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Michigan House, Senate Appropriations Subcommittees Report FY 2016 Budget Recommendations

Tuesday, March 31, 2015  
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Before adjourning for Spring recess at the end of last week, Michigan House and Senate appropriations subcommittees began reporting their fiscal year 2016 budget recommendations. The next step in the state budget process involves the full House and Senate Appropriation Committees voting on the proposed subcommittee appropriations bills, and then the bills move to the House and Senate floor for consideration by the full chambers, after which any differences between the chambers will be reconciled through a conference committee. Below is a summary of the recommendations put forth by the Subcommittee on Community Health in each chamber, which are of most interest to MPCA and Michigan Health Centers.

 

The House Appropriations Subcommittee on Community Health forwarded the FY 2016 proposed Community Health budget to the full House Appropriations Committee, which includes:

  • The House subcommittee included supplemental adjustment for the state’s Medicaid expansion program, the Healthy Michigan Plan, for projected increases in caseload, utilization, and inflation adjustments. The supplemental appropriation allocates $361.1 million in federal funds to the Healthy Michigan Plan, of which 100% of program costs are funded by federal revenue through the end of calendar year 2016.
  • The House subcommittee concurs with the Governor’s recommendation to fund Graduate Medical Education (GME) with a new hospital tax, rather than GF/GP, with a minor technical adjustment to fully reflect the estimated GF/GP savings.
  • The House subcommittee recommendation assumes savings of $2.24 million from the merger of the Departments of Community Health and Human Services.
  • The House subcommittee recognizes a $30 million increase in federal State Innovation Model (SIM) grant funding to implement Michigan’s Blueprint for Health Innovation. The subcommittee also added new boilerplate language, including outcomes and performance measures.
  • The House reduces state GF/GP funding for Health Innovations Grants leaving a $100 placeholder for the line item to leave room for later discussion.
  • The House subcommittee does not include the Governor’s proposed increases in Health Insurance Claims Assessment (HICA) and retains the current GF/GP funding.
  • The House concurs with the Governor’s proposed $21.8 million Gross increase ($7.5 GF/GP) to expand Healthy Kids Dental to an estimated 210,000 children age 0-8 in Kent, Oakland, and Wayne counties.
  • The Governor recommended $23 million Gross ($7.9 million GF/GP) for the conversion of the current Medicaid FFS adult dental program to a managed care organization statewide. The House rejects the Governor’s proposal and instead includes a $100 placeholder in the line item for Adult Dental Services.
  • The House concurs with the Governor’s recommendation to eliminate $11 million Gross ($3.8 GF/GP) allocated for lump sum payments for the amount of obstetrical and newborn care at rural hospitals qualifying for the special payments.
  • The House includes a $100 placeholder in the line item for the child and adolescent health services pilot.
  • The House allocates $33.3 million GF/GP to continue the increases to Medicaid rates for primary care services provided only by a primary care provider.
  • The House concurs with the Executive recommendation and removes a $500,000 FY2014-15 allocation to MIDocs for the creation of the residency program consortium and preparation of report detailing per resident costs for training and clinical quality measures.

 

The Senate Appropriations Subcommittee on Community Health forwarded the FY2016 proposed Community Health budget to the full Senate Appropriations Committee, which includes:

  • The Senate subcommittee reflected a $15 million increase from Federal grants, specifically the federal State Innovation Model (SIM) grant funding to implement Michigan’s Blueprint for Health Innovation. This represents a $5 million reduction from FY2014-15 and only half of the amount reflected in the FY2016 House budget.
  • The Senate subcommittee proposed delaying implementation of Healthy Kids Dental to Kent, Oakland, and Wayne counties until July 1, 2016, at which time all eligible children (ages 0-21) would have access to the program (cost $5.6 million GF/GP), and includes an outline for performance measures for the program.
  • The Senate subcommittee supported the Executive Budget recommendation for a Medicaid Adult Dental program enhancement with an effective date of September 1, 2016 (cost $2.6 million GF/GP), and includes new boilerplate language requiring a contract with a managed care organization to administer the Medicaid adult dental benefit.
  • The Senate restores FY2014-15 Executive Order cuts to support GME and the rural/sole hospital pool (cost of $7 million GF/GP), and rejects the Governor’s proposal to increase the hospital Quality Assurance Assessment Program (QAAP) to support GME. The Senate also includes new boilerplate requiring hospitals that receive GME payments to submit data to a national nonprofit organization.
  • The Senate allocates $25 million GF/GP plus associated Federal match to increase Medicaid rates to primary care providers and included new boilerplate directing the Department of Community Health to examine including neonatal medicine to its definition of primary care provider.
  • The Senate budget did not reflect the assumed savings from the Governor’s proposed increase to the HICA rate.
  • The Senate retains a $100 placeholder in the line item for MIDocs consortium.
  • Additional boilerplate changes include:
    - New language requiring three separate reports regarding GME funding and the creation of a workgroup to develop metrics for funding distribution and states legislative intent to implement new metrics in the next fiscal year.
    - Relative to Medicaid obstetrical rates, the Senate changed boilerplate language to “maintain” last year’s increases

 
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