Wisconsin Budget

2007-09 Wisconsin Budget Update

The Hamilton Consulting Group

July 2007

Health Summary

Healthy Wisconsin Plan
Governor – No provision.

Joint Finance – No provision.

Senate – Creates a universal health care plan for all Wisconsin residents funded with roughly 15.2 billion in employer and employee wage assessments. [See Senate 79]

Assembly – No provision.

Injured Patients and Families Compensation Fund Transfer
Governor – Proposed to transfer $175,000,000 from the Injured Patients and Families Compensation Fund (IPFCF) to be used in the Health Care Quality Fund.

Joint Finance – Defaulted to the Governor’s position. [See Paper 377]

Senate – No change.

Assembly – Deleted the provision. [See Assembly 114]

Hospital Assessment
Governor – Proposed to create an assessment on the gross revenues of hospitals not to exceed 1 percent of the gross revenue.

Joint Finance – Defaulted to the Governor’s position. [See Paper 371

Senate – No Change

Assembly – Deleted all provisions relating to the assessment on hospitals’ gross revenues tax.

Health Savings Accounts
Governor – No provision.

Joint Finance – No provision.

Senate – No provision.

Assembly – Federalizes state tax treatment of individual income tax exclusions and deductions for health savings accounts (HSAs). Provide that for tax year 2008, the income tax exclusions and deductions would be 50% of the allowable exclusions and deductions under federal law. For taxable years starting on or after January 1, 2009, the income tax exclusions and deductions would be the same as those provided under federal law. [See Assembly 33]

Health Care Quality Fund
Governor – Created the health care quality fund (HCQF) as a segregated fund to receive revenue from the proposed hospital tax, tobacco tax increases and Injured Patients and Families Compensation Fund transfer.

Joint Finance – Modify the Governor's recommendations by reducing funding for tobacco control grants, deleting funding and statutory provisions relating to grants to promote the adoption of health care quality, deleting funding to the Healthy Wisconsin Authority, and increasing funding for the well-woman program.[ See Paper 370 and JFC 287]

Senate – No change

Assembly – Deleted all provisions relating to the creation of the health care quality fund, including the revenue sources to the fund and budgeted expenditures from the fund.

Workplace Wellness Tax Credit
Governor – No provision.

Joint Finance – No provision.

Senate – No provision.

Assembly – Created a workplace wellness tax credit, under the state individual income and corporate income and franchise taxes, equal to 30% of the amount paid by a claimant in a tax year to provide a workplace wellness program to any employee who is employed in Wisconsin, excluding amounts paid to acquire, construct, rehabilitate, remodel, or repair real property. Also provided that the tax credit could be claimed for three years, and that unused credit amounts could be carried forward up to 15 years to offset future tax liabilities. The total amount of credits that could be claimed in a year would be limited to $2,500,000 for all claimants who employ 50 or fewer employees and to $2,500,000 for all claimants who employ more than 50 employees. [See Assembly 39]

Health Care Quality Fund – Replace GPR Benefits Funding
Governor – Replaced $700 million base GPR funding in MA with money from the Health Care Quality Fund.

Joint Finance – No change.

Senate – No change.

Assembly – Deleted provisions that would replace base GPR funding for medical assistance (MA) benefits with revenue from the health care quality fund (HCQF). Increased funding in the bill by $362,900,000 GPR in 2007-08 and by $370,902,800 GPR in 2008-09. [See Assembly 94]

HCQF – Demonstration Project to Provide MA Coverage to Childless Adults
Governor – Proposed to expand BadgerCare to cover childless adults within incomes up to 200% of the federal poverty level.

Joint Finance – Defaulted to Governor’s proposal. [See Paper 374 and Paper 375]

Senate – Provided an additional $1,120,300 SEG from the health care quality fund and reduce funding by $343,500 FED in 2008-09 to reflect the administration’s revised estimates of the cost of the Governor’s proposal to expand primary and preventive health care services to adults under age 65 who have family incomes up to 200% of the federal poverty level, and who are not otherwise eligible for MA, BadgerCare, or Medicare, and who did not have coverage under the health insurance risk-sharing plan within six months before applying to participate in the project. [See Senate 102]

Assembly – Delete all provisions relating to a demonstration project to provide MA coverage to childless adults.

BadgerCare Plus
Governor – Proposed an expansion of coverage under the current BadgerCare Plan.

Joint Finance – Included the provision. However, from the funding the Governor recommended to increase access to dental services, require DHFS to allocate 200,000 in 2007-08 to the Peter Christensen Health Center and $200,000 in 2007-08 to the Lake Superior Community Health Center to increase access to dental services. [See Paper 383 and JFC 283]

Senate – No change

Assembly – Delete all funding and statutory changes relating to BadgerCare Plus, except provisions relating to HMO cost savings, eligibility simplifications and cost sharing.

Dental Rate Increase Pilot Project
Governor – No provision.

Joint Finance – Increase MA benefits funding by $4,112,800 ($1,750,000 GPR and $2,362,800 FED) in 2007-08 and $4,172,600 ($1,750,000 GPR and $2,422,600 FED) in 2008-09 to support a one-time funding increase for a dental access pilot project, under which DHFS would increase MA pediatric dental rates in Brown, Racine, and La Crosse Counties, beginning in 2007-08. [See JFC 331]

Senate – No change.

Assembly – Deleted the provision. Instead provided $7 million for a general rate increase for MA dental services.

Non-Institutional Provider Rate Increase
Governor – Provides $14,130,700 and $44,063,700 to increase rates for certain MA and BadgerCare non-institutional services. DHFS would also increase rates for all noninstitutional provider services by 1 percent in 2007-08 and an additional 2% (for a total of 3%, compared to current rates) and would increase reimbursement to pharmacies that dispense drugs to MA and BadgerCare recipients by eliminating DHFS' current practice of subtracting $0.50 per drug claim from the total reimbursement a pharmacy receives, and rates for psychiatric services would be increase by 20 percent.

Joint Finance – Defaulted to Governor’s provision on 8-8 vote on omnibus motion.
[See Paper 384]

Senate – Modified the current requirements relating to the delivery of medical assistance (MA) services through health maintenance organizations (HMOs) by requiring DHFS to calculate that portion of any increase in the capitation rate paid to each HMO if the increase is made to reflect increases in fee-for-service MA payment rates to one or more classes of providers. Also required each HMO to increase its payments to any class of providers for services to MA recipients and required DHFS to conduct audits to ensure compliance. [See Senate 102]

Assembly – Deleted provisions that would increase reimbursement for certain non-institutional services provided to MA and BadgerCare recipients. Deleted hospital rate increase associated with the hospital tax. Instead, provided $26 million for hospital inpatient and outpatient rate increases. Also deleted the dental rate increase pilot in certain counties and instead provided $7 million for a general MA dental rate increase. [See Assembly 97]

Time Limits for Paying MA, BadgerCare and Senior Care Claims
Governor – No provision.

Joint Finance – No provision.

Senate – No provision.

Assembly – Required DHFS to issue payment for at least 95% of proper provider claims for reimbursement under the MA, BadgerCare, and SeniorCare program within 30 days of receipt of the claims and issue payment for 100% of such claims within 45 days of receipt of the claims. Some deadline extension provisions were also included. [See Assembly 100]

Claim Common Carrier Transportation as an MA Service and Establish Transportation Broker Program
Governor – Reduced GPR funding for MA benefits by $2,002,900 and by $2,370,500 and increased FED funding for MA benefits by corresponding amounts to reflect the fiscal effect of the administration's proposal to claim most common carrier transportation costs as MA service costs, rather than as MA administration costs. The federal matching percentage for MA administration is 50%, while the MA benefits matching percentage is approximately 58%. Under this item, counties would submit additional information to DHFS to document the common carrier services MA recipients receive, enabling DHFS to claim these services as service costs, rather than as administration costs. There are no statutory changes relating to this item in the budget. DHFS intends to implement this change as a matter of policy.

Joint Finance – No change. [See Paper 386]

Senate – No change.

Assembly – Modified provision to require DHFS to contract with a transportation manager (broker) that would provide a single point of contact for MA and BadgerCare recipients who require non-emergency transportation services. Also, provided $52,400 in both years for DHFS to contract for a program manager who would meet with stakeholders, issue a request-for-proposal, and negotiate the contract. Then reduced MA and BadgerCare benefits funding by $9,809,600 in 2008-09 to reflect projected savings. [See Assembly 98]