MINNEAPOLIS, May 21, 2008 — Not as bad as it would have been without physicians speaking up. Lawmakers ended the 2008 Legislative Session with a budget deal that included a $50 million loan from the Health Care Access Fund and another $18 million of spending that previously came from the general fund.

Physicians suspected lawmakers would go after money in the Health Care Access Fund to fix the budget shortfall, and that’s just what they tried to do.

At the start of the 2008 legislative session, Gov. Tim Pawlenty proposed taking $250 million from the HCAF plus  a permanent $48 million  each year to offset other spending.

Hundreds of MMA physicians voiced their objections. Rep. Thomas Huntley, DFL-Duluth, and Sen. Linda Berglin, DFL-Minneapolis, also fought to preserve the integrity of the fund.

In the end, the governor and lawmakers struck a deal to make a one-time $50 million loan from the HCAF to the state’s General Fund on June 30, 2009. The loan will be repaid with savings expected to accrue from  health care reforms that were enacted this session. The budget deal also shifts $18 million in expenditures for health care programs from the General Fund to the HCAF.

“This ‘loan’ from the HCAF is significantly better than the earlier recommendations to transfer $250 million and use an ongoing $48 million each year to offset other General Fund spending,” says Dave Renner, MMA director of state and federal legislation.

In total, the Legislature balanced the budget by using $500 million of the state’s budget reserves, making $355 million in program cuts, and raising about $100 million by reconfiguring the way some foreign-operating corporations are taxed.

DFL leaders put forward a plan to cut physician payments by 3 percent for care provided to patients using fee-for-service public programs. The MMA strongly objected to this proposal and was able to get it removed from the budget bill.

Health and human services was the largest target for spending reduction, and will see cuts of  about $170 million for the 2008-2009 budget cycle and $206 million for the following two years. Part of the spending reduction will come from cuts to hospital reimbursement rates. Nursing homes, however, will see a 4 percent increase in funding.

“The Health Care Access Fund isn’t a good mechanism for funding health care,” says MMA President James J. Dehen Jr., M.D., “but as long as they’re collecting the sick tax, we need to make sure it is spent on sick people.”