State of Wisconsin Assisted Living News

DHS Provides Legislative Committee Update on Family Care and LTC Programs

The Wisconsin Department of Health Services sent an report to the Wisconsin Legislature's Joint Finance Committee on April 18 providing an update on the state's long-term care (LTC) programs.

Further the report provides information and statistics of what happened to individuals during the Family Care \ IRIS cap period and the department's plan for the future of LTC.

1. What individuals experienced between July 1, 2011 and April 3, 2012 (Duration of Family Care Caps).

Wisconsin continues to lead the nation in developing effective strategies to address the needs of individuals who rely on public assistance for long-term care (LTC).
About 85% of Wisconsin citizens have access to an Aging and Disability Resource Centers (ADRC) in their community.
In 2010, ADRCs responded to almost 345,000 requests for assistance.
More than 73% of ADRC activity related to information and assistance.
Nearly 38,000 people received services from a benefit specialist.
Over 93% of those surveyed would recommend the ADRC to others.
90% of ADRC customers said that the ADRC was helpful or very helpful.
Although enrollment cap temporarily slowed pace of program growth, ADRC continued certain services.
The budget (Act 32) provided $12.6 million a year to meet "urgent/emergency needs." On average, 12 people per month were enrolled using this money.

2. What happened to people on the wait-list?

100% of the 6,263 individuals on wait list received at least one-type of service from an ADRC.
98.6% were enrolled in either Medicare (46%) or Medicaid (52%), which provides access to health services.
34.6% (2,167) identified a need for services in the future.
29% (1,810) are not currently eligible due to the county phase-in of LTC programs.
28% (1,753) had no immediate need (as determined by the ADRC).
6.9% (433) are currently in the process of enrollment using available attrition slots.
1.6% (100) received needed services by remaining on State's Children's Long-Term Support Waiver, and will transition to adult programs in the future.

3. Aggregate Enrollment and Nursing Home Data.

Enrollment of the total elderly, blind, disabled (EBD) population in Medicaid continued to rise from 206,512 to 211,015 individuals.
Enrollment of the EBD population in Family Care, IRIS and legacy waivers rose from 48,222 to 48,742 people.
Some expressed concern during this period that they would be forced to seek assistance in institutional care, however
- Enrollment of people in nursing homes and (Intermediate Care Facility) ICFs continued to fall from 17,735 to 17,357 individuals.
- Nursing home population as a percent of total EBD population declined form 8.59% to 8.23%.
The EBD population enrolled in Medicaid continued to grow.
The percentage of the EBD population in nursing homes consistently fell during the time of the cap.
ADRCs reported that 614 people were relocated from nursing homes and ICFs-MR to the community from July 2011 - February 2012.

4. Wisconsin's action plan to expedite outreach and enrollment into LTC programs.

Significant enrollment into LTC programs occurred in the months leading up to enactment of the Family Care caps.
This section provides a summary of what the Governor and DHS did during the cap and after the cap was repealed.
A "DHS Timeline" summarizing DHS Action Plan to ADRC Functions (see document).
A "DHS Timeline" summarizing DHS Action Plan related to Managed Care Organization (MCO) Functions (see document).
A "DHS Timeline" summarizing DHS Action Plan related to IRIS Consultant Agency (see document).
A "DHS Timeline" summarizing DHS Action Plan related to Income Maintenance (see document).
There were 6,263 individuals on the Wait List in February 2012.
- DHS estimates that 4,453 will be contacted for potential enrollment into LTC programs.
- Of these,1,327 are in the 14 counties that had reached entitlement prior to July 2011.
- 1,677 are in the 19 counties that reached entitlement at some point during the period of the cap.
- 1,499 are in the 25 counties that are in the process of phasing-into entitlement.

5. What is the waitlist, who has enrolled and what are people waiting for?

Summary of DHS Actions during the Cap period.
Charts summarizing ADRC Enrollment Data by Month for LTC Programs.
ADRC Wait List Survey
- 81% individuals on wait list live in their own home, apartment or relative's home.
- Most individuals want to stay where they are now once they enroll into Family Care or IRIS.
- Many receive support from family and friends now, but additional supports needed.
- The top LTC services request include help with laundry/chore services, meal preparation, supportive\personal care (including care in assisted living facilities), and transportation.
- 51% indicated they get help now from family, friends, neighbors or other programs.
- Those who do not receive help now, 24% "manage" with help of family.
  - 14% ore doing "okay".
  - 3% manage with difficulty.
1/3 of people on wait list indicated they need help in the future, not now.

6. What are the LTC Sustainability Initiatives that generate savings and strengthen LTC programs in 2011-13 and in the future?

Family Care and other community-based, long-term care programs currently serve over 44,000 individuals.
About 75% of individuals served are individuals who have a developmental or physical disability.
About 25% of individuals are frail elderly enrollees.
Over past several decades, payments of LTC services have shifted from individuals to taxpayers.
Nationally, the largest payer of all LTC services is Medicaid at 42% of total spending.
"While the largest payer of services is the American taxpayer, the majority of long-term care services are actually provided on an unpaid basis through a person's natural support system by their family and friends."
Wisconsin Medicaid program spends almost $3 Billion in LTC, supports and other services.
"It is vitally important that the Department ensure that Family Care and its related programs are fiscally sustainable. Moreover, Wisconsin is facing significant growth in the number of people needing long-term care. Finding solutions now that can be sustained for years to come is a priority for the Department and the Governor."
A detailed Sustainability Initiatives can be found on DHS website (www.dhs.wisconsin.gov/ltcreform/)Â

DHS Held Town Hall Meetings about Virtual Pace Proposals

Wisconsin recently received a $1 million federal grant to secure federal authority, similar to PACE (Program of All-inclusive Care for the Elderly) authority, for the state to have more flexibility in combining Medicare and Medicaid funding to serve people who have a nursing home or ICF-MR level of care. While PACE is available only in select counties to people age 55 or older, and coordinates services through an adult day care setting, this Virtual PACE pilot program envisions serving younger people in more counties and with greater flexibility in the location where care is provided.

The town hall meetings are a broad public outreach venue for soliciting ideas and feedback on the Department's Demonstration Grant proposal and the overall opportunity this initiative presents to improve the integration of care coordination for Wisconsin's Medicare/ Medicaid dually eligible residents. In addition, links to the Virtual PACE webpage and the online survey are here so that you can go to learn and share ideas.

Further outreach and input mechanisms are continuing to be identified and developed. The Department of Health Services is hosting a series of Virtual PACE town hall forums to engage stakeholder input. The current separation of Medicare and Medicaid payment for services and the lack of access to coordinated care create administrative barriers to the promise of full integration into a community setting, which prevents the best possible member outcomes. The Department's summary of the Virtual PACE demonstration proposal and the grant proposal itself is available at www.dhs.wisconsin.gov/wipartnership/pace/

Governor Walker Signed into Law Bill Lifting Family Care Caps

from WALA eBlast on March 28, 2012

Governor Walker signed SB -380 mid-March after the Assembly passed it with an amendment that would require the state's Joint Finance Committee to approve contracts for expansion into new counties. Some legislators have expressed concern that the amendment which removes "14-passive review" and will now require a majority vote approval from the Joint Finance Committee could block future expansion of the program into new counties. Other legislators believe the amendment will ensure cost effectiveness of the program.

Concealed Carry FAQ's from WALA

WALA has prepared this Frequently-Asked-Questions (FAQ) document to provide information to assisted living facilities in the state of Wisconsin on how the concealed carry law might affect them as providers. There are still many unanswered questions on the impact of this law. Check back with us as WALA learns more.

Concealed Carry Passed: WALA Amendment Included

On July 8th Governor Walker signed Senate Bill 93 (Wisconsin "Concealed Carry" bill) into law, meaning Wisconsin will become the 49th state to allow persons with a permit to carry concealed weapons. Many provisions in the new concealed carry law will go into effect on November 1, 2011.

As previously reported, WALA lobbyists were successful in obtaining an amendment to provide specific long-term care facilities with the ability to prohibit firearms in the building if they wish. According to a Wisconsin Legislative Council Memo on the new act (see footnote on below), "The bill specifies that the following are defined as non-residential facilities and are therefore subject to a prohibition against the carrying of firearms imposed by the management of the facility: a nursing home, a community-based residential facility (CBRF), a residential care apartment complex (RCAC), an adult family home, and a hospice." This means that if you wish, all assisted living facilities can prohibit their residents from carrying concealed weapons. You can decide how you wish to handle this prohibition. WALA led the charge on your behalf on this issue.

The facility if it chooses to prohibit firearms in the building would need to post a sign that is at least 5 inches by 7 inches located in a prominent place near all of the entrances to the part of the building to which the restriction applies. The bill does not specify what the posted sign restriction should say, beyond communicating the restriction. WALA will send you additional information as soon as it is available.

The Wisconsin Department of Health Services - Division of Quality Assurance is expected to provide a memo on the new concealed carry law that will fully explain the impact of the bill on providers and consumers. The bill goes into effect later this year on November 1, 2011.

For additional information, the Wisconsin Legislative Council has provided a summary and "frequently asked questions" on the bill.

Legislative Council Memo (Best Summary and FAQ Sheet) http://legis.wisconsin.gov/lc/publications/im/IM2011_10.pdf

State Budget Passed - Attention turns to Medicaid and Family Care Reform

Now that Governor Walker has provided his list of 50 partial vetoes and signed the remainder of the 2011-13 biennial budget bill into law, the attention for stakeholder healthcare and long-term care organizations turns toward the Medicaid and Family Care "reform" process that the Department of Health Services will undertake. This involves both the $466.6 million "unspecified cuts" to Medicaid and the "reform" that DHS will look to implement by seeking Medicaid state plan amendments and federal Department of Health & Human Services (DHHS) waivers. Governor Walker's and DHS' Medicaid budget goals rely heavily on obtaining these Medicaid state plan amendments and federal waivers to implement the unspecified cuts, which if DHS were to fail to obtain the concern is that this could lead to heavier cuts to providers - which is why our focus as an association will be on this process.The Wisconsin Assembly debated the 2011-13 biennial state budget, passing the amended bill. Senate is deliberating and then Governor Walker will have until June 30 to take action on the bill through partial vetoes and signing into law. The budget will go into effect on July 1, 2011.

There are many items that impact assisted living providers, including the cap on enrollment and expansion of Family Care. It should be noted that WALA was successful in obtaining an amendment to include RCACs in the expanded confidentiality protections granted under a peer review \ healthcare service review.

Budget Provisions Impacting Assisted Living

Imposes $466.6 million (all funds) unspecified cuts to Medicaid programs.
Provides a 14-Day Legislative Committee Passive Review of DHS Federal Medicaid Waivers (reshaping Medicaid).
Cuts Family Care funding by -$265.5 million, recognizing caps on enrollment & expansion.
Caps enrollment for Family Care, PACE, Partnership and IRIS for 2-years.
Halts expansion of Family Care into new counties for 2-years.
Provides for certain institutional facility relocations in Family Care counties.
Creates a $12.6 million (all funds) annual Family Care Waiting List Crisis Fund.
Requires a DHS Study and Report on cost-effectiveness of Family Care, PACE, Partnership and IRIS.
Prohibits MCOs from requiring return funding in excess of the cost of service to the CMO for certain services.
Transfers state regulation of Adult Family Homes to counties and Family Care MCOs.
Includes RCACs in confidentiality protections of Peer Review \ Health Service Reviews.
Provides that all criminal history background check search fees be $7 per request.
Provides 1 position ($85,000 CMP funding) at BOALTC to serve as a relocation ombudsman specialist position.

WALA Sends DHS Secretary Dennis Smith Ideas from WALA Members on How to Reduce Costs to Medicaid

DHS Secretary Smith asked WALA members at the March 24 Spring Conference – as he has in many other forums - to submit ideas on how to cut the $500M Medicaid shortfall. Many of you took this quite seriously and submitted dozens of ideas. We organized, winnowed and synthesized these ideas into the following April 22, 2011 letter to Secy Smith in advance of our meeting with him.

YOUR comments can still be submitted, easily and electronically, and we encourage you all to do so. The Department of Health Services is still accepting public input online at http://bit.ly/dInAXp

In addition, many ideas were submitted on ways to save costs on regulatory compliance. Since those ideas are not Medicaid savings, they were not part of this letter. WALA will submit those ideas directly to BAL at a meeting with them. We will encourage BAL to follow Gov Walker’s lead when he said, “Wisconsin is open for business.” As a major business, there are many regulatory issues that can be revised to make your AL business easier – and more cost effective.

Voter ID Legislation Signed into Law

Governor Walker signed Act 23, the "Voter ID" bill into law on May 25, which was published on June 9.Â The bill allows absentee voters in long-term care facilities in lieu of providing a photo ID to submit the absentee ballot with a statement signed by the special voting deputies.Â When special voting deputies are not sent to the facility, the bill allows "an authorized representative" of the facility to submit with the absentee ballot a statement verifying the voter's name and address.Â WALA requested an amendment allowing for an "authorized representative", instead of the administrator\manager of the facility.

Wisconsin Supreme Copurt Upholds ACT 10 Budget Repair Bill Provisions

Sets Aside Judge Sumi's Rulings Collective Bargaining, Medicaid Reform and Other Provisions in Act 10 Move Forward

Act 10 (Special Session Assembly Bill 11)Â included provisions giving the Department of Health Services (DHS) the power to modify Medicaid by administrative rule, which would supersede statute. In addition, Act 10 required DHS to study potential changes to the Medicaid state plan and to waivers of federal law relating to Medicaid obtained from the federal Department of Health and Human Services (DHHS). Act 10 Legislative Council MemoÂ (Best Explains all the provisions of Act 10)

View Supreme Court Decision

The Wisconsin Supreme Court issued the following decision today:

Certification and motions for temporary relief in this case are denied.
Petition for original jurisdiction in this case is granted and all motions to dismiss and for supplemental briefing are denied.
All orders and judgements of the Dane County Circuit Court in this case are vacated and declared void ab initio.
The Supreme Court has granted the petition for an original action because one of the courts that it is charged with supervising has usurped the legislative power which the Wisconsin Constitution grants exclusively to the legislature. It is important for all courts to remember that Article IV, Section 1 of the Wisconsin Constitution provides: "The legislative power shall be vested in a senate and assembly."
Because the circuit court did not follow the court's directive inÂ Goodland, it exceeded its jurisdiction, invaded the legislature's constitutional powers under Article IV, Section 1 and Section 17 of the Wisconsin Constitution, and erred in enjoining the publication and further implementation of the Act.
The Supreme Court concluded that in enacting the Act, the legislature did not employ a process that violated Article IV, Section 10 of the Wisconsin Constitution, which provides in relevant part: "The doors of each house shall be kept open except when the public welfare shall require secrecy."
It has been argued to the court that the Legislature amended Article IV, Section 10 of the Wisconsin Constitution by its enactment of the Open Meetings Law. That argument is without merit.
The court declines to review the validity of the procedure used to give notice of the joint committee on conference.
The Supreme Court concludes that the legislature did not violate the Wisconsin Constitution by the process it used.
Chief Justice Shirley S. Abrahamson, Justice Ann Walsh Bradley and Justice N. Patrick Crooks concur in part and dissent in part from this order.

Legislature's Joint Finance Committee Takes Action on Family Care and Medicaid Budget Issues

By WALA Lobbyist Forbes McIntosh

The Legislature's Joint Finance Committee took action today on budget items impacting Medicaid and long-term care, including Family Care. The changes voted on by the committee were included in an omnibus motion #316 that passed the committee 12 - 4, Democrats dissenting. The goal of the Legislature is to have the Joint Finance Committee and both houses of the Legislature pass the final biennial budget bill in mid-June and have Governor Walker take action so that the bill can become law by July 1, 2011 - the beginning of the state's fiscal year. Although this will not be the final actions by the legislature on the budget bill, it is likely most of these provisions will be included in the final budget bill that will be sent to the Governor for his review and action (approval or partial veto).

The Joint Finance Committee took the following actions on the budget today:

Approve Governor's $500 million (all funds-approx.) unspecified cuts to Medicaid programs.
Approve Governor's proposal to cap enrollment for Family Care, PACE, Partnership and IRIS for 2-years.
Approve Governor's proposal to halt expansion of Family Care into new counties for 2-years.
Increase funding by $21.8 million to recognize a 1% acuity increase for nursing homes in each year of the biennium.
Provide for certain institutional facility relocations in Family Care counties.
Require a DHS Study and Report on cost-effectiveness of Family Care, PACE, Partnership and IRIS.
Prohibit MCOs from requiring return funding in excess of the cost of service to the CMO for certain services.
Create a Family Care Waiting List Crisis Fund.
Delete the Governor's Senior Care recommendations and fully funds the program.
Require a DHS study on competitive bidding process for purchase of generic drugs.
Seek CMS approval of family contributions for irrevocable burial trusts.
Prohibit prior-authorization for certain wheelchair repairs.
14-Day Legislative Committee Passive Review of DHS Federal Medicaid Waivers.
Modify Nursing Home Labor Regions for Dunn and Dodge Counties Effective 2013.

Motion #316 & #322 - Detail

Paper 340: Medical Assistance (Medicaid) Base Re-Estimate

Adopt Alternatives 1 and 2 (Modified)
Increase funding in the bill by $98.6 million (all funds) to reflect the funding adjustments summarized in Discussion Point 16:

Revised MA Estimates. Increase SEG and decrease GPR by $485,400 in 2011-12 and by $5,485,400 in 2012-13 to reflect revised estimates of the revenues to be deposited to the MA Trust Fund.
Actual Enrollment. Increase funding by $78.2 million over the biennium to update the enrollment assumptions in the bill to reflect actual program enrollment as part of April, 2011.
Nursing Home Acuity. I ncrease funding by $21.8 million to recognize a 1% acuity increase for nursing homes in each year of the biennium.
Independent Rural Hospitals. Reduce funding by $800,000 GPR in each year of the biennium that was mistakenly provided for supplemental payments for independent rural hospitals.
Modify Alt. 2: Increase funding by $56 million over the biennium to reflect revised projections of enrollment growth in the MA program, and revenue funding from the amounts in Alternative 2 to reflect the allocation of funding that would be available to support Family Care Crisis Slots.
Delete DHS Lapse. Delete the provision in the bill that would require DHS to lapse $24.9 million in the first year of the biennium. Reduce estimated lapses to the general fund by $24.9 million to reflect that savings in MA capitation payments that the Governor assumed would occur over the biennium as a result of enactment of 2011 January Special Session Assembly Bill 11 (will not be realized).

Paper 341: Unspecified Program Cuts to Medical Assistance (Medicaid)

Adopt Alternative 1 & 2B (Accept Governor's Recommendation)
Accepts Governor's recommendation to cut Medicaid Programs by $466.6 million (All Funds) to reflect the administration's estimate of the savings that will be achieved by making various unspecified changes to the MA program.
Require DHS to submit quarterly reports to the Joint Finance Committee:

Updated descriptions of any MA program changes implement by DHS, including a description of any amendments to the state MA plan;
Updated projections of the total MA benefit expenditures during the biennium and an analysis of how these projected expenditures compare to the funding provided in the 2011-13 biennial budget act.

Paper 342: FamilyCare Enrollment Cap and 2-Year Hold on Expansion

Adopt Alternatives A1, B1, C1, D1 (Governor's Recommendations).
2-Year Family Care Enrollment Cap. Prohibit DHS from enrolling more persons into Family Care, Family Care Partnership, PACE, or IRIS by the total number of persons enrolled on June 30, 2011to June 30, 2013.
Hold Family Care Expansion. Prohibit from proposing to contract with entities to administer the Family Care Benefit in a county in which the Family Care benefit is not available on July 1, 2011, unless DHS determines that administering the Family Care benefit in such a county would be more cost-effective than the county's current mechanism for delivering long-term care services.
Allow Institutional Relocations. Notwithstanding the provision above, DHS could enroll an individual into the Family Care, Family Care Partnership, PACE, or IRIS who is relocated from a nursing home, ICF-MR or State Center if the individual has resided in the facility for 90-days, the facility is not licensed, and emergency exists or the facility is closing or downsizing.
Require DHS Study\Report. Require DHS to study and report by March 1, 2012 the cost-effectiveness of Family Care, PACE, Family Care Partnership and IRIS compared to one another and compared to standard MA card services, both before and after an individual enrolls in the programs.
Prohibit Certain MCO Contracting Provisions. Prohibit care management organizations (CMOs) that provide the Family Care benefit from including in their contracts with providers any provision that would require providers to return funding in excess of the cost of service to the CMO. Limit this provision to residential facilities, pre-vocational services, and supported employment (amendment\motion #322 by Sen. Olsen - passed 14-2).
Waiting List Crisis Fund. Creates a one-time (2011-13) "crisis fund" with $5 million (GPR) $12.5 million (All Funds) per year allocated to individuals on wait lists who are in urgent need of long-term care services, as determined by DHS. Specify that these funds could be used to serve individuals on a temporary basis until the individual is permanently enrolled in the program.

Paper 343: SeniorCare Base Reestimate

Fund Senior Care. Fully fund SeniorCare, based on current law.

Paper 344: Require SeniorCare Participants to Enroll in Medicare Part D

Alternative 5 (Deletes the Governor's Recommendation).

Medical Assistance Payments for Medicare Part A Services (Does not impact Nursing Homes)

Alternative 1 (Adopt Governor's Recommendation)
Institute a Medicare Part A cutback as follows:

Create a Medicare Part A cutback that would apply to categorically eligible and medically needy full-benefit duals as well as to QMBs;
Apply the proposed cutback to Part A deductibles and Part A coinsurance requirements relating to inpatient hospital services (and not to other Part A services such as nursing home services);
Repeal statutory provisions that exempt "outpatient hospital services" from the current Medicare Part B cutback.

Paper 348, Supplemental Payments to Nursing Homes

Adopt Alternative 3.
Increase funding in the bill by $2.3 million (all funds) so that $39.1 million (all funds) would be budgeted for supplemental payments to municipal nursing home annually.

Study Competitive Bidding Process for Purchase of Generic Drugs

Require DHS to study and determine whether the use of a competitive bidding process for the purchase of generic drug equivalents provided to MA recipients would generate savings to the MA program. Require DHS to submit a report to the Joint Committee on Finance by December 31, 2011, with the results of its study.

Family Contributions for Irrevocable Burial Trusts

Require DHS, within 60-days after the enactment of the bill, to seek approval from the Centers for Medicare and Medicaid Services that would permit friends and family of individuals enrolled in the Medicaid program to contribute to the individual's irrevocable burial trust, up to a limit of $4,500, without the individual losing eligibility for Medicaid. Specify that, if CMS approves the DHS request, DHS must implement these changes to the program within 60-days following CMS approval of the DHS request.

Prior Authorization for Wheelchair Repairs

Prohibit DHS from requiring prior authorization for wheelchair repairs that would cost less than $300 for power wheelchairs and $150 for manual wheelchairs, and specify that this provision would apply to all MA-related programs.

MA Program Changes - Rule Requirement

Repeal provision in 2011 Act 10 which would authorize DHS to promulgate rules to implement changes to the MA program that conflict with the specific statutory sections identified in Act 10. Instead, establish the following "passive review" with respect to any changes to the Medicaid program that would otherwise be in conflict with the statutory sections specifically identified in Act 10:

DHS Notice to Committee on Federal Waiver Requests. Require DHS to submit any federal waiver request or requests for amendment to the State's Medicaid plan, together with estimates of the projected savings associated with those proposed changes, to the Joint Committee on Finance before submitting any such requests for federal approval;
14-Day Passive Review. Allow DHS to submit the requests for federal approval unless the Committee schedules a meeting within 14-working days of receiving the proposed requests and at the meeting either rejects or amends the proposed waiver request or proposed amendment to the state Medicaid plan.
Sunset. Repeal the passive review process that would be established by this motion effective January 1, 2015.

Nursing Home Rate Methodology - Designation of Labor Regions Beginning in 2013

Dodge County. Require DHS to include Dodge County in a single labor region with Dane, Iowa, Columbia, Sauk, and Rock Counties and to adjust payments so that the direct care cost targets of facilities in these counties are not reduced as a result of including facilities in Dodge County in this labor region.
Dunn County. Require DHS to include the facilities in Dunn County with the facilities in Douglas, Pierce, and St. Croix Counties, for the purposes of adjusting the direct care cost target by use of the wage index that is used by the U.S. Department of Health and Human Services for hospital reimbursement under 42 USC 1395 to 1395ggg.
Effective Date. This provision would become effective as of July 1, 2013.
In preparing its 2013-15 budget request, direct DHS to increase its adjusted base year funding for nursing home payments by $1,340,700 (all funds).

State Budget Process Begins with Governor Walker Introduction of 2011-13 Biennial Budget

By WALA Lobbyist Forbes McIntosh

Wisconsin Governor Walker provided his budget address on Tuesday, March 1, 2011. The speech and the introduction of the 2011-13 biennial budget to the Legislature marks the beginning of the budget process.

Read the Budget Address Speech
View Summary of Budget: " Budget in Brief"
Actual Budget Bill: AB-40 \ SB-27
NEW: DHS Releases Internal Financial Evaluation of Family Care â€“ information below

What Does This Mean to Long-Term Care?

Wisconsin faces a projected $3.6 billion deficit, which Medicaid represents nearly half of that total. Governor Walker's budget appears to fund much of the Medicaid deficit with GPR (state funding) meaning Medicaid long-term care programs do not appear to be cut in the biennial budget bill. In fact, approximately $1.3 billion of GPR is being infused into the overall Medicaid program to offset the loss of federal stimulus funding (ARRA). ICF-MRs are the only long-term care provider expected to receive a rate increase, which amounts to 4% in each year of the biennium that is funded by a $100 per bed per month increase in the bed assessment\tax. Since ICFs-MR patient are basically 100% reliant on Medicaid, an increase in the assessment\tax does not create unintended cost-shifts.

Although no cuts are being proposed to providers, key long-term care programs like Family Care will have its census capped and expansion frozen until a proposed plan is created based on the findings of the Legislative Audit of the Family Care program. This plan could be attached to the biennial budget through the Joint Finance Committee or possibly through the Medicaid Reform plan process created through the budget repair bill.

Keep in mind that although the "2011-13 biennial budget bill" does not provide cuts to long-term care providers, the "2011 budget repair bill" does require DHS to study the Medicaid program and seek waivers from the federal government on recipient income levels, benefits and eligibility (Maintenance of Effort). DHS will have the power by emergency rule to create policy and funding changes to the Medicaid program that would supersede certain state statute provisions. Again federal waivers maybe necessary for some changes to occur, in addition the plan created will have Legislative oversight via a "14-day passive review" by the Joint Finance Committee. When the budget repair bill does pass the Legislature, DHS is expected announce a number of public hearings or "town hall" type of meetings around the state to obtain recommendations, feedback and information from those involved\impacted by the Medicaid system.

Biennial Budget: Areas Impacting Long-Term Care

Medicaid Base Re-estimate. The Governor recommends adjusting the department's base budget by increasing funding by +$1.7 billion over the biennium to reflect re-estimates of Medicaid and BadgerCare Plus enrollment, intensity, managed care premiums, Medicare premiums and revenues.

Replacement of Enhanced Federal Matching Funds for Medicaid. The Governor recommends replacing one-time enhanced federal matching funds provided under the American Recovery and Reinvestment Act (ARRA) and the Education Jobs Act with approximately $1.3 billion GPR (state revenue) over the biennium.

Family Care Freeze Expansion. Under current law, in certain counties, a person who meets certain functional and financial criteria and who is either a frail elder or an adult with a physical disability or a developmental disability is eligible for community-based services through Family Care, a medical assistance waiver program known as Family Care Partnership, the Program of All-Inclusive Care for the Elderly (PACE), or a self-directed supports options program (known as IRIS).

In a county where Family Care, Family Care Partnership, PACE, or IRIS is available, this bill caps enrollment in an available program at the number of participants in that program on a specific date for the 2011-13 biennium.

This bill also prohibits the expansion of Family Care to counties in which the program is not available on July 1, 2011, during the 2011-13 biennium, unless DHS determines that the expansion is cost-effective.

Family Care Program and Funding. The Governor proposes to reduce funding to Family Care by -$284.5 million over the biennium to reflect the projected cost savings of freezing the expansion of the Family Care program over the next two-years. According to the Department of Administration the reduction is not meant to impact MCO capitation payments or provider reimbursement. Further, the Governor and DHS have indicated that proposed changes to the Family Care program shall not occur until the Legislative Audit Report on the program is released, which is expected soon.

SeniorCare Re-estimates. The Governor recommends re-estimating\reducing by -$14.1 million SeniorCare costs to reflect changes in caseload, cost and utilization of prescription drugs. In addition, the Governor recommends for Medicaid Efficiencies to require individuals in SeniorCare to also in Medicare Part D (which means SeniorCare then become a wrap-around).

Medicaid Efficiencies. The Governor recommends increasing efficiency in the Medical Assistance program to generate approximately -$97.2 million savings\reductions by making the following changes: (a) limiting Medicaid reimbursement for end stage renal disease; (b) eliminating Medicaid payments for family planning services for men; (c) limiting payment of coinsurance for services under Medicare Part A (impacting hospitals); (d) eliminating supplemental payments to essential access city hospitals; and (e) requiring individuals enrolled in SeniorCare to also enroll in Medicare Part D.

Income Maintenance Centralization. The Governor recommends transferring administration of income maintenance programs, including determination for Medicaid and FoodShare, from counties and tribes to the state. This consolidation will improve the accuracy and timeliness of eligibility determinations, while reducing total income maintenance costs by $48 million per year and decreasing the number of overall staff in the program by an estimated 270 FTE positions.

Medicaid Cost Reporting Simplification. The Governor recommends reducing funding to reflect a change in the process for claiming federal Medicaid funding under the Wisconsin Medicaid Cost Reporting program.

Medicaid Rebates and Collections. The Governor recommends creating a program revenue appropriation for provider refunds and other collections related to expenditures for the Medical Assistance program.

Community Recovery Services. The Governor recommends expanding the scope of services under the Community Recovery Services waiver to permit counties to claim federal Medicaid reimbursement for additional types of community-based services provided to individuals with mental illness.

ICF-MR Rate Increase. ICF-MRs are the only long-term care provider expected to receive a rate increase of 4% in each year of the biennium, which will be funded by an increase of $100 per bed per month of the bed assessment \ tax.

Repeal of Adult Family Home Certification. The Governor recommends transferring the certification of one and two bedroom adult family homes to counties. The authority to certify these facilities was transferred to the state in 2009 Wisconsin Act 28, but the administration of the program did not transfer because it was determined that it was more efficient for local entities to conduct the certifications.

Eliminate WI Quality Home Care Commission. The Governor recommends eliminating $1 million funding related to the Wisconsin Quality Home Care Authority to reflect the elimination of the authority. The repeal of this entity would also eliminate the ability of SEIU to represent the independent home health workers covered under this commission.

Centers for the Developmentally Disabled. The Governor recommends restoring expenditure authority and positions to the Southern Wisconsin Center for the Developmentally Disabled to reflect the number of community placements made during the 2009-11 biennium. The 2009-11 biennial budget deleted a total of 120.1 FTE PR positions, assuming a total of 70 placements would be made; however, only 11 placements are now planned. The Governor also recommends increasing expenditure authority to reflect a re-estimate of the licensed bed assessment fees. (+$17,981,000)

Chippewa Falls Veterans Home & Contracting Out Operation. The Governor recommends providing expenditure authority to construct and open a veteran's nursing home in Chippewa Falls. The Governor also recommends contracting for the operation of the home and establishing statutory requirements that ensure proper oversight of the home, including requirements to provide access to records and comply with audits and legislative reviews.

Wisconsin: Projected MA LTC Expenditures in Governor's Budget

Below is a comparison chart of the spending in the different LTC programs, showing the current fiscal year and the next two under the Governor's proposed 2011-13 biennial budget.

Look at the incremental increase in IRIS (self-directed managed care) spending - and compare to the Family Care CMOs, in particular 2013. Notice the drop in projected spending in Family Care in 2013 and the increase in IRIS.

This information was provided by the Wisconsin Department of Administration - Budget Office.

Projected Medicaid Expenditures for Long-Term Care (All Funds)

		FY 2011	FY 2012	FY 2013

Nursing Homes and Centers		$984,425,490	$976,677,116	$946,667,870

Community-Based Long-Term Care
	FFS home care	$263,129,615	$266,948,430	$274,670,388
	Legacy waivers	$174,470,868	$177,252,022	$177,982,528
	IRIS	$89,280,176	$109,468,107	$112,940,267
	Family Care CMO	$1,128,169,756	$1,237,992,021	$1,185,708,642
	PACE/Partnership	$176,762,972	$183,789,677	$185,681,137
	Total CB LTC	$1,831,813,387	$1,975,450,257	$1,936,982,962

Total Long-Term Care		$2,816,238,877	$2,952,127,373	$2,883,650,832

Budget Repair Bill Passes the Assembly - Without Quorum, Senate Remains Stalled

The Wisconsin Assembly after nearly 60 hours of debate passed the budget repair bill (Special Session AB-11) on the morning of Friday, February 25th at 1:00 AM by a vote of 51-17. Of the 38 Assembly Democratic members, only 13 were available to vote in time. 4 Republicans also voted in opposition to passage of the budget repair bill. Democrats offered 128 amendments to the budget repair bill some of which would have impacted the Medicaid provisions included in the bill, however the amendments failed to pass.

The Senate has engrossed the Senate companion bill (Special Session SB-11), meaning it has received a majority vote of the presiding members to move the bill to the calendar where no further amendments can be made to the bill. As both local and national media outlets have reported, the 14 Democratic Senators remain outside of Wisconsin preventing the necessary quorum for the Senate to take final action on the budget repair bill.

Governor Walker has indicated in a press release that if the budget repair bill does not pass in time, a delay of payments to Medicaid providers would occur in mid-May through June 30th. In addition, Governor Walker stated in his "Fireside Chat" last week that, "Failure to act on this budget repair bill means (at least) 15 hundred state employees will be laid off before the end of June. If there is no agreement by July 1st, another 5-6 thousand state workers - as well as 5-6 thousand local government employees would also be laid off" (Text of Fireside Chat).

New DHS Releases Internal Financial Evaluation of Family Care (This is NOT the Legislative Audit)

The Department of Health Services released a December 2010 report created by APS Healthcare that provides a financial evaluation of Family Care. This is not the Legislative Audit Bureau report that was initiated last summer, but an internal report created for DHS. To View Report, go to: Family Care Financial Evaluation

The two questions DHS requested APS to study were:

Whether current methods for determining capitation payments to managed care organizations under contract to provide Family Care benefits are consistent with Department goals, requirements, and the needs of program enrollees; and
When the Family Care Managed Care Organization (MCOs) are likely to come into full compliance with the Department's capital requirements, given the current MCO's financial positions assumptions and funding availability.

Findings:

Several potential weaknesses that require further attention to address. In particular, the capitation model and the functional status screen on which it is based may under-estimate costs for members with the most severe functional status impairment and over-estimate costs for those with the least severe impairment. Further investigation of additional measures that may be made available through the assessment process or supplemental data sources may improve the ability to match payments to risk. Data to consider include :

Diagnoses, including behavioral health (ICD- 9, DSM III);
Information related to progression of condition (e.g. advanced v. early stage Alzheimer's);
Additional care - plan indicators, such as intensity of behavioral interventions, for example, the staffing needs required.
These items are not currently captured on the functional screen but could possibly be drawn from other sources, such as Medicaid claim history, HSRS Long-Term Care database, or professional review of care plans.

Linear cost model based on functional status information may not efficiently account for cost - outliers. This is especially problematic for MCOs with a high concentration of members with high costs associated with high-acuity of functional status impairment.

According to the report, MCOs basically fall into two groups:

Those on track to achieve adequate reserves to maintain solvency within a three year time frame, and
Those that require further action to achieve solvency as soon as possible.

Reasons for financial underperformance by the latter group include:

Higher initial fee-for-service costs,
Higher administrative costs due to coordination of agencies across multiple counties,
Higher proportions of developmentally disabled members, and
Failure to implement the Family Care service and financial management model.

Actions to support MCOs in the latter group fall into two categories: funding policies and cost control policies.

Funding Policies Recommendations:

Risk sharing arrangements between DHS and the MCOs may need to be extended beyond the 3-year limit currently in effect.
Using the risk-sharing arrangements mentioned here, these actions would increase the program budget by as much as $40 million over two years (2.1% of total capitation payments) if all four of the MCOs suggested above encountered their worst case scenarios. However, DHS would have net positive recoveries of $3 million under the intermediate scenarios, and would recoup $23 million (1.2% of total capitation payments) if all MCOs with risk-sharing achieved their best case scenario results.
Phase-in payments might also be extended for MCOs with higher initial cost structures, large multi - county service areas, or higher proportions of members with developmental disabilities relative to the pilot counties.

Cost Control Policies Recommendations:

Reduce administrative costs where warranted;
Provide technical training and monitoring to ensure that the Family Care service delivery model is deployed effectively;
Share centralized or standardized infrastructure where feasible;
Standardize provider fee schedules.

Other recommendations:

Maintain or increase oversight of MCO progress toward Family Care long-term care system transformation to ensure that opportunities for cost savings are realized;

Develop a contingency plan in the event that technical assistance or temporary financial support fail to prevent the insolvency of an MCO:

Develop criteria to define unacceptable financial performance or insolvency;
Consider a solvency standard that requires year- over- year improvement in capital reserves rather than achieving a fixed amount within a certain time frame;
Develop an action plan to cope with insolvency.

Preliminary Analysis on Governor Walker's Biennial Budget

From WALA Lobbyist Forbes McIntosh. Additional updates will be provided in the coming days upon further analysis.

Governor Walker Gives Budget Address: 2011-13 Biennial Budget Process Begins

Family Care Expansion to be Frozen, BadgerCare Eligibility to be Limited, but Limited Cuts to Long Term Care (LTC).

Please Note: This preliminary analysis is based on the Governor's Summary and a first review of the budget bill.

Further, the Budget Repair Bill introduced two weeks ago provides DHS the greater authority to reshape Medicaid and provider rates.

(WALA note: please refer to the 2/23 Legislative Update Blast on the potential impact of that aspect of the Budget Repair Bill. That may have a major long term impact when/if passed.)

Wisconsin Governor Walker provided his budget address at 4:00 PM on Tuesday, March 1, 2011. The speech and the introduction of the 2011-13 biennial budget to the Legislature marks the beginning of the budget process.

Governor Walker stated that Wisconsin faces a $3.6 billion deficit. "This deficit did not appear overnight. Wisconsin got here through a reliance on one-time fixes, accounting gimmicks and tax increases. Previous governors and legislatures from both parties took money from our tobacco settlement. They raided more than a billion dollars from the transportation fund and $200 million from the patients' compensation fund. They increased taxes on the sick and set up shell games to draw down additional federal funds. They relied on one-time federal stimulus dollars as if the money would be there forever - but it's already gone. Wisconsin owes Minnesota nearly $60 million and some $200 million to the patient's compensation fund. In short, they governed for the short-term, with an eye only on the next election - not the next generation."

"Our budget reduces all funds spending by $4.2 billion, or 6.7 percent, and decreases the structural deficit by 90 percent from $2.5 billion to $250 million - the lowest structural deficit in recent history. That's over $2 billion we are saving from future obligations and for future generations...Gone are the segregated fund raids, illegal transfers, and accounting gimmicks. Gone are the tax or fee increases. Our state cannot grow if our people are weighed down paying for a larger and larger government. A government that pays its workers unsustainable benefits that are out of line with the private sector. We need a leaner and cleaner state government."

Budget Repair Bill- Provisions Impacting Medicaid

From our Lobbist, Forbes McIntosh, a summary on what provisions in the Budget Repair Bill will effect Medicaid in Wisconsin.

Authorize DHS to Study and Restructure Medicaid Program Notwithstanding Current Law: Requires DHS to study potential changes to the Medicaid State Plan and to waivers of federal law relating to Medicaid for certain purposes, including increasing the cost-effectiveness and efficiency of care for the MA program and MA waiver programs and improving the health status of individuals who receive benefits under the MA program or MA waiver program. DHS may then promulgate rules to implement certain changes, including making certain requirements, modifying benefits, revising provider reimbursement models, developing standards and methodologies for eligibility, and reducing income levels for purposes of determining eligibility. Before promulgating a rule, DHS must submit the proposed rule and any plan to the Joint Committee on Finance for a 14-day passive review. Specify that all of these provisions would sunset on January 1, 2015.

Repeal of the Wisconsin Quality Health Care Authority: Repeals the authority of home health care workers under the Medicaid program to collectively bargain.

Address FY-11 Medicaid Deficit: Medicaid Costs are expected to exceed current GRP appropriations by $153 million. The bill would increase the Medicaid GPR appropriation to address this shortfall.

Take Advantage of Higher FMAP: Increase medical assistance (MA) benefits funding in the bill by an additional $42.7 million GPR in 2010-11 to enable DHS to partially fund June, 2011, capitation payments to health maintenance organizations and other entities that provide MA services through managed care in the current fiscal year to take advantage of the higher federal medical assistance percentage (FMAP) that applies to MA benefit payments made through June 30, 2011. Increase estimated FED funding for MA benefits costs by $82.6 million in 2010-11.

Indigent Health Care in Milwaukee County: $6,800,000 increase to fund the contribution to this program.

Medicaid Technical Correction: Act 28 included language that required unused GPR expenditure authority in Medicaid GPR appropriation at the end of the biennium to be carried over to the subsequent biennium. The bill repeals this provision in order to ensure unspent funds in Medicaid lapse to the general fund balance.

Aging & Disability Resource Centers \ Community Aids: The bill transfers an estimated $3 million in savings in this appropriation to Medicaid. ADRC's are the intake and assessment element of the state's Family Care program.

Income Augmentation Revenues: Allow the Dept. of Children & Families and Dept. Health Services to utilize $6.5 million of already identified income augmentation revenues to meet fiscal year 2010-11 lapse requirements.

Current Legislative Fiscal Bureau Summary of the Budget Repair Bill

Includes Changes by Joint Finance Committee (2/17/2011)

More information about this bill and other legislative happenings in Wisconsin.

Joint Finance Committee Changes to Budget Repair on Medicaid (LFB Summary)

The Joint Finance Committee voted on a number of amendments to Governor Walker's Budget Repair Bill, see below for a quick summary of changes:

Specify that all of these provisions would sunset on January 1, 2015. Under this change, any emergency rules or plans approved by the Joint Committee on Finance, any amendment to the MA State Plan, and any waiver agreements DHS enters into as a result of these provisions would terminate on January 1, 2015, if they are inconsistent with the MA statutes that are in effect as of that date. Further, if MA eligibility for non-disabled, non-pregnant adults is reduced to individuals with family income no greater than 133% of the federal poverty level as of July 1, 2012, as provided under the bill, this group would again become eligible for MA as of January 1, 2015, unless the statutes are modified to reflect this reduction in the eligibility standard for this group. It is not clear whether an emergency rule promulgated under the procedures established in the bill would remain in effect after that date.

Increase medical assistance (MA) benefits funding in the bill by an additional $42.7 million GPR in 2010-11 to enable DHS to partially fund June, 2011, capitation payments to health maintenance organizations and other entities that provide MA services through managed care in the current fiscal year to take advantage of the higher federal medical assistance percentage (FMAP) that applies to MA benefit payments made through June 30, 2011. Increase estimated FED funding for MA benefits costs by $82.6 million in 2010-11. This provision would enable the state to pay $42.7 million GPR in 2010-11 to make MA capitation payments that would cost $49.9 million GPR if they are made in July, 2011. If enacted, the administration indicates that the $49.9 million GPR savings for MA benefits that would be realized in 2011-12 will be included in the Governor's 2011-13 biennial budget bill as a GPR-Lapse from the Department of Health Services in the 2011-13 biennium.

Democratic Senators Leave State to Prevent Senate from Taking Action

On Thursday, Feb 17, Democratic Senators left the State of Wisconsin in protest and to delay the Senate from taking action on Governor Walker's Budget Repair Bill. State law enforcement has been requested to search for Democratic Senators and bring them to the floor to allow the Senate to begin the floor vote process.

The budget repair bill has generated much opposition and protests around that Capitol in the past four days. Governor Walker introduced the bill to the Legislature last Friday; Legislative Fiscal Bureau summaries were made available on Monday; a Joint Finance Committee public hearing held on Tuesday; a Joint Finance Committee vote held on Wednesday; and, both houses of the Legislature were scheduled to meet in Special Session to pass the bill Thursday.

The protests have also closed many schools around the state due to a request by the state teacher's union (WEAC) Wednesday night for members to join the protest at Wisconsin's Capitol.

Democratic Legislators are stating that they are delaying the vote to seek negotiations with Republicans and obtain changes to the bill. The question by some is whether Democrats can delay a vote until Tuesday, February 22nd - when Governor Walker is scheduled to give his Budget Address and release his proposed 2011-13 biennial budget to the public.

The controversial budget repair bill would make significant changes to public employee collective bargaining procedures and would provide the Wisconsin Department of Health Services broad authority to create a plan reshaping the State's Medicaid system, including provider reimbursement, that would only require legislative oversight through a 14-day passive review by the Legislature's Joint Finance Committee. Meaning, it would take a majority vote from that committee to make any changes to the plan proposed by DHS - and if no action were taken the plan would automatically go into effect.

On Tuesday, February 15th, there were an estimated 13,000 protesters at Wisconsin's State Capitol. Since then several thousand protesters have been rallying inside and outside the Capitol building during the day and some through the night. The largest number to date was estimated at 77,000 protesters, on Saturday, February 19th.

Governor Walker Introduces Budget Repair Bill

On Friday, February 11, 2011, the Governor released his budget repair bill for the current fiscal year, which ends on June 30, 2011. According to a letter to Legislators the need for a budget repair bill is based on a projected shortfall in the current fiscal year and over $175 million of cost pressures from Medicaid, Corrections and other areas that need to be addressed. In addition, over $250 million of liabilities must also be met by the state related to repayment of funds to the Injured Patients and Families Compensation Fund and to the State of Minnesota for tax reciprocity payments from prior years.

The area that seems to be getting the greatest focus by the Governor are state and local public employee unions. The bill makes significant changes to public employee unions, including: increased employee and elected official pension contributions; increased health insurance contributions; cap wage increases; require annual member votes to maintain union certification; employers prohibited from collecting union dues; and, local law enforcement, fire department, state troopers and inspectors would be exempt from these provisions. In addition, the bill repeals the authority of University of Wisconsin (UW) faculty and academic staff and UW Hospital-Clinics Board\Authority to collectively bargain. The bill also provides that if the Governor declares a state of emergency, appointing authorities have the authority to terminate any employees that are absent for three days without approval by employer.

Please note that the 2-year biennial budget will be introduced on February 22nd, which will likely have significant impacts to the long-term care profession.

Areas of the budget repair bill impacting long-term care include:

Repeal of the Wisconsin Quality Health Care Authority : Repeals the authority of home health care workers under the Medicaid program to collectively bargain.
Address FY-11 Medicaid Deficit : Medicaid Costs are expected to exceed current GRP appropriations by $153 million. The bill would increase the Medicaid GPR appropriation to address this shortfall.
Indigent Health Care in Milwaukee County : $6,800,000 increase to fund the contribution to this program.
Authorize DHS to Study and Restructure Medicaid Program Notwithstanding Current Law: Requires DHS to study potential changes to the Medicaid State Plan and to waivers of federal law relating to Medicaid for certain purposes, including increasing the cost-effectiveness and efficiency of care for the MA program and MA waiver programs and improving the health status of individuals who receive benefits under the MA program or MA waiver program. DHS may then promulgate rules to implement certain changes, including making certain requirements, modifying benefits, revising provider reimbursement models, developing standards and methodologies for eligibility, and reducing income levels for purposes of determining eligibility. Before promulgating a rule, DHS must submit the proposed rule and any plan to the Joint Committee on Finance for review.
Medicaid Technical Correction: Act 28 included language that required unused GPR expenditure authority in Medicaid GPR appropriation at the end of the biennium to be carried over to the subsequent biennium. The bill repeals this provision in order to ensure unspent funds in Medicaid lapse to the general fund balance.
Aging & Disability Resource Centers \ Community Aids: The bill transfers an estimated $3 million in savings in this appropriation to Medicaid. ADRC's are the intake and assessment element of the state's Family Care program.
Income Augmentation Revenues: Allow the Dept. of Children & Families and Dept. Health Services to utilize $6.5 million of already identified income augmentation revenues to meet fiscal year 2010-11 lapse requirements.

Interview of Wisconsin DHS Secretary Dennis Smith

Now available online is a taped video interview of Wisconsin's new Department of Health Services Secretary Dennis Smith. The video provides some insight of Secretary Smith's views and goals with respect to public policy and the funding challenges facing the Medicaid program. The video was taped on Thursday, Feb 3rd, 2011. To view the video click here.

From our Breakfast with BAL

Strategies to Promote Regulatory Compliance in Assisted Living Facilities with the Top 10 Citations of 2010. Click here for the document.

Wisconsin Governor Walker State-of-the-State Summary

Read entire speech as prepared here.

State Faces Significant Budget Deficits - Little Detail Provided of how Deficits will be Overcome

During a declared state of emergency for a winter storm and blizzard in southern Wisconsin, including the capital area, Governor Scott Walker (R) gave his first State-of-the-State speech in the State Capitol before both houses of the legislature, Supreme Court Justices, Constitutional Officers, tribal leaders and members of the Cabinet. The speech was less than 30-minutes in length, which is considered short by comparison to other past gubernatorial speeches. The Governor outlined the state's fiscal challenges - and focused some general attention where financial solutions could come from: public employee pension and benefits; relationship with local governments; and, entitlement programs such as Medicaid.

Governor Walker outlined the State's fiscal challenges, stating, "First, let me be clear: we have an economic and fiscal crisis in this state that demands our immediate attention. The solutions we offer must be designed to address both job creation and our budget problems."

There was very little detail given into the budget repair and state biennial budget bills - or what level of impact to the Medicaid system will be proposed. The Governor did say that "our upcoming budget is built on the premise that we must right size our government. That means reforming public employee benefits – as well as reforming entitlement programs and reforming the state’s relationship with local governments."

In addition, the Governor stated:

"Without swift corrective action, entitlement programs and legacy costs will eat up more and more of the operating budget. Failure to act only makes the problems worse in the future."

"Last week, our Secretary at the Department of Health Services, Dennis Smith, testified before Congress on some of the challenges we are facing in Medicaid. In that program alone, we face a more than 150 million dollar shortfall over the next 6 months and, over the next biennium, the shortfall exceeds 1.8 billion dollars. These are challenges that cannot be ignored."

Some Excerpts:

Commending Men and Women in Uniform - and the Green Bay Packers

At the beginning of the speech the Governor commended a state trooper who was seriously injured in the line of duty, and all those serving our country in uniform. In addition, Green Bay Packer's Football President Mark Murphy was video conferenced in from Texas to share a few words - along with the announcement that the State Capitol is now being illuminated at night with green and gold lights.

Fiscal Crisis

"First, let me be clear: we have an economic and fiscal crisis in this state that demands our immediate attention. The solutions we offer must be designed to address both job creation and our budget problems. Wisconsin’s once strong economy is in need of repair. Too many of our people are hurting and too many of our employers are struggling. The unemployment rate in December dropped to 7.5% but that is still 3 points worse than it was just three years ago at this time. We must do better."

Overview of the Current Special Session

The Governor provided a summary of the Special Session called to focus on job, through the introduction of 8 pieces of legislation, which four have already been passed and signed into law (eliminating taxes on health savings accounts; tort reform; regulatory reform; tax relief to small businesses; relocation and economic development tax credits).

Budget and Budget Repair Legislation

"That’s why the budget and budget repair bills we will introduce in the coming weeks will be even more important than our Special Session legislation. It is in those budgets where rhetoric meets reality, where we will show that we will make the tough decisions now to lay the foundation for future economic growth."

Wisconsin's 2011-13 biennial budget faces a $3 billion deficit that starts on July 1, 2011. Wisconsin also faces a $200 million shortfall in the current fiscal year that ends on June 30, 2011.

"Without swift corrective action, entitlement programs and legacy costs will eat up more and more of the operating budget. Failure to act only makes the problems worse in the future."

"In addition to the deficits facing these critically important areas of state government, bill collectors are waiting on the doorsteps of our capitol. Due to a past reliance on short term fixes, one ‐ time money, delayed payments, and fund raids, we owe the State of Minnesota nearly 60 million dollars and we owe the Patient’s Compensation fund for a past raid of $200 million."

"The decisions we face are not easy and the solutions we must approve will require true sacrifice. But, the benefit of finally making these tough decisions and being honest with the citizens of this state will help us to balance the budget in a way that creates a permanent, structurally sound state budget."

"If we are going to move our state forward, we have to be honest and agree that we no longer can afford to rely on short ‐ term fixes that only delay the pain, compound the problems, and lead to ongoing financial uncertainty."

"In the coming weeks, I will introduce a budget repair bill focusing on the most immediate fiscal challenges our state must address to avoid massive layoffs or reductions in critical services. Our budget repair bill will lay the foundation for a structurally sound budget that doesn’t rely on short-term fixes and other stop-gap measures that only delay the pain and create perilous uncertainty."

Areas of State Spending to Look at:

"The difficult reality is that healthcare costs and pension costs have risen dramatically and that has created a benefit system that is simply unsustainable. Government benefits have grown while so many others in the private sector have seen their benefits adjusted in order to protect jobs.

Currently, most state employees pay next to nothing from their salaries toward their pension, while the state’s taxpayers pay more than $190 million each year on state employees' behalf.

Similarly, most state workers only pay about 6% of their premium costs for their health care plan.

Asking public employees to make a pension payment of just over 5% (which is about the national average) and a premium payment of 12% (which is about half of the national average) would save the state more than $30 million over three months. Most workers outside of government would love a deal like that – particularly if it means saving jobs."

"Our upcoming budget is built on the premise that we must right size our government. That means reforming public employee benefits - as well as reforming entitlement programs and reforming the state’s relationship with local governments."

Wisconsin Budget Shortfall - Overview

In a press release from Monday, Governor Walker was quoted as stating, "Wisconsin is in a fiscal crisis." The crisis is the negative $115.7 million projected ending balance for the current fiscal year (ending on June 30, 2011) when taking into account the budget shortfalls.

$121.4 Million (Gross Balance of Wisconsin Budget, June 30, 2011)

-$178.4 Million shortfall in Medicaid, public defender\private bar and Department of Corrections.

-$58.7 Million bill due to the State of Minnesota for tax reciprocity (assumes payment made in this fiscal year).

-------------

-$115.7 Million total shortfall in current fiscal year

It should be noted that Medicaid represents $153.2 million (GPR) of the total $178.4 million shortfall being identified.

The Governor's press release mentions that this shortfall does not include the $200 million repayment from a Supreme Court decision that found a budget transfer made to balance the budget 2-years ago was illegal. That repayment will likely have to be made in the 2011-2013 budget, but could impact this fiscal year. In addition, it should be noted that the Governor's office is assuming the $58.7 million will be paid to Minnesota for tax reciprocity in this fiscal year and not after June 30, 2011 (next fiscal year).

The budget issues facing Wisconsin's Medicaid program are: the $153.2 million (GPR) shortfall in Medicaid for this fiscal year, which ends on June 30, 2011; and, the 2-year (2011-13) projected biennial budget shortfall in Medicaid of approx. $1.8 billion (total budget shortfall all programs is $3.2 billion - according to information provided by the Governor's Office)

Report: Legislative Fiscal Bureau Revenue & Expenditure Projections

Tort Reform Update!

Assembly Passage Sends Tort Reform to the Governor
The Wisconsin Assembly debated and passed Special Session Senate Bill 1 relating to tort reform. The bill headed to Governor Walker's desk for final approval, and was published 1-31-2011. http://legis.wisconsin.gov/2011/data/acts/11Act2.pdf
Democratic members of the state Assembly offered 20 amendments to the tort reform legislation, which all were tabled (failed to pass). Much of the opposition debate focused on provisions pertaining to nursing homes and long-term care providers. In fact, Rep. Peggy Krusick (D-Milwaukee) and fellow Democrats offered an amendment that would have ensured that nursing home and CBRF incident reports would be available to the families of victims of neglect or to prosecutors filing criminal charges. The amendment was defeated 55-38.
All long-term care providers are asked to please contact your state senator and state assembly representative and if they voted in favor of the Tort Reform proposals - please send them a letter thanking them. Remember, when our state legislators do something right for the long-term care profession, we need to take the time to let them know how appreciative of their efforts we are and how important it is to support Wisconsin's long-term care providers. For more information about what the Tort Reform Bill means for you go to: http://www.ewala.org/news/WisconsinSenatePassesTortReformBill.doc

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