Responding to ongoing and coordinated advocacy efforts from the MHA, Michigan's 144 nonprofit community hospitals, and the entire health care community, the state House Appropriations Committee reported out House Bill (HB) 4310, a supplemental fiscal year (FY) 2009 appropriations bill, last week. The bill would restore 1.5 percent of the 4 percent Medicaid provider rate cut that was passed in Executive Order (EO) 2009-22, scheduled to take effect July 1.

In addition to reducing the rate cut to all Medicaid providers, the bill would restore funding for optional Medicaid services - podiatric, chiropractic, optometric, hearing and dental - that were eliminated in the EO.

The bill also includes an important MHA-supported amendment requiring hospitals and nursing homes to receive a proportional share of retroactive federal Medicaid matching funds if the state receives the funding. The MHA estimates the hospital portion of the proposed refund to be approximately $12 million. Several years ago, a one-time pension contribution by General Motors was counted as compensation in calculating the state's average per capita income, resulting in a negative impact on Michigan's federal medical assistance percentage (FMAP). In January 2009, the U.S. Congress corrected this error, allowing Michigan to become eligible for the retroactive FMAP funds.

The full House is expected to pass HB 4310 later this week; however, support must still be received from the full Senate and the state budget office. Given the uncertainty of this legislative remedy progressing, the MHA is continuing its discussions with the Granholm administration to advance mechanisms that mitigate the full impact of the EO cuts, details of which were sent to the membership last week.

MHA members are strongly urged to contact their state representative to press for passage of HB 4310. Lawmakers should be told that efforts to reduce Medicaid provider cuts in the current fiscal year will assist in protecting the health care safety net for all patients in this difficult economic situation.

On a related note, legislative activity on the FY 2010 budget has slowed since recent economic forecasts outlined a $1.7 billion state budget deficit. Legislative leaders and the governor are expected to continue negotiations this week to establish department-specific financial targets for the FY 2010 budget.

In addition to its traditional grassroots advocacy efforts, the MHA conducted a "virtual town hall meeting" in Oakland County last week. This innovative approach involved telephone calls to numerous residents in Oakland County, inviting them to participate in an interactive conference call on the subject of health care and the state budget. The ultimate goal was to recruit activists outside the four walls of the hospital, and more than 800 participated in the conference call.

Members with questions may contact David Finkbeiner or Peter Schonfeld at the MHA.

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On June 1, General Motors Corporation (GM) sought to reorganize itself under the Chapter 11 bankruptcy process, and President Obama expressed confidence that the automobile manufacturer will emerge from this course of action as a leaner and stronger company. During the court-supervised process:

• GM is conducting regular business operations both in the United States and worldwide.
• GM will continue to provide health care benefits without interruption, subject to court approval. As part of this process, changes may be made to health care benefits. There are currently no details available about any potential benefit changes.

To provide information to GM members and health care providers, Internet microsites have been launched by both Blue Cross Blue Shield of Michigan and Blue Care Network. A similar microsite was launched earlier for Chrysler.

Hospitals should continue to follow established claim submission and remittance processes for health care benefits. Health care providers should continue to verify patients' eligibility and benefits and to submit claims in a timely manner for all customer groups.

To date, the bankruptcy process and the courts have enabled affected companies and their employees to continue their health benefits. Information about GM's Chapter 11 case is available on a GM Web site. The site also includes relevant court filings, press releases and contact information.

MHA members received additional information today about the impact of the bankruptcy on hospitals. Contact Peter Schonfeld or Amy Barkholz at the MHA with questions on this issue.

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Today, the MHA Keystone Center for Patient Safety & Quality and MPRO, Michigan's quality improvement organization, officially announced the STate Action on Avoidable Rehospitalizations (STAAR) initiative, which will seek to reduce 30-day rehospitalization rates by 30 percent and to increase patient and family satisfaction with transitions and coordination of care.

Fifteen Michigan hospitals will initially be selected to participate in the initiative and improve patient care transitions through interventions that include enhanced patient communication and timely follow-up after hospital discharge. This effort will target unplanned, related rehospitalizations - which are rehospitalizations that are not expected/scheduled, but whose reason is clinically related to the initial admission.

To ensure success across the health care continuum, a voluntary steering committee has been convened including Aging Services of Michigan, Blue Cross Blue Shield of Michigan, the Health Care Association of Michigan, the Institute for Healthcare Improvement, Medicaid Program Operations and Quality Assurance, the Michigan Association of Health Plans, the Michigan Critical Access Hospital Quality Network, the Michigan Department of Community Health, the Michigan Home Health Association, the Michigan Hospice and Palliative Care Organization, the Michigan Osteopathic Association, the Michigan State Medical Society and the University of Michigan Health System, Ann Arbor.

MHA-member hospitals are invited to apply for participation and are encouraged to do so by the June 19 deadline.

Massachusetts and Washington join Michigan as the states selected for the pilot program. To foster peer-to-peer learning, the STAAR initiative will also exchange best-practice information with Care Transitions, a pilot project in 14 regions across the nation (including Lansing) to reduce preventable hospital readmissions through improved care coordination. Ultimately, the goal is to apply what is learned from these two pilot programs to statewide and regional efforts.

Members with questions should contact Sam Watson or Morgan Martin at the MHA.

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Last week, the House Health Policy Committee reported out House Bills (HBs) 4940-4941, sponsored by Rep. Dian Slavens (D-Canton Twp.), which would prohibit a health care professional from reusing medical devices that are intended for single use and would provide for criminal penalties. The legislation also includes a provision to allow hospitals and health care providers to reprocess medical devices that are labeled "single-use only," in accordance with federal regulations set forth by the U.S. Food and Drug Administration (FDA). By properly and safely sterilizing and reprocessing these devices, hospitals can reduce both medical equipment costs and hazardous waste.

This legislation is, first and foremost, an attempt to prevent situations such as that exposed in 2007 when a Michigan dermatologist was discovered reusing instruments and materials without proper sterilization. Reuse of the equipment involved in the dermatologist's case is not permitted by the FDA, and currently, state law provides only for civil, not criminal, penalties for such an offense.

Last year, the MHA Legislative Policy Panel recommended that the association oppose legislation that would prohibit the reuse of medical devices unless it allowed hospitals to continue reprocessing devices as set forth by the FDA. Because HBs 4940-4941 include that reprocessing provision, the association supports the bills. They now move to the House Floor for consideration. For more information, contact Chris Mitchell at the MHA.

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On May 29, the Medical Services Administration (MSA) released an updated schedule regarding implementation for the Community Health Automated Medicaid Processing System (CHAMPS). In March 2008, the MSA launched the provider enrollment (PE) subsystem of CHAMPS. Effective Sept. 18, 2009, the MSA intends to implement the following subsystems:

•  eligibility
•  prior authorization
•  claims and encounters (CE)
•  contracts management

The CE subsystem will allow Medicaid fee-for-service (FFS) claims submission, inquiry and adjustments/voids through the CHAMPS online system beginning Sept. 18. All Medicaid FFS claims submitted on and after that date will be processed for payment starting Oct. 1, 2009. The ability for Medicaid health maintenance organizations (HMOs) to submit encounter claims through CHAMPS is delayed until the next CHAMPS release, which is undefined at this time. As a result, Medicaid HMOs will continue to submit encounter claims via the current Medicaid system until further notice.

The MSA is currently conducting parallel testing of the FFS claim processing by comparing results under the current Medicaid Management Information System (MMIS) legacy system with results under CHAMPS. The MSA has assured hospitals that it will not adjudicate claims for payment using CHAMPS until parallel testing results match those of the current legacy system for all tested claims. The federal government is providing 90 percent of the $90 million funding for the replacement of the current system that was developed in the 1970s. Members with questions should contact Vickie Seal at the MHA.

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The Centers for Medicare & Medicaid Services (CMS) recently issued an interim final rule, reducing the current-year Medicare payment rates for long-term, acute-care hospitals (LTCHs) effective June 3, 2009. The CMS reports that its analysis of the LTCH final rule for FY 2009, which includes the 15-month period July 1, 2008, through Sept. 30, 2009, contained an error in the re-weighting of the LTCH Medicare severity diagnosis-related groups (MS-DRGs). As a result, the CMS estimates it has overpaid providers by $130 million nationally since July 1, 2008. While it will not recover this amount, the CMS reduced LTCH payments nationally by an estimated $43 million, or 0.9 percent, effective June 3 through Sept. 30, 2009.

To incorporate this adjustment into the FY 2010 proposed rule, the CMS released a supplemental proposed rule that would increase LTCH payments by 2.2 percent, instead of the previously proposed 2.8 percent, effective Oct. 1, 2009. Comments on both the LTCH proposed rule and the supplemental are due to the CMS by June 30. Members with questions should contact Vickie Seal at the MHA.

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The Medical Services Administration (MSA) is notifying hospitals regarding lower Medicaid interim payment (MIP) amounts resulting from the mandatory shift of pregnant women from Medicaid fee-for-service (FFS) to Medicaid health maintenance organizations (HMOs) that took effect Oct. 1, 2008. As hospitals that provide maternity and newborn services experience a shift in Medicaid maternity volume from FFS to managed care and HMOs begin to provide payment for these services, MIPs through the FFS payment system will decline. Hospitals with a high FFS maternity and newborn volume will experience a significant reduction in their MIP amounts.

In addition, during the fourth quarter of fiscal year (FY) 2009, the MSA will recover $45.9 million from hospital MIPs, as mandated by Executive Order Numbers 2001-09, 2002-22 and 2005-07 and Public Act 246 of 2008, which were part of the FY 2009 Medicaid budget. Hospitals should reflect these adjustments in their cash flow projections. Members with questions should contact Vickie Seal at the MHA.

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Perhaps the most unpleasant task for supervisors and managers is the disciplining of an employee. Most employees don't intentionally violate policies and procedures, and some people seem to think managers take pleasure in the process. The truth is that managers usually dread confrontation, and it is often done in an ineffective way. But a potentially uncomfortable meeting can turn into an occasion for teaching. The MHA Health Foundation Webinar We Have a Situation ... Disciplinary Action or Mentoring Opportunity? will provide numerous examples of how to approach an employee on sensitive issues and how to:

• discuss a problem without hurting their pride • approach a problem respectfully • understand the connection between discipline and mentoring

For more information about the webinar or how to register, contact Sara Miller at the MHA

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Michael Slubowski	Rick O'Connell	Daniel Hale	Terry O'Rourke, MD	Debra Canales

Trinity Health, Novi, will restructure its senior leadership team effective July 1. To help lead the system's strengthened focus on ambulatory services and physician networks, Michael Slubowski has been appointed to the new role of president of health networks. He will lead the development of ambulatory services, physician alignment and practice management initiatives, home care, and long-term-care initiatives. The new president of hospital operations position will be filled on an interim basis by Rick O'Connell, who was most recently interim chief operating officer of a Trinity Health facility in Idaho. Daniel Hale has been appointed executive vice president of the Trinity Institute of Health and Community Benefit. In addition, Hale will continue to lead legal, policy and advocacy initiatives. Chief Medical Officer Terry O'Rourke, MD, has been promoted to chief clinical officer, overseeing clinical safety and outcomes, clinical informatics and the integration of physicians and patient care executives. Chief Human Resource Officer Debra Canales will expand her current duties to include corporate logistics and the management of various administrative services in her new role as chief administrative officer.

Paul Conlon, JD, PharmD, has been appointed to serve on the National Quality Forum (NQF) Consensus Standards Approval Committee (CSAC) for a term beginning in July 2009 and concluding in July 2011. Conlon is senior vice president, clinical quality & patient safety, for Trinity Health, Novi, and has been chairman of the MHA Patient Safety Organization since its inception in 2007. The CSAC reviews and approves proposed consensus standards and makes recommendations to enhance NQF's consensus development process.
 

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The Medical Services Administration (MSA) recently distributed correspondence to hospitals regarding its new option to electronically transfer information between the MSA and hospitals in a manner that complies with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Medicaid files that will be available for electronic transfer via the Department of Community Health (DCH)-File Transfer application include:

• electronic cost report software from the MSA
• completed cost reports submitted to the MSA
• quarterly reconciliation reports for interim payments
• claims files containing protected health information for validation

The MSA will approve access to the DCH-File Transfer function for a limited number of users at each organization. Members with questions on the electronic transfer process should contact Jason Jorkasky at the MHA or the MSA Hospital and Health Plan Reimbursement Division at (517) 335-5330.

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The 2009 Health PAC fundraising campaign is making great strides to meet its goal. MHA-member hospitals/systems that have not met their organizational goals are strongly encouraged to take the necessary steps to initiate or complete their fundraising campaigns by June 30. At a minimum, the Health PAC Board is encouraging 100 percent participation from every hospital administrator.

As of June 3, the MHA Health PAC had raised more than $250,000 toward the $350,000 statewide goal. Six additional hospitals/systems have achieved their organizational goals: Alpena Regional Medical Center; Bay Regional Medical Center, Bay City; Bronson Healthcare Group, Inc., Kalamazoo; Henry Ford Health System, Detroit; Huron Valley-Sinai Hospital, Commerce Township; and Sparrow Hospital, Lansing.

All those who contribute to the campaign secure membership to one of the following clubs: Chairman's Circle ($1,000+), Trustees' Club ($750+), President's Club ($500+), Capitol Club ($350+) and Century Club ($250+). For more information on the campaign, goal achievers and club members, visit the Health PAC Web site.

Hospitals/systems with exceptional fundraising performance will be recognized at the MHA Annual Membership Meeting later this month. Members with questions should contact Stacy Dowdy at the MHA.

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In partnership with the Small Business Association of Michigan, the MHA will soon publicly launch the Michigan's Wellness Resource Web site to help small businesses build wellness programs and use resources available at their local hospitals to do so. The site was originally scheduled to go live today; however, to ensure all member hospitals and health systems are afforded ample time to review the site and submit comments, the site will now launch June 15. Suggestions and comments may be submitted until 5 p.m. Wednesday to Paige Hathaway at the MHA.

In addition to serving as a resource guide for businesses looking to their local hospitals for wellness assistance, Michigan's Wellness Resource will feature helpful information for individuals and families striving to build healthier lifestyles, nutritional and activity tools, a wellness program toolkit, and case studies from the business community. Members with questions should contact Paige Hathaway at the MHA.

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The number of uninsured American citizens is projected to reach at least 52 million in 2010, according to a study published by the policy journal Health Affairs. The projection represents an increase of 6.9 million, or 15 percent, from the 45 million American who were uninsured in 2007. U.S. Census Bureau documents show the number of Michigan citizens without health insurance was 1.15 million in 2007, a number expected to increase substantially due to the economic conditions that continue to plague the state.

Many newly unemployed Michigan residents become either uninsured or eligible for Medicaid coverage. According to the Michigan Department of Energy, Labor, & Economic Growth, Michigan's jobless rate jumped from 7.1 percent in 2007 to 12.9 percent in April 2009. The Michigan Department of Human Services indicates that, during the same time period, Michigan's Medicaid enrollment increased by nearly 200,000, from more than 1.5 million people to just over 1.7 million, equating to approximately one of every six Michigan residents. During this time period, unemployment and the Medicaid caseload increased in every county. The continued growth in the number of uninsured - which translates to increased bad debts and charity care - and increasing Medicaid enrollment will further threaten the financial viability of Michigan's hospitals and their ability to provide care to patients in their communities.

In light of this information, members are encouraged to talk to their state and federal legislators about the impact of the current economic situation on the delivery of health care (see related article). Members with questions should contact Jason Jorkasky at the MHA.

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• The MHA Health Information Technology (HIT) Task Force meeting scheduled for Tuesday has been canceled. For more information, contact Jim Lee at the MHA

• The Blue Cross Blue Shield of Michigan Participating Hospital Agreement Utilization Management and Quality Assessment Committee will meet Thursday. For more information, contact Cassandra Burke at the MHA.

• The American Hospital Association (AHA) is offering a new hospital billing reference guide for use with the UB-04 Manual. The tool, Handbook for Hospital Billing: A Reference and Training Tool for the UB-04 Manual, is available for purchase in both electronic and print form on the AHA Web site and may be used by coders, billers, auditors, and financial staff who are responsible for preparing and reviewing documents for claims submission. The 2010 UB-04 Manual may be ordered from the AHA using its subscription order form. Members with questions should contact Cassandra Burke at the MHA.