Johns Hopkins Institutions



Legislative Hotline

2004 SESSION OF THE
MARYLAND GENERAL ASSEMBLY



Volume 12, Number 1 January 29, 2004


This week Governor Ehrlich introduced the FY 2005 Operating Budget. The following is a summary of information to date of those operating budget issues affecting the Johns Hopkins Institution. As the budget details evolve we will keep you apprised.

CIGARETTE RESTITUTION FUND
MEDICAID AND MENTAL HEALTH
HIGHER EDUCATION


BILLS INTRODUCED
STAFF CONTACT INFORMATION

Cigarette Restitution Fund

The Governor's FY2005 budget includes an allowance for the two Johns Hopkins' Cigarette Restitution Fund grants; however, as noted below, both experienced a reduction over last year's budget.


Grant FY 04 Award FY 05 Allowance
Cancer Research grant $2,590,000 $2,409,000
Public Health Grant $1,400,000 $1,223,000

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Medicaid and Mental Health

The Department of Health and Mental Hygiene's budget increases 7% from the FY 2004 appropriation to $6.1 billion. The largest single item in the State budget is Medicaid (including the Children's Health Insurance Program) which grew to $3.99 billion, an increase of 8% or $302 million. The Governor's FY 2005 budget also includes a $157.4 million deficiency appropriation for Medicaid. The Medicaid program is expected to increase enrollment by 4.5%, allowing 636,000 Marylanders to be served by the program. Due to rapid cost increases in the Medicaid program, the Department will introduce several management initiatives to rein in costs including the following:

•$2.6 million in savings by enrolling more developmental disabled individuals into Medicaid
•$2.4 million in savings by requiring the Department of Human Resources to update Medicaid eligibility records more frequently
•$5.0 million in savings by restructuring the Rare and Expensive Case Management Program
The Governor's budget also provides for a $32 million increase in Mental Health for FY 2005 and a deficiency appropriation of $54 million for FY 2004. The budget also reflects projected savings from a proposal consolidating the State's largest residential psychiatric facilities by moving patients and staff from Crownsville Hospital to Spring Grove Hospital and Springfield Hospital, saving $12 million. A portion of the savings, $5 million, will be used to increase the Community Services budget. In addition, the Carter Center's operations will be shifted from DHMH to the University of Maryland Medical Center. It is estimated that the closure of Crownsville and the shifting of ownership of the Carter Center will eliminate 267 State funded positions.

Other items in the budget include:

•Funding to support a tripling of the number of seniors served by the Maryland Pharmacy Discount Program
•$129.4 million increase for alcohol and drug abuse treatment, an $8.5 million or 6% increase over FY 2004 that includes $4 million to support a residential treatment program in lieu of incarceration for adult and adolescent offenders
•$1 million to support the creation of a new Department of Disabilities to focus on Maryland's capacity to address the needs of the disabled community
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HIGHER EDUCATION

Sellinger Aid

The Governor's budget for Higher Education level funds Sellinger Aid at the FY 2004 levels. Johns Hopkins will receive $12,899,539, an increase of $303,955. The actual FY 2005 allowance for the total MICUA allowance is $43,188,448, but it is expected that the Governor will introduce a Budget Reconciliation and Financing Act that will cut Sellinger by $11,713,060, thus level funding Sellinger.

MICUA Capital Projects

The MICUA Capital projects will receive $8 million for four MICUA projects. JHU will receive $2 million for the Shelving Facility.

University System of Maryland and the Community Colleges

The University System of Maryland and the Community Colleges had minimal growth. The System received a 3.8% increase in its budget, while Community Colleges grew by 2.7%. The System's increase reflects total allowances including funds received from tuition, fees, contracts, and grants. Also, the increases account for some special projects, including $1 million to meet the basic start-up and first half-year operating needs of USM's new Hagerstown Regional Higher Education Center and $100,000 to assist Coppin with construction management and planning initiatives. There are also other special projects included in the budget that accounted for these minimal increases. Excluding special projects, the University System of Maryland will only see a .7% increase in its budget.

Financial Aid

The budget includes a $15.9 million increase in additional funding for need-based student assistance. The allowance also includes an additional $1 million for a Loan Assistance Repayment Program for teachers and nurses. Merit-based aid will be contained in the State budget.

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BILLS INTRODUCED
Economic Development
General Health Care
Health Insurance
Higher Education



BILLS INTRODUCED

Economic Development

HB57     Biotechnology Investment Incentive Act
The bill allows a qualified investor to claim credits against the State's income tax or premium tax equal to 33% of the investment made in qualified biotechnology companies. The credits claimed may not exceed $100,000 in any calendar year for an individual or $250,000 for a corporation. The credits may not be applied more than once and the total amount of tax credits approved by the State may not exceed $12 million in any calendar year.

The bill defines a qualified biotechnology company as one that has significant operations in the State, fewer than 100 full-time employees, and has been certified by the Director of the Maryland Technology Development Corporation or has received State funding or was a tenet of a State funded incubator within the previous 24 months. A qualified investor is defined as an individual or corporation that invests at least $30,000 or if a member of a group (greater than 2 but less than 20) invest at least $250,000.

Effective Date: July 1, 2004 (for taxable years beginning after December 31, 2003)

For more information, please contact: Jim Kaufman


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General Health Care

HB81     Electric Companies - Special Medical Equipment Program List
This bill would allow an individual who is dependent on medical equipment to submit their name and address to a utility company so that in the event of a power outage, they would be a priority in having their power restored and would have to be provided 48 hours notice in the event of a scheduled power outage. The utility company would maintain the list of individuals and would be responsible for distributing the list to its service dispatchers in the event of an outage.

Effective Date: October 1, 2004

For more information, please contact: Heather Woods Barthel


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Health Insurance

HB115     Health Insurance - Coverage for Parents of Insured or Spouse of Insured
This bill requires health insurance policies or contracts that provide coverage for family members to offer coverage for parents of the enrollee or spouse. The parent must reside in Maryland, be at least 50 years old and lose coverage at the age of 64. The parent must reside in Maryland.

Effective Date: October 1, 2004

For more information, please contact: Jim Kaufman


HB116     Health Insurance - Small Group Market - Comprehensive Standard Health Benefit Plan
The bill modifies the Standard Health Benefit Plan by requiring the plan to offer a pharmacy discount card. In addition the bill requires that the plan include a co-payment of $200 for emergency room services and $50 for primary care and specialty care services (includes outpatient laboratory, diagnostic services, skilled nursing services, outpatient rehabilitative and chiropractic services) for HMO plans. For indemnity, preferred provider plans, and point of service plans, the annual deductible will be $1,500.

Effective Date: October 1, 2004

For more information, please contact: Jim Kaufman


HB122     Health Insurance - Coverage for Children
The bill extends the age that a child may be carried on their parent's health insurance plan to 30 if the child has been continuously insured for at least the previous two years. The child qualifies for coverage regardless of whether he or she resides with the parent, is a dependent, and regardless of martial status. However, if the child is married, the health benefits do not extend to the child's spouse. The coverage offered is required to be subject to the same co-payments, coinsurance, or deductibles that are offered for similar coverage. In addition, the policy must be priced at a rate appropriate for coverage based on underwriting standards.

Effective Date: October 1, 2004

For more information, please contact: Jim Kaufman


HB123     Health Insurance - Prompt Payment of Claims
The bill alters the prompt pay statute by deleting the requirement for an insurance company to pay a clean claim within 30 days to requiring the insurance company mail or otherwise transmit payment of a clean claim within 30 days.

Effective Date: June 1, 2004

For more information, please contact: Jim Kaufman


HB125     Health Insurance - Medicare Supplement Policies - Individuals Transferred to the Maryland Health Insurance Plan
The bill creates a new section that requires a carrier that sells Medicare supplemental policies to issue any policy that it sells to an individual eligible for Medicare if the enrollee has transferred from the Substantial, Available, and Affordable Coverage Plan to the Maryland Health Insurance Plan by July 1, 2003 and applies for the Medicare Supplemental Policy before July 1, 2004. The carrier may not exclude or limit benefits for losses incurred after the effective date of coverage due to losses related to a preexisting condition.

Effective Date: Emergency Measure, effective upon enactment and remains in effect through 2005.

For more information, please contact: Jim Kaufman


HB126     Maryland Health Insurance Plan - Modification
The bill adds that the Board of Directors of the Maryland Health Insurance Plan may vary the premium rate by geographic region of the State. Currently, the Board may only adjust rates based on family composition.

Effective Date: June 1, 2004

For more information, please contact: Jim Kaufman


HB127     Nonprofit Health Service Plans and Health Maintenance Organizations - Underwriting Standards
The bill requires that HMOs be subject to §27-501(H) of the Insurance Article. This section requires that each insurer, including HMOs and non-profit health plans, file a copy of its underwriting standards and amendments with the Insurance Commissioner.

Effective Date: October 1, 2004

For more information, please contact: Jim Kaufman


SB4     Regulation and Acquisition of Nonprofit Health Service Plans
The bill extends the Statute of Limitation to three years for misdemeanor offenses under Title 14 of the Insurance Article, which directs the business and affairs of non-profit health plans.

The bill also modifies Title 14 of the Insurance Article and requires a Board member to act in a manner that is consistent with the mission of the nonprofit health plan and the board may not use their position for personal or financial enrichment to the detriment of the plan or its mission. It requires the board, before consideration of any bid or proposal to acquire the plan, to ensure that adequate consideration is given to an independent valuation of the non-profit health plan.

The bill creates a new subsection under Title 14 requiring officers of the non-profit health plan to: act in good faith, serve in the best interest of the plan and its mission, act with the care that an ordinarily prudent person in a similar position would use, and bar the use of their position for personal or financial enrichment. Any violation of this subsection is considered to be an unsound or unsafe business practice. In addition, if an officer or director fails to take appropriate action regarding a warning from the Insurance Commissioner regarding an unsafe or unsound business practice, the Commissioner may impose a civil penalty not to exceed $125,000 for each warning.

Effective Date: June 1, 2004

For more information, please contact: Jim Kaufman


SB29     Nonprofit Health Services Plans - Compensation of Officers and Executive - Authority of Insurance Commissioner
As a result of the US District Court for Maryland's Order and Consent Judgment, this bill modifies Chapters 365 and 357 of the Acts of 2003, which reformed various statuary requirements for nonprofit health plans. The bill eliminates the requirement that a non-profit plan's Board of Directors develop and submit guidelines regarding compensation to the Insurance Commissioner for review and approval.

Effective Date: Emergency Measure and Retroactive to June 6, 2003

For more information, please contact: Jim Kaufman


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Higher Education

HB17     Edward T. Conroy Memorial Scholarship Program - Victims of Terrorism
House Bill 17 expands eligibility for the Edward T. Conroy Memorial Scholarship Program to include family members of Maryland residents that were victims of terrorism. This is defined as a person killed as a result of an act that is dangerous to human life, violates criminal laws and appears to be intended to intimidate or coerce a civilian population or a government for political or social objectives and includes victims of September 11, 2001.

Effective Date: October 1, 2004

For more information, please contact: Bret Schreiber


SB1     Education - Teachers - State and Local Aid Program for Certification
Senate Bill 1 repeals the sunset for the program that provides State and local aid to teachers who pursue certification by the National Board for Professional Teaching Standards. Each school year, the State Board selects a maximum of 500 teachers to participate in the Program and this bill will allow the initiatives of providing aid to the potential students to continue.

Effective Date: Emergency Measure, effective upon enactment.

For more information, please contact: Bret Schreiber


SB17     Higher Education - Student Financial Assistance - Maryland Teacher Scholarships
This bill allows a recipient of a Maryland Teacher Scholarship to work in a nonpublic school as well as a public school as part of their service obligation.

Effective Date: October 1, 2004

For more information, please contact: Bret Schreiber


SB30     Higher Education - Student Financial Assistance - Service Obligation Requirements
Senate Bill 30 allows any student attending a public institution of higher education who is not a resident of the State and who is enrolled in an education course or program leading to an occupation as a licensed registered nurse or a licensed practical nurse to pay only the tuition fees and other mandatory fees payable by a resident of this State. The student must furnish a surety bond or promissory note to the State, with security satisfactory to the Maryland Higher Education Commission, that, upon completion of the education course or program, the student will work in Maryland for at least 4 years as a licensed registered nurse or a licensed practical nurse in a hospital or related institution. The bill eliminates the word "guaranteed promissory note," and instead simply states "promissory note."

Effective Date: July 1, 2004

For more information, please contact: Bret Schreiber


SB31     Higher Education - Graduate and Professional Scholarship Program
The bill expands the graduate and professional scholarship program to include social work programs offered at the University of Maryland at Baltimore.

Effective Date: July 1, 2004

For more information, please contact: Bret Schreiber


SB112     Access to Quality in Higher Education Act of 2004
Senate Bill 112 creates a funding formula for the University System of Maryland, Morgan State University, and St. Mary's College of Maryland. The bill requires the Governor to allocate State aid to the public institutions in Fiscal Year 2006 at a level that is at least equal to the amount provided to the institutions in Fiscal Year 2002. In addition, the bill includes a provision requiring the State to appropriate additional funds to the public institutions in fiscal 2005. The bill also creates a funding formula for future appropriations that differentiates between in-state students and out-of-state students.

Effective Date: July 1, 2004

For more information, please contact: Bret Schreiber


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STAFF CONTACT INFORMATION
Please contact Government Relations if you have concerns or would like additional information. Your input assists us greatly in evaluating and formulating the position of Johns Hopkins on all legislation.

Legislative Session Office
47 State Circle, Suite 203
Annapolis, MD 21401
410-269-0057
fax 410-269-1574


Sheila Higdon shigdon@jhmi.edu
Jim Kaufman jkaufma@jhmi.edu
Bret Schreiber bschreiber@jhu.edu
Heather Woods Barthel hbarthe1@jhmi.edu
Suchita Lorick slorick@jhsph.edu
Mickey Giesler mgeisler@jhu.edu

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Acronyms


Legislative Hotline is a collaborative service of The Johns Hopkins University and Johns Hopkins Medicine offices of Government Relations.

© 2004 The Johns Hopkins University. Baltimore, Maryland.
Office of Government, Community and Public Affairs.
Last updated 04jan28