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Conference Committee Reports Recommended MDCH Budget for FY 2015

Wednesday, June 11, 2014  
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On June 10, 2014, the House-Senate conference committee approved its recommended fiscal year (FY) 2015 appropriations bill (SB 763) for the Michigan Department of Community Health (MDCH), which includes many positive provisions important to MPCA and Michigan Health Centers, as listed below. The proposed MDCH budget has a higher total than was first discussed, because it incorporates the Health Insurance Claims Assessment (HICA) rate reduction and implementation of the Use Tax on HMOs.

SB 763 is now headed to the House and Senate floors where a “yea” or “nay” vote will be taken, as no amendments can be proposed. It is very likely the bill will pass as reported by the conference committee, at which point it would go to Governor Snyder for his signature.

“While the budget is not yet final, given the somewhat concerning Revenue Estimating Conference projections that state revenues would be down for next year, all of this is very good news,” said Doug Paterson, Director of State Policy, MPCA. “We especially would like to thank Senator John Moolenaar, Senator Roger Kahn, and Representative Matt Lori for their leadership during this budget process in including provisions that preserve and increase access to care.”

The following is a summary of the major recommendations of importance to MPCA and Michigan Health Centers:
  • Healthy Michigan Plan: Includes funding to continue the Healthy Michigan Plan. Michigan is fortunate to be one of the 26 states that have expanded their Medicaid program. As a result, over 400,000 Michigan residents will benefit from coverage through the Healthy Michigan Plan. As of June 9, over 287,000 Michiganders are already enrolled. Again, take a moment to celebrate!
  • Healthy Kids Dental Program: MPCA commends Governor Snyder and State Legislators for continuing to expand the Healthy Kids Dental program. SB 763 calls for expanding the program to Kalamazoo and Macomb counties; thus, only Kent, Oakland, and Wayne counties would remain uncovered. Governor Snyder has stated during this budget process that he is committed to make the Healthy Kids Dental Program a statewide program during his next term as Governor. 
  • State Loan Repayment Program: Invests an additional $500,000 (which, when matched, becomes over $1 million) to expand the State Loan Repayment Program 
  • Graduate Medical Education (GME): Rejects the Governor’s recommendation to cut Graduate Medical Education (GME) by $4.3 million of “one-time funds” from the FY 2014 budget, and instead fully funds the program and designates the funding as ongoing; also allocates $500,000 in new funds to create an accredited GME consortium of medical schools, called “MIDocs,” to develop new residency programs focused on primary care physicians who are willing to serve in underserved areas
  • Medicaid Payments for Obstetrical Services: Significantly increases Medicaid payments for obstetrical services to 95% of the Medicare rate ($4.75 million General fund and $13.7 million with federal match)
  • Rural and Sole Community Hospital Pool: Rejects the Governor’s recommendation to reduce the Rural and Sole Community Hospital Pool by $12 million 
  • Increased Payments to Small Hospitals Providing Obstetrics Services: Additional General Funds were appropriated to help small hospitals in critical areas of the state that provide OB services ($3.8 General Fund and $11 million with match); these hospitals will receive additional payments of $830 for each pregnant woman and another $830 per infant
  • Medicaid Reimbursement of Breast Pumps: $2 million appropriation ($689,200) for Medicaid reimbursement of breast pumps 
  • Medicaid Primary Care Services Rate Increase: The Medicaid primary care rate increase to Medicare levels is funded with 100% federal funds through December 31, 2014; the conference committee supported the Governor’s recommendation to retain half of the increase effective January 1, 2014, at a cost of $25 million General Fund
  • Prenatal Care Home Visitation in Northern Michigan: The Governor recommended $2.5 million in General Fund for the Prenatal Care Home Visitation in Northern Michigan and the conference committee supported that recommendation
  • Mental Health Coverage and Systems Improvement: $36.5 million in funding ($14.32 million General Fund) will be provided to implement the recommendations of the Mental Health and Wellness Commission to improve Michigan’s Mental Health Coverage and systems. The Governor had recommend $10 million of ongoing General Fund money to implement some of the recommendations and another $5 million of one-time funding. This budget recommendation did prevail with a slight cut to the ongoing part to $9.3 million. However, it is expected that Medicaid match to several of the recommendation will increase the gross amount to $36.5 million. MPCA's recommendation to pilot Health Homes under the Affordable Care Act is under consideration for funding from this appropriation.

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