The MHA Board of Trustees met June 24 in conjunction with the association's annual meeting, focusing much of its attention on the matters of national and state health care reform and Michigan's budget crisis.

The board reviewed the current status of federal proposals, including the ideas emanating from the White House and key ideas generated by the House Tri-Committee, the Senate Finance Committee, and the Senate Health, Education, Labor and Pension Committee.

The group discussed common elements; reviewed potentially concerning matters regarding proposed financing schemes; and directed the MHA to take a firm position with the Michigan congressional delegation that reform cannot be achieved through arbitrary cuts to Medicare and Medicaid; true reform cannot be built on an existing faulty and underfunded Medicaid program; and the efforts to build on Michigan's model of collaboration to improve efficiency should be a key element of reform.

On the state level, the board discussed the differing reform strategies being advanced through the House and Senate Health Policy Committees. The group expressed support for many of the concepts, including coverage expansion, rules governing pre-existing conditions, portability requirements and loss ratios. However, the trustees expressed concerns that funding for these activities must not jeopardize the ability of hospitals to carry out their mission of service and that any financing obligations must be proportionate to the benefit derived.

The board discussed the MHA's efforts to minimize the impact of the recent executive order cuts to the fiscal year (FY) 2009 budget and continued deliberations about the Legislature's FY 2010 budget debates (see related article) and the association's increased activities aimed at restoring both current and planned cuts. Additionally, the board began discussions around new strategies to protect critical health care services in FY 2011 when current federal stimulus funding is exhausted.

The final reports and associated recommendations from the MHA Strategic Planning Committee and the MHA Task Force on Clinical Appropriateness and Cost Effectiveness were submitted to the board. Further information on both of these endeavors will be made available to the association membership early in the MHA's 2009-2010 program year.

Finally, the board authorized the MHA to seek amicus curiae standing in the matter of Holman v. Rasak seeking to protect the rights of hospitals to conduct ex parte interviews with the plaintiffs treating physician(s) in medical liability cases; approved special awards and resolutions for various MHA members and affiliates; and approved the membership applications of five new MHA members: Harbor Oaks Hospital, New Baltimore (Type I-B); Bodman, LLP, Detroit (Type III-A); Emergency Medicine Specialists, PC, Fraser (Type III-A); Fresenius Medical Care - Michigan, Plymouth (Type III-A); and MedImpact Healthcare System, Inc. (Type III-A). Questions regarding the board's activities should be directed to David Seaman at the MHA.

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Last week, the Michigan Senate reported out its fiscal year (FY) 2010 budget recommendations (House Bill 4336) for the Michigan Department of Community Health (MDCH). Under the Senate plan, hospitals and other providers, community mental health, and the Healthy Michigan Fund would receive dramatic funding reductions. The Senate proposal - strongly opposed by the MHA, Michigan nonprofit hospitals and health care citizen advocates - cuts more than $533 million in general fund dollars from the governor's revised executive budget recommendation.

The most significant provisions included an 8 percent reduction to hospital inpatient and outpatient rates (Medicaid fee-for-service and health maintenance organization capitation); a similar 8 percent cut to physicians and nursing homes; elimination of adult Medicaid patient optional services (chiropractic, podiatric, optometric, dental and hearing); and $10 million in general fund savings that the MDCH is instructed to produce from Medicaid co-payments and premiums.

An 8 percent cut to hospital inpatient and outpatient rates will result in lost funds totaling more than $112 million ($32 million in general funds and $80 million in federal matching funds).

The state House of Representatives did not concur with the Senate recommendations and sent the bill to conference committee to work out the differences between the various proposals. The next step in the budget process is the appointment of six conferees (three from the Senate and three from the House). The Legislature is in recess until July 14 and legislative leaders and the administration have not agreed on a budget expenditure amount; therefore, it is doubtful any legislative action will occur over the next two weeks.

When the Legislature returns, the MHA and member advocacy will target legislative leaders, the governor and budget conferees, urging them to resolve the FY 2010 MDCH budget with an infusion of new federal stimulus dollars - NOT through continued MASSIVE CUTS - which will protect health care services for all residents.

Members with questions on the state budget should contact David Finkbeiner at MHA.

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Earlier this month, U.S. Representative Sander Levin (D-Royal Oak) introduced the Healthcare Improvements for Generating High Performance (HIGH Performance) Act to establish a network of technical assistance centers to help health care providers implement clinical, managerial, and health care delivery best practices. The HIGH Performance Act, H.R.2948, is intended to foster more projects like those underway through the MHA Keystone Center for Patient Safety & Quality.

"Michigan has been a leader in providing technical assistance to its hospitals to implement best practices in health care. As a result of its initiatives, Michigan's hospitals are now among the highest-performing in the country. For example, Michigan's hospitals now outperform 90 percent of hospitals nationwide when it comes to preventing hospital-acquired infections. Over the course of 18 months Michigan hospitals saved $75 million and over 1500 lives by implementing best practices. If we achieved these results nationwide it is estimated that we could save $13 billion over 10 years," said Rep. Levin in a recent news release.

"The HIGH Performance Act builds on Michigan's successes to make technical assistance available to doctors and hospitals nationwide to train them in the use of best practices for improving patient outcomes and preventing medical errors," Rep. Levin concluded.

To support the network the act creates, the national coordinating body, the Center for Health Extension, will facilitate, coordinate, and conduct research into health care delivery best practices that have long been underemphasized. A condensed version of the HIGH Performance Act is included in the U.S. House of Representatives Tri-Committee working draft (pages 827-833) for health care reform released last week. A summary of the House bill is also available. The MHA is working to achieve similar legislation in the U.S. Senate.

U.S. House and Senate committee work on national health reform continued last week and votes on health reform plans in both chambers is still scheduled for the end of July.

This week, members of Congress will be in their districts and many will hold meetings on health reform. MHA members are asked to use this opportunity to urge their representatives to strongly object to the provisions in the draft reform bill released by the House that call for permanent cuts to Medicare's annual hospital marketbasket updates and a public insurance plan that would pay Medicare rates for hospitals. These provisions would cut billions of dollars from payments for hospital services. For more information, contact Laura Appel at the MHA.

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Michigan's process for initiating medical liability claims was the subject of a recent hearing in the House Judiciary Committee, chaired by Rep. Mark Meadows (D-East Lansing). House Bill 4571, sponsored by Rep. Meadows, seeks to amend the current rules for obtaining qualified expert witnesses, providing notice to defendants of claims, and assuring a case has merit and is entitled to a cause of action under the law.

Opponents of the bill, which included the MHA, Michigan State Medical Society, Michigan Osteopathic Association, Michigan Chamber of Commerce, and liability insurance carriers, argued that the legislation would weaken the state's medical liability laws, which were amended in 1993 to stem the tide of rising professional liability insurance rates that was jeopardizing access to medical care in Michigan. Opponents also testified that the 1993 reforms have been a success and Michigan's liability climate has stabilized, especially compared to many other states in which rates have skyrocketed. The MHA and others fear that the bill could create uncertainty that would result in higher costs to providers, resulting in difficulty recruiting and retaining physicians.

Supporters of the bill included several plaintiff attorneys who testified the current process is burdensome to plaintiffs and may unfairly limit some claims. The bill was not reported out of committee but a vote in the House is expected in the future. For more information, contact Amy Barkholz at the MHA.

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Representatives of the MHA and its members convened June 18-19 in Sandusky, Ohio for a meeting of the American Hospital Association (AHA) Regional Policy Board (RPB) Region V (Michigan, Ohio, Illinois, Indiana and Wisconsin). The RPB is designed to facilitate guidance on public policy and advocacy matters from hospital leaders and enhance coordination between the AHA and state hospital associations. The Michigan contingent at this meeting included Brian Connolly, president & chief executive officer, Oakwood Healthcare Inc., Dearborn (state delegate); Georgia Fojtasek, president & CEO, Allegiance Health, Jackson (state delegate); Mary-Anne Ponti, RN, chief nurse executive, Northern Michigan Regional Hospital, Petoskey (American Organization of Nurse Executives representative); Daniel Wolf, trustee, Munson Medical Center, Traverse City (regional trustee delegate); and MHA and regional council representatives.

The group discussed several topics related to the ongoing federal health care reform debate, including comparative effectiveness research, health IT development, bundled payments, prevention and wellness strategies, and quality improvement. RPB members expressed concern that comparative effectiveness research, while potentially helpful in controlling health care costs, could stifle innovation if not implemented appropriately. Members also deliberated on the appropriate timeframes for inclusion with bundled payments (e.g. 30 days vs. 60 days post-discharge). Finally, members discussed the AHA's Hospitals in Pursuit of Excellence strategy, which focuses on actions hospitals can take immediately without changes in law or regulation. Among those actions are several already being addressed by the MHA Keystone Center for Patient Safety & Quality, including the reduction of central-line associated blood stream infections, ventilator-associated pneumonia and catheter-associated urinary tract infections.

The next RPB meeting is scheduled for October 8-9 in Indianapolis, Indiana. Members with questions should contact Brian Peters or Clark Ballard at the MHA.

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The Medical Services Administration (MSA) released a proposed policy that would implement a revision to the Medicaid disproportionate share hospital (DSH) ceiling calculation methodology, as required by the federal DSH auditing and reporting rule that was published in the Dec. 19, 2008, Federal Register. Historically, the MSA used only inpatient data or a combination of inpatient and outpatient data to calculate hospital-specific DSH ceilings. As a result of the final DSH auditing and reporting rule, the MSA is now required to use both inpatient and outpatient data in the hospital-specific DSH ceiling calculations.

In its comment letter, the MHA recommends that the MSA ensure that fiscal year 2009 DSH ceilings are calculated to comply with the final DSH auditing and reporting rule, since the Centers for Medicare & Medicaid Services audits the Medicaid DSH program on an annual basis.

Members are encouraged to submit comments on the DSH ceiling policy to Meghan Sifuentes at the MSA by the Friday, July 3, deadline. Members with questions should contact Jason Jorkasky or Vickie Seal at the MHA.

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Due to the legislature remaining in session through summer, the Government Relations Retreat originally scheduled July 29-31 in Traverse City has been canceled. In lieu of the retreat, the MHA is holding a one-day seminar Friday, July 31, at the Country Club of Lansing.

Attendees will hear directly from elected officials on their legislative priorities and receive a preview of state and federal health care legislation. Additionally, a detailed analysis will be provided on the condition of Michigan's economy and how the federal American Recovery and Reinvestment Act funds will be directed to health information technology.

MHA members interested in attending the seminar may register online or submit the event registration form to Stacy Dowdy at the MHA. Coordinators of political or grassroots advocacy activities in MHA-member hospitals are strongly encouraged to attend this seminar; however, multiclient lobbyists who represent MHA-member hospitals are ineligible. Members with questions should contact Stacy Dowdy at the MHA.

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The MHA recently submitted comments to the Centers for Medicare & Medicaid Services (CMS) recommending that the CMS create a specific marketbasket to use for updating Medicare payment rates for inpatient psychiatric facilities (IPFs) under the IPF prospective payment system (PPS). Statewide, Medicare payments to Michigan IPFs are projected to increase by only 1.8 percent in rate year 2010, which begins Wednesday.

Since fiscal year 2007, the CMS has used the Rehabilitation, Psychiatric, and Long-term care (RPL) marketbasket, which reflects the operating and capital cost structures for inpatient rehabilitation facilities, IPFs and long-term-care hospitals, to establish the annual Medicare payment update for IPFs. The MHA recommends that the IPF-specific marketbasket include both free-standing and hospital-based facilities, noting that Michigan's IPFs experienced a negative 6.5 percent margin in 2007, threatening their ability to care for patients suffering from mental illness. In addition, the MHA urged the CMS to allow permanent adjustments to the resident limit for hospitals that take on and complete the training of residents from hospitals that are closing.

Hospitals with IPFs and independent IPFs are encouraged to submit their comments to the CMS by close of business tomorrow, June 30. Members with questions should contact Vickie Seal at the MHA.

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The Joint Commission recently announced that it is accepting comments related to staffing effectiveness standards (PI.04.01.01) in response to concerns raised by accredited organizations that compliance with the standards does not significantly impact the quality and safety of care and consumes a substantial amount of resources.

The Joint Commission is seeking input from health care organizations, professional groups and state legislative initiatives on how best to evaluate effective staffing. As part of the evaluation process, The Joint Commission has developed two new Elements of Performance (EPs): EPs 12 and 13 at PI.02.01.01 (current PI.2.10 for long-term care). EP 12 focuses on the use of outcome data to guide analysis of staffing effectiveness. EP 13 is similar to current leadership requirements and calls for leadership to review analyses of data related to staffing issues. These EPs are the first step in transitioning to requirements that more effectively identify staffing-related issues and that can be more readily used by health care organizations to evaluate staffing.

Members that wish to submit comments to The Joint Commission should do so by July 10. For more information, contact Sam R. Watson at the MHA.

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With overwhelming bipartisan support, the House of Representatives recently approved Senate Bill 151, sponsored by Sen. Bruce Patterson (R-Canton). The bill, which is supported by the MHA, requires physical therapist assistants (PTAs) to be licensed and establishes minimum standards for licensure.

In 2007, the Centers for Medicare & Medicaid Services (CMS) included in its final rules a provision which established that any PTAs who are already regulated in the state in which they are practicing prior to Dec. 31, 2009, are recognized by Medicare as a PTA going forward. If Senate Bill 151 is signed into law, PTAs can continue to receive payments from Medicare without interruption or satisfying additional qualifications. The bill, which passed the Senate unanimously in March, now moves to Gov. Granholm's desk for signature. Upon final passage, Michigan would become the 45th state to enact legislation which regulates PTAs. For more information, contact Chris Mitchell at the MHA.

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The Medical Services Administration (MSA) recently distributed correspondence to hospitals requesting additional information to calculate the fiscal year (FY) 2010 Medicaid Quality Assurance Assessment Program (QAAP) tax. The tax is determined by subtracting Medicare revenue, as shown on the Medicare cost report, from a hospital's net patient revenue. However, Medicare Advantage (MA) revenue is not included on the Medicare cost report, and therefore is not currently being captured as Medicare revenue that should be excluded from the hospital's tax base. MA revenue has increased substantially in recent years, and in some cases, is 30 percent of a hospital's Medicare revenue.

The MSA hospital work group, comprised of representatives from hospitals, the MSA and the MHA, pointed out that the current tax calculation fails to capture all of a hospital's Medicare revenue. Therefore, the MSA evaluated alternatives to collect this data to more accurately determine a hospital's tax base and developed a supplemental data request to obtain hospital MA net revenue for the cost reports for fiscal years ending between Oct. 1, 2007, and Sept. 30, 2008, which will be used to calculate the FY 2010 QAAP tax. In addition, the MSA will collect information for Medicare outpatient laboratory and therapies and for certified registered nurse anesthetist and physician services, which will be excluded from the tax base. The newly requested information is due to the MSA by July 22. Members with questions should contact Vickie Seal at the MHA or Cindy Drumm at the MSA.

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Schlichting	Connelly

On June 19, Nancy Schlichting, president and CEO, Henry Ford Health System, Detroit, and immediate past chair of the MHA Board of Trustees, was honored with the 2009 Michigan Universal Health Care Access Network (MichUHCAN) Health Care Hero Award. MichUHCAN President Marjorie Mitchell praised Schlichting's unwavering commitment to improving health care access to everyone in the Detroit community, as well as her public policy leadership at the state and national levels.

James Connelly, chief financial officer (CFO) of Henry Ford Health System, Detroit, was recently recognized as one of nine winners of the 2009 CFO of the Year award presented by Crain's Detroit Business. Connelly has been with Henry Ford Health System for nine years, helping the system through a difficult economy to continue to provide high-quality care to patients throughout the Detroit area. The award, in its third year, is presented to those CFOs who have demonstrated savvy and skill in solving financial and corporate management problems and their contributions to the community.

Two Michigan hospitals, University of Michigan C.S. Mott Children's Hospital, Ann Arbor; and Children's Hospital of Michigan, Detroit, made the U.S. News and World Report's recent list of America's best Children's Hospitals. The list features the nation's top children's hospitals in 10 specialties, all of which featured one or both of the two Michigan hospitals.

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In late May, the Centers for Medicare and Medicaid Services (CMS) announced that Recovery Audit Contractor (RAC) complex reviews of Medicare claims for medical necessity would likely be delayed until 2010. RAC automated reviews (those completed by a review of the claim administrative data) could begin as early as July, 2009, and diagnosis-related group (DRG) complex reviews for DRG validation and coding will begin no earlier than fall, 2009.

However, CGI Technologies and Solutions Inc., Michigan's RAC, recently confirmed that they planned to submit automated claims review as their first issue for approval to CMS by the end of last week, and the CMS New Issue Review Board approval process can take up to 60 days. Therefore, RAC automated reviews may not begin until after July. Automated reviews occur when a RAC makes a claim determination at the system level without a human review of the medical record, meaning hospitals will not receive medical record requests for "test" claims for this review type.

This fall, the American Hospital Association (AHA) will begin collecting data via a Web-based survey that will track and summarize the impact of RAC activity on hospitals nationally. Additional information about the survey and the AHA's claim-level tool, RACTrac, is available online. For more information on RAC activities, contact Marilyn Litka-Klein at the MHA.

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The 2009 Michigan Health Council has scheduled its Annual Symposium and Luncheon on Workforce Challenges for Nov. 17. The symposium, taking place from 11:30 a.m. to 2:30 p.m. at the University Club in Lansing, will feature keynote speaker Jo Manion, PhD, who will present on Engaging your Workforce in Difficult Times. Registration for the symposium is available online.

The event will also feature the presentation of the Building Michigan's Healthcare Workforce Awards, given annually to recognize Michigan health care organizations and educators who are designing and implementing creative approaches to address Michigan's health care workforce needs and issues.

The awards recognize:

• health care workforce recruitment
• health care workforce retention
• community or regional collaboration
• education and training strategies
• cultural competency and diversity

Applications for the Building Michigan's Healthcare Workforce Awards should be submitted to the Michigan Health Council no later than July 30. Members with questions should contact Clark Ballard at the MHA.

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The Federal Emergency Management Agency recently announced the final fiscal year 2009 grant allocations for the Urban Areas Security Initiative (UASI) Nonprofit Security Grant Program (NSGP). These grants are designed to provide nonprofit organizations with funding to integrate specific disaster preparedness tools such as security equipment, specifically for prevention of and/or protection against the risk of a terrorist attack. Nationwide, a total of $15 million in federal funds will be distributed among 227 nonprofit organizations.

The UASI NSGP grant awarded $586,705 to be divided among 10 nonprofit organizations in Michigan, including nine Michigan hospitals: Botsford Hospital, Farmington Hills; Children's Hospital of Michigan, Detroit; Detroit Receiving Hospital; Harper-Hutzel Hospital, Detroit; Henry Ford Macomb Hospital, Clinton Township; Mercy Memorial Hospital System, Monroe; Oakwood Hospital & Medical Center, Dearborn; Sinai-Grace Hospital, Detroit; and St. John Hospital & Medical Center, Detroit. The grant funds, for which hospitals in Macomb, Monroe, Oakland, St. Clair, Washtenaw and Wayne Counties were eligible, will be awarded on or before Sept. 30.

Members with questions should contact Mary Gager Anderson at the Michigan State Police.

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On June 18, the MHA distributed a hospital-specific analysis that projected Medicare Outpatient Prospective Payment System (OPPS) payments for 2009, compared to 2007 and 2008. The projected 2009 payments are based on 2007 Medicare patient claims data for hospitals. Information regarding how to interpret and use the reports is now available. To further assist hospitals in utilizing these reports, a free webinar is available to MHA members at 1 p.m. tomorrow and Wednesday. Registration is available online. Members with questions should contact Vickie Seal at the MHA.

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• The 2009 International Food Med Conference takes place today through Wednesday, July 1, at the MGM Grand hotel, Detroit. The conference is designed to help participants incorporate sustainable and nutritious food purchasing at their facilities and learn cost-effective strategies that meet the unique needs of health care and facilitate the development of healthy communities. For more information, contact Paige Hathaway at the MHA.

• The MHA Keystone Advisory Board will meet from 2 to 4 p.m. Tuesday, July 7, at MHA headquarters, Lansing. The board will discuss expansion of the On the CUSP: STOP BSI initiative, and quality improvement health reform. For more information, contact Sam R. Watson at the MHA.

• The MHA Patient Safety Organization Board of Directors will meet from 8:30 to 10 a.m. Thursday, July 9, at MHA headquarters, Lansing. The board will be given an update on the implementation of the data collection system budget. For more information, contact Sam R. Watson at the MHA.

• The Blue Cross Blue Shield of Michigan Utilization Management and Quality Assessment Committee will meet from noon to 3 p.m. Thursday, July 9, at MHA headquarters, Lansing. The committee will discuss quality initiatives. For more information, contact Cassandra Burke at the MHA.

• The MHA Monday Report will be published on a revised schedule during the summer months. The next issue will be dated July 13, and regular weekly publication will resume with the Sept. 7 issue. Have a safe and healthy summer!