Late last week, the U.S. Senate voted to delay for one month a 23 percent Medicare reimbursement cut for physicians scheduled to take effect Dec. 1. The legislation must still be passed by the House of Representatives and signed by the president before the delay would take effect. The delay would allow Congress to examine potential permanent solutions for a long-standing, flawed reimbursement formula known as the sustainable growth rate (SGR). The potential cut is a result of the SGR, a budget solution developed in the late 1990s that ties Medicare reimbursement levels to growth of the United States gross domestic product (GDP). However, because healthcare inflation has grown much more rapidly than the nation's GDP, the SGR has called for cuts to Medicare reimbursement every year since 2002. To avoid the cuts, Congress has enacted several laws that delay reimbursement decreases, resulting in an accumulated, massive, looming cut to Medicare physicians that threatens services to Medicare recipients.

The American Medical Association has endorsed a 13-month delay of the reimbursement cut, during which Congress could develop and finalize a permanent fix for the SGR. The MHA and the American Hospital Association continue to support the development of a long-term solution to ensure continued access to high-quality healthcare services for Medicare recipients without risking the viability of the healthcare safety net. Members with questions should contact Laura Appel at the MHA.

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Individuals with specific pre-existing medical conditions are now eligible to receive healthcare insurance through the state's new high-risk pool - formally known as the Health Insurance Program (HIP) for Michigan.

As part of an overall strategy recently approved by the MHA Board of Trustees, the association is urging its members to encourage eligible patients to consider enrollment in HIP Michigan, helping hospitals achieve their mission of providing care to all who walk through their doors, while also reducing the facility's financial burden. To help raise awareness of HIP Michigan and how it can benefit patients and hospitals, the MHA has developed a comprehensive electronic communications toolkit that includes print-ready flyers and posters, talking points, customizable templates and more.

The MHA joins the Michigan Association of Health Plans, the Michigan Office of Financial and Insurance Regulation and the Michigan Organization of Nurse Executives in these efforts and plans to participate in media events to raise awareness of the program throughout the state in coming months. For information about the toolkit or to join the awareness efforts, contact Kevin Downey at the MHA. For information on how this program can reduce hospitals' uncompensated care, contact Peter Schonfeld at the MHA. To learn more about HIP Michigan or to apply for coverage, visit www.HIPMichigan.com.

*This article was edited May 10, 2011, with updated HIP Michigan information.

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MHA PSO Board Chair Paul Conlon, PharmD, JD, presents Janet Olszewski with a service recognition plaque.

The MHA Patient Safety Organization (PSO) Board of Directors met recently to address key priorities of the MHA PSO and its member hospitals.

During the meeting, board members discussed the pending transition for many member hospitals to an automated data transfer process, an upgrade that will significantly enhance the efficiency of the serious adverse event reporting process for hospitals. The automation is a valuable investment; while improving safety and quality for patients by increasing the amount of data hospitals are able to transfer and analyze, it will also save participating hospitals' staff members time and resources, allowing them to focus on direct patient care.

In addition, the board received an update on a recently released wrong-site surgery toolkit distributed to MHA PSO hospitals as a member benefit to address key issues related to the prevention of surgical adverse events. The information in this toolkit is intended to help in identifying process problems and redesign solutions, ultimately enhancing safety in the operating room.

The board also discussed additional opportunities to enhance safety and quality of care for Michigan patients through sharing of preventive strategies and information.

Finally, the MHA PSO formally recognized Janet Olszewski for dedicated service on the MHA PSO Board of Directors and her eight years as director of the Michigan Department of Community Health. During her time on the board, Olszewski has contributed valuable time and talent to making Michigan a safer place for patients by supporting the MHA PSO and its member hospitals in their voluntary efforts to collect data and improve care. Members with questions on MHA PSO Board activities should contact Sam R. Watson at the MHA.

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Last week, the MHA submitted its comments to the Medical Services Administration (MSA) regarding the recent proposed policy to implement the Centers for Medicare & Medicaid Services (CMS) payment policy for outpatient services provided within three days of an inpatient admission. Under this proposal, effective Jan. 1, 2011, the MSA would follow Medicare's policy for all preadmission diagnostic services and other preadmission services, with a few exceptions. No nondiagnostic services rendered in the three-day window prior to the inpatient hospital admission could be billed separately and would instead be bundled into the inpatient stay, unless the hospital can document they are unrelated services. The MSA indicates the implementation of this policy will facilitate coordination of benefits and relieve the administrative burden of processing institutional crossover claims for adjudication.

In its comments, the MHA requested that the MSA:

• Exclude critical access hospitals from the proposed policy, since they are not currently subject to the Medicare policy for these services. Requiring these hospitals to comply with the proposed Medicaid policy would result in billing inconsistencies.
• Delineate both the current MSA policy and the proposed policies, highlighting the changes.
• Provide examples of bundled services under both the current and proposed policies.

Hospitals are encouraged to review the proposed policy and submit their comments to the MSA by Nov. 26. Members with questions should contact Vickie Seal at the MHA.

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A second cohort of emergency department teams will join the MHA Keystone: Emergency Room (ER) collaborative of the MHA Keystone Center for Patient Safety & Quality in December. Letters of invitation and informational materials were sent Oct. 27 to chief executive officers, chief operating officers, chief nursing officers, chief medical officers, and directors of quality and patient safety of MHA-member hospitals that are not currently involved in the MHA Keystone: ER collaborative.

MHA Keystone: ER seeks to prevent harm to emergency patients through interventions including a Comprehensive Unit-based Safety Program, known as CUSP, to improve safety attitudes and practices, the reduction of boarding/overcrowding and wait times using Lean practices, and the early treatment of sepsis using evidence-based best practices. These interventions ensure the most critically ill patients receive treatment first and reduce the likelihood that a patient will leave a hospital before receiving appropriate treatment.

Letters of commitment to join the MHA Keystone: ER collaborative are due Dec. 3. Members with questions should contact Brittany Bogan at the MHA Keystone Center.

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The MHA submitted its comments last week to the Medical Services Administration (MSA) regarding its proposed policy to reinstate the Small Hospital Disproportionate Share Hospital (DSH) Pool, expand the Outpatient Uncompensated Care DSH Pool, and change the timing of Medicaid fee-for-service (FFS) graduate medical education (GME) payments, effective upon federal approval. In its comments last week, the MHA supported the MSA's proposals to:

• Change the timing of Medicaid FFS GME payments to quarterly rather than one payment at the end of the state fiscal year. This change would provide needed cash flow to hospitals that train the state's future physicians.
• Reinstate and/or expand the aforementioned Medicaid DSH pools. This change would provide needed funding to hospitals that serve a disproportionate share of indigent patients. The MHA also recommended that the MSA provide hospital-specific payment estimates for each of the Medicaid DSH pools addressed in the policy proposal.

The MHA urges all hospitals to review the proposed policy and submit their comments to Meghan Sifuentes at the MSA prior to Saturday's deadline. Members with questions should contact Jason Jorkasky at the MHA.

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In October 2012, the Patient Protection and Affordable Care Act requires that the Centers for Medicare & Medicaid Services (CMS) launch a Medicare bundled payment initiative, selecting certain patient conditions and paying a single, inclusive rate for a patient's stay and all services related to a specified procedure. Hospital, physician and post-acute services all will likely be in the defined "bundle." The amount of the bundled payment may be determined by the CMS or may be awarded to healthcare systems based on their "bid." Over time, the number of conditions subject to bundled payment will be increased. Every hospital that admits Medicare patients likely will be affected, which is why hospitals should closely examine how to prepare for the impact of bundled payment. The MHA Health Foundation webinar Accountable Care Organizations and Bundled Payment: New Approaches to healthcare Delivery will help attendees understand how bundled payment may work based on current CMS-sponsored demonstration projects; create structures and financial systems that align performance requirements of physicians and post-acute providers participating in the bundled payment; identify how care protocols and technology can help eliminate high-cost, unproductive steps in care delivery; and prioritize actions needed to be financially sustainable under an impending bundled payment system.

The webinar will be held from 11 a.m. to noon Dec. 9 and has a connection fee of $195 per MHA-member organization. To learn more or for assistance with registration, contact Leigh Anne Jewison at the MHA.

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Last week, the Medical Services Administration (MSA) distributed correspondence to hospitals regarding preliminary quarterly payment amounts from the tax-funded Medicaid Access to Care Initiative (MACI) pool for fiscal year 2011. Hospitals are encouraged to review this information by Nov. 30 to determine whether these payment amounts will result in exceeding their individual hospital charge and cost limits. Hospitals should notify the MSA if they opt to receive a reduced payment amount to avoid exceeding the mandated charge and cost limits so these amounts can be re-distributed to the remaining eligible hospitals. A federal regulation requires that Medicaid fee-for-service (FFS) inpatient payments to an individual hospital cannot exceed charges. These include diagnosis-related group, capital, graduate medical education and MACI payments. For Medicaid FFS outpatient services, a state regulation stipulates that Medicaid FFS payments cannot exceed cost. Disproportionate share hospital payments are excluded when calculating these limits, which apply by hospital fiscal year. The MSA anticipates distribution of first-quarter MACI payments in late December, with the corresponding tax bills due in early January. Members with questions should contact Jason Jorkasky at the MHA.

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Michigan hospitals have garnered 10 percent of the places on the 2010 Thomson Reuters list of the top cardiovascular hospitals nationwide. Now in its 12th year, the study has, for the first time, singled out 50 hospitals rather than the traditional 100 winners. Five of these elite hospitals are in Michigan.

The study examined the performance of 1,022 hospitals by analyzing outcomes for patients with heart failure and heart attacks and for those who received coronary bypass surgery and percutaneous coronary interventions such as angioplasties.

In the category of teaching hospitals with cardiovascular residency programs, winning Michigan hospitals include Providence Hospital and Medical Center, Southfield; St. Joseph Mercy Oakland, Pontiac; and St. John Macomb-Oakland Hospital, Warren.

Among the winners in the category of teaching hospitals without cardiovascular residency programs are Marquette General Hospital and Munson Medical Center, Traverse City. No Michigan facilities were chosen in the community hospitals category.

Michigan is one of three states with the highest number of winning hospitals. Florida hospitals won six spaces, and Ohio and Michigan each filled five positions.

The MHA submitted its comments last week to the Medical Services Administration (MSA) regarding its proposed policy to rebase Medicaid hospital diagnosis-related group (DRG) rates and weights and update hospital rehabilitation unit per diem rates, effective Jan. 1, 2011. In addition, the Medicaid policy would update DRG weights to Medicare Severity DRG Grouper version 28 that was implemented by Medicare Oct. 1, 2010. The proposed Medicaid policy would also require hospitals to report present-on-admission (POA) indicators on inpatient claims. Key changes proposed for fiscal year 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.
• Using 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-calculated, cost-based rates will be adjusted to maintain budget neutrality on a statewide basis.

In its comments last week, the MHA requested that the MSA include only FFS data to establish FFS hospital rates and weights and to calculate the budget neutrality factor, since the HMO claims are not representative of the FFS population and may inappropriately skew both the weights and rates for FFS patients. Medicaid HMOs contract directly with hospitals and establish their own reimbursement models and make a conscious business decision each time they use FFS rates as a basis for hospital reimbursement in lieu of independently determining a basis for payment.

The MHA urges all hospitals to review the proposed policy and submit their comments to Meghan Sifuentes at the MSA prior to the Nov. 30 deadline. A final policy is anticipated to be released by Dec. 1 for the Jan. 1 effective date. Members with questions should contact Jason Jorkasky at the MHA.  

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The Michigan Health Insurance Access Advisory Council Annual Meeting & Networking Luncheon is scheduled from noon to 3 p.m. Dec. 14 at the Radisson Hotel, Lansing. MHA members are encouraged to attend the meeting, which is themed "healthcare Reform: Next Steps for Michigan!" and will include a keynote speaker with a national view on healthcare reform and a panel of experts with a variety of perspectives on Michigan's challenges.

Seating is limited for this event and members are encouraged to reserve their spaces by completing a registration form before the Dec. 9 deadline. For more information, contact Brian Peters at the MHA.  

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• The MHA Small or Rural Hospital Council will meet from 12:30 to 2:30 p.m. Tuesday, Nov. 30, at MHA headquarters, Lansing. The council will discuss barriers in access to women's and children's healthcare services in Michigan and will also hear a presentation from the Health Insurance Program for Michigan, which serves as the state's designated health plan under the Patient Protection and Affordable Care Act for individuals with pre-existing conditions seeking healthcare coverage. For more information, contact Amy Barkholz at the MHA.

• The MHA Business Advisory Council will meet at noon Wednesday, Dec. 1, at MHA headquarters, Lansing. This meeting will focus on the impact of federal healthcare reform on the Michigan insurance market. For more information, contact Brian Peters at the MHA.

• An MHA Keystone: Obstetrics workshop will be held from 8 a.m. to 3:45 p.m. Wednesday, Dec. 1, at the Kellogg Hotel & Conference Center, East Lansing. Attendees will discuss strategies to promote safe and effective obstetrics and perinatal care in labor and delivery units in Michigan. For more information, contact Morgan Martin at the MHA.

• The MHA Legislative Policy Panel will meet from 9:30 to 11:30 a.m. Thursday, Dec. 2, at the MHA Capitol Advocacy Center, Lansing. The Legislative Policy Panel will make a recommendation to the MHA Board of Trustees on auto no-fault legislation and look ahead to the 96th state Legislature by hearing from one of its incoming leaders. For more information, contact David Finkbeiner at the MHA.

• A report released last week by the Economic Policy Institute indicates that the number of people in Michigan who have health insurance through their employers dropped by 10.4 percentage points between the two-year periods 2000-2001 and 2008-2009. That is the second-highest percentage point drop in the nation, following Indiana's 11.4 percent decline, and equates to nearly a million Michigan residents who lost employer-sponsored health insurance during that time span. The study supports the experiences of Michigan hospitals and illustrates the need for adequate funding of the state's Medicaid program.

• Blue Cross Blue Shield of Michigan (BCBSM) will begin accepting applications Jan. 17 for its 2011 Building Healthy Communities grant program. The program is designed to support school and community efforts to encourage healthy lifestyles and reduce the risk of childhood obesity. Hospitals interested in being part of this grant opportunity should partner with a local elementary school, which must submit an online Notice of Intent form by Feb. 11 and a full grant proposal by March 13. The necessary forms and grant details will be available Jan. 17. Contact BCBSM for additional information.

• A Nov. 29 edition of the MHA Monday Report will not be published due to the Thanksgiving holiday. The next issue will be dated Dec. 6. Have a safe and healthy celebration!