Wisconsin Governor Makes 139 Vetoes, Including Significant Cuts to Medicaid
Legislature May Consider Veto Override on Medicaid Cuts

Governor James Doyle signed the Wisconsin 2005-07 Biennial State Budget Monday, where he provided 139 line item vetoes. The final budget will implement Medicaid reductions of over $130 million, including $40 million in cuts proposed by the Governor in his original budget and approximately $90 million in new Medicaid cuts provided through the Governor’s budget vetoes.

Governor Doyle vetoed the 1.4% ($36 million) rate increase for nursing homes; vetoed $5 million for outpatient hospital rate increases; cut pharmacy reimbursement rates by $50 million; maintained a $16.8 million cut to personal care services, but requested the cuts be distributed among all Medicaid programs; and, requested an additional $62 million in cuts to Wisconsin’s Medicaid program overall (savings through efficiency).

Legislative leadership has indicated that they may attempt a veto override on those areas impacting Medicaid. However a veto override is unlikely since 3 Democrat Senators and 6 Democrat Assembly Representatives would be necessary to override the Governor’s additional Medicaid cuts.

Governor’s Action on the Budget:

• Veto: Nursing Homes. 1.4% MA Nursing Home Rate Increases in FY 2005 and FY 2006.
• Veto: Hospital Outpatient Reimbursement Increases . Delete $5 million rate increase.
• Veto: Cut Medicaid by an Additional $48 Million in FY 2005-06 and $14 Million in FY 2006-07.
• Veto Message: $16.8 million Personal Care Cuts: “Direct DHFS to manage this reduction across the entire Medicaid program.”
• Veto: Nursing Home Reimbursement Rates. Veto deletes direction to DHFS to identify the extent to which payments are made to nursing homes for direct care nursing services.
• Veto: 100-Day Nursing Home Relocation Provision: This provision specified that CIP II relocation funding could only be used to support MA-eligible individuals who have resided in a nursing home for a minimum of 100 consecutive days.
• Veto: Cost Study of Nursing Home Relocation Provision: This provision had required DHFS to submit a report to the Joint Committee on Finance by January 1, 2007, that analyzed the costs associated with relocating individuals from nursing homes into the community.
• Veto: FamilyCare Functional Screen: Veto deletes restriction on DHFS 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.
• Veto: Prohibition Against Limitations on Reimbursement for Psychotropic Medications. This deletes the budget provision which prohibited DHFS from imposing any limitations on reimbursement under MA, 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.
• Veto: Generic Drug Co-payments. Veto deletes sections increasing the co-payment charged to recipients under MA and BadgerCare for generic prescription drugs from $1 to $3, the maximum allowed under federal law.
• Veto: Requirement that State Capitation Rates to HMO’s be Actuarial Sound. Veto deletes requirement for DHFS to provide reimbursement for services provided by HMOs to MA or BadgerCare recipients through capitation rates that are actuarially sound.
• Veto: Joint Services Study. This deletes sections requiring Dept of Corrections, Veterans Affairs and DHFS to jointly develop a plan that analyzes how certain functions, such as personnel and grounds keeping, can be shared between agencies at the Northern and Southern Centers for the Developmentally Disabled.

Provisions That the Governor Signs into Law:

• Maintain: Change current nursing home reimbursement system to an acuity-based reimbursement system based on the federal RUGs III reimbursement methodology.
• Maintain: CIP-II Nursing Home Relocation Plan to move 1,440 nursing home residents into the community, but a veto of the 100-day and cost study provisions were vetoed.
• Maintain: Allow persons to be relocated from state centers and ICF\MRs into CBRFs with 5-8 beds without DHFS approval.
• Maintain: Support SSI Managed Care Expansion.
• Maintain: Approves the creation of nine new aging and disability resource centers serving 13 counties in 2005-07.
• Maintain: Support additional funding for Jefferson County ICF\MR relocations.
• Maintain: Support Community Opportunity Recovery Waivers to fund new slots in the Community Options Program.
• Direct Development of Long-Term Managed Care RFI: Instruct the Department of Health and Family Services to issue a Request for Information (RFI) to managed care organizations regarding their ability to develop primary, acute and long-term managed care on a regional basis. In addition, direct the department to issue the RFI within the first six months of fiscal year 2005-06. Upon receipt of the RFI results, the information should be provided to the Department of Administration.

Want to View the Governor’s Vetoes, Click on:
Governor's Veto Message in Brief
Governor's Veto Message (114 Pages)
WI Act 25 (AB-100) Wisconsin Budget

Wisconsin State Journal (July 26, 2005)
Doyle reshapes budget
'Tighten their belt'
http://www.madison.com/wsj/home/local/index.php?ntid=48193&ntpid=1

Critics hit Doyle's veto of nearly $94 million in spending on state-subsidized health-care programs, much of that in reduced reimbursements to nursing homes, hospitals and pharmacists for Medicaid patients.

Administration Secretary Marc Marotta said the cuts will have no effect on patient eligibility and benefits and predicted they would have little impact on providers.

"Providers are going to have to do, essentially, what the state's done, and that's continue to tighten their belt and continue to do things that will help reduce costs," Marotta said.

But health-care providers said the veto will ultimately be felt by patients. Hospitals have received no increase in Medicaid payments for many years, said Mary Starmann-Harrison, chief executive officer of Wisconsin operations for SSM Health Care, which owns St. Mary's Hospital in Madison.

"Frankly, you have to make that up either by charging more to other patients or getting more efficient," she said. "It's a little of both, but at some point, you can't keep absorbing no increase year after year."

The Wisconsin Hospital Association estimated Monday that as much as $450 million in unpaid hospital costs were shifted to private sector employers in 2004 due to inadequate Medicaid payments, resulting in higher health insurance premiums.

"I understand K-12 is the governor's priority, but it should not be the only priority," said WHA President Steve Brenton.

Gard said overriding the Medicaid veto would be lawmakers' first priority when they reconvene this fall, although he acknowledged that "any override would be an enormous mountain to climb."

Legislative Hearing Notices

Assembly Committee on Medicaid Reform
Wednesday, July 27, 2005 10:00 AM State Capitol, Room 413-N
Wisconsin's Medicaid Program. The committee will hear from invited speakers only. Ms. Mary Kennedy of Evercare and Dr. Robert Phillips, Marshfield Clinic, will present information to the committee relating to Medicaid