KEY ISSUES AFFECTING YOUR BUSINESS

COMMERCE - COLLABORATION - COMMUNITY

• KNOW AND UNDERSTAND BEFORE YOU VOTE – PAID FAMILY & MEDICAL LEAVE
• MEDICAID TRUST FUND
• IS THERE A DOCTOR IN THE STATE? LOANS, COMPACTS & MALPRACTICE
• WHATEVER HAPPENED TO MINIMUM WAGE

WHAT A CONCEPT! KNOW AND UNDERSTAND THE LEGISLATION BEFORE YOU VOTE!

PAID FAMILY & MEDICAL LEAVE
WELCOME CHILD & FAMILY WELLNESS LEAVE ACT

Yesterday the Senate Finance Committee performed due diligence on Bill 11, this year's version of a paid family and medical leave bill, sponsored by Rep. Christine Chandler (D-Los Alamos, Sandoval & Santa Fe).

If you have been following our fight against this bill, you know it is so complicated and impactful, that it takes far more than a casual glance to understand exactly how the legislation would work. 

We give big kudos to Senate Finance Committee Chair George Muñoz (D-Cibola, McKinley & San Juan) who decided to hold a discussion session that involved Legislative Council and Staff experts summarizing provisions in the bill and answering questions from the committee, which included requests for additional data. 

What a great idea! A chance to get the facts before actually hearing the bill so committee members can have the best information available and ask the most relevant questions. This is a move rarely seen in Santa Fe.  Muñoz is also doing the same thing with Senate Bill 279 that tackles semiautomatic firearms. Some members of the committee objected to the absence of the sponsor being in attendance. However, think about that for a minute. If you bring the sponsor into the discussion, suddenly you've turned a fact-finding forum into a bill hearing, which sometimes is a contested event with arguments going back and forth. This discussion allowed for clear unbiased analysis to be presented to the committee. The bill will be heard later, and the sponsor will have her day to advocate. 

 Some Great Questions

As part of the Senate Finance Committee analyst presentation, the analyst raised these questions:

• Is the $9,000 "refund" payment to parents exactly a refund? There were no payments made by the parents, so is this just a way to attempt to get around the constitutional "anti-donation" clause? And will it hold up in court?
• What will be the cost of administering opt in/opt out provisions? What's the experience of other states, which some say is quite costly?
• Why is the definition of "safe leave" broad and not well defined, who will define this and what documentation will be required (from the New Mexico Counties Association)? In addition, the definition of "close association" to define a family member seems overly broad, so who will define what this means? 
• What is the fiscal impact of choosing the cap on payments being the state's median or mean income levels? 
• Can the Early Childhood Care Trust fund be tapped to pay for the welcome child "refunds?"
• Why is the State Investment Council managing the funds created in HB 11 instead of the state treasurer, who normally handles short-term investments? 

Senate Majority Whip Michael Padilla (D-Bernalillo) asked a number of penetrating questions driving at the heart of the legislation, some of which require more analysis and research:

• Who pays for everything? When I come with a bill, I have to identify funding sources. Are there funding sources identified in the bill, for example where is the $193 million to pay for the welcome child refunds coming from?
• The Early Childhood Care Trust fund is "my baby," and I'm concerned about tapping that fund. Does this bill contemplate using the ECE trust fund?
• Do I understand correctly that the startup costs of this bill are close to $50 million before any benefit has even been paid?
• Where are the triggers in the bill that determine when taxes, fees or appropriations are needed to pay for the program? Can a matrix be developed to make that clear?
• Can you produce an analysis that looks at the impacts on small, medium and large businesses? Similarly, can you provide data from states similar to us that have implemented this kind of program and what happened in terms of fund solvency, uptake rates, income levels, job growth, cost per citizen, etc.

Sen. Nicole Tobiassen (R-Bernalillo) had these concerns:

• What happens if the parents are estranged and one parent tries to claim the entire $9,000 benefit when the benefit should be split between the two? Who's responsible for monitoring these payouts and preventing abuse by one parent or the other? 
• What happens if someone who has been a resident of another state moves here for six months and wants to claim either the family wellness and/or welcome child benefits but their employer is out of state (remote work) and the employer has not paid into the fund? Does six months qualify for welcome child benefit because no one has to pay into the fund? Sen. Steven Lanier (R-San Juan) had a similar question, what happens if a New Mexico employer hires all out-of-state employees - does the employer still have to pay into the fund?
• Can both the family wellness and welcome child benefits be taken together, for example with childbirth?
• My analysis shows that the cost of replacing an employee with a temporary employee is between $6K and $16K, can you verify those costs?
• Are the welcome child "refunds" subject to federal taxation? If so, how much of that benefit will be owed for taxes? If federal taxes are applied to the benefit you receive, you will only receive about a 30% benefit of the all the money you’ve paid into the fund so, what are the net benefits paid out to workers?
• Are there any limitations on how many family members can take family leave in order to take care of another family member? 
• Is there any actual actuarial analysis available?

Sen. Linda Trujillo (D-Santa Fe) asked:

• Can state and local agencies/governments opt out? What's the cost of opting out, and who pays for that? If it's through fees, is there any cap on how much the fees charged can be?
• Can you show us the effects on low-income wage earners, median- and mean-income earners?
• What if neither parent works for 6 months - can they still get the $9,000 "refund"?

Sen. Pat Woods (R-Curry, Harding, Quay & Union) raised these issues:

• Is there any tie between the welcome child benefit and receiving home visitations from the Early Childhood Education and Care Department? If not, should there be as it appears only about half of new parents are receiving home visitations that teach parenting skills?
• What is the dollar difference between using mean and median income levels?
• What additional data can we get from other states about uptake rates and other issues they've faced in implementing similar programs?

That's a bunch of great questions, and if you have followed the Chamber’s analysis, then you know we have raised many of these same questions and concerns. it'll likely take a few days for staff to come up with answers. As the Albuquerque Journal posted last evening, "Solvency questions swirl around paid leave proposal as session nears homestretch." Unbelievably, when asked by reporters - IS IT FUNDED? the bill’s sponsor Christine Chandler responded…” Not Really, but does it need to be funded?  SERIOUSLY!? You just can’t make this stuff up. Read the full story here.

This is great preparation for a hearing, laying the foundation based on facts! Earlier this week, Sen. George Muñoz, D-Gallup, the committee’s chairman, said the paid leave bill is part of what are $3 billion in “unfunded mandates” approved by the House. As Tobiassen said, she wants definitive facts, not "hopes and dreams." That's a great summation, and all New Mexicans deserve the answers. We will keep you posted. Hopefully Senate Finance will now take our concerns to heart and stop this bill before it goes any further. Let’s put a plan in place that makes sense for New Mexico Employers and Employees, a plan that doesn’t go belly up and continually needs taxpayer bailouts.

MEDICAID TRUST FUND HEADS TO HOUSE APPROPRIATIONS

Yesterday, the House Health & Human Services Committee started the day by hearing Senate Bill 88, Medicaid Trust Fund, sponsored by Sens. George Muñoz (D-Cibola, McKinley & San Juan), William Sharer (R-San Juan), Pat Woods (R-Curry, Harding, Quay & Union), Elizabeth "Liz" Stefanics (D-San Miguel, Santa Fe, Torrance & Valencia) and Rep. Pamelya Herndon (D-Bernalillo). The bill creates a new Medicaid trust fund, which would be seeded with a $300 million appropriation from the general fund. A Senate Finance Committee amendment to SB 88 adds a provision requiring that money in the Medicaid trust fund may be appropriated to support the state Medicaid program if a reduction in federal Medicaid funding received by the state will cause a reduction in coverage or benefits below the levels provided as of the effective date of the act. 

Herndon said there would be $300 million a year put into the fund until it gets to $2 billion, and then the state stops putting money into it. This is when the fund starts to draw off of the interest and funds itself.

The bill does a lot of things, which are all aimed at ensuring the state can sustain the Medicaid program, whether there are reductions in federal matches or through expanded usage or levels of care. The costs of Medicaid have grown exponentially to the point where it places the second-largest demand on the general fund, just below public education. This bill addresses what's likely to be a critical need, and the Chamber supports this smart step.

Minority Whip Rep. Alan Martinez (R-Sandoval) was supportive as the bill would help fund Medicaid should federal cuts come in October. “We have promises from the new administration that they're going to finally balance the federal budget. I don't know if we're going to have the 7-to-1 match, the 4-to-1 match. I think it's going to be closer to a 1-to-1 match. I think planning for the future is a great idea.”

A motion was made for a “do-pass” vote as amended. The committee voted in favor on a 6-1 vote, sending the bill to the House Appropriations & Finance Committee.

KEEP PHYSICIANS WITH SCHOOL LOAN HELP

Sen. Craig Brandt (R-Sandoval) wants New Mexico to attract more doctors. His Senate Bill 411, Physician Loan Repayment Act, offers $75,000 per year for a maximum of $300,000 over four years for physicians practicing in designated professional shortage areas. In New Mexico, that’s practically the entire state.

SB 411 passed 8-0 this morning in the Senate Finance Committee and now heads to the Senate floor.

New Mexico is in a health care crisis as 30 of its 33 counties are designated health professional shortage areas. Healthcare is key for economic development, the Physician Loan Repayment Act not only provides for New Mexicans to be cared for across the state, but it would also be a positive step in keeping New Mexico competitive in the health care arena.

Brandt says doctors must sign a commitment to stay in New Mexico four years before qualifying for the loan repayment assistance. “And that’s what we want, we want these doctors to love it so much that they never leave New Mexico,”

We absolutely agree with Brandt, and we’ll let you know when this bill is brought up on the Senate floor.

PHYSICIAN ASSISTANT LICENSURE COMPACT

Just before 9 p.m. Tuesday night, House Bill 413 was one of the last bills to be heard on the House floor after more than eight hours of discussion and debate. HB 413, Physician Assistant Licensure Interstate Compact, sponsored by Rep. Gail Armstrong (R-Catron, Sierra, Socorro & Valencia), enters New Mexico in the Physician Assistant Licensure Interstate Compact for the purpose of strengthening access to medical services and enhancing the portability of a license to practice as a physician assistant. The Physician Assistant Licensure Compact Commission would serve as the national administrative body. According to the American Academy of Physician Assistants, 62% of PAs in New Mexico are working in medical specialties, and 28% in primary care.

The Chamber remains supportive of this and other medical professional compacts every step of the way this session. A motion was made for a “do-pass” for the bill. With no opposition, it sailed through the House floor with a vote of 56-0. The bill heads to the Senate and unfortunately, we only have 9 days to the get it across the finish line.

MEDICAL MALPRCTICE REFORM

Late yesterday, the Senate Health and Public Affairs Committee held an extensive hearing on Senate Bill 176, sponsored by Sen. Martin Hickey (D-Bernalillo), which seeks to make significant reforms to our current out-of-balance medical malpractice laws. Hickey, a retired physician and hospital administrator, has taken recommendations from a Think New Mexico report on what changes need to be made in order to stop the flight of physicians from our state, which also blocks recruitment efforts as well.

The committee completed taking public testimony and will conduct committee discussion and a vote on Friday. The Chamber has been and continues to be a very strong advocate for malpractice reform. You'll see below a letter we sent to the committee. 

The fact is this, our state has a crazy litigious nature. Often we see lawsuits being brought by out-of-state lawyers because New Mexico, unlike many other states, puts no caps on attorney fees or amounts of punitive damages. It's a huge incentive to sue, and that's exactly what happens. SB 176 would place a cap on attorney fees - 33% if the case goes to trial, 25% of the judgement if the case is settled. If punitive damages are awarded, 75% goes to a patient fund to ensure injured parties are cared for and additional training for professionals can be provided. And 25% would go directly to patients. Also, New Mexico allows lump-sum payments rather than payments as ongoing medical expenses incur. SB 176 would ban lump-sum payments to ensure that patients receive lifetime payments if that's necessary.

It's no secret that the results of New Mexico's med-mal laws are out of balance. Here are just a few of the stats:

• We have the second-highest number of medical malpractice suits in the nation. Insurers pay out $1.83 for every dollar collected in malpractice premiums.
• There are few companies left that are willing to write medical malpractice policies.
• Malpractice premiums are twice as high on average in New Mexico as they are in other states. A local doctor in our community who serves a large portion of our population is seeking to sell his practice and relocate his family, in large part because of these stats.
• Very large, excessive punitive damages are awarded – (recently in Albuquerque there was a judgement for $412 million – this will come out of the physician's pocket, which obviously could bankrupt them.) The potential for large punitive damage awards is what lures trial lawyers to sue, sue, sue.

A long parade of doctors and patients reported how difficult it is to get an appointment for primary care and, even more difficult, an appointment with a specialist. One specialist reported a waiting list of 2,100 patients even though she has worked longer hours and given up her administrative time. Moreover, 30% of physicians are set to retire within the next five to 10 years. Only about 25% of medical school graduates stay in the state. There are 2,400 doctors in the state and that number is declining. A health care recruiter reported that in the recent past, there were about 300 positions open for various health care professionals. Today, the number is 769. The recruiter sent out 2,500 solicitations to submit resumes and only received 185. Candidates are looking at Arizona, Texas and Colorado, all of which have much less litigation and much lower malpractice premiums. 

In fairness, there were a number of heart-wrenching stories from patients about pain and suffering experienced due to malpractice. Clearly, patients who are victims need reasonable compensation, nobody argues against that. However, it's our observation that they're missing an important point: if we don't significantly increase the number of health care professionals willing to practice here, they're not going to get the care they deserve and probably can't afford to get by going out of state. 

Unfortunately, SB 176 is only getting its first hearing yesterday (Day 50 of 60-day session) even though it was introduced on Day 8 of the session. As much as we hate to say it…it is very improbable that this bill can make it through the entire process before adjournment.

If ever there were a need for a special session, the governor should put make this a priority, along with other initiatives that may or may not get enacted this session. A special session with a focus just on health care would shine a bright light on what needs to be done to cure our health care crisis.

WHATEVER HAPPENED TO MINIMUM WAGE?

If you recall, way back when…okay maybe not that long ago!  On February 13 we gave an update on the proposed bill to raise the minimum wage.

House Bill 246 (HB 246) seeks to raise the minimum wage to $17.00 per hour and then increase it annually based on the Cost-of-Living index (CPI). Strange how the bill will not allow for a decrease if the CPI moves downward…it can only go up!

It is proven that minimum wage increases force businesses to cut back employee hours, or cut jobs (think about the kiosks in fast food or self-checkout stations). The added cost in overhead in business is passed onto the consumer…so while you may see your paycheck increase, the dollars simply won’t go as far.

We testified against the bill…but as we predicted it sailed through its first committee on a straight party line vote.  Since then, there has been no appetite by the House Appropriations Committee to take the bill up.  Thankfully the budget by the House was set two weeks ago, and it did not include what would have been necessary funding for such a large minimum wage increase.

We get asked about this bill with ever increasing frequency. With only 9 days left in the session, we believe it is unlikely to move any further…but...we also believe this was a set up for what will most likely be presented next year in the 30-day session. So, for now the bill is dead, but we remind you of the story of Frankenstein,