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Vol. 43, Number 39

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October 22, 2012


Top Stories

State and City Leaders, Analysts, Polls Agree: “NO on Proposal 5”

Graham explained the risks presented by Proposal 5.
Last week, the ranks of Proposal 5 opponents continued to grow as community and state leaders made their concerns known through public events, online videos and new polling.

On Tuesday, St. Mary’s of Michigan hosted a news conference in Saginaw featuring representatives of essential public services — including healthcare, public safety, roads and schools — that would be threatened if Proposal 5 passes. Hospital president and chief executive officer John Graham told media in attendance, “If the state does not have the ability to provide reliable, adequate funding support, it puts patient access to healthcare in Michigan at risk.”

In a video recently released by the Vote No on Prop 5 coalition, Gov. Rick Snyder (R) and Lansing Mayor Virg Bernero (D) form an unlikely alliance to urge voters to reject the constitutional amendment. Two of the most conservative members of the Michigan Legislature, Sen. Arlan Meekhof (R-Olive Township) and Rep. Joe Haveman (R-Holland), urged voters to oppose Proposal 5 in a joint viewpoint appearing on Mlive last week. Respected analysts also posted their assessments of Proposal 5 online in Dome Magazine and Bridge Magazine, exposing its dangerous consequences.

Voter sentiment appears to be reflecting this growing concern, with support for Proposal 5 plummeting from 68 percent in August to 38 percent in October, according to a recent poll released by The Detroit News and WDIV-TV.

Michigan hospitals are encouraged to use the MHA’s Proposal 5 toolkit and sign up to receive news and updates from the Vote No on Prop 5 coalition. For more information, contact Dave Finkbeiner or Kevin Downey at the MHA.

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BCBSM Mutualization Efforts Advance in Legislature

Last week, the State Senate passed Senate Bills 1293 and 1294, the legislative package to allow Blue Cross Blue Shield of Michigan (BCBSM) to become a nonprofit mutual disability insurer subject to the Insurance Code, rather than Public Act 350 of 1980. While a limited number of amendments were adopted, the overall design of the proposal to allow BCBSM to become regulated under the Insurance Code remains intact. Each bill passed by a 33-4 margin, with one member absent.

The most substantive change to the package before it passed the Senate was the codification of the Office of Financial and Insurance Regulation (OFIR) order, which requires prior approval from the OFIR commissioner for most-favored nation clauses in contracts between insurers and providers that begin after Feb. 1, 2013.

Earlier in the committee process, the MHA sought codification of an OFIR order regarding BCBSM provider reimbursement related to shortfalls in government payment, to no avail. Two other amendments related to an “insurer of last resort” and recognition of the provider contract administration process also failed to gain consideration in the Senate.

As it stands, the legislative package now defines the purpose of the trust fund and specifies the composition of the board that would oversee it. The trust fund, to be known as the Michigan Health and Wellness Foundation, would be funded with up to $1.5 billion over 18 years. Senate Bill 1294 stipulates that the governor will maintain primary control over the membership of the trust fund board. The Senate also established that 60 percent of the annual expenditures of the trust fund would be used to subsidize the purchase of Medicare supplemental insurance policies by lower-income senior citizens.

The bill package now moves to the Michigan House of Representatives and deliberation in the House Insurance Committee is expected to begin after the November general election. The MHA, with guidance from the MHA Participating Hospital Advisory Committee, will continue to advocate for association priorities. Members with questions should contact Dave Finkbeiner or Peter Schonfeld at the MHA.

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H.R. 6575 Provides Essential Improvements to the RAC Program

Legislation was introduced in Congress last week that would make greatly needed improvements to the Recovery Audit Contractor (RAC) and other Medicare audit programs. As introduced, H.R. 6575 would limit the number of medical record requests, require medical necessity audits to focus on widespread payment, allow denied inpatient claims to be billed as outpatient claims when appropriate, and require physician review for Medicare denials.

Many Michigan hospitals have experienced ongoing frustration with the growing administrative burden of RAC audits. Despite hospitals' longstanding commitment to compliance, RAC audits have become increasingly onerous, even though few substantive problems have been revealed through the associated expenditure of staff time. Hospitals are experiencing a significant number of inappropriate payment denials amounting to hundreds of thousands of dollars in unwarranted recoupment payments for medically necessary care, and RAC operational problems are persistent and widespread.

MHA members are asked to contact their U.S. House member on this important legislation to provide critically needed relief from the undue administrative burden of these audits. While Congress is currently not in session, this is the time to lay the foundation and establish momentum for RAC legislation in the lame-duck session and into next year. The MHA will be working closely with the American Hospital Association to continue to improve the programs, and member assistance in securing co-sponsors will demonstrate congressional support for change in the RAC program. For more information, contact Laura Appel at the MHA.

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Legislative Policy Panel Reviews Potential Lame-duck Legislation

Recently, the MHA Legislative Policy Panel convened its first meeting of the 2012-2013 program year and was briefed on major legislative initiatives impacting Michigan hospitals. This year, the panel is led by chair David Jahn, president and chief executive officer, War Memorial Hospital, Sault Ste. Marie, and vice-chair Tim Johnson, chief executive officer, Eaton Rapids Medical Center.

The meeting was highlighted by a special presentation from Sen. Bruce Caswell (R-Hillsdale), who provided the committee with an overview of Senate Bill 1245. Sponsored by Caswell, the bill would prohibit Michigan from participating in the Medicaid expansion provision allowable under the Affordable Care Act.

After receiving a recap of the fiscal year 2013 Michigan Department of Community Health budget, the group discussed the MHA Board-approved principles relating to Senate Bills 1293 and 1294, which would allow Blue Cross Blue Shield of Michigan to become a nonprofit mutual disability insurer (see related article).

In a review of the 2011-2012 legislative session, panel members were briefed on potential lame-duck activity on House Bill 4936, legislation that would eviscerate auto no-fault insurance in Michigan, which is still awaiting a vote in the state House. The MHA remains committed to working with the Snyder administration and the state Legislature on an outcome that protects patients and healthcare providers by preserving the country’s best no-fault insurance program.

In final action, the committee received an update on the 2012 election, including details on the critical nature of the elections for the Supreme Court and the MHA’s efforts to defeat Ballot Proposal 5, which would require a two-thirds supermajority vote in each chamber of Michigan’s Legislature to alter, update or modernize the state’s tax system in any way (see related article). For more information, contact Chris Mitchell at the MHA.

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Training Available for Reporting Healthcare Personnel Vaccination Rates

As part of the 2012 hospital inpatient prospective payment system final rule, effective Jan. 1, the Centers for Medicare & Medicaid Services will include reporting healthcare personnel (HCP) influenza vaccination rates as a condition for healthcare facilities to receive full annual payment updates for services to Medicaid and Medicare beneficiaries. This quality improvement measure will assess the percentage of HCP employed at each facility that received a prophylactic vaccination for flu, and the data will be made publicly available on the Hospital Compare website. The Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) system will be the reporting tool for these efforts. A recorded version of a recent training webinar and presentation materials on healthcare influenza vaccination coverage reporting via NHSN are available at the CDC website. Members can also refer to the frequently asked questions on the CDC site for more information.

The Michigan Department of Community Health (MDCH) and the MHA are working together to encourage hospitals to vaccinate HCP to protect their patients, staff and visitors from influenza and pertussis. Vaccination continues to be the most effective method for preventing influenza and its complications.

Members with questions on available resources or materials should contact Cristi Carlton at the MDCH Division of Immunization. All other questions should be directed to Leigh Anne Jewison at the MHA.

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CMS Places High Priority on Patient Safety and Quality of Care

The Centers for Medicare & Medicaid Services (CMS) continues to place a high priority on patient safety and the quality of care. The new Partnership for Patients: Better Care, Lower Costs initiative is aimed at keeping patients from getting injured or harmed while in the hospital. Major revisions to the discharge planning, infection control and performance improvement worksheets have been made.

The MHA Health Foundation webinar CMS on Meeting Partnership for Patients Goals: Discharge Planning, Infection Control and Performance Improvement in the Spotlight will explain the steps for accurately completing the CMS worksheets for these three areas. The webinar is scheduled from 10 to 11:30 a.m. Dec. 6, and MHA members can register for a connection fee of $195. For more information, contact Erica Leyko at the MHA.

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Study Examines Health Status of Hospital Employees

A white paper released last week by Truven Health Analytics announced that, on average, U.S. hospital and health system employees use more healthcare and have higher rates of chronic disease than workers in other sectors. Specifically, the study states that hospital employees have 9 percent higher healthcare costs, are more likely to have chronic illnesses such as obesity and depression, have higher rates of emergency room use and hospital admission, and have a population that trends toward younger females.

The study also explains some of the unique factors that may be influencing hospital employee health. These include caring for others at the expense of their own health; easy, onsite access to services; and the assumption that they, as healthcare professionals, do not need care or expertise from another party to improve their health status.

Lastly, the study identifies steps a hospital or health system can take to address the contributing factors to below-average employee health.

In recent years, Michigan hospitals have taken critical steps toward addressing employee and community health by creating environments that encourage healthy behaviors and support wellness. These include eliminating smoking from campuses; removing all trans-fats from cafeterias, patient nutrition programs and other food sources; creating employee wellness programs and chronic disease management programs; partnering with small businesses to improve access to wellness resources; and more. However, there is room for considerable improvement in overall employee health. To that end, the MHA Board of Trustees, at its Sept. 12 meeting, directed the association to explore collaborative efforts that could improve hospital and health system employee health and result in best practices for health-care-sector population health management. Members with questions should contact Jim Lee at the MHA.

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Members in the News

Diane Postler-Slattery, PhD, FACHE, has been selected to serve as president and chief executive officer (CEO) of MidMichigan Health, Midland, when current President and CEO Rick Reynolds retires in early 2013. Postler-Slattery has been president and chief operating officer (COO) at Aspirus Wausau (WI) Hospital since 2005. She began her career with Aspirus Inc. in 1987 as a medical surgical intensive care nurse and subsequently served in various leadership positions. As COO and chief nurse executive at Aspirus Wausau Hospital, she established the vision for nursing practice that led in 2005 to magnet recognition by the American Nurses Credentialing Center.

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Post-stabilization Determination Clarifications Made in Proposed Policy

Last week the Medical Services Administration (MSA) issued a proposed policy to clarify for noncontracted hospitals and Medicaid Health Plans (MHPs) the process of authorizing the admission of Medicaid patients whose condition has been stabilized in the emergency department. This would put into Medicaid policy some information regarding these post-stabilization authorization determinations for noncontracted hospitals and MHPs that were included in the L-letter issued in December 2009 on the same subject.

The proposed policy would require noncontracted hospitals to contact the MHP with necessary clinical information to make a determination for inpatient admission. The MHP is required to return inquiries within one hour of receiving the hospital’s call, and the hospital is not required to make more than one call if the initial call included all necessary information. The MHP may not indicate that authorization for observation or admission will be delayed until clinical outcomes are determined. Authorization for admission will be automatic if the MHP fails to respond within one hour.

The MHA will evaluate the proposed policy and provide comments to the MSA prior to the Nov. 15 deadline. Comments should be submitted to Torey Schlaufman at the MSA. For further information, contact Marilyn Litka-Klein at the MHA.

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Michigan Leaders Participate in AHA Policy-setting

Representatives of the MHA and its members convened Oct. 4 and 5 in Milwaukee for a meeting of the American Hospital Association (AHA) Regional Policy Board (RPB) Region Five, representing Michigan, Ohio, Illinois, Indiana and Wisconsin. The RPB is designed to facilitate guidance from hospital leaders on public policy and advocacy matters and enhance coordination between the AHA and state hospital associations. The Michigan contingent at this meeting included Dennis Swan, president and chief executive officer (CEO), Sparrow Health System, Lansing (section metropolitan alternate); Mary-Anne Ponti, RN, chief operating officer and chief nursing executive, McLaren – Northern Michigan, Petoskey (ex-officio American Organization of Nurse Executives representative); Gary Muller, president and CEO, Marquette General Health System (state delegate); Neeta Delaney, trustee, Allegiance Health, Jackson (regional trustee delegate); Bill Jackson, Charlevoix Area Hospital (state delegate); Michael Geheb, MD, executive vice president, Physician Planning and Operations, Oakwood Healthcare, Dearborn (section metropolitan alternate); Monica Lypson, MD, assistant dean for Graduate Medical Education, University of Michigan, Ann Arbor (regional physician alternate); Michael Falatko, president and CEO, Hills & Dales General Hospital, Cass City (invited guest); and other association representatives.

RPB representatives provided input on public policy related to entitlement reform, including dual eligibles (those who qualify for both Medicare and Medicaid coverage), reform of the Medicare wage index process, and payment differentials across care settings (including policy options to counter legislative proposals to reduce Medicare hospital outpatient payment for evaluation and management services). Further, the group discussed patient and family engagement strategies, inpatient versus outpatient observation status, and the recent AHA report on advanced illness management. Additional discussion focused on the AHA's political advocacy strategy for the duration of 2012, including the November elections and the significant breadth of regulatory issues soon to enter the implementation phase. The next RPB Region Five meeting is scheduled for March 7 and 8. Members with questions should contact Brian Peters or Clark Ballard at the MHA.

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Technical Corrections Made to Long-term-care Hospital Final Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a technical correction to the fiscal year (FY) 2013 final rule regulating Medicare payments to long-term-care hospitals (LTCHs). The notice, which took effect Oct. 1, specifies the CMS's methodology for calculating the percentage of discharges that will not count toward the 25 percent payment adjustment threshold policy for LTCHs and their satellite facilities, with cost reporting periods beginning between July 1 and Oct. 1, 2012.

Since 2005, the CMS has pursued a policy to reduce payment amounts for LTCHs that admit more than 25 percent of Medicare cases from an onsite or neighboring inpatient acute care hospital. Legislative moratoria, which applied a less restrictive threshold to certain LTCHs and exempted others from the threshold, delayed the full application of the 25 percent payment adjustment threshold for nearly five years. With the current legislative moratoria set to expire, the CMS extended the existing moratoria for one year in the FY 2013 final rule rather than allowing the payment policy to be fully implemented. In most cases, the one-year extension will be based on the cost report period, effective for cost reporting periods beginning during FY 2013. The recent CMS notice corrects technical and typographical errors in the FY 2013 final rule published Aug. 31. The notice does not make substantive changes to the policies or payment methodologies that were adopted in the final rule. Members with questions should contact Vickie (Seal) Kunz at the MHA.

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News To Know

  • An educational webinar on the Medicare area wage index will be held from 9 a.m. to noon Wednesday. This webinar with Baker Healthcare Consulting Inc. will review the latest interpretations of the Centers for Medicare & Medicaid Services (CMS) and Medicare Administrative Contractors to assist hospitals in reporting accurate data for use by the CMS to develop the fiscal year 2014 Medicare wage index. For more information, contact Vickie (Seal) Kunz at the MHA.
  • A webinar demonstrating a Web-based application for reporting Medicare area wage index data will be held from 3to 4 p.m. Thursday. This webinar by Crowe Horwath will demonstrate the company’s software that guides hospitals through a series of questions to report wage data correctly and in compliance with current Medicare regulations. For more information, contact Vickie (Seal) Kunz at the MHA.
  • There is growing evidence that pharmaceuticals persist in the environment, and the MHA recently partnered with the Michigan Department of Environmental Quality (DEQ) to produce a Pharmaceutical Waste Management Guide outlining the federal and state regulations for the safe disposal of unused pharmaceuticals. Last month, the DEQ released a Pharmaceutical Waste Tutorial to assist providers in managing unused pharmaceuticals in a healthcare setting. A number of resources to assist in the safe disposal of healthcare waste, including the guide developed with the MHA, are available on the DEQ website. For additional information, contact Steven Johnson at the MHA or Christine Grossman at the DEQ at (517) 373-0590.
  • Hospitals and health systems that are experiencing a drug shortage or anticipate a possible shortage as a result of the closure of the New England Compounding Center (NECC) and Ameridose should contact the federal Food and Drug Administration Center for Drug Evaluation and Research Drug Shortage Program at drugshortages@fda.hhs.gov or toll-free at (855) 543-3784. The closures are in response to investigations into a national meningitis outbreak. Ameridose is a Boston-area pharmacy that shares ownership with the NECC and is closing voluntarily for a short period of time, though it has not been linked to the outbreak.

MHA Members can also refer to these items in our Weekly Mailing:

AB 1332 MSA Workgroup Meeting
MHA MHA Patient Safety & Quality Newsletter – Oct. 17, 2012
AHA FDA Expands Medication Recall Regarding Fungal Meningitis
MHA Upcoming MHA Events
Michigan Health & Hospital Association
6215 West St. Joseph Highway • Lansing, MI 48917
(517) 323-3443 • Fax: (517) 323-0946
www.mha.org

©2003-2012 by the Michigan Health & Hospital Association. All rights reserved. Materials may not be reproduced without permission.