Frank Sardone (left), president/CEO, Bronson Healthcare Group Inc., Kalamazoo, and chairman, MHA Board of Trustees, welcomed Ballenger to the meeting.

The MHA Board of Trustees conducted its first meeting of 2010 on Feb. 3. As a lead-in to its broader discussions, Bill Ballenger, editor of Inside Michigan Politics, provided a view of Michigan's political landscape; its impact on current discussions in the State Capitol; and the significance of the upcoming November elections, both in the short term (2010 legislative agenda) and the longer term (legislative redistricting or reapportionment).

The key purpose of the meeting was to establish the association's strategic priorities in calendar year 2010, which include the themes of funding, politics and policy. Regarding the matter of funding, the board reviewed the association's proposed state budget advocacy strategy, including the need to protect the current payment system through appropriate use of Quality Assurance Assessment Programs, federal efforts to achieve extension of the federal medical assistance percentage (see related story), strategies to expand coverage, and ongoing operational payment enhancement activities through mechanisms like the hospital rate adjustment.

Within the political theme, the board reviewed current information concerning state and federal races and, at the recommendation of the MHA Legislative Policy Panel, opposed a new constitutional convention for the state of Michigan. Under the policy category, the board identified several key areas requiring the MHA's attention, including health care reform (Hospital Insurance Trust Fund and regulatory reform efforts), health information technology (Centers for Medicare & Medicaid Services meaningful use/electronic health records), quality (including efforts through the work of the MHA Keystone Center for Patient Safety & Quality, the MHA Patient Safety Organization, and the MI Hospital Inform price and transparency Web site), and community health improvement (with a focused effort around trans-fat-free hospitals and new initiatives to combat childhood obesity).

The board also engaged in a more in-depth discussion concerning the 2010 state budget and its potential impact on the state's Medicaid program, concluding that the key to success is the design of strategies that ensure continued member unity, achieve short-term financial solvency, and address longer-term opportunities to safeguard the community asset represented by Michigan hospitals. Following discussion, it was agreed that the authority granted to the MHA in November to "pursue the establishment of an assessment on all paid health care claims or other broad-based assessments dedicated to improving health care funding levels and increasing coverage to uninsured populations" remains appropriate and serves as the roadmap for the association's advocacy activities.

In additional action, the board approved the MHA's 2010-2011 budget (including no dues increase); the reappointment of Brian Connolly, president and chief executive officer, Oakwood Healthcare Inc., Dearborn, as a hospital provider director to the Blue Cross Blue Shield of Michigan Board or Directors; and approval of two new Type III-A membership applications (CSM Group, a company delivering construction management services located in Kalamazoo, and Smith & Johnson, Attorneys, PC, a full-service law firm located in Traverse City). Questions regarding the board's activities should be directed to David Seaman at the MHA.

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Last week, President Barack Obama presented his fiscal year (FY) 2011 budget to the U.S. Congress. The budget proposal includes $25 billion for Medicaid assistance to states by extending the higher federal medical assistance percentage (FMAP) through June 30, 2011. For Michigan, the extended FMAP would result in an estimated $500 million for the state Medicaid program. The enhanced FMAP, granted to states through the American Recovery and Reinvestment Act, is scheduled to end Dec. 31, 2010. Without the extension, Michigan's FMAP will drop by approximately 10 points, causing a loss of $725 million in federal funding in FY 2011.

The U.S. House of Representatives passed the FMAP extension as part of its Jobs for Main Street Act of 2010 (H.R. 2847) in December, which is currently pending before the U.S. Senate. The U.S. Senate could take up a different version of a jobs bill this week that includes an FMAP extension.

The increased FMAP is a crucial element to avoiding state Medicaid cuts. If a vote on the FMAP extension is scheduled, MHA members will be notified and asked to contact members of Michigan's congressional delegation to urge support of the expansion. Members with questions should contact Laura Appel at the MHA.

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Gov. Jennifer Granholm gave her final State of the State (SOS) speech last week, focusing primarily on job creation and education. The governor stressed that the economy must continue to diversify, as the industrial economy that Michigan has known for 100 years is gone.

The life sciences corridor, which includes health care research and development of medical devices, was identified as a key element in the state's new knowledge-based economy. Advanced manufacturing, homeland security, clean energy, tourism and the film industry were highlighted as important sectors for job growth in the coming years. The governor also introduced several initiatives to support entrepreneurs and small business development; however, proposals to advance innovation or funding for health care services were not included.

Throughout the speech, education was identified as a critical factor in attracting and maintaining employment opportunities in Michigan. As a result, the governor stated she would not support additional cuts to K-12 or higher education funding.

The governor did not discuss potential solutions for the state's more than $1.6 billion budget shortfall for fiscal year (FY) 2011; however, she described the current budget process as "a last-minute, crisis-driven disaster." Gov. Granholm urged the Legislature to send her a completed FY 2011 budget by July 1 and expressed support for a constitutional amendment proposal that would reduce state lawmakers' and the governor's pay every day the budget is not finished after July 1.

Before the SOS address, the governor released several reform proposals that would eliminate lifetime health care benefits for lawmakers, offer retirement incentives for state government and public school employees, increase employee contributions to state health care insurance plans, establish a Medicaid inspector general, require competitive bidding for local units of government, and more.

On Thursday, State Budget Director Robert Emerson will present the executive budget proposal to the Legislature. The reform proposals and a tax restructuring proposal will likely be included in the executive budget recommendation as mechanisms to solve the structural budget deficit. In closing, the governor told lawmakers that approving the FY 2011 budget will require "a large measure of courage."

MHA members will receive additional information on Gov. Granholm's FY 2011 executive budget recommendations and their impact on Michigan hospitals soon after the budget director's presentation. Members with questions should contact Dave Finkbeiner at the MHA.

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On Jan. 27, CGI Technologies and Solutions, the Medicare recovery audit contractor (RAC) for Michigan and neighboring Great Lakes states, mailed its first requests for medical records to hospitals. Approximately 75 Michigan Medicare prospective payment system hospitals were asked to provide medical record information for Medicare fee-for-service inpatient claims. No letters were sent to critical access hospitals. The request for medical records was based on the list of issues approved by the Centers for Medicare & Medicaid Services (CMS) and included on the CGI Web site.

Due to an error, CGI did not use the RAC contact information provided by hospitals and, as a result, letters may have been routed incorrectly at hospitals. CGI has requested that hospitals contact the CGI Technologies and Solutions call center at (877) 316-7222 to ensure that the correct mailing information is on file. In the meantime, hospitals should check throughout their facilities to determine whether a letter has been received and, if so, ensure that it is routed appropriately. Based on CMS guidelines, CGI Technologies and Solutions indicated that hospitals that received a letter dated Jan. 27 will not receive another request for at least 45 days. Questions regarding this first set of requests or any aspect of the Medicare RAC program should be directed to Marilyn Litka-Klein at the MHA.

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The American Hospital Association (AHA) annually recognizes two individuals from Michigan as the Most Valuable Political Action Committee Players. The award recognizes individuals who raise -- rather than simply contribute -- money for the AHA Political Action Committee (PAC) and the MHA Health PAC.

Plaques honoring the 2009 Most Valuable PAC Players are displayed by (left to right) Byas, Connolly, Murtha and Maidlow.

At the recent MHA Board of Trustees meeting (see related story), Spencer Maidlow, 2010 MHA Health PAC chair and president and chief executive officer (CEO), Covenant HealthCare, Saginaw, and AHA Regional Executive Kim Byas honored Brian Connolly, president and CEO, Oakwood Healthcare Inc., Dearborn, and Patrick Murtha, CEO, St. Joseph Health System, Tawas City, for their exceptional fundraising efforts in 2009. The MHA Health PAC Board congratulates Connolly and Murtha for their hard work and dedication in helping to raise money for lawmakers who will advocate on behalf of Michigan hospitals during critical health care debates in Washington, DC.

On a related note, the 2010 MHA Health PAC fundraising campaign begins March 1. MHA-member hospitals electing to have the association prepare and mail Health PAC solicitation materials are encouraged to complete and return the Mailing Service Form to Stacy Dowdy at the MHA by Feb. 19. With a state budget deficit of more than $1.6 billion, potential implementation of health care reform mandates, and the critical importance of the national and state elections, the MHA Board of Trustees urges every member of the hospital community to personally contribute to Health PAC in 2010. For more information on Health PAC, including general campaign information, materials and updated information about hospital-specific goals, members should contact Stacy Dowdy at the MHA.

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In anticipation of the Feb. 16 deadline for 2010 Patient Safety & Quality Leadership Award nominations, members are encouraged to complete the nomination this week. This award honors governing board members, executives and clinicians who exemplify leadership in patient safety and quality improvement work that keeps patients at the center of care. To be eligible, a nominee must represent an MHA-member organization in good standing. Nominations will be judged on a 100-point scoring system based on criteria in three categories: leadership, collaboration and personal knowledge, and patient-centered improvement.

The awards will be presented April 19 at the MHA Patient Safety and Quality Symposium in Dearborn.

Nominations should be printed, completed, and submitted via fax or mail. For more information, contact Sam R. Watson at the MHA.

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Last week, the MHA provided correspondence to the Michigan Departments of Human Services (DHS) and Community Health regarding significant cash flow problems hospitals are experiencing as a result of the state's implementation of the new Bridges and CHAMPS systems. The Community Health Automated Medicaid Processing System (CHAMPS) was launched in September to replace the previous Medicaid Management Information System, and Bridges is used to determine eligibility for all of Michigan's social service programs, including food stamps, cash assistance and Medicaid.

For the hospitals that submitted data to the MHA Monthly Financial Survey for January through November 2009 and the same period in 2008, Medicaid days in accounts receivable have increased from 63 to 78 days on a statewide basis. This increase can be attributed to several key factors, including:

• There has been an increase in case loads per DHS worker.
• The number of Medicaid and other social service applications has increased.
• The complexity of the Bridges system has slowed application processing.
• A lack of reporting within the system results in the inability to determine whether the state is in compliance with federal Standard of Promptness requirements.
• There is a shortage in staff resources for processing Medicaid applications.
• Inaccuracies in the eligibility verification system result in inaccurate pending and coverage information.
• The lack of hearing officers has resulted in long delays for cases where there is a hearing.

While the MHA understands that efforts to resolve issues in both Bridges and CHAMPS have occurred, the increased administrative burdens continue to be a concern. If Medicaid coverage is denied, the hospital must make additional efforts to obtain payment, further delaying payment and increasing the likelihood of receiving no payment for services already provided. In its letter, the MHA urged the state to authorize overtime for DHS workers at both state and local county DHS offices to help reduce the backlog of Medicaid applications currently pending approval. Members with questions should contact Vickie Seal at the MHA.

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The Michigan Green Health Care Committee focused on the major issues of pharmaceutical waste and environmental purchasing in 2009. The committee partnered with the Michigan Apple Committee to conduct a statewide campaign for hospitals to learn about purchasing more local, sustainable food. The Michigan Apples in Michigan Hospitals campaign was rolled out to support healthy foods in hospitals and to promote the economy in the state, which is the third largest apple grower in the nation. The Michigan Apple Tool Kit was created by the committee and is available online to assist hospitals as they carry out the initiative. This collaborative program demonstrates the ongoing commitment of Michigan hospitals to improve community health and support the state.

The committee also addressed pharmaceutical waste regulations that apply to hospitals and health care facilities through an advisory group comprised of representatives of Michigan hospitals and the Michigan Department of Natural Resources and Environment. The advisory group is charged with seeking clarity about standard practices and regulations of the pharmaceutical disposal methodologies. The advisory group has been meeting monthly since it first convened in December.

Read the committee's 2009 Recap Newsletter for more information about its past activities and upcoming events. Any questions regarding the Michigan Green Health Care Committee should be directed to Paige Hathaway at the MHA.

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• The Task Force on Hospital-Physician Alignment will meet from noon to 3 p.m. Tuesday at MHA headquarters, Lansing. Jerome Frankel, DO, president of Oakland-Southfield Physicians, will join the task force to provide an overview of his organization and the key challenges and opportunities for Michigan physician organizations. For more information, contact Brian Peters at the MHA.

• The Blue Cross Blue Shield of Michigan Participating Hospital Agreement Payment Practices Committee will meet Wednesday. For more information, contact Marilyn Litka-Klein at the MHA.

• The MHA Keystone Emergency Room (ER) Senior Executive Champion Immersion webinar will take place from 11 a.m. to noon Thursday. The webinar will include an introduction, a brief overview of the MHA Keystone: ER collaborative, and a discussion of the role of LEAN concepts in MHA Keystone: ER. For more information, contact Kimberly Sepulvado at the MHA.

• The Hospital Council of East Central Michigan (HCECM) Board of Trustees will meet Friday at the Bay Valley Resort & Conference Center, Bay City. For more information, contact Elizabeth Schnettler at the HCECM.