sections 140 and 331f change the existing supplemental security income benefits appropriation from a sum sufficient appropriation to a sum certain appropriation. Section 1188d permits the Department of Health and Family Services to request additional funding from the Joint Committee on Finance for this appropriation if budgeted funding is insufficient to meet caseload demand.
I am partially vetoing section 140 and vetoing section 331f because keeping the appropriation as a sum sufficient will give the department the maximum possible flexibility in managing this program. I am vetoing section 1188d because this provision is unnecessary if the appropriation is maintained as a sum sufficient.
