Johns Hopkins Institutions



Legislative Hotline

2003 SESSION OF THE
MARYLAND GENERAL ASSEMBLY

SINE DIE REPORT



Volume 11, Number 13 April 10, 2003


Below is a brief summary of the major policy issues enacted by the 2003 session of the Maryland General Assembly.

FY 2004 Operating Budget
    Cigarette Restitution Fund
     Higher Education
     Mental Health
     Medicaid and CHIP
FY 2004 Capital Budget
CareFirst Reform
Certificate of Need
HIV Testing
State Board of Physicians (formerly Board of Physician Quality Assurance)
Trauma Center Funding

FY 2004 Operating Budget
The General Assembly adopted a $22.4 billion operating budget for FY 2004, which includes $10.5 billion in General Funds. The General Fund budget only increased $86 million, less than 1% from FY 2003. While overall spending was constrained, State Aid for Public Schools grew $206 million or 6.6%, and Medicaid spending increased over 8%.

In order to balance the budget, the General Assembly passed two bills that include $336 million in transfers and $291 million in additional tax revenues. The Governor has threatened to veto the tax bill, which will leave the operating budget with a shortfall of $128 million. In order to address the potential unbalanced budget either a special session of the General Assembly would be required to address the shortfall or the Governor, through the Board of Public Works, can impose additional reductions to balance the budget. The Board of Public Works may reduce a State agency�s or a program line item in the budget by an additional 25% from the legislative appropriation. For example, the Sellinger Aid Program is a program line item in the budget and the Board of Public Works may reduce the program by an additional $8.2 million. This additional reduction, if adopted, would reduce funding to Johns Hopkins by roughly $3.3 million, for a total FY 2004 appropriation of $9.9 million.

HB 753 � Taxes and Revenues, which the Governor has threatened to veto, includes several tax provisions. The three main taxes are:

� Corporate Income Tax Surcharge (3 years) - this surcharge is a 10% tax on the existing 7% tax for corporations. The estimated revenue generated for FY2004 is $44 million.
� HMO/MCO Premium Tax - this section makes HMO/MCO subject to the 2% insurance premium tax that is currently imposed on all gross direct insurance premiums derived from businesses in the State. The estimated revenue generated for FY2004 is $48.9 million.
� Corporate Tax Changes to Address Tax Avoidance/Compliance - these are a series of tax items to increase tax compliance. They include accelerating withholding tax payments, streamlining bank attachment process, and expanding the requirement for tax clearance for licenses, to include all professional licenses, as well as several other measures. The estimated revenue generated for FY2004 is $35 million.

Below is a brief summary of 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
� The budget includes $32.8 million for the Sellinger Aid program. This amount reflects an $11 million or 25% reduction from the Governor�s allowance. For The Johns Hopkins University, this represents a $4.4 million cut for a total appropriation of $13.2 million. The General Assembly also reduced the Governor�s allowance for the public higher education (University System of Maryland, Morgan State University, and St. Mary�s College) by $5.6 million.

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.

Medicaid and CHIP
� Language was adopted requiring the Department to develop a methodology to address adverse risk selection in the HealthChoice program and report back to the General Assembly by October 1, 2003.
� 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)
- Restricted $1.2 million of the MCO Performance Incentive Fund for Medbank
- Added language requiring pharmacy co-payments to be extended to MCO enrollees, generating a savings of $700,000
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FY 2004 Capital Budget
The capital budget includes $5 million for the Broadway Research Building located on the East Baltimore campus, which represents the final year of funding for this project. Over the past four years, the State has authorized $23.8 million for this $140 million project.

The Johns Hopkins University will receive the final $2.15 million in capital funding for the construction of the New Chemistry Building on the Homewood Campus. Johns Hopkins received $425 thousand during the 2002 Session and the $2.15 million completes the funding of the project for a total State grant of $2.575 million.

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CareFirst Reform
Following the Insurance Commissioner�s rejection of CareFirst�s for-profit conversion and acquisition, legislation has been passed to refocus and reorganize the Board of Directors for CareFirst. The bill generally codifies the non-profit mission of CareFirst and disallows the acquisition or conversion of the company for five years. A Joint BlueCross and BlueShield Oversight Committee composed of senators, delegates, and appointees of the General Assembly will evaluate and report quarterly on the ability of CareFirst to meet its legislative requirements. Much of the responsibility for Board oversight falls on the Commissioner, including the Board�s fulfillment of the non-profit mission of the company. The bill dictates the composition of the 23 member board and mandates that the board maintain racial, gender, and geographic diversity. At the discretion of a nominating committee, 10 Maryland Board members must be removed no later than December 2003 and the remaining 2 Maryland members replaced by June 2004. DC and Maryland Board members must be replaced by March 2006.

A key source of debate has been Board member and senior executive compensation. Board members may only be compensated for attendance at meetings or direct related expenses, and compensation is capped at $12,000 for members and $15,000 for the Board chairman annually. Compensation for Board members and senior executives must be reviewed and approved by the Commissioner. The Attorney General may retroactively and prospectively assess penalties for any act of illegal compensation of the CareFirst Board and senior executives from January 20, 1995 forward. The Commissioner will review possible unlawful activity of the CareFirst Board and recommend action or changes to existing laws that may come to light in the investigation.

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Certificate of Need
The General Assembly adopted SB 732 � Hospice Care Prohibition which prohibits the Health Care Commission from granting a person that operates a hospice program a statewide CON or the authority to operate a statewide CON through ruling or determination. The bill allows a hospice program that operates under a statewide CON to continue to serve patients in the jurisdictions that hospice was operating as of December 31, 2001. In addition, a hospice that is a hospital based or had an affiliation agreement with a health care system before April 5, 2003 may serve those patients immediately upon discharge from the hospital regardless of the jurisdiction in which the patient resides.

Two bills have been defeated that would have: 1) eliminated open heart CON and required licensure and 2) granted a CON to hospitals participating in the C-PORT program. Much 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.

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HIV Testing
The General Assembly has passed legislation, HB 343 - Hospitals - HIV Testing - Health Care Providers and First Responders, that would allow the 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 and informed consent or substitute consent was sought and the patient was unavailable or unable to consent.

The exposed health care provider must promptly notify the hospital of the incident and must give informed consent and submit to a blood sample. The hospital will determine if testing the patient for HIV would be helpful in managing the provider�s or responder�s risk of disease and health outcome. A hospital must notify the patient of the test results and, if the results are positive, provide or arrange for counseling and treatment recommendations for the health care provider or first responder and patient. The hospital may not document the test in either the patient�s, the provider�s, or the responder�s medical records. Instead, the hospital must keep a confidential record or incident report of these tests. A provider, responder, hospital, or hospital designee acting in good faith to notify or maintain confidentiality of the test results may not be held liable in any cause of action related to a breach of patient, health care provider, or first responder confidentiality. Hospitals must pay for the HIV testing costs.

The Department of Health and Mental Hygiene�s AIDS Administration, consulting with the Maryland Hospital Association and AIDS advocacy organizations, must study the issue of HIV testing of individuals who refuse to consent to HIV testing when there is an exposure involving a health care provider or first responder. The Administration must report its findings by December 1, 2003.

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State Board of Physicians (formerly Board of Physician Quality Assurance)
Significant changes, including renaming of the physician licensing and disciplining board, have been effected by legislation passed after contentious negotiations.

Composition of the Board has been revised, increasing membership from 15 to 21, with an increase from 2 to 5 consumer members. Membership will also include a physician with a fulltime faculty appointment (chosen from a list of names submitted by Johns Hopkins and the University of Maryland), as well as a Doctor of Osteopathy and a Certified Physicians Assistant.

The Board will be permitted to contract with an entity other than MedChi for physician peer review, physician rehabilitation and investigation of allegations of grounds for disciplinary action. The entity/entities with which the Board contracts must be nonprofit and will be required to employ physician reviewers who are Board Certified, and licensed in Maryland. Peer reviews must be completed within 90 days, unless an extension is granted.

The evidentiary standard for disciplinary hearings will be a preponderance of evidence, but factual findings must be based on clear and convincing evidence for charges based on a finding that the physician has failed to meet appropriate standards of medical care.

Physician profiles must now include (1) the number of medical malpractice final court judgments and arbitration awards against a licensee within the most recent 10 years; (2) the number of medical malpractice settlements involving the licensee if there are three or more with a settlement amount of $150,000 or greater within a 5-year period; (3) the public order of any disciplinary action taken by the Board; (4) a description of any conviction or plea for a crime involving moral turpitude; and (5) medical education and practice information about licensees.

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Trauma Center Funding
After a two-year study on the financial needs of the trauma centers, the General Assembly adopted SB479 which creates a $10 million fund to provide subsidies for the State�s 11 adult and pediatric trauma centers. The $10 million fund does not include federal matching funds or hospital funds through the HSCRC for trauma services. The fund, which will be supported by a $2.50 surcharge on vehicle registrations will be used to address on-call costs for Level II and III trauma centers, increase Medicaid reimbursement for physicians providing trauma care up to 100% of Medicare, and will subsidize uncompensated care up to 100% of Medicare rates for physicians providing trauma care. In addition, the bill requires the HSCRC to report to the General Assembly by December 1, 2003 on efforts to include stand-by costs for Level I and II trauma centers and other costs incurred by the centers to meet regulatory requirements into hospital rates.

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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
Nicole Xander nxander@jhmi.edu
Kate Bishop sbishop2@jhu.edu
Jason Spangler jspangle@jhsph.edu
Beth Chaney greltemp@jhmi.edu
Lynette Floyd lfloyd@jhmi.edu
Mickey Giesler mgeisler@jhu.edu

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

© 2003 The Johns Hopkins University. Baltimore, Maryland.
Office of Government, Community and Public Affairs.
Last updated 03apr10