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2005 Testimony

Testimony Before The Senate Human Services Committee

SB 2139 - Health Care Trust Fund

January 5, 2005

Chairman Lee, members of the committee, I am David Zentner, Director of Medical Services for the Department of Human Services, I appear before you to provide information and support this bill.

The Legislature authorized the Department of Human Services to establish the Health Care Trust Fund beginning in 1999. The trust fund was created as a depository for money that was transferred from two community-owned nursing facilities. Through an approved state plan amendment the Department was able to pay these facilities an additional amount of money based on the difference between the aggregate amount that could have been paid had we used the Medicare upper payment limit process and the actual payments made to all nursing facilities that participate in the Medicaid Program.

The additional payment minus a fee paid to the two nursing facilities was then returned to the state through an intergovernmental transfer. The general funds used to generate the payments were returned, and the remaining funds that were no longer identified as federal funds were then deposited into the trust fund.

The federal government changed the regulations beginning with payments generated in 2002, which gradually eliminated our ability to claim these additional dollars. Our last transfer occurred in July 2004. During the six years we were able to use this process a total of $98.2 million was deposited into the trust fund through the intergovernmental transfer process.

This bill proposes to remove language relating to the generation of the funds through the intergovernmental transfer process. The language is no longer needed because the federal government no longer permits us to generate funds through this mechanism.

The bill will continue to permit the Department to maintain the North Dakota Health Care Trust Fund while repealing the language that established the manner in which funds were obtained through the intergovernmental transfer process from community owned nursing facilities.

The Department supports this bill and recommends that you consider a do pass for this proposed legislation.

I would be happy to respond to any questions you may have.


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