Deal on state health coverage for the poor is unraveling

It looks like the deal to continue state-paid health care for Minnesota's poorest residents is unraveling. The Hennepin County Board has rejected a contract with the state to have Hennepin County Medical Center take part in a new version of General Assistance Medical Care.

Hennepin County Commissioner Peter McLaughlin said HCMC initially applied to treat the state's poorest residents, but that was under the assumption that 16 other hospitals would also join in. To date, only five hospitals have applied, prompting concern that more and more GAMC patients would show up at HCMC for medical treatment.

McLaughlin said that's unacceptable.

"It could be a $90 million to $100 million loss for Hennepin County Medical Center," said McLaughlin. "That's an enormous loss that would destroy the integrity of Hennepin County Medical Center, and would be an unfair property tax burden on the property taxpayers of Hennepin County."

Hospital officials across Minnesota have been forced to decide whether they want to accept GAMC patients under a deal reached last month by Gov. Pawlenty and DFL lawmakers. Pawlenty vetoed funding for the program in 2009, prompting state lawmakers and hospital officials to scramble to fix it.

The new program means the state wouldn't pay hospitals for treating patients. Instead, it would create a system of block grants for 17 hospitals around the state, and a pool of money for other hospitals to treat the population.

The concern from hospital officials is that the pool of money -- $164 million earmarked for hospitals -- won't be enough.

If hospitals opt out of participating, that means they could potentially turn away GAMC recipients, or set some other limits on how many people they would treat.

Rep. Erin Murphy, DFL-St. Paul, said HCMC's decision is a blow to the program.

"There are two key benchmarks in the legislation that I believe we need to meet -- 80 percent of the GAMC population is to be covered through a Coordinated Care delivery system, and we're supposed to achieve geographic access," said Murphy. "And I'm concerned that we're not going to meet either of those benchmarks at the rate that we're going."

Murphy, McLaughlin and other Democrats in the Legislature want to scrap the new GAMC program and instead apply for a fix under the new federal health law. That law would give Minnesota and other states extra money to shift GAMC clients into a federal program for poor people.

Democrats, hospitals and doctor groups say the federal program is the best solution. But Gov. Pawlenty, and Republicans in the House and Senate, say the federal program would end up costing the state money it doesn't have.

Rep. Matt Dean, R-Dellwood, said he thinks the hospitals are opting out of GAMC to increase pressure on the governor to accept the federal funds.

"Hospitals need to know that the likelihood of that is very, very small. So we believe that the agreement that we have is the best we can do with the dollars we have," said Dean. "We should move forward with that and encourage hospitals, particularly ones like HCMC that treat a lot of GAMC patients, to reconsider the application process."

County Commissioner McLaughlin said the state should enroll in the federal system. He said short of that, Hennepin County Medical Center will consider several options: Refuse to accept GAMC patients; negotiate a cap on the number of patients the hospital could accept; or accept only recipients who are residents of Hennepin County.

Gov. Pawlenty has been highly critical of the federal health law. His spokesman said hospitals will be forced to accept patients in emergency rooms whether the patients enroll in the program or not. McClung said the governor thinks ultimately the hospitals will accept the state funding.

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