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April
3,
2006
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Michigan Health & Hospital Association 6215 West St. Joseph Highway Lansing, MI 48917 (517) 323-3443 Fax: (517) 323-0946 |
IN THIS ISSUE
Community Health Budget Passes Senate, MHA Testifies in House
Community Health Budget Passes Senate, MHA Testifies in House Last week, the fiscal year (FY) 2007 Michigan Department of Community Health (MDCH) budget passed out of the Michigan Senate. The Senate proposal mirrors the executive budget proposal with no additional cuts to hospital rates, graduate medical education (GME) or disproportionate share hospital payments. Additionally, the Senate approved the MHA's request to restore $6 million (general fund) in GME funding that was cut by a FY 2002 executive order. Both the Senate and executive budget proposals call for an increase in the hospital tax and would fund the payments through the state's Medicaid health maintenance organizations (HMOs). The MHA continues to evaluate the concept of an additional hospital tax, but has consistently stated its opposition to processing GME funding through the HMOs.
The House has also begun deliberations on the MDCH budget. The House Appropriations Subcommittee on the Community Health Budget, chaired by Rep. Bruce Caswell (R-Hillsdale), received public testimony last week on the Medicaid program. Ned Hughes Jr., president, Gerber Memorial Health Services, Fremont, presented testimony on behalf of the MHA, telling the committee that Michigan's nonprofit hospitals highly value and place their patient care mission first, as shown by the more than 1.3 billion dollars a year in uncompensated care they provide. Hughes also stressed that additional Medicaid cuts will cause reductions in access to care, the loss of good jobs in the health care community, and higher insurance premiums for employers forced to cover the costs of underinsured and uninsured Michigan residents. The state legislature is currently on a two-week spring recess that will end April 10. Members are urged to contact their state representative and senator to stress the importance of adequate funding for the Medicaid program. The House is projected to pass the Medicaid budget by mid- to late May and then transmit it to a Senate-House Conference Committee to work out the differences between the two proposals. Members with questions should contact Brian Peters at the MHA. Medicare Wage Index Appeals Due April 21 Hospitals are encouraged to protect future appeal rights by sending the CMS a letter indicating their disagreement with the adjustments by the April 21, 2006, deadline, with a copy to the fiscal intermediary. The correspondence must be received by this date, as a postmark will not suffice. The MHA has drafted a sample appeal letter that may be useful to hospitals affected by these or other fiscal intermediary determinations. Members with questions should contact Vickie Seal at the MHA. MHA Keystone: ICU Project Leadership Testifies on Capitol Hill
Chris Goeschel, executive director of the MHA Keystone Center for Patient Safety & Quality, testified about the success of the Keystone: ICU project in saving an estimated 1,574 lives, 84,000 intensive care unit (ICU) patient days and more than $175 million. Asked about the benefit of public reporting, Goeschel said the Keystone: ICU project focused efforts on improving patient care and saving lives, rather than debating public reporting mechanisms. Despite the title of the hearing, subcommittee members showed a broad interest in the topic of reducing and eliminating infections, rather than simply developing additional reporting requirements. The Keystone: ICU project received praise from others who testified, indicating they believe Michigan's efforts are the vanguard in improving patient safety. In addition, the American Hospital Association (AHA) submitted a statement for the record at the hearing. The AHA listed the MHA Keystone initiatives as an example of hospitals achieving remarkable results in reducing and preventing infections in the health care setting. For more information about congressional activity on health care-acquired infection, contact Laura Appel at the MHA. For more information about MHA Keystone Center patient safety activities, contact Chris Goeschel at the MHA. State Commission Releases Safety Report Central recommendations include the creation of a Center for Safe Health Care, a freestanding, nonprofit organization to coordinate statewide efforts to reduce patient harm; the establishment of a statewide, confidential and nonpunitive voluntary error-reporting system; and increased outreach to patients and their families. Some of the recommendations will require action by the state legislature and governor, and the group estimated it would cost $1 million to $2 million to launch such an endeavor. "Just about everyone can agree that the people involved in health care share a deep commitment to healing, but our systems are far from perfect," noted MHA President Spencer Johnson. "We must acknowledge the complexity of our interactions, choose to learn rather than blame when the unexpected happens, and set no higher priority when it comes to keeping patients safe. Culture change like this is difficult and requires a long-term commitment." The Michigan Health & Safety Coalition, of which the MHA is a founding member, represents organizations that include health plans; major employers; professional groups; and hospital, physician, consumer and labor organizations. Members with questions should contact Sam Watson at the MHA Keystone Center. Workshop Clarifies Revised Occupational Mix Survey On April 25, the MHA will host occupational mix workshops in Lansing, Novi and via teleconference to prepare hospitals to complete the revised Medicare occupational mix survey. The Centers for Medicare & Medicaid Services made several significant revisions in the 2006 survey, including a standardized data collection period, a reduced number of standard occupation categories, and collection of both paid hours and wages. This survey must be completed for the six-month period Jan. 1 through June 30, 2006, by all hospitals subject to the inpatient prospective payment system and be submitted to the fiscal intermediary by July 31. Additional information regarding the educational sessions is available online. The workshop is offered free of charge, but advance registration is required. Members with questions should contact Vickie Seal at the MHA. CMS Revises Cardiac Rehabilitation Guidelines In late March, the Centers for Medicare & Medicaid Services (CMS) released a National Coverage Decision (NCD) that provides additional flexibility for cardiac rehabilitation services provided to Medicare beneficiaries. The changes in Medicare coverage for cardiac rehabilitation services are effective immediately. The CMS removed the unique language for physician supervision, and instead, referenced existing regulations that indicate “direct supervision” means a physician must be present at the hospital and available to furnish assistance. It does not mean that the physician must be present in the room when the procedure must be performed. In place of the current, more limiting language, the NCD references additional Medicare manual sections that indicate, “the hospital medical staff that supervises the services need not be in the same department as the ordering physician.” However, the NCD states that supervision by a physical therapist would not satisfy the physician direct supervision requirement. Since the NCD does not define “hospital premises,” the issue of physician supervision at a cardiac rehabilitation facility that is not located in the main building of the hospital remains undefined. The NCD expands the covered time frame for cardiac rehabilitation to 18 weeks and increases the number of sessions covered to 36. Finally, the CMS coverage now includes cardiac rehabilitation for patients who have had heart valve repair or replacement, percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting, or heart or combined heart-lung transplant. For further information, contact Marilyn Litka-Klein at the MHA.
Robert Smythe has been named vice president and chief operating officer at Sinai-Grace Hospital, Detroit. He will lead all aspects of daily operations of the hospital, including patient care and ancillary and business services. He most recently served as chief operating officer of Henry Ford Wyandotte Hospital. Smythe holds a bachelor of science degree in education from Wayne State University and a master's degree in public health from the University of Michigan. Henry Ford Health System (HFHS), Detroit, announced last week that Gerard van Grinsven will join the system in June as president and chief executive officer of Henry Ford West Bloomfield Hospital. Van Grinsven is currently vice president and area general manager for The Ritz-Carlton Hotel Company, overseeing the operations of the Ritz-Carlton hotels in Dearborn, Cleveland, St. Louis and Philadelphia. He is a former member of the Western Wayne/Downriver board of HFHS and serves on the board of the Detroit Regional Chamber. The West Bloomfield hospital is slated to open in July 2008.
Partnership Meets with HMO Leadership
Common concerns include strategies to manage health care costs and create affordable benefit options to help Michigan's employer base. Inadequate funding of the Medicaid budget has had negative consequences to both providers and HMOs that are trying to ensure that people have access to physicians and hospitals. The group plans to hold additional liaison meetings and to make members of each association aware of opportunities for future collaboration. The Partnership for Michigan's Health is comprised of the MHA, the Michigan State Medical Society and the Michigan Osteopathic Association. Together, this group represents a majority of the health care providers in Michigan. MHA members with questions should contact Peter Schonfeld at the MHA. Improving Billing and Reimbursement, Present and Future Web-based Tool Measures Quality Performance This report reflects the continuing interest in transparency and public accountability by hospitals. Tools of this nature provide additional venues for hospitals to review and identify potential areas for improvement, using historical data that represent a slice of overall care delivery. The 2005 State Snapshots uses data from 2002 to 2003. The MHA Service Corporation also provides tools that allow hospitals to evaluate opportunities for improvement, such as the Michigan Inpatient/Outpatient Databases and Core Options™. For more information, contact Bob Zorn at the MHA. Some HMOs Grow, Some Lag in 2005
Michigan's health maintenance organizations (HMOs) reported a $270 million profit for 2005, representing a 3.7 percent margin, which is a 16 percent increase over the $233 million earned during the same period in 2004, according to HMO financial information filed with Michigan Department of Community Health. The three largest HMOs by income continue to be Blue Care Network ($78 million), Priority Health ($55 million), and Health Alliance Plan ($34 million), representing 62 percent of the total profit. The HMOs that reported the largest gain in income were Omnicare ($9.3 million increase), which is under rehabilitation; Health Plan of Michigan ($6.1 million increase); and Physicians Health Plan of Mid-Michigan ($5.2 million increase). The HMOs reporting the greatest loss in income were Blue Care Network ($2.6 million decrease) and Grand Valley Health Plan ($1.2 million decrease). Contact Joseph Chiappetta at the MHA for more information.
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The
Centers for Medicare & Medicaid Services (CMS) recently instructed fiscal
intermediaries to exclude unfunded post-retirement benefit and pension costs
from allowable hospital wage-related costs during the annual desk review process
for developing the fiscal year 2007 wage index. As a result, some hospitals received
fiscal intermediary adjustments that reduced allowable costs and the resulting
Medicare wage index. In developing the Medicare wage index in prior years, hospitals
were allowed to claim reasonable post-retirement benefit and pension costs in
accordance with Generally Accepted Accounting Principles, regardless of funding
status. The MHA believes the recent interpretation represents inappropriate retroactive
rule-making by the CMS. 
Last
week, the Oversight and Investigations Subcommittee of the U.S.
House Energy and Commerce Committee held a hearing titled "Public Reporting of Hospital-Acquired
Infection Rates: Empowering Consumers, Saving Lives." The subcommittee is
chaired by Rep. Ed Whitfield (R-CA) and Rep. Bart Stupak (D-Menominee) is the
ranking member on the committee. Last year, Whitfield sent letters of inquiry
to eight hospital systems requesting information on how some of the nation's
largest hospitals detect, monitor and report health care-associated infection
rates. The subcommittee hearing was a follow-up to that letter. 
Last
week, the Michigan Health & Safety Coalition, serving as the State Commission
on Patient Safety appointed by Gov. Granholm, released A Plan to Improve
Health Care Safety. The report was created as a result of public hearings held last
year to gather feedback on patient safety and was crafted into recommendations
by researchers and an analytic team. Their qualitative approach condensed the
information, identified patterns, and was supplemented by a literature search
on other patient safety initiatives. In all, the report contains 13 major objectives,
ranging from redesigning health care facilities and processes with safety in
mind to improved collaboration among health care organizations to promote patient
safety.
The
Josephine Ford Cancer Center, part of the Henry Ford Health System,
Detroit, is one of the sites selected for six demonstration projects
to improve the early
detection and treatment of cancer and reduce health disparities among minority
Medicare beneficiaries. Funded by the Centers for Medicare & Medicaid Services
under the authorization of the Benefits Improvement and Protection Act of 2000,
the demonstration will run for four years and targets breast, cervical, colorectal
and prostate cancers. The project at the Ford Cancer Center will target the African-American
Medicare population in Oakland, Macomb and Wayne Counties.
To
plan effectively for the future of Michigan health care, the
Partnership for Michigan's Health met recently with leadership
of the Michigan Association of
Health Plans. The group discussed the five-year outlook of the state's health
care marketplace and their views regarding collaborative provider relationships. 
Because
health care coding and billing is a highly complex and regulated
environment, professionals must be at the top of their game to
help the hospital maintain
a positive margin. The MHA Health Foundation 
The
Agency for Healthcare Research and Quality within the U.S. Department
of Health & Human Resources recently 
