The MHA's key priorities for election year 2010, established in collaboration with the MHA Board of Trustees, were officially achieved last Tuesday as voters turned out at the polls and the campaign season concluded.

The all-important Michigan Supreme Court race was won by Republican Party nominees, incumbent Justice Bob Young and Wayne County Circuit Court Judge Mary Beth Kelly, whom the MHA supported. This creates a four-member, conservative majority on the court. Republican Bill Schuette, who was endorsed and actively supported by the MHA, defeated Democrat David Leyton for the office of Attorney General. Schuette has a positive track record and a history of cooperation and partnership with the hospital community.

The MHA was a founding partner of a coalition opposed to a state constitutional convention. That ballot question was soundly defeated at the polls, sparing Michigan from an unnecessary effort of potentially unlimited scope and cost. Lastly, Michigan voters passed a proposal to ban felons convicted of fraud, dishonesty and deceit from holding elected or appointed office.

As predicted, Republican gubernatorial nominee Rick Snyder won election by an overwhelming margin. While the MHA did not endorse a gubernatorial candidate, the association is encouraged that Snyder included improving Medicaid reimbursement for providers as a key element in his plan to reform the healthcare system. In the race for Michigan Secretary of State, Republican nominee Ruth Johnson was victorious over Democratic nominee Jocelyn Benson. In addition, Republicans gained a super majority (26-12) in the state Senate and a majority in the state House (63-47).

At the federal level, Republicans added two seats in the Michigan congressional delegation: Dan Benishek, MD, will replace retiring Democratic U.S. Rep. Bart Stupak, and Tim Walberg defeated Democratic U.S. Rep. Mark Schauer in District 7. The congressional delegation now stands at nine Republicans and six Democrats. Importantly, the Michigan delegation has the potential to play significant roles in committees with jurisdiction over health affairs. U.S. Rep. Dave Camp (R-Midland) is slated to become the chairman of the House Ways and Means Committee, which oversees Medicare Part A, setting Medicare policy for hospital reimbursement and regulation. Rep. Sander Levin (D-Royal Oak) could remain ranking minority member of the Ways and Means Committee. Rep. Fred Upton (R-St. Joseph) is considered the front runner to become chairman of the House Energy and Commerce Committee, which has oversight of public health issues, biomedical programs, health insurance and Medicaid.

MHA members are thanked for their sustained efforts this election season to directly engage candidates, discuss critical issues and support healthcare champions. For complete state election results, visit the Secretary of State website. Members with questions should contact Dave Finkbeiner at the MHA.

Back to Top

Last week, the Centers for Medicare & Medicaid Services (CMS) released its final rule to update the Medicare outpatient prospective payment system (OPPS) effective Jan. 1, 2011.  Key highlights of the rule include:

• A marketbasket update of 2.35 percent, resulting from the 2.6 percent marketbasket being reduced by 0.25 percentage points mandated by the Patient Protection and Affordable Care Act.
• Waiving the beneficiary deductible and copayment for certain preventive services that are paid under the OPPS.
• The addition of four quality measures to the current list of 11 measures used for reporting purposes, bringing the total number of measures to 15 for the 2012 payment determination. These measures include one structural health information technology measure and three claims-based imaging efficiency measures.
• A quality data reporting validation requirement to ensure that hospitals are accurately reporting measures using chart-abstracted data. While the results will not affect the 2011 payment determination for any hospital, for the 2012 payment determination, the CMS will validate data from 800 randomly selected hospitals and will randomly select up to 12 cases per quarter for each of those hospitals.
• A modification to its physician supervision policy for outpatient therapeutic services. Under the revised policy, the CMS will require direct supervision for the initiation of a service, followed by general supervision for a limited set of "non-surgical extended duration services," including observation services, effective Jan. 1, 2011. This requirement will not be enforced for critical access hospitals or small rural hospitals with 100 or fewer beds for 2011. The CMS is also modifying the definition of "direct supervision" for all hospital outpatient services to require "immediate availability" without reference to the boundaries of a physical location.
• Establishment of four separate rates for partial hospitalization services, with two per diem rates for hospitals and two for community mental health centers, with the rates phased in over a two-year period.

The MHA will provide additional information regarding the final rule and hospital-specific impact analyses in the next few weeks. Detailed OPPS reports for each facility will be available in early 2011. Members with questions should contact Vickie Seal at the MHA.

Back to Top

The Medical Services Administration (MSA) recently released a proposed policy to rebase Medicaid hospital diagnosis-related group (DRG) rates and weights, update hospital rehabilitation unit per diem rates, and implement Medicare Severity DRG Grouper version 28 effective Jan. 1, 2011. In addition, the Medicaid policy would require hospitals to report present-on-admission (POA) indicators on inpatient claims. Key changes proposed for FY 2011 include:

• Using two years of Medicaid fee-for-service (FFS) paid claims and Medicaid health maintenance organization (HMO) encounters to rebase DRG rates and weights. The MSA historically used four years of only FFS paid claims.
• Developing separate FFS and HMO cost ratios to calculate a single set of DRG rates and weights. FFS outlier and transplant claims would be processed using the FFS cost ratios, with similar HMO claims for out-of-network hospitals processed using the HMO cost ratios. Historically, the MSA calculated an FFS cost ratio for these purposes.
• Including two years of cost report data instead of three years.
• Calculating a single rate for all critical access hospitals (CAHs) rather than hospital-specific rates.
• Requiring POA indicators on inpatient claims. The MSA proposes to adopt Medicare's payment policy for hospital-acquired conditions and require acute-care hospitals and CAHs to report POA indicators on inpatient claims. Claims submitted without a required POA indicator would be denied. The MSA began collecting POA edits on inpatient claims for informational purposes Oct. 1, 2010.

Consistent with past practice, hospital rates will be adjusted to maintain budget neutrality on a statewide basis.

The MHA will make its comments available to hospitals in the next few weeks and encourages hospitals to review the proposed policy and submit comments to Meghan Sifuentes at the MSA prior to the Nov. 30 due date. Members with questions should contact Jason Jorkasky at the MHA.

Back to Top

Last week, the Medical Services Administration (MSA) hosted a conference call regarding business-to-business testing for ambulatory surgical centers (ASCs). As indicated in the MSA policy, effective Jan. 1, the MSA will reimburse ASCs for services provided to Medicaid beneficiaries, with reimbursement based on a percentage of the Medicare ASC rate schedule. The MSA recently completed preliminary testing and successfully adjudicated test claims for some ASCs. The MSA encourages all Medicaid-enrolled ASC providers and their billing agents to participate in the business-to-business testing with claims submitted using the 837 professional format rather than the 837 institutional format. The agency will provide specific information on its website regarding the business-to-business testing process. Members with questions should contact the MSA or Vickie Seal at the MHA.

Back to Top

The Medical Services Administration (MSA) recently released a proposed policy regarding the billing of Medicaid outpatient services provided within three days of an inpatient hospital admission. Consistent with the Medicare policy, the MSA will treat these services as part of the inpatient claim, with a few exceptions, effective for dates of service on and after Jan. 1, 2011. Current Medicare and Medicaid policy requires hospitals to bill all diagnostic services provided in their outpatient departments on the day of an inpatient admission and on the three days prior to the admission as part of the inpatient stay. In addition, current policy requires all "related" nondiagnostic services provided within the three days prior to an admission to be included in the inpatient claim.

In a clarification of the Medicare policy issued by the Centers for Medicare & Medicaid Services (CMS) in July, the CMS explained the terms "related" and "unrelated" for purposes of this policy. For Medicare, the clarification states that all nondiagnostic services provided within the three days prior to an admission are "deemed related to the inpatient admission and all services must be billed with the inpatient stay." Hospitals may only bill for these services separately if they can document that the services are unrelated to the inpatient admission, with documentation maintained in the patient's medical record and made available for post-payment audit upon request. The policy does not apply to maintenance renal dialysis or ambulance services.

Effective Jan. 1, 2011, the MSA proposes to implement the same policy, but notes that, unlike Medicare, the policy will also apply to specialty hospitals and facilities. The MSA will accept comments until Nov. 26. Members with questions should contact Vickie Seal at the MHA.

Back to Top

The Medical Services Administration (MSA) recently released a proposed policy affecting reimbursement for graduate medical education (GME) and disproportionate share hospitals (DSH). The proposal would reinstate the Small Hospital DSH Pool, expand the Outpatient Uncompensated Care DSH Pool, and change the timing of Medicaid fee-for-service (FFS) GME payments, effective upon federal approval.

The Medicaid Small Hospital DSH Pool, which was implemented in fiscal year (FY) 2005 and eliminated as part of the FY 2010 budget, will be reinstated and expanded from $5 million to $7.5 million. In addition, the Outpatient Uncompensated Care DSH Pool will be expanded by $27 million and split evenly between the small-rural hospital and large-urban hospital components of the pool. Each eligible hospital's share of these pools will be based on the MSA's established policy for each pool. While these DSH pool expansions are a one-time increase that will be paid during state FY 2011, pending federal approval, payments from these pools will count against hospital-specific DSH ceilings for state FY 2010.

The MSA proposes to make payments from the FY 2011 Medicaid FFS GME pools quarterly rather than generating an annual payment in September as has been done in recent years.

The MHA will make its comments available to hospitals in the next few weeks and encourages hospitals to review the proposed policy and submit comments to Meghan Sifuentes at the MSA prior to the Nov. 27 due date. Members with questions should contact Jason Jorkasky at the MHA.

Back to Top

The MHA sponsorship program is designed to provide businesses with exposure to and interaction with key decision-makers of MHA-member hospitals and healthcare providers, providing numerous opportunities to support association events and meetings throughout the year. Sponsorship opportunities are now available for the MHA Health Foundation Winter Leadership Conference, to be held Feb. 21 and 22 at the Grand Traverse Resort & Spa, Acme.

The MHA's ability to offer a five-star conference on a limited budget depends on the generosity of sponsoring organizations. The Winter Leadership Conference is the most popular education and networking event for Michigan small and rural hospital chief executive officers and senior leaders and is the place for them to gain critical new skills. Sponsorship offers a variety of ways for organizations to gain visibility among this group of executives, from recognition in the brochure and meeting guide to the opportunity to display promotional literature to verbal thanks throughout the event.

To become a sponsor and be recognized in the conference brochure, refer to the MHA Sponsorship Brochure and submit the Intent to Sponsor form to the MHA no later than Dec. 17. All sponsorships are due Jan. 17. For more information, contact Sara Miller at the MHA.

Back to Top

Beginning in 2010, the Internal Revenue Service (IRS) has updated its Form 990 to include the Schedule H form, a newly required submission of nonprofit hospitals designed to collect meaningful information about the many benefits hospitals provide to their communities. Data from the Schedule H will become publicly available by means of hospital websites and public databases after filing, and it is important for Michigan hospitals to ensure that their data is being calculated and represented accurately.

To help hospitals streamline the collection of their community benefit activities data and gather community benefit event information quickly and easily, the MHA offers the Community Benefits Tracker Hospital Event Module. Community Benefits Tracker is a hosted, Web-based data collection and reporting system developed by the MHA Data Services department. The Tracker IRS 990 Schedule H module gives hospitals the ability to easily total events into categories and include vital financial data. MHA-member hospitals are encouraged to take advantage of Community Benefits Tracker and ensure that their dedication to serving local residents is well represented. For more information about the tool or to request a 90-day free trial, contact Rosanne Tersigni at the MHA.

In addition, the American Hospital Association (AHA) is working with tax-exempt specialists at Ernst & Young to collect and analyze Schedule H forms that have been filed with the IRS to pinpoint weaknesses, advocate for necessary changes, and better understand how well Schedule H conveys community benefit information to the public. The AHA's Schedule H Project, launched last week, collects filed Schedule H forms through a secure website and will provide participants with a concise benchmark report summarizing the responses of similar hospitals to certain questions. Hospitals may submit filed Schedule H forms through Jan. 15, 2011. For more information about the Schedule H Project, contact AHA Member Relations at (800) 424-4301.

Back to Top

The eighth class of the MHA Excellence in Governance Fellowship was recently launched in conjunction with the MHA Governance Leadership Forum in Plymouth. Twenty-four hospital governing board members joined this unique learning collaborative designed specifically for healthcare trustees. The eighth class represents the largest cohort of fellows since the inception of the program. Throughout the fellowship, fellows will participate in a series of intensive face-to-face learning collaboratives, online discussions and study groups. Session one of the fellowship focused on values and leadership styles, board roles and responsibilities, oversight, mission-focused governing and strategic thinking. Class eight fellows include Tim Baroni, Portage Health, Hancock; Laura Benitez, Gratiot Medical Center, Alma; Bill Boyce, Otsego Memorial Hospital, Gaylord; Paul Compo, Mercy Hospital, Grayling; Sue Cook, Marlette Regional Hospital; Brad Cory, Marquette General Hospital; Joan David, MidMichigan Health, Midland; Rossana DeGrood, MD, St. Joseph Mercy Health System, Ann Arbor; Mark Douglas, Henry Ford Hospital, Detroit; Dick Graybill, Bell Memorial Hospital, Ishpeming; Terry Harris, Borgess Lee Memorial Hospital, Dowagiac; Brad Johnson, Pennock Health Services, Hastings; Dan Johnson, Kalkaska Memorial Health Center; Bob LoFiego, MidMichigan Health; Dean McCulloch, Kalkaska Memorial Health Center; Maureen Brosnan, St. Joseph Mercy Health System; Bassam Nasr, MD, Port Huron Hospital; Pat Nelson, Gratiot Medical Center; Jeanne Oakes, Memorial Medical Center of West Michigan, Ludington; John Ogden, Port Huron Hospital; Kellie Parkes, West Shore Medical Center, Manistee; Clara Saari, West Shore Medical Center; Mike Turnbull, Port Huron Hospital; and Ron Verch, MidMichigan Health. The class will continue its work for the next nine months, with graduation slated for June 2011. Applications to nominate individuals to become part of the next class of fellows will be available in the near future. For further information on this one-of-a-kind, nationally recognized program, contact Marlene Hulteen at the MHA.

Back to Top

The MHA is once again partnering with the Michigan Healthcare Human Resources Association to present the 2011 Michigan Healthcare Human Resources Conference. This conference provides a unique opportunity for all Michigan healthcare human resource professionals to come together for two days of professional development, continuing education and networking. The conference is scheduled for April 28 and 29 at the East Lansing Marriott at University Place. For additional information, contact Neil Mac Vicar or Wendy Knight at MHA.  

Back to Top

• The MHA Board of Trustees will meet from 9 a.m. to 12:30 p.m. Wednesday at MHA headquarters, Lansing. The board meeting will feature a special session on the election results and what the new makeup of the legislative and executive branches will mean for healthcare in 2011. For more information, contact David Seaman at the MHA.

• The MHA Health Foundation Board will meet from 1 to 3 p.m. Wednesday at MHA headquarters, Lansing. Dennis Archambault, director of Public Affairs, Detroit-Wayne County Health Authority, will join the board to discuss the topic of "essential community health services." For more information, contact Brian Peters at the MHA.

• The MHA Health Foundation webinar Accountable Care Organizations and Bundled Payment: New Approaches to healthcare Delivery - Part I will be held from 11 a.m. to noon Wednesday. This webinar will outline how accountable care organizations are likely to evolve and what opportunities the model may provide to healthcare organizations. Faculty members for this webinar are part of the leadership team at one of the Dartmouth Brookings Accountable Care Organization Demonstration Project sites. For more information, contact Leigh Anne Jewison at the MHA.

• The MHA Patient Safety Organization Board of Directors will meet from 8:30 to 10 a.m. Thursday at MHA headquarters, Lansing, and via conference call. Participants will discuss the surgical error toolkit. For more information, contact Sam R. Watson at the MHA.

• Save the date for the MHA Health Foundation Winter Leadership Conference, designed for small and rural hospital leaders. The conference will be held Feb. 21 and 22 at the Grand Traverse Resort & Spa, Acme. Brochures with details of the event will be available in late December. Questions should be directed to Erin Steward at the MHA.