April 4, 2016
PEIA Finance Board Makes Latest Play in “Political Football”
Legislative leaders have indicated they are making progress in negotiations among themselves and with officials from the governor’s office toward working out a new state budget, but they haven’t released any details. Meanwhile, lack of action on the budget for the fiscal year beginning in July has forced members of the Public Employees Insurance Agency’s Finance Board to take a step backward.
Those board members are angry with the legislature, legislative leaders are upset with the board, and “draconian” cuts in benefits for PEIA members are again set to go into effect. The only way to avoid those cuts is for the legislature to pass a state budget that includes more funding for PEIA, but so far there is nothing more than promises that legislators will do that.
The PEIA Finance Board has reverted to approving $120 million in benefit cuts for the next fiscal year, as they did last December. After Gov. Earl Ray Tomblin proposed in January a state budget that would use an increase in the tobacco tax and other means to put more money into PEIA, the board approved a new plan to avoid the benefit cuts. But the House of Delegates declined to approve the tobacco tax increase or any other revenue increase. Consequently, the legislative session ended without agreement on a state budget for the fiscal year that will begin in July. Tomblin is expected to call a special session this spring to work out the budget, but there is no indication that the House and Senate are close to resolving their differences on the budget.
House Speaker Tim Armstead and Senate President Bill Cole have criticized the PEIA Finance Board for meeting again this week to go back to the plan with the $120 million cuts of benefits. Armstead, R-Kanawha, called it an “unnecessary step.” Cole, R-Mercer, accused the administration of using PEIA “as a political football for the sole purpose of gaining leverage in the budget process.”
But Finance Board members said they had no choice because of their fiduciary responsibilities and because open enrollment for PEIA’s next fiscal year is set to begin on Saturday. “Basically, we’ve been pretty much been put in a box to make a decision when there’s not sufficient funding,” Elaine Harris, a Finance Board member, said. People on both sides have referred to the benefit cuts as “draconian,” she added.
Another board member, Josh Sword, said, “It’s like that movie with Bill Murray, ‘Groundhog Day.’ It’s a never-ending nightmare, except under this scenario, I don’t think there’s going to be a happy ending.”
Although legislators did not approve more funding for PEIA, one bill they seriously considered would have restructured the Finance Board and prohibited people like Harris and Sword from serving on it. Senate Bill 622, which got through the Senate on a strict party-line vote but died in the House in the final days of the session, would have prohibited registered lobbyists from serving on the board. Harris lobbies on behalf of the Communications Workers of America and Sword lobbies on behalf of the AFL-CIO.
Another board member, Mike Smith, said he is afraid that, unless the legislature provides some help, PEIA might face the type of problems its predecessor faced in the late 1980s when it had trouble paying its bills and pharmacies, hospitals and doctors’ offices had signs saying they would not take patients with insurance from the state.
“I’m not political. I don’t give a crap about politicians. The last 10 years, it’s all went south.” – Mike Smith
“I’m not political,” he said, choking up as he spoke. “I don’t give a crap about politicians. The last 10 years, it’s all went south.”
Smith added that the “powers that be” think state employees should be happy they have jobs despite low pay and benefits that no longer are very good.
Armstead said in a news release, “The House and Senate leadership have repeatedly committed to fully funding our state employees’ health insurance program for the coming year.” But he also asserted that the commitment was reflected in the budgets that each chamber passed, even though the Senate version included a $1.00 per pack increase in the cigarette tax and the House version instead chose to take money out of the Rainy Day Fund and use other one-time sources to balance the budget.
Cole said, “At this time of fiscal crisis, we need to have a serious debate about how much government we want and how much we want to tax our people for it. Using scare tactics about people’s health insurance is not the way to accomplish that.”
But Finance Board members and PEIA Director Ted Cheatham contended they had no choice but to approve a plan with the benefit cuts this week because open enrollment will begin on Saturday. Cheatham said PEIA must have a “shoppers’ guide” ready for members to use during the open enrollment period. Board members approved a motion to avoid the big cuts if they get more funding from the legislature, but Cheatham said if the legislature waits too long to approve a new budget, PEIA will face a delay in getting the revised information out to people insured through the agency.
“As long as there is a budget in place by June 30 – and we intend to have one long before that point – then we will avert these ‘draconian’ cuts to PEIA.” – Speaker Tim Armstead
Armstead said he and other legislative leaders have been assured “that as long as there is a budget in place by June 30 – and we intend to have one long before that point – then we will avert these ‘draconian’ cuts to PEIA.”
However, Cheatham said that if the budget would be approved in late May or early June, PEIA would have trouble communicating the changes to members.
“Electronic communication can probably happen within about a week,” he said. “Hard copy – and a lot of people need hard copy – is going to take a two-to-three-week lead time to get out. And that’s just the communication on what the plan is.”
Making a change in plans operational requires a long lead time, Cheatham said. “We have literally hundreds of plans that have to be built when something changes at the pharmacy side and at the medical side,” he said. “I will tell you it’s a minimum of 30 days to set up a system to be able to pay claims and to pay benefits. So if this happens June 30th, probably the scenario is we publish what the new plan is and we shut the plan down while we build it and we don’t pay any claims until we get it set up to pay claims correctly, which would probably be closer to August. If this happens the first week in June, potentially we could be ready to pay claims by July. I would tell you a month’s lead time is what we’re going to need to make it operational.”
Harris called it “a precarious situation” for PEIA. “I think we have done as much as we can do,” she said. “I understand the fiduciary responsibilities we all have.”
About 230,000 West Virginians are covered by PEIA. They include public teachers around the state. Representatives of teachers’ unions have decried the proposed benefit cuts.
“These cuts will take a personal toll on teachers, on service personnel, on retirees,” Davin White, government relations specialist with the West Virginia Education Association, said, adding that they will hurt those who need to use their benefits the most. “This is a statewide workforce issue. How can West Virginia recruit, hire and then keep highly qualified professionals with such severe cuts to their health insurance?”
The governor and the legislature should work out a solution that would avoid the cuts, he said. “They need to get to the business of the people, even if, for some, that involves making politically uncomfortable decisions,” White said.
Christine Campbell, president of the American Federation of Teachers-West Virginia, told the Finance Board, said, “Everyone keeps using the phrase ‘political football,’” but legislators have not followed through on their promise to take care of the problem.
“We’re looking at a cut in pay for all public employees – teachers, service personnel and everyone included in the public sector. Over 230,000 people are affected by this. And it’s very frustrating to me that you’ve been blamed, that the governor has been blamed when he clearly put a proposal forward.” – Christine Campbell
“The people who need this health care coverage are the people who are going to suffer,” she said. “We’re looking at a cut in pay for all public employees – teachers, service personnel and everyone included in the public sector. Over 230,000 people are affected by this. And it’s very frustrating to me that you’ve been blamed, that the governor has been blamed when he clearly put a proposal forward.”
Campbell added, “If this legislature doesn’t do something, people are going to be choosing between medication and food. People are going to be choosing to go to the doctor or pay their power bill. It’s completely unacceptable, and I hope that we have a solution here very quickly.”
Because of a requirement that 80 percent of premiums must come from the public agencies for which the employees work and 20 percent from the employees, the Finance Board cannot raise premiums for employees without additional funding from the state. Thus, the board approved cutting benefits by $120 million.
The proposed cuts for all PEIA members, except for retirees eligible for Medicare, include:
- · Increasing the Medical Home Program copayment to $20 for $1 million in savings to the plan, although members still would have one free visit per year;
- · Increasing the urgent care copayment to $50 for $1.5 million in savings;
- · Adding tele-health with a $40 copayment;
- · Charging a $40 copayment for Comprehensive Care Program members for any non-CCP office visit;
- · Going to a 70/30 co-insurance ratio for all out-of-state services in Plans A, B and C for $2.5 million in savings;
- · Removing the living will discount;
- · Removing out-of-network benefits for $1.4 million in savings;
- · Adding a $500 emergency room copayment for high-risk behaviors (including accidents while driving motorcycles or UTVs/ATVs without wearing a helmet, drunken-driving or drug-related accidents, or failure to wear seatbelts);
- · Establishing a new fee schedule for select items for $2 million in savings;
- · Adjusting provider reimbursements to 100 percent of Medicare levels over three years for $4 million in savings over that period; and
- · Making the Face-2-Face Program for diabetics a two-year program.
Other adjustments for active state and school district employees would include:
- · Changing coinsurance for Plan B members to 70/30 for all services for savings of
- · Increasing deductibles to $500 for single coverage and $1,000 for family coverage for savings of $30 million;
- · Increasing out-of-pocket maximums by $1,500 for single coverage and $3,000 for family coverage for $16 million in savings; and
- · Changing prescription drug benefits for more than $17 million in savings.
Plan C members also would face various other changes. Retirees on Medicare would face these changes:
- · Increasing premiums by 8 percent for $4 million in savings;
- · Increasing deductibles by $50 for $1.6 million in savings;
- · Increasing out-of-pocket maximums by $350 for $2.1 million in savings;
- · Making changes in prescription drug benefits for more than $11 million in savings; and
- Removing the living will discount.
- Employees of non-state agencies that get insurance through PEIA will face 4 percent premium increases. “We’ve officially divorced ourselves from the non-states,” Cheatham said. “They’re a completely separate plan. They always have been a separate plan, but now their benefits may not even track with us anymore – separate benefit structure and separate premiums.”
Those in the non-state pool will face minor reductions in benefits, he said.
Governor Signs Bills Affecting Certificate of Need and Health Care Authority
Gov. Earl Ray Tomblin has signed into law three bills affecting operations of the Health Care Authority and its certificate of need process.
As reported earlier by Legislative Update, House Bill 4365 changes the certificate of need process. The bill went through many negotiations and had to get through a House-Senate conference committee before being passed on the final day of West Virginia’s legislative session.
The bill removes a protection that senior centers have had for years that has prevented competition in providing personal care services. The current law includes a provision that, if there would be any fiscal burden by allowing a new entity to provide personal care services, the Health Care Authority would have to get permission from the Medicaid program before granting a certificate of need. But Medicaid never would issue such permission, which effectively blocked new providers of personal care services. House Bill 4365 still requires personal care providers to get certificates of need, but the requirement for getting Medicaid’s permission is removed. That could cost senior centers significant funding.
The governor’s signing of the bill essentially codifies the corporate practice of medicine for purposes of certificate of need. It gives hospitals and other corporate entities like urgent care facilities owned by large retailers or insurers the same exemptions as private physician offices. It also allows physicians to get low-cost computed tomography (CT) scanners for their offices.
In addition, the new law speeds the review process for certificates of need, allows hospitals to replace equipment with like equipment, raises the threshold for requiring certificates of need to $5 million, and gives nursing homes flexibility in moving beds to other locations. It also provides nursing homes with the ability to replace existing facilities without certificates of need. Because nursing home services are paid for on a cost basis, this could affect the budget.
Another bill Tomblin has approved affecting the Health Care Authority is Senate Bill 597, which is designed to provide a regulatory structure to oversee cooperative agreements among health care facilities and exempt those agreements from state and federal antitrust laws. That is targeted specifically at a proposed $185 million merger between Cabell-Huntington Hospital and St. Mary’s Medical Center in Huntington. The Federal Trade Commission challenged that deal last fall because the new entity would have 75 percent of all inpatient admissions in that market. The FTC scheduled a hearing on the matter for early April.
The third bill receiving the governor’s signature is Senate Bill 68, which the West Virginia Hospital Association wanted. It alters the powers and duties of the Health Care Authority by eliminating the agency’s jurisdiction to review hospital rates after July 1. But the agency would be required to publish on its website the average patient charges of the 25 most frequently used outpatient diagnostic services.
New Law Gives Some Nurses Greater Authority
The governor approved House Bill 4334, which changes the authority of advanced practice registered nurses (APRNs). The version approved by the legislature was pared back from the original version, which would have allowed APRNs to prescribe Schedule II drugs, such as OxyContin, for supplies lasting up to 72 days. In the version signed into law, they would be allowed to prescribe nothing stronger than Schedule III drugs and for no longer than 30 days.
The new law also will set up a Joint Advisory Council on Limited Prescriptive Authority, which will go into existence on July 1. The council is to advise the Board of Examiners for Registered Professional Nurses on collaborative agreements and prescriptive authority for advanced practice registered nurses.
Members of the council will be appointed by the governor and include:
- · Two allopathic physicians recommended by the Board of Medicine who are in a collaborative relationship with advanced practice registered nurses;
- · Two osteopathic physicians recommended by the Board of Osteopathic Medicine who are in a collaborative relationship with advanced practice registered nurses;
- · Six advanced practice registered nurses recommended by the Board of Examiners for Registered Professional Nurses who have at least three years fulltime practice experience, including at least one certified nurse practitioner, one certified nurse-midwife, and one certified registered nurse anesthetist, all of whom actively prescribe prescription drugs;
- · One licensed pharmacist recommended by the Board of Pharmacy;
- · One consumer representative; and
- · One representative from a school of public health of an institution of higher education.
All members of the council who are health care providers are to have at least three years of fulltime practice experience and hold active state licenses. Each member is to serve a three- year term. Those terms are to be staggered so that no more than five appointments would expire annually.
The council is to evaluate applications for advanced practice registered nurses to prescribe without collaborative agreements, assist APRNs with entering into collaborative agreements, and advise the board in emergency situations in which collaborative agreements have been rescinded, giving 60-day grace periods. The council also is to assist the board in developing and proposing emergency rules and providing advice on complaints against advanced practice registered nurses.
In addition, the council is to develop a pilot project that would allow the independent prescribing of controlled substances by advanced practice registered nurses and study results to assure the safety of patients and the public.
The Board of Nursing must promulgate rules, which likely will be the subject of much debate during the next legislative session.
Other Health Care Bills Get Signed
Gov. Earl Ray Tomblin signed several other bills affecting health care. Here are some of them:
- · Senate Bill 454 will require prescriptions for opioid antagonists to be logged into the Controlled Substances Monitoring Program and impose penalties and fines for failure to register for and access the Controlled Substances Monitoring Program as required by code. In addition, the bill would allow the Office of Health Facility Licensure and Certification to perform unannounced complaint and verification inspections, including reviews of patient records, at office-based medication-assisted treatment programs.
- · Senate Bill 563 affects the Emergency Medical Services Retirement System. The bill is meant to address a provision that had become an obstacle to participating EMS agencies’ being able to retain senior EMS employees. The bill was presented as an EMS workforce issue because it removes the current 25-year cap on the accumulation of EMSRS years of service, allowing system members to continue to earn service credits beyond 25 years but at a lower benefit accrual level. Given the major changes being faced by EMS agencies nationwide, the legislation was seen as important for allowing agencies to retain employees best suited to lead the changes.
- · Senate Bill 602 will close the Medical Liability Fund and transfer money in that fund to the Patient Injury Compensation Fund at the beginning of July. It provides for the Board of Medicine and the Board of Osteopathic Medicine to collect a biennial assessment of $125 from every licensed physician for the privilege of practicing medicine in West Virginia. The bill will levy a tax of 1 percent of the gross amount of medical malpractice settlements and a fee on trauma centers of $25 for each trauma patient treated. Trial lawyers have indicated they now will ask for increasing the amounts of settlements by 1 percent to make up for the tax. Basically, the bill lets hospitals off relatively easily. They pick up about one-third of costs for the fund while creating about two-thirds of the burden.
- · House Bill 4040 will regulate the use of step therapy protocols by providing a simple and expeditious process for exceptions to the protocols that health care providers deem not in the best interests of patients. It should reduce the burden on physicians.
- · House Bill 4315 sets the maximum amount for air-ambulance services that could be collected pursuant to the plans of the Public Employees Insurance Agency. It will extend allowable benefit coverage to any air-ambulance provider for which the reimbursement amount in total can’t exceed the amount then in effect for the federal Medicare program. The bill meant to stop vendors from excessive balance billing to West Virginians. Currently, air ambulance carriers are not restricted from “balance billing” PEIA members. Only certain groups of air-ambulance providers do that, while others accept PEIA rates and do not balance bill. The amount of the balance billings average $23,000 per case, and can range from $15,000 to as high as $45,000. The bill is to level the playing field for providers that accept PEIA rates and do not balance bill. PEIA told legislators the bill also should reduce the potential for lawsuits against the state by PEIA members exposed to balance billing and aggressive collection efforts by air-ambulance carriers. However, one air-ambulance carrier reportedly is considering suing the state over the new law.
- · House Bill 4388 will require the Bureau for Public Health to designate certain hospitals as stroke centers. The designations would be based on criteria recognized by national organizations, such as the American Heart Association.
- · House Bill 4463 will regulate the use of telemedicine, which has been called “a great chance of improving access to care.”
- · House Bill 4659 will permit local public health departments to bill for health care service fees without having to obtain the approval of the commissioner of the Bureau for Public Health.
Governor Signs Education Bills for Computer Science and WVU Tech
The education bills that Gov. Tomblin signed include those requiring instruction of computer science in public schools and making it easier for West Virginia University Institute of Technology to move.
House Bill 4730 requires the state school board to submit a plan to the Legislative Oversight Commission on Education Accountability prior to the 2017 legislative session on the implementation of computer science instruction and learning standards in the public schools.
The standards are to:
- · Introduce the fundamental concepts of computer science to all students, beginning at the elementary school level;
- · Present computer science at the secondary school level in a way that is “both accessible and worthy of an academic curriculum credit and may fulfill a computer science, math, or science graduation credit”;
- · Encourage schools to offer additional secondary-level computer science courses that would allow interested students to study facets of computer science in more depth and prepare them for entry into the workforce or college; and
- · Increase the availability of rigorous computer science for all students.
Recommendations for teaching standards and endorsements would have to be included if they would be found to be necessary.
Another bill the governor signed, House Bill 4351, transfers the Cedar Lakes Camp and Conference Center from the state school board to the Department of Agriculture. That change was recommended a few years ago by an efficiency audit of the public school system.
House Bill 4310 removes the requirement that WVU Tech must keep its headquarters in Montgomery, where it has been located for more than a century. That makes it easier for WVU Tech to relocate to the campus in Beckley that WVU bought from the defunct Mountain State University. The new law also requires collaboration among WVU Tech and other higher education institutions in the region, including Marshall University, Concord University and Bluefield State College. Meetings among WVU, WVU Tech, Concord University and Bluefield State College will be required.
Bills on Other Topics Get Approval
Gov. Tomblin approved other types of legislation before his deadline to act on bills ran out late last week. Among them are:
- · House Bill 4364 is to protect the privacy of personal electronic data for employees and applicants for employment. The bill also authorizes employers to investigate to ensure compliance with applicable protections of certain business information.
- · House Bill 4739 creates the Unclaimed Life Insurance Benefits Act. It requires each insurer to conduct an annual comparison of its insureds’ policies, retained asset accounts and account owners against a death master file. For potential matches, insurers would have 90 days to complete good faith efforts to confirm the deaths based on other available records. The insurers must take reasonable steps to locate and contact beneficiaries or other authorized representatives regarding the claims process.
Big Education Bills Get Vetoed
Gov. Tomblin vetoed two controversial public education bills.
House Bill 4014 started out as a harsh ban on any standards or assessments associated with the Common Core State Standards. During the legislative process, it was amended to recognize that the state school board already had substituted former standards based on Common Core to new standards not based on Common Core. However, the final version still would have require the state board to dump use of the Smarter Balanced Assessments, which were designed to be aligned with Common Core, after this year.
Tomblin said that provision was problematic for two reasons:
- · It would have discounted the time and consideration needed to evaluate and establish a new statewide summative assessment test.
- · The uncertainty that would have been caused by the assessment mandates could have disrupted the state’s ongoing implementation of the new school accountability system in which schools will receive grades of A, B, C, D or F.
“While revisions might be warranted as we move along, we need to be cautious not to undermined stability for our teachers or the children then are trying to educate. Because this bill occasions yet more uncertainty and instability in our system of public education, it is hereby vetoed.” – Gov. Earl Ray Tomblin
In his veto message, the governor noted that he had championed education reform measures that would improve student achievement. “We need to give these changes and measures added time to take hold, and see what works and what does not,” Tomblin wrote. “While revisions might be warranted as we move along, we need to be cautious not to undermined stability for our teachers or the children then are trying to educate. Because this bill
occasions yet more uncertainty and instability in our system of public education, it is hereby vetoed.”
Another education bill the governor vetoed is House Bill 4171, which would have set limits on the school calendar. Among its provisions, it would have prohibited school districts from starting the school year before August 10 or ending after June 10. It also would have removed the requirement for schools to have 180 “separate” days of instruction and allowed them to make up some missed days with accrued time. Tomblin objected to both of those provisions.
“To be college or career ready, West Virginia’s students need to be in the classroom receiving instruction and learning for at least 180 separate days a year – even if this means making up lost time due to weather or emergencies,” the governor wrote in his veto message. “With proper planning, a county school system should be able to achieve 180 separate days of instruction without encroaching on summer vacation to a great degree. Because this bill retreats from the comprehensive education reform I championed in 2013, including the flexible school calendar concept, it is hereby vetoed.”
Governor Cites Technical Flaw in Rejecting Lottery Bill
Lottery players had better be prepared for attention if they win big. Gov. Tombin vetoed House Bill 4505, which would have allowed Powerball, Mega Millions and Hot Lotto ticket winners to remain anonymous. Their identities also would have been exempt from the Freedom of Information Act. The governor said he vetoed the bill because it would have been in conflict with another bill he had signed into law previously.
Governor’s Actions Are Available
The governor’s actions on bill are available on his website. Included are links to his veto messages. The list is available at: http://www.governor.wv.gov/media/Bill%20Status/.