Hennepin County says that the state's care proposal for the poor is too financially risky.
A delicate compromise to continue health coverage for about 37,000 poor Minnesotans, hammered out last month between DFL leaders and Gov. Tim Pawlenty, suffered a major blow Tuesday when Hennepin County commissioners rejected the state's terms.
While they didn't rule out participation by their hospital, Hennepin County Medical Center (HCMC), commissioners said they need a better deal for taking on 10,000 or so poor patients in the revamped General Assistance Medical Care program, scheduled to start June 1.
Without participation by HCMC, the biggest provider for these patients, the new program might fail. At least one other hospital said Wednesday that it would back out if Hennepin County does, and several outstate hospitals said last week they will not participate.
Commissioners said they worry the hospital could become responsible for a limitless number of patients from all over Minnesota, many with difficult chronic illnesses, while getting limited funds from the state.
"We can't do it that way," said County Board Chairman Mike Opat. "We'd be exposing Hennepin County taxpayers to incredible risk. Our uncompensated care [costs] could kill the hospital."
The county's action caused concern and confusion Wednesday among hospital officials and legislators.
Human Services Commissioner Cal Ludeman hinted in a statement Wednesday that there's room to negotiate: "We understand [Hennepin County] will be submitting a proposal and we will work with them to meet their goals within the parameters of the law."
But not all legislators who worked on the new law agree.
"I think we may need to give [Ludeman] some guidance because I'm not so sure the law offers enough leeway," said Rep. Erin Murphy, DFL-St. Paul, a primary negotiator with Gov. Pawlenty on the legislation after he vetoed the old program last year and vetoed a replacement this year. Murphy may propose amending the law.
Focus on HCMC
The compromise struck last month asks 17 major hospitals statewide to set up "coordinated care delivery systems" that -- for a single pot of money -- treat all General Assistance Medical Care patients who choose their hospital.
But only five of the 17, all in the Twin Cities metro area, have said they are likely to participate.
"With that little participation, it would be irresponsible to accept the program," Opat said. "It could be financially catastrophic. We'd have unlimited liability to treat patients who might come from all over the state."
If HCMC backs out, North Memorial Medical Center in Robbinsdale will, too, said a spokesman, who cited similar worries.
While concerned, officials at the other three hospitals said the Hennepin County decision does not change their plans, although all suggested that they, too, might seek limits on the number of patients they would see. They are Regions Hospital in St. Paul, University Fairview in Minneapolis and Fairview Ridges in Burnsville.
Brian McClung, the governor's spokesman, expressed little concern Wednesday: "Individuals needing care will show up at hospitals, including HCMC, regardless of whether or not hospitals participate in the program. They can accept the funding available in this plan or no funding at all. Ultimately, we think they'll accept the funding."
HCMC sees far more of the affected patients than any other hospital, more than 10,000 of the 16,000 enrolled in Hennepin County.
It expects to receive about $22.5 million in payments under the new law, down from $49 million last year. It has already cut staff and services to compensate.
Overall, the law would spend $164 million for the year, compared with the program's $386 million budget last year.
Hospitals that participate are expected to use better care coordination and preventive care to help trim their costs, although even the architects of the new law say they expect hospitals to lose money.
County officials have worried that if outstate patients in the program lack access to comprehensive care where they live, they would go to local hospitals for emergency care or treatment of common ailments, but come to Hennepin County for complicated -- and expensive -- care.
When they can't get care elsewhere, "GAMC patients flow downhill to us and Regions" hospital, said Mike Harristhal, director of government relations at HCMC.
"We're not saying we won't participate," he said. "But we have to negotiate something that doesn't leave us so [financially] exposed."
A different solution?
"Without HCMC, the new program can't work," said Rep. Tom Huntley, DFL-Duluth, who chairs the House Health and Human Services budget division. "But I think there's room to negotiate. I think the commissioner has the authority."
Less certain is Sen. Linda Berglin, DFL-Minneapolis, Huntley’s counterpart in the Senate who also negotiated with the governor. “We certainly never envisioned that hospitals could limit the number of patients,” she said. “I’m pretty concerned.”
Berglin said a better solution — one the governor has resisted so far because of higher state costs — would be to move the affected patients onto Medicaid, a larger program for low-income residents, which might be possible under the new federal health-care law. Both she and Huntley have bills to make that switch.
“I’ve almost got the money part worked out,” she said. “I think we can get it in the budget bill, but whether the governor to sign it — well, I’m trying to do the right thing and make the governor happy at the same time.”
Warren Wolfe • 612-673-7253