Monday Report January 22

IN THIS ISSUE

State Revenue Shortfall May Exceed $800 Million in FY 2007
Advisory Committee Seeks Health Insurance Solutions
Proof of Medicaid Eligibility to Be Required Beginning April 1
Graduate Medical Education Advocacy Day Set for Feb. 21
Education Offered on Transition to UB-04 Claim Form
New Laws Limit Sale of Mercury Devices
"Meeting the Challenge" Focus of HR Conference
MHA Service Corporation Offers Service

State Revenue Shortfall May Exceed $800 Million in FY 2007

Last week, the state treasurer and directors of the House and Senate Fiscal Agencies met for their annual January revenue estimating conference. The state's fiscal crisis continues as the revenue estimate for the current fiscal year (FY) is $556 million below the amount budgeted for FY 2007. This means that $233 million must be cut from general fund spending, and school aid spending must be cut by $323 million. State officials also said that anticipated lower revenues and spending issues through the remainder of 2007 may result in a current-year deficit of $800 million or more; that determination will be made at a later date. The governor will issue executive orders to implement cuts in the weeks ahead. Medicaid funding, which represents a large proportion of general fund spending, is at risk for cuts in these orders.

The revenue and budget picture for FY 2008 is less clear. The repeal of the single business tax (SBT) takes effect Jan. 1, 2008, three months after the next fiscal year begins. In addition to the state's structural deficit of approximately $900 million next year, the repeal of the SBT will reduce revenue by $2 billion annually. Without replacement funds, the FY 2008 general fund is in deficit by $3 billion compared to current-year spending. On Feb. 8, State Budget Director Bob Emerson will present the executive budget recommendation, which is expected to reflect the cuts that would be necessary to offset a $3 billion revenue shortfall.

The MHA is working aggressively to help lawmakers understand the degree of cuts imposed on the state Medicaid program since 1999 and to protect against any further reductions during this year and next. In the weeks ahead, the MHA will provide members with talking points that will allow them to contact their state representatives and senators to express grave concern over the impact of further state budget cuts to the health care safety net. For more information about the state fiscal situation and MHA initiatives to protect health care funding, contact Dave Finkbeiner at the MHA.

Advisory Committee Seeks Health Insurance Solutions

The Michigan Health Insurance Advisory Council, formed as the continuation of the Michigan State Planning Project to cover the uninsured in Michigan, held its inaugural board meeting last week. The council is nonpartisan, nonprofit and independent of state government, and will focus on securing insurance coverage for all Michigan residents through a long-term solution. The group is comprised of leadership representing consumers, payers, providers and purchasers of health care and is chaired by Rob Fowler, president of the Small Business Association of Michigan, with MHA Senior Corporate Vice President Brian Peters serving as vice chair. Members of the executive committee include the MHA, the Economic Alliance for Michigan, Blue Cross Blue Shield of Michigan, the Michigan Public Health Institute, the Michigan Universal Health Care Access Network, and the Detroit Regional Chamber. Members with questions should contact Brian Peters at the MHA.

Proof of Medicaid Eligibility to Be Required Beginning April 1

The federal Deficit Reduction Act of 2005 requires states to adopt policies to verify the identity and citizenship of each Medicaid applicant and recipient as a condition for receiving federal Medicaid matching funds. Last summer, the Centers for Medicare & Medicaid Services issued an interim final rule further defining the state’s responsibilities. The federal rule specifies that each state must collect original verification documents (e.g., original birth certificates and original driver’s licenses or state identification cards) and impose time requirements on the applicant/recipient, comparable to a state’s other verification time standards.

Late last month, the state issued its proposed policy and procedure for public comment. The MHA and others worked hard to educate the Michigan Department of Community Health (MDCH) and the Michigan Department of Human Services (MDHS) on the problems arising from this new law, and as a result, the proposed rule gives serious consideration to the negative consequences of denying Medicaid benefits for a sizeable portion of Michigan’s indigent population. Michigan’s proposed rule, although not perfect, requires both departments to take an active role in assisting Medicaid applicants and recipients to obtain the required documents. The state will begin requiring verification of identity and citizenship under the new rule on April 1. The deadline for comments on this rule is Jan. 26.

Along with a number of other interested parties, the MHA asked the state to approve Medicaid benefits on a presumptive basis, pending receipt of the required citizenship verifications. The state did not accept that recommendation. In addition, the proposed policy does not specify whether the state will require indigent applicants and recipients to pay the fees associated with gathering the documentation required. For more information, contact Laura Appel at the MHA.

Graduate Medical Education Advocacy Day Set for Feb. 21

Graduate medical education (GME) advocates will gather Feb. 21at the MHA Capitol Advocacy Center in downtown Lansing to educate legislators on the vital role of teaching hospitals and the statewide benefits derived from GME funding. GME directors, program administrators and residents are being asked to join the MHA to participate in this important effort. A breakfast briefing will begin at 8:30 a.m. and the MHA will schedule legislator visits for attendees that will take place throughout the day.

Protecting Michigan's health care funding in the state's fiscal year 2008 budget will require a great deal of effort, and GME funding is more important than ever as Michigan faces physician shortages and additional challenges to health care access. Members who are interested in participating should complete and return the registration form by Feb. 5. For more information about the GME Advocacy Day, contact Laura Appel at the MHA.

Education Offered on Transition to UB-04 Claim Form

Health care providers are required to use the new UB-04 form for submitting health insurance claims by May 23. Health care professionals who work with patient financial services and accounting, health information management, and the revenue cycle should begin to transition now from the current paper patient-claim form UB-92 to the UB-04 claim form. The MHA member education session, The Revenue Cycle and the New UB-04 Claim Form, will outline the upcoming changes, with a specific focus on the required data elements, including a crosswalk from the UB-92 to the UB-04; the changes to the 837I-004010A1; key activities to successfully convert to the UB-04; and the impact of the National Provider Identifier and Present on Admission indicator on reimbursement, data analysis and pay-for-performance initiatives.

The half-day program will be held from 9 a.m. to noon and from 1 to 4 p.m. on March 2 in Novi and on March 15 in Lansing. Members interested in participating in a videoconference session or who have questions about the registration process should contact Linda Moots at the MHA at (517) 886-8367. Space is limited, so early registration is suggested.

New Laws Limit Sale of Mercury Devices

Three new laws limiting the use of mercury-containing devices were signed by the governor last month with the support of the MHA Task Force on Hospitals for a Healthy Environment. Public Acts 492-494 of 2006 will phase-out the sale and use of blood pressure devices, thermostats, esophageal dilators, bougie tubes and gastrointestinal tubes containing mercury. The law prohibiting the sale of mercury-containing blood pressure devices takes effect Jan. 1, 2008, and the prohibitions on the sale of the other devices become effective Jan. 1, 2009. Violators are subject to a misdemeanor and fine. The bills contain several exceptions, including allowances for calibration of equipment and the use of button-cell batteries that contain mercury.

The MHA supported the bills because reliable, efficient and cost-effective mercury-free alternatives are broadly available for these commonly used health care products, and mercury is widely recognized as one of the most dangerous environmental pollutants. For more information on the MHA Hospitals for a Healthy Environment Task Force, contact Sherry Mirasola at the MHA.

"Meeting the Challenge" Focus of HR Conference

The MHA Service Corporation is partnering with the two Michigan chapters of the American Society for Healthcare Human Resources Administration to host the 2007 Healthcare Human Resources Conference. This event will be held April 26-27 at the East Lansing Marriott and provides an opportunity to gather for professional development and networking. For details, contact Steve O'Connor at (517) 663-5755 or Wendy Knight at (517) 886-8416 at the MHA.

MHA Service Corporation Offers Service

The MHA Service Corporation's Employee Safety and Disability Management program works with health care employers to reduce costs and keep disability benefits for health care employees under control. To learn about the MHA Service Corporation's loss prevention, medical management, and claims administration programs, contact John Parks at (517) 886-8417.