Introduction
The 2003 Session of the Maryland General Assembly was an historic one. For the first time in 36 years a Republic Governor was in office, while the Democratic Party held the majority of the Assembly�s membership. There was a 36% turnover of senators and delegates, and all four of the Senate standing committee chairs were newly appointed. A new Speaker of the House was elected, following the surprising defeat of the previous, long-standing Speaker. The House reorganized its standing committees, resulting in one completely new committee (Health and Government Operations), and the dissolution of another (Commerce and Government Matters). Two delegates were appointed chairs of a standing committee for the first time, while another committee had its subject jurisdiction completely altered.
The Governor and General Assembly took on the daunting task of balancing the State budget in the face of a $1.2 billion projected deficit in FY 2004, with strong differing ideas on the method to achieve a balanced budget. Some supported increased revenue from slots or tax increases, while others supported balancing the budget through large reductions in State-funded programs. These dynamics set the stage for a contentious Session and put every State-funded program at risk.
The Johns Hopkins� legislative initiatives, such as the Sellinger Aid Program, Medicaid, the Cigarette Restitution Fund Program, and capital funding for existing and future projects, were far from exempt from proposed cuts (see ___ below for further detail on each). Governor Ehrlich repeatedly stated his intention to rein in State aid to higher education appropriated during the previous administration, but promised to focus State dollars on health programs such as Medicaid and Public Mental Health. At the end of the Session, the Maryland General Assembly balanced the budget that had mixed results for Johns Hopkins. State aid to higher education in the form of Sellinger Aid was substantially reduced, Medicaid dollars increased, the Cigarette Restitution Fund was level funded, and the State completed its funding commitment for existing capital projects, but did not address future support for new initiatives. However, with the death of the slots legislation and the Governor�s vow to veto legislation that increases certain taxes, the fate of all programs remains uncertain.
Although the budget and slots dominated the Session, a number of public policy issues affecting Johns Hopkins were also addressed by the General Assembly. Detailed below are issues in areas of interest such as higher education, general education, public health, health insurance, health practitioners, health facilities, tort reform and economic development. The summaries of issues and bills included below are the final actions taken by the General Assembly. The Governor has signed some of the bills passed by the General Assembly, while others are still pending final action. Bills that are vetoed by the Governor of interest to Johns Hopkins will be reported in a separate Legislative Hotline in June 2003.
To view the legislative information below, click on the subject of interest to go directly to that area or scroll down to view the entire document.
PERTINENT ISSUES
Capital Budget
Economic Development
Financial Aid and Scholarships
General Education
General Health Care
Health Care Facilities
Health Care Practitioners
Health Insurance
Health Operating Budget
Higher Education
Medicaid
Mental Health
Operating Budget
Pharmaceuticals
Public Health
Research
Tort Reform
Capital Budget
The General Assembly passed a capital budget totaling $2.4 billion including $1.4 billion for the transportation program. Of the total, $740 million is funded with general obligation bonds; about $1.3 billion is funded through pay-as-you-go (PAYGO) funding in the operating budget; and $406 million is funded with revenue bonds, including higher education academic bonds ($33 million) and transportation bonds ($370 million). This year, Johns Hopkins received $7.15 million in the capital budget for two projects that are detailed below. The Maryland Association of Independent Colleges and Universities Association (MICUA) received a total of $7 million for three projects and the Maryland Hospital Association (MHA) received $5 million for 9 capital projects, all of which are listed below.
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Economic Development
Much of the attention this Session focused on the budget and the State�s fiscal challenges. Policy initiatives whose enactment would have required the use of new State operating funds to implement were rejected. As a result, policy initiatives focusing on the economic development needs of Maryland were limited in numbers. Several pieces of legislation were not passed into law such as allowing portions of the State�s pension funds to be invested in biotechnology parks, and the creation of a commission to study the State�s procurement initiatives. Following are the legislative priorities of Johns Hopkins for economic development that were enacted this year.
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Financial Aid and Scholarships
The total FY 2004 appropriation for State financial aid is $80.2 million, a 3% decrease from FY 2003. Of that total, 48% is allocated for need-based financial aid ($39.1 million) and 24% is allocated for the HOPE Scholarship Programs ($19.2 million). Another 27% includes several workforce shortage and merit-based financial aid programs. On average, most State scholarship programs retained the same funding levels as in FY 2003. However, the HOPE Scholarship programs, which include General, Science and Technology, Teacher and Transfer Scholarship awards, were reduced by 8% from the FY 2003 appropriation.
Students attending Johns Hopkins significantly benefit from many State Scholarship Programs and for the 2002-2003 academic year, Johns Hopkins students received a total of $1.9 million in grants and scholarships from the State of Maryland, an increase of 4% over last year. The charts below demonstrate the total amount of State dollars appropriated in FY 2004 for the State Scholarship Programs. The next chart demonstrates the total number of Johns Hopkins students who received State grants and scholarships, and the total dollars for each grant and scholarship program in FY 2003.
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General Education
The primary focus in education this year was budgetary support to help pay the first year of the phase-in scheduled for the new education finance structure established by the Bridge to Excellence In Public Schools Act of 2002 (recommendations from the Thorton Commission). Full funding for the first year of the program ($238 million) was included in the Governor�s proposed FY 2004 budget, however the General Assembly reduced that amount to $206 million. Even with the General Assembly�s reductions, the final appropriation for FY 2004 for public education represents a 6.6% increase from FY 2003 and preserves the integrity of the financing structure. While the State�s remarkably difficult fiscal situation made additional policy initiatives difficult to pass, the following bills were legislative priorities for our primary and secondary education programs.
SB295 would have established a program of salary grants with the goal of improving recruitment and retention of well-qualified principals, vice-principals and assistant principals. This legislation supported the recommendations of the Maryland Task Force on the Principalship and the Visionary Panel�s Leadership Task Group, which recognized the great need for highly skilled principals who understand and support Maryland�s school reform agenda. SB295 would have helped implement reforms, but the costs associated with implementation proved too great during a time of fiscal crisis in Maryland, and the bill failed.
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Health Care Facilities
Again this year, the General Assembly considered numerous pieces of legislation to alter or abolish the Certificate of Need process. Several bills were introduced, and defeated that would have: 1) eliminated open heart CON and required licensure or 2) required the Health Care Commission to granted a CON to hospitals participating in the C-PORT program. This year, most of the discussion surrounding CON focused on a proposed amendment that would have decoupled angioplasty and on site open heart surgery backup. However, the amendment was not accepted since the Maryland Health Care Commission is currently addressing this issue and is planning a research study to examine the safety and efficacy of decoupling these services.
In addition, the General Assembly adopted several bills that will impact how health care facilities deliver care. SB 732 � Hospice Care Prohibition (see summary below) prohibits the Health Care Commission from granting a person the authority to operate a statewide CON, while SB 479 � Trauma System Funding Act (see summary below) will provide resources to the State�s trauma system.
Legislation was also introduced again this year regarding the use of cameras in nursing homes. One bill, known as Vera�s Law, passed and requires the Department of Health to develop guidelines for a nursing home that elects to use electronic monitoring with the consent of the resident. Another bill that would have required installation of cameras failed.
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Health Care Practitioners
Following failed legislation that would have extended the Board of Physicians Quality Assurance during the 2002 Session, and contentious negotiations down to the final week of the 2003 Session, SB500 was passed that constitutes a new Board of Physicians (see summary below). A major compromise was achieved regarding the evidentiary standard, allowing the clear and convincing standard to remain in effect when assessing the charge of failure to meet the appropriate standard of care.
The Maryland Hospital Association, Johns Hopkins Medicine, the Board of Nursing, and others collaborated to secure passage of HB343 (summary below) that will allow a hospital�s designated infectious disease/communicable disease officer to order an HIV test if there has been an exposure between a patient and a health care provider that, in accordance with CDC guidelines, would warrant recommending or offering chemoprophylaxis treatment when informed consent or substitute consent was sought and the patient was unavailable or unable to consent.
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Health Insurance
During the 2003 Session, the Legislature continued to examine ways to ensure accessible and affordable health insurance for Maryland citizens. While several bills were introduced, such as a proposal by the Maryland Citizens� Health Initiative to expand access health insurance, due to the tremendous budgetary crisis in the State, no new state funded initiatives were adopted. In an effort to assure that health care insurance in Maryland remains affordable and adequate, the Maryland Health Care Commission will conduct an evaluation of mandated health insurance services (HB605 � summary below). By January 2004, the Commission will make recommendations on existing mandated benefits, including decision-making criteria for reducing the number of mandates.
The State attempted to adopt HB753 (see Taxes) to increase funding for the Medicaid program by subjecting Health Maintenance Organizations (HMO) and Medicaid Managed Care Organizations (MCOs) to the 2% premium tax. Currently, these plans are the only health insurance products not subject to the tax and by levying the tax on both products the State would be able to increase its share of federal matching funds for Medicaid. The business community opposed the HMO premium tax believing that the tax will increase health insurance costs, thus reducing access to affordable coverage.
In the area of health insurance, the most notable issue is the adoption of SB772/HB1179 � Nonprofit Health Service Plans Reform, which codifies the nonprofit mission of BlueCross and BlueShield of Maryland (see summary below).
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Higher Education
Johns Hopkins, along with MICUA, advocates on multiple legislative initiatives in the higher education sector, but due to the State�s fiscal challenges, the number was down over 60% from previous years. Bills designed to strengthen higher education in Maryland�s were supported, including legislation aimed at alleviating the State�s shortage of teachers and others lessening the costs of higher education for students. Following are top higher education priorities for Johns Hopkins that were not passed by the General Assembly:
SB 291 would have allowed a recipient of a Maryland Teacher Scholarship to perform the required service obligation as a teacher in a nonpublic elementary or secondary school that holds a certificate of approval from the State Board of Education. This expansion would have enabled Maryland to attract and retain more teachers by not restricting to public schools.
SB555 would have reduced the State�s aid to nonpublic institutions of higher education by altering the methodology for calculating the full-time equivalent (FTE) student count that is used to determine aid under the Joseph A. Sellinger formula. FTE counts for in state and out-of-state students at each institution would have been computed separately, and the out-of-state FTE student enrollment would have been reduced by 25%. The Sellinger aid formula for each institution would have been calculated using the reduced FTE computation. For Johns Hopkins, the bill would have resulted in a $3.1 million reduction in next year�s Sellinger Aid formula and lowered appropriations every year thereafter. With the assistance of MICUA, this bill received an unfavorable report from the Senate Budget and Taxation Committee.
HB 568 would have authorized Senators and Delegates to award all or a portion of the funds authorized for the Senatorial or Delegate scholarships to a public institution of higher education or an academic program in a public institution of higher education. This bill would have required the public higher education institutions to award the scholarships to only residents of Maryland. Johns Hopkins and MICUA attempted to amend the legislation to allow a legislator to award a Senatorial or Delegate scholarship to individuals who intend to study and work in a workforce shortage area in Maryland, including nursing and teaching. This bill however did not pass.
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Medicaid
The FY 2004 Medicaid budget totals $3.5 billion, representing an 8% increase over FY 2003. However, due to the fiscal crisis facing the State, the General Assembly made several changes to the program to limit rapidly increasing costs. Through budgetary actions, the State froze enrollment in the Children�s Health Insurance Program for families with incomes greater than 200% of the federal poverty level and now requires a 2% contribution for families with incomes between 185% to 200% of the federal poverty level (See Budget Summary). In addition, included as a provision of HB935 � Budget Reconciliation and Financing Act, the Children�s Health Program Private Option Program was eliminated and the 200 children enrolled in this program will be transferred to the Medicaid Managed Care Organizations.
SB709 � Specialty Care Networks would have required the Department of Health and Mental Hygiene to adopt regulations regarding the MCOs specialty care networks failed to receive final approval in the Senate before the session closed at midnight. Other bills, such as HB232 creating a separate department for Medical Assistance and HB793 creating a Reimbursement Rate Commission failed to be passed out of the House of Delegates.
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Mental Health
It has been widely recognized by the General Assembly, the Governor and his Administration, that the entire public mental health system needs to be overhauled. Legislators took steps to address some of the issues through the passage of HB25 (summary below) that convenes a task force to study access to mental health services. HB433 (summary below) also convenes a task force to look comprehensively at the needs of persons with co-occurring mental illness and substance abuse disorders.
Low provider reimbursement rates have exacerbated access to mental health services. HB675 (summary below) seeks to address one aspect of this problem, by requiring the Medical Assistance Program to reimburse the entire amount of the program fee to health care practitioners who provide outpatient mental health to individuals with Medical Assistance and Medicare.
Compelling testimony from families who have been unable to obtain timely assistance overcame opposition to legislation (SB273/HB668 summary below) that alters the requirement for a petition for emergency evaluation of an individual with a mental disorder. The legislation also broadens what information may be used by a health professional to determine an individual�s need for emergency treatment.
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Operating Budget
The State of Maryland provides essential funding to Johns Hopkins, including critical operating funds for the University�s academic divisions under the Sellinger Program of Aid to the Independent Colleges and Universities, funding through the Cigarette Restitution Fund for cancer research and public health initiatives, as well as various programs to support health care access for Maryland citizens. A top priority for Johns Hopkins each year is to ensure that the integrity of these programs remain intact in the State�s operating budget.
This year the budget dominated the 2003 Session of the Maryland General Assembly, as the State faced a $400 million deficit in the current fiscal year (FY 2003) and a projected FY 2004 shortfall of $1.2 billion. The new administration proposed to balance the budget through reductions and one time transfers. Additionally, new revenues of nearly $400 million were proposed in conjunction with legislation to permit slot machines at four racing facilities. Subsequent defeat of revisions to the administration�s slot machine plan and declining revenue projections declining state revenues forced the legislature to make significant reductions changes to the administration�s budget as introduced.
The budget passed by the legislature provides $22.4 billion in appropriations for FY 2004, an increase of $18.5 million (0.1%) over FY 2003. The chart below indicates the funding type by revenue.
For FY 2005, a $688 million deficit is projected. By FY 2008, the gap could be as great as $1.8 billion. The most significant factor driving the out-year fiscal deficits is the cost of implementing the Bridge to Excellence in Public Schools Act. Additionally, the FY 2004 budget was passed contingent on the passage of a tax bill that would address series of tax compliance measures and subject HMOs and Medicaid MCOs to the 2% premium tax. This bill expectedis expected to raise $135 million in new revenues. The Ehrlich Administration has promised to veto the tax legislation, which will put the FY 2004 budget in a structural imbalance. In order to balance the budget, the Administration has vowed to enact a series of additional cuts to the FY 2004 operating budget. Should this occur, Johns Hopkins could be severely impacted in several areas, most notably through the Sellinger Aid program and the funding of Medicaid.
Below is a brief summary of other provisions of the FY 2004 budget of interest to Johns Hopkins:
Cigarette Restitution Fund
� The Governor allocated $4.59 million in FY2004 for the Johns Hopkins Institutions Cigarette Restitution Fund programs that include a cancer research grant and a public health grant to provide a prostate cancer education, screening, prevention and treatment initiative in Baltimore City. Although the Senate proposed a $2 million cut to the cancer research grant, funding was restored during Conference Committee deliberations. Consequently, funding for the Johns Hopkins CRF programs will be at approximately the same level as the FY2003 appropriation.
Higher Education
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Each year, Johns Hopkins receives operating funds that go to the University�s Academic Divisions, under the Sellinger Aid program of Aid to Independent Colleges and Universities. This year was challenging for the Sellinger Aid program. In an effort to balance the FY 2004 budget, the Department of Legislative Services recommended limiting the amount of Sellinger funds for institutions based on the number of in-state residents that an institution enrolls. Further, the Department recommended permanently capping the Sellinger program by rebasing the formula at 14.3% per full time equivalent student. If this formula were modified, it would have cut the Sellinger program in half. Efforts by Johns Hopkins and other MICUA institutions prevented the legislature from accepting the Department�s recommendations. However, the Legislature did make a one-time reduction of $11 million or 25% to the Sellinger Aid program.
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By comparison, the legislature took no action to reduce FY 2004 appropriations for the Senator John A. Cade formula for community colleges and the Legislature reduced State support for the University System of Maryland by only 0.6%.
Mental Health
� $2 million of the appropriation was restricted until a plan is submitted outlining how the State will operate a network of psychiatric facilities that closes one of the three large regional hospitals, while maintaining existing bed capacity.
� The Mental Hygiene Administration may enter into a privatization agreement for the operation of all or parts of its current facilities. All agreements must be submitted to the budget committee for a 30-day review.
Developmental Disabilities
� By November 15, 2003, DHMH is to report on its plan to close one of the State�s residential centers for the developmentally disabled by FY 2005. The report will include how residents will be served either in other state facilities or community settings.
Substance Abuse
� DHMH may not award Baltimore City funding under the Substance Abuse Treatment Outcomes program in FY 2004 to allow other jurisdictions to receive funding.
� DHMH must report by October 1, 2003, on the five-year historical substance abuse funding by jurisdiction to include treatment, prevention, and total number of individuals served. The report will include the estimated need for treatment and criteria for future substance treatment funding by jurisdiction.
� The Department of Veterans Affairs and DHMH must report to the budget committee by October 1, 2003, on the availability of drug treatment for veterans. The report is to include the number of slots in both publicly and privately funded substance abuse treatment programs and the projected need for treatment.
Medicaid and CHIP
� While approving a $3.5 billion total fund appropriation for the program, the budget committee reduced General Funds support for Medicaid program by:
- $3.0 million for MCO capitation rates
- $5.3 million for nursing home reimbursements
- $1.8 million for the Expansion of Waiver for Older Adults
- $3.8 million for the Children Health Program (this reduction is the result of a freezing enrollment in the Children Health Program for families above 200% of the federal poverty level) and requiring a family contribution of 2% for families with income from 185% to 200% of the federal poverty level
- $1.2 million of the MCO Performance Incentive Fund restricted for Medbank
- Added language requiring pharmacy co-payments to be extended to MCO enrollees, generating a savings of $700,000
- $7.5 million restricted to increase fees for dental restorative procedures and DHMH is to develop a plan for increasing utilization of dental care services by October 1, 2003
- Elimination of the Children�s Health Program�s employer sponsored coverage, transferring these children to the MCOs
Workforce Development
� The Governor�s Workforce Investment Board (GWIB) must review the State�s efforts related to workforce development to seek efficiency savings and report its recommendations by September 1, 2003.
University of Maryland Medical System
� In FY 2004, the State appropriated $9.7 million to support operations at Montebello at Kernan ($2.7 million) and the Shock Trauma Center ($7.0 million - $3.5 million in operating support and $3.5 million in equipment and technology upgrades).
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Pharmaceuticals
While continued financial support for the Medbank Program was in question, the General Assembly adopted language requiring the program to receive funding from the HealthChoice Performance Incentive Fund for FY 2004, 2005 and 2006. In addition, the program will receive $800,000 in General Fund support for FY 2004.
Several bills affecting pharmacists and pharmaceutical manufacturers were defeated during the session. HB188 would have required pharmaceutical manufacturing companies to report on the value, nature, and purpose of any gift, fee, payment, subsidy, or any other economic benefit provided directly or indirectly through marketers. HB548 would have prohibited physicians and nurse practitioners from accepting gifts greater than $50 from a pharmaceutical manufacturing company or a pharmaceutical marketer.
Several bills were adopted (see summaries below) including SB450/HB211 which remove the enrollment cap for the Senior Prescription Drug Program. The bill allows the program to enroll the maximum number of Marylanders subject to available funds. The Senior Prescription Drug Program provides drug coverage to all Medicare-eligible residents over 65 and individuals who have annual household incomes at or below 300% of the federal poverty level.
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Public Health
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Research
This year, only one bill was introduced in the area of research � HB 482 � Stem Cell Research � Donation of Certain Tissue for Research Purposes. The intent of the bill was to clarify that it was the public policy position of the State of Maryland that research involving the derivation and use of human embryonic stem cells, human embryonic germ cells, and human adult stem cells from any source shall be allowed. Research involving these cells must give full consideration to any ethical and medical implications of this research. The bill would have required that an institutional review board review research involving derivation and use of these cells. The bill had a hearing, however, the committee did not take any formal action thus leaving it sitting in committee, in effect killing the bill. While the committee did not report on the bill, the committee intends to study the issue of stem cell research in more detail over the legislative interim. After this study, it is expected that legislation similar to HB482 will be introduced during the 2003 Session of the Maryland General Assembly.
It should be noted that HB481 - In Vitro Services - Advance Directives for Disposition of Cryopreserved Eggs, Sperm, or Embryos has been discussed by some groups as a means to increase the supply of tissue for research purposes. The bill, which failed in the Senate, would have required a health care provider offering assisted reproductive services to have an advance directive for the disposition of the cryopreserved eggs, sperm, or embryos.
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Taxes
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Tobacco Settlement
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Tort Reform
With the defeat of Senator Walter Baker (Chairman, Senate Judicial Proceedings Committee) in the November election, many expected the plaintiffs� bar to present an aggressive agenda to alter Maryland�s tort environment. However, while bills were expected to change Maryland current system of contributory negligence to one of comparative fault, these bills were not introduced.
Only SB283/HB294 � Consumer Protection Act (see summary below) was adopted, although several bills that would have assisted in the skyrocketing costs of medical malpractice insurance failed. These bills included HB832 that would have allowed future economic damages exceeding $100,000 to be paid in the form of an annuity or other appropriate financial instruments; and HB676 that would have modified the statute of limitations for minors requiring an action arising out of an injury to be filed before the claimant reaches the age of 19.
In addition, bills that would have negatively impacted Johns Hopkins and other health care providers were successfully defeated. SB437/HB524 would have prohibited health care providers from communicating information about a patient to anyone in connection with an actual or potential personal injury claim, or family law proceeding, without the written consent of the patient or their authorized representative. SB149/HB340 would have prevented a party to a court action from being excluded from the trial, regardless of their physical or mental disability.
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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
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Annapolis, MD 21401
410-269-0057
fax 410-269-1574
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© 2003 The Johns Hopkins University. Baltimore, Maryland.
Office of Government, Community and Public Affairs.
Last updated 03may09
