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2010 Legislative Session Overview
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2010 Legislative Session Overview

By Matthew Lemke, Winthrop & Weinstine and Julie Johnson, MPhA Executive Vice President, Public Affairs staff

The 2010 Minnesota Legislative session began on February 4, much like the past several sessions, with a dark cloud looming over the State’s budget situation. The expected biennial budget deficit for the current biennium was estimated in early December, 2009 to be $1.2 billion. There was concern that the fiscal situation would deteriorate even further by the time the February economic forecast was prepared. Minnesota operates on a biennial budget where the first odd numbered year is considered the “budget year,” and the second even numbered year, like 2010, the “capital bonding year.” In reality, the dire financial picture made this both a budget and a bonding year. After months of political haggling, the session ended on May 17 after a one-day special session was called by the Governor to complete the legislative session for 2010.

In March, the Legislature passed an almost $1 billion capital bonding bill for construction projects in spite of the Governor’s objection to the size of the bill. Instead of vetoing the entire bill, the Governor line- item vetoed various projects and cut the bill down to approximately $686 million. Rumors of a second public works bill persisted but never came true. A “Jobs Bill” that includes tax credits and several options for expansion of the Mall of America did pass, however. Talk of a new stadium for the Minnesota Vikings also reached a level not heard before at the Capitol, but in the end the clock ran out before a stadium solution could be reached. The Vikings’ lease at the Metrodome is up after the 2011 season and team officials have been very candid that, although they want to stay in Minnesota, the team will not renew their lease at the Metrodome unless the stadium issue is resolved.

For the first time in memory, both the DFL and Republican parties held their endorsing conventions during the Minnesota legislative session. At one point, there were a dozen sitting legislators seeking their party’s respective endorsement for Governor. Adding to this already politically charged atmosphere was an anticipated Minnesota Supreme Court decision regarding the Governor’s 2009 use of his unallotment authority. Unallotment is a unique power for the executive branch in the state of Minnesota, allowing the Governor to cut spending already approved by the Legislature. The Court eventually ruled that the Governor had indeed overstepped his authority, thus leaving the Legislature with essentially two choices: 1) ratify the Governor’s cuts; or 2) find other areas to cut. In a somewhat symbolic gesture, the Legislature offered another alternative and sent the Governor a $435 million tax bill that would have solved part of the budget problem by raising the income tax for the highest income earners in Minnesota. As expected, the bill was quickly vetoed by Governor Pawlenty.

In the final hours of the session, lawmakers and the Governor became ensnared in a fight over whether to use state money to trigger additional federal dollars to expand Medicaid. The eventual compromise was to allow the Governor or his successor to go that route if he or she chooses. Generally, the late-breaking budget deal eliminates a multi-billion dollar deficit by ratifying the Governor’s spending cuts and payment deferrals that were struck down by the Court. The largest item delays until the next biennium nearly $2 billion in payments to schools. The compromise also leaves approximately $400 million in projected federal money resulting from expanded Medicaid reimbursement. Both the Governor and the Legislature are touting victory for ending the session with a balanced budget under difficult economic circumstances.

2010 PHARMACY-RELATED LEGISLATION ENACTED

MPhA again maintained its strong presence as pharmacists weighed in on many issues of importance to both patients and professionals. The budget shortfall loomed over all proceedings and resulted in healthcare providers taking cuts in almost every area of the health care system.

  • Medicaid Pharmacy Reimbursement: HF 3266, SF 3146. Many legislators supported language which would have restored pharmacy reimbursement to levels prior to the AWP rollback from September 26, 2009. This bill did not represent an increase in what is paid to pharmacies but simply keeps subsequent to the September 2009 date. The state estimates receiving a $2.6 million dollar "windfall" as a result of the non-adjustment of industry benchmark. In summary, the bill proposed the use of industry accepted conversion factor options to keep pharmacy reimbursement whole. MPhA provided testimony in the house finance committee and worked with authors on possible scenarios to decrease the fiscal impact. The language was strongly supported by the House but because of the state’s economic situation did not make successful inclusion in the final days of session. MPhA will be addressing issue again next year.
  • MTM Provided Via Interactive Video: HF 3412, SF 2972. Allows pharmacists to provide medication therapy management services via two-way interactive video and creates provisions for reimbursement by insurance providers. The bill requires the practicing pharmacist to be located in a reasonable geographic distance from the patient and both parties must be located in an ambulatory care setting.
  • Generic Substitution Restriction: SF 1137 and HF 1320 were introduced in 2009 to attempt to limit the ability of pharmacists to substitute generic products. The initial language was intended to prohibit pharmacists from substituting drugs for the treatment of epilepsy, without prior consent and notification from the patient or the patient's parent, legal guardian, or spouse; and notifying the prescribing physician within 60 days. MPhA provided testimony during numerous policy committee meetings of both the house and senate. An amendment was proposed and language subsequently passed that would essentially direct the Board of Pharmacy to engage in rule making in the event the FDA is provided valid scientific evidence of patient harm upon the substitution of drugs for the treatment of epilepsy. The FDA is currently conducting studies to determine if there is data to warrant such action. Should this be the case, the Board of Pharmacy would be required to return to the legislature should there be fiscal impact of these new rules.
  • Rural Pharmacy Planning & Transition Grant Program: HF 1707, SF1375: The Minnesota Rural Pharmacy Planning and Transition Grant Program that was established in 2005 with the passage of the Rural Pharmacy Preservation Act provided over $690,000 through this program. Twenty different health care sites in rural Minnesota received funding specifically designed to "maintain local access to medications and the knowledge of a pharmacist," which was initially funded through dollars from the Board of Pharmacy. This mechanism for funding was discontinued at the end of June 2009. MPhA is making every effort at a difficult time to insure that long range funding is secured for this valuable program. Legislative action is required in order for this program to be continued past 2009. While this effort was unsuccessful this year, MPhA leadership continues to keep the topic front and center until economic pressures allow for rejuvenation of this important program.
  • Pharmaceutical & Syringe Waste: HF1217, SF 1568: The original intent of the bill was to address drug waste by encouraging environmental stewardship and reduce source contamination from drug manufacturers. The final language passed contained components allowing law enforcement officers to possess controlled substances for the purpose of proper disposal activities and language to study the issue of pharmaceutical waste and make recommendations report to the legislature by the end of the year. MPhA is a member of the group that will be consulting on this issue. See extensive issue brief outlying current policy which may be accessed at mpha.org. HF 1372, SF 1323. This bill will require syringe manufacturers to provide a sharps container with every sale of 90 or more syringes.
  • Prescription Monitoring Program (PMP): SF 3201. Senate leaders introduced language to provide long range funding for the newly established Minnesota Prescription Drug Monitoring Program (PMP). Long range funding for the PMP is necessary after initial federal grant money for development. MPhA worked with the Board of Pharmacy and the bill author to structure which allows continued support for the program through fees from licensing boards including medicine, pharmacy, nursing, dentistry, podiatry, and optometry.

    In addition, the Department of Human Services will convene the Chemical and Mental Health Services Transformation Advisory Task Force for the purpose of engaging stakeholders and building consensus regarding the future role of state provided behavioral health services within the system of care complying with recent legislation. MPhA will provide a pharmacist with expertise in this area to serve beginning this summer. The Minnesota Department of Health also contains a newly MPhA nominated Minnesota Diabetes Plan Steering Committee. Efforts to populate key state committees and activities are vital to pharmacy’s inclusion in ongoing health reform efforts.

    MPhA closely monitored many other issues with potential impact on pharmacy. These included proposed cuts to MERC funding which provides state dollars and matching federal dollars to residency and rotation sites where students of pharmacy receive valuable education and training during their program. Efforts to prevent these cuts were successful. Issues of interest including gift bans, academic detailing, and prohibited use of data were of little impact or unsuccessful during the 2010 session. Issues which expanded or improved medication coverage for patients were broadly supported and those with little or no fiscal impact to the state passed in tact. Expansion of the state’s GAMC program has brought many changes to the pharmacy program. Please pay special attention to the Medicaid Provider Updates received from the Department of Human Services as these changes are outlined.

STATE REGULATORY UPDATES: BOARD OF PHARMACY APPOINTMENT

Governor Tim Pawlenty announced the appointment of Laura Schwartzwald to the Minnesota Board of Pharmacy. Schwartzwald owns Arrowhead Pharmacy in Grand Marais and GuidePoint Pharmacy, with locations in Brainerd, Redwood Falls, Rochester and Worthington. A registered pharmacist, Schwartzwald has held pharmacist and pharmacy manager positions in Minnesota and Wisconsin for 22 years. She earned her Bachelor of Science degree in pharmacy from North Dakota State University in Fargo. Schwartzwald is a member of the American and Minnesota Pharmacists Associations, is a pharmacy instructor with the University of Minnesota College of Pharmacy, serves on the U of M's Committee on Experiential Practice, mentors pharmacy students, organizes community clinics at local group homes and businesses, has developed and implemented diabetic care centers in pharmacies and performs diabetic screenings at the Crow Wing County Fair. In 2007 and 2008 Schwartzwald received the "Community Preceptor of the Year," an award given annually by the U of M College of Pharmacy to a candidate who exemplifies exceptional practice in the pharmacy profession. Schwartzwald replaces Gary Schneider on the Board of Pharmacy as a pharmacist member. Her term will expire January 6, 2014.

2010 MINNESOTA ELECTIONS PREVIEW

The 2010 elections will significantly change the face of Minnesota government. All 201 House and Senate seats with the Minnesota Legislature are up for election this year and thus far there are 24 current legislators who have announced their retirements. The constitutional offices are up as well. This includes the offices of Governor, Lieutenant Governor, Attorney General, Auditor and Secretary of State. The Governor's race is an open seat because Governor Tim Pawlenty announced that he will not seek re-election. Pawlenty is considered a potential Presidential candidate for 2012.

  • Governor’s Race: Former U.S. Senator Mark Dayton added depth to his team by choosing state Senator Yvonne Prettner Solon (DFL-Duluth) for his ticket. Solon is a well respected legislator with expertise in health care, especially rural health care. She chairs the Senate Energy, Utilities, Technology and Communications Committee and has won the respect of many for her knowledge of energy issues and diplomacy as chair. Dayton did not seek the DFL endorsement and plans to self-finance his run in the primary election set for August 10.

    Former Representative Matt Entenza also plans to self-fund his primary bid. He is behind in the polls despite having launched a major television ad campaign. Entenza has picked television news anchor Robyne Robinson as his running mate.

    The endorsed DFL candidate and only female running for Governor is House Speaker Margaret Anderson Kelliher (DFL-Minneapolis). Kelliher chose former Finance Commissioner John Gunyou as her running mate. Gunyou is a moderate and may help her with independent voters. Gunyou served as Finance Commissioner under Republican Governor Arne Carlson and has considerable fiscal and budget management experience. Kelliher has strong backing from her fellow House members and will be well financed and organized via the DFL Party endorsement.

    Independence Party candidate Tom Horner is a respected public relations and communications professional. He served as Chief of Staff for Senator Dave Durenberger in 1978 and gained important experience while working in D.C. Horner selected retiring Association of Minnesota Counties Executive Director Jim Mulder as his running mate. Horner will be challenged in the Independence Party primary by three other Independence Party candidates.

    On the GOP side, the Republicans endorsed Representative Tom Emmer (R-Delano). Emmer fought an endorsement challenge from former Minority Leader Marty Seifert (R-Marshall). After two ballots, Seifert graciously conceded and the GOP unified behind Emmer. He will not face a primary challenge. Emmer selected Annette Meeks as his running mate. Meeks has D.C. experience and is a media savvy policy wonk with extensive background in working with conservative think tanks.

    According to the latest MPR Humphrey Institute poll conducted May 13-May 16, in a DFL Primary among likely voters, Mark Dayton is ahead with 38 percentage points, followed by Anderson Kelliher with 28 points, and Entenza with 6 points. Emmer stacks up well against Dayton in the poll with 35 points to Dayton and 31 to Emmer. Independence candidate Tom Horner is a wild card though in the poll he received 11 percentage points. On May 26, Rasmussen Reports also released a new poll on the Governor's race. The poll shows Emmer with a slight edge over any of the three DFL candidates. The lead does not cover the margin of error making the race a toss up. Emmer garners 37 or 38 percent of the vote with Dayton, Kelliher and Entenza earning 34 to 36 percent of the vote in a head to head against Emmer and Tom Horner comes in at 12 percent. Undecided voters tally 16 percent.

    The August primary is new to Minnesotans. In order to comply with new federal legislation, the Minnesota primary was changed from early September to early August. It will be a test of politicians and campaign organizing to turn out vacationing Minnesotans for the August 10 election.
  • State House: Currently the Minnesota House is a DFL stronghold with 87 members to the GOP's 47 seats. The GOP has eight members retiring and they would need to maintain those eight seats and pick up 21 additional seats to win the majority. Of the eight retiring GOP members, four are vying for other offices. Tom Emmer (R-Delano) is running for Governor with the GOP endorsement; Randy Demmer (R-Hayfield) is running for the First Congressional District against incumbent Democrat Tim Walz (D-MN); Dan Severson (R-Sauk Rapids) is running for Secretary of State against incumbent Mark Ritchie and Doug Magnus (R-Slayton) is hoping to win the Senate seat vacated by Senator Jim Vickerman (DFL-Tracy) who announced his retirement after serving 24 years in the Senate. The other retiring GOP members are Laura Brod (R-New Prague), Paul Kohls (R-Victoria), Rob Eastlund (R-Isanti) and Marty Seifert (R-Marshall).

    The House DFL has six retiring members. Of the six, only Speaker Margaret Anderson Kelliher (DFL-Minneapolis) is running for another office. Kelliher is the endorsed DFL candidate for Governor. She will face former Representative Matt Entenza and former U.S. Senator Mark Dayton in the August 10 primary. The other retiring House DFLers are Karla Bigham (DFL-Cottage Grove), Jeremy Kalin (DFL-North Branch), Cy Thao (DFL- St. Paul), Larry Haws (DFL-St. Cloud) and Mary Ellen Otremba (DFL-Long Prairie).
  • State Senate: In the Senate, five DFLers and four Republican members are retiring. The current balance in the Senate is overwhelmingly DFL with a 46 to 21 split, giving the DFL a veto-proof majority. Two of the retiring Senate DFLers are running for higher office. Senator Tarryl Clark is running as the endorsed DFL candidate in the Sixth Congressional District, hoping to unseat incumbent Republican Michelle Bachman. Senator Yvonne Prettner Solon (DFL-Duluth) announced she will run for Lieutenant Governor with gubernatorial candidate Mark Dayton. Also retiring are long time Senators Steve Murphy (DFL-Red Wing), Jim Vickerman (DFL-Tracy), and, in a surprise announcement, Mee Moua (DFL-St. Paul), the Chair of the Senate Judiciary Committee.

    In order to take the majority, Senate Republicans face an uphill battle. The GOP Senate Caucus would need to maintain the four seats of retiring members and pick up 13 additional to get to a 34 vote majority. The retiring Republican members are Senators Steve Dille (R-Dassel), Denny Frederickson (R-New Ulm), Debbie Johnson (R-Ham Lake) and Pat Pariseau (R-Farmington).

    Three of the open Senate seats will be difficult for the DFL to hold. Senate District (SD) 28, currently represented by Steve Murphy includes two House districts that are currently represented by GOP members. The Vickerman seat, SD 22, is also represented by two Republicans in the House. Incumbent Representative Doug Magnus (R-Slayton) is running for that Senate seat. Magnus is a corn, soybean and feed cattle farmer who fits the district well. In the St. Cloud area, Senator Tarryl Clark's retirement creates some excitement for the GOP. In this district one of the House members is also retiring, DFL Representative Larry Haws. The other half of the district is represented by Republican Steve Gottwalt and Stearns County legislative seats have been held by Republicans in the past.

2011 SESSION PREVIEW

Although Minnesota’s budget is technically balanced, the financial outlook for 2011 is bleak. There will be a new Governor and the number of legislators that have announced their retirement has guaranteed that there will be a significant number of new faces in the Legislature.

With many of the tough budget choices delayed until the next biennium, the Legislature in 2010 will face a projected $6 billion deficit for the 2012-2013 biennium. Approximately $1.2 billion of the total results from school aid payments that were delayed. In its annual ranking of state budget deficits, the National Conference of State Legislatures ranked Minnesota’s deficit as sixth highest when measured as a percentage of the state’s general revenue fund.

For the first time in eight years, Minnesota will have a new governor in 2011. That governor will bring his or her own legislative priorities to the Legislature. New leadership is a certainty in the House with Speaker Kelliher retiring. All of which indicates a very unpredictable 2011 legislative session.

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