Legislature Passes State Budget That Protects Healthcare Funding

capitol building

Michigan CapitolThe Michigan Legislature approved Sept. 22 the fiscal year (FY) 2022 state budget. The governor has indicated support for the budget that goes into effect Oct. 1, and the agreement protects vital funding sources for patient care in Michigan hospitals and expands access to healthcare services. The MHA published a statement on the passage of the budget Sept. 22.

Specifically, the budget reflects the protection or enhancement of many MHA priorities:

  • Continues enhanced outpatient Medicaid rates. For FY 2022, the increase in rates is projected to result in the continuation of funding that translates to $270 million in net revenue for hospitals.
  • Protects funding for the rural access pool and obstetrical stabilization fund.
  • Continues to maintain funding for disproportionate share hospitals (DSH) and graduate medical education (GME), pursuant to the MHA board-supported multiyear budget agreement.
  • Fully funds the Healthy Michigan Plan.
  • Continues the additional $2.35 hourly wage increase for direct care workers at skilled nursing facilities and enhanced reimbursement for ground ambulance services to reimburse at 100% of the Medicare rate.
  • Continues expanded Medicaid coverage for women up to 12 months postpartum.
  • Adds $3 million in new funding to set up a statewide system of care for stroke and ST-elevated myocardial infarction (STEMI) emergencies within the existing statewide trauma system.

In addition, nearly $10 billion in state and federal funding is still available that will be allocated through a supplemental budget process. The MHA will advocate the state use portions of the funding to address the association’s behavioral health priorities and workforce issues.

Members with questions on the state budget may contact Adam Carlson at the MHA.

MHA Statement on U.S. Supreme Court Affordable Care Act Ruling

MHA CEO Brian Peters

The following statement can be attributed to Brian Peters, CEO of the Michigan Health & Hospital Association. 

MHA CEO Brian PetersToday’s opinion issued by the U.S. Supreme Court on California v. Texas is a victory for all who believe in expanding access to healthcare. The decision upholds the Affordable Care Act (ACA) and keeps in place a system that provides health insurance to millions of Americans, access to care for millions of residents with preexisting conditions and has launched innovative models of care that have improved patients’ lives and saved billions of healthcare dollars. The success of the ACA is apparent in Michigan, as the Healthy Michigan Plan provides over 900,000 working Michiganders with comprehensive, affordable health insurance who otherwise would be uninsured.

CEO Report — Emerging from a Pandemic Program Year

MHA Rounds Report - Brian Peters, MHA CEO

"Keep your face to the sunshine and you cannot see a shadow."Helen Keller

MHA CEO Brian PetersFor many years, the turning of the calendar to June has created an air of excitement as we make final preparations for our incomparable Annual Membership Meeting on Mackinac Island. While I am disappointed that the pandemic has necessitated a virtual annual meeting for the second consecutive year, new guidance from the Centers for Disease Control and Prevention and subsequent revised state guidelines have many optimistic that we have emerged from the darkest days of the COVID-19 pandemic. We know it will still be a long time before our hospitals cease caring for patients infected by COVID-19, but the increasing vaccination rates and mounting evidence documenting the reduced risk of vaccinated individuals contracting, transmitting or falling ill with COVID-19 is a sure sign that better days are ahead.

Now that we are in the home stretch of the current MHA program year (and in light of declining COVID-19 case rates, hospitalizations and test positivity rates in Michigan), I’d like to highlight several very recent non-COVID MHA accomplishments that show the strength and value of our association.

Our advocacy work never stops, and I am very pleased to share that the Michigan Legislature recently advanced budget proposals for both the current and upcoming fiscal year that fully fund our MHA priorities for hospitals and health systems. They include the Healthy Michigan Plan, which now has record enrollment levels in excess of 900,000 Michiganders; recent Medicaid outpatient rate increases; graduate medical education; the rural access pool and obstetrical stabilization fund; and disproportionate share hospital payments. In addition, the budget now includes potentially transformational behavioral health funding.

We are all too familiar with the worsening behavioral health crisis in Michigan and its significant impact on patients and families (as well as hospitals themselves). This issue has been elevated as a priority by the MHA Board of Trustees this year and, with their encouragement and support, we are pleased that the MHA team has secured inclusion in the House budget proposal for $125 million in new funding to add access to pediatric psychiatric treatment at hospitals, improve care of behavioral health patients in the emergency departments and add additional settings of care for behavioral health cases. By adding these resources, we should be able to reduce the time it takes for children to find placement, while also providing infrastructure funding for hospitals to find innovative solutions for emergency departments to improve existing facilities to accommodate patients with psychiatric needs. This may include distinct entrances for patients in crisis and separate spaces with safe furnishings and restrooms. As demand and the acuity of these patients increases, we are hopeful these funds can help address the main challenges so Michiganders can receive the treatment they need.

From an operations perspective, there has been a great deal of recent activity at the association. We recently welcomed Molly Dwyer-White, MPH, as the MHA’s new vice president of safety and quality and the MHA Keystone Center’s new executive director. Molly brings over 18 years of experience in healthcare and comes to us from Michigan Medicine, where she led multiple efforts to establish and integrate structures to assess and improve patient experience while serving as the director of the Office of Patient Experience. Molly is working closely with the MHA and MHA Keystone Center staff and governing boards as she transitions into her role, and I am confident she will continue the MHA’s strong work in improving health outcomes and addressing health inequities.

We just announced our newest MHA Service Corporation Endorsed Business Partner, CyberForce|Q, which is a leading provider of cybersecurity services, advancing the safety of information systems by utilizing a tactical, collective defense model with a focus on continuous improvement. CyberForce|Q has worked directly with the MHA for a number of years and helped us to launch our Mi|HSOC cybersecurity operations center for hospitals and health systems. With healthcare now the top target for cybercriminals globally, we are pleased to offer this new collaboration.

The MHA has also reconfigured our headquarters in Okemos, the Spencer C. Johnson Building, to allow for a new tenant in the Michigan Osteopathic Association (MOA), effective May 1. We are delighted to welcome the MOA and its members to our facility, and we are confident that this arrangement will lead to even greater opportunities for synergy well into the future. Both of our organizations, along with the Michigan State Medical Society, comprise The Partnership for Michigan’s Health, which routinely produces the Economic Impact of Healthcare in Michigan report, and collaborates on efforts that improve Michigan healthcare.

As for those MHA employees housed in the MHA headquarters and our Capitol Advocacy Center in downtown Lansing, their contributions and insights have helped the MHA make Modern Healthcare’s list of Best Places to Work in Healthcare for 2021 — the only state hospital association to be recognized. I am incredibly proud of this prestigious distinction because it validates our constant efforts to support our employees — who are the strength of our association. To earn this distinction in the midst of a pandemic is especially gratifying.

I also want to recognize our outgoing Board Chair Edwin A. Ness, president & CEO of Munson Healthcare, whose term will end later this month. Taking the gavel amid a once-in-a-century pandemic, Ed provided tremendous leadership to help guide us through multiple statewide COVID-19 surges and the challenges associated with the delivery of safe and effective COVID-19 vaccines. We spent many early mornings and late nights on phone calls, and the MHA could not have accomplished what we did without Ed’s unwavering commitment to the role.

During Annual Meeting, we will formally transition from Ed to incoming Board Chair Tina Freese Decker, president & CEO of Spectrum Health, who I could not be more excited to lead us through our next program year. In addition to guiding West Michigan’s largest health system, Tina has played an active role as a co-chair with the Protect Michigan Commission in addressing vaccine hesitancy and increasing education and awareness efforts on the safety and effectiveness of the COVID-19 vaccines.

If you have not done so already, I encourage you to register and join us at Annual Meeting. In addition to hearing Tina’s formal remarks, I’m particularly happy to have my friend Rick Pollack, president and CEO of the American Hospital Association, scheduled to join us to discuss key healthcare advocacy items at the federal level. We will also be joined by Kevin Ahmaad Jenkins, a leader in health equity who serves as a fellow within the Veterans Health Administration’s Office of Minority Health and will explore racism and its effect on public health, as well as breaking social stigmas relating to racial injustice in healthcare.

While the 2020-2021 program year has been one of the most difficult in recent memory, I am proud of the strength and resiliency displayed by the MHA, our employees, our member organizations and the front-line caregivers who have gone to war against the COVID-19 virus every day. We are not out of the woods yet by any means, as we must be mindful of potential emerging variants and other complicating factors that could lead to yet another future surge. Rest assured that the MHA will continue our daily efforts in support of our members until COVID-19 is defeated once and for all. In the meantime, we should collectively celebrate the fact that, at least for now, new infections and hospitalizations have been dramatically reduced.

Through it all, the MHA has continued to serve our members and live our mission to advance the health of individuals and communities, to innovate and to keep an eye to the future. I am pleased to share just a few tangible examples in this column, and I am optimistic about our ability to create even more successful outcomes in the future. In short, we have kept our collective faces to the sunshine and, as a result, our association is as strong as ever.

As always, I welcome your thoughts. 

CEO Report – Protecting the Financial Health of Hospitals

MHA Rounds Report - Brian Peters, MHA CEO

"Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery."Charles Dickens

MHA CEO Brian PetersThe past year has been extremely challenging for everyone across the globe. At the very top of that list: those who have lost loved ones to the pandemic, and those who have suffered from the often severe health consequences associated with COVID-19. At the same time, the financial blow to hotels, restaurants, bars, entertainment venues, and countless other businesses large and small has been well documented. And we all know about the mental health concerns brought about by income and job loss, the need for remote learning for students and the resulting lack of socialization, plus a host of other consequences that have accompanied this pandemic and negatively impacted people for many, many months now.

As a Michigander and a father, I care deeply about all of this. And as the CEO of the Michigan Health & Hospital Association, I have the great privilege of getting to do something about it every single day. After all, our very mission is to “advance the health of individuals and communities.” It is from this perspective that I can tell you how proud I am of our member hospitals and health systems throughout the state — and how concerned I am for the wellbeing of our caregivers and staff, and for the financial viability of the organizations themselves as the dark cloud of the pandemic continues to hover over all of us. Am I biased? Perhaps. But I truly believe that hospitals must be supported and protected at this time more than ever, for the betterment of our entire society.

Our members have now been serving on the front lines for over a year and have experienced significant physical and mental trauma. For those institutions that serve our local communities and employ our healthcare heroes, the last year has also been filled with financial uncertainty at best, and devastation at worst. Early in the pandemic, when elective procedures came to an abrupt halt, the double-edged sword of new, unbudgeted expenses related to ramping up to deal with COVID-19 combined with lost volume and revenue on an order of magnitude that we have never seen in modern times, pummeled our hospitals and health systems financially. For even our largest members, furloughs and layoffs became necessary.  And for our smaller, independent or rural hospitals, there were legitimate concerns about keeping the doors open in the face of severe cash flow disruptions.

Just one example of new costs: personal protective equipment (PPE) is a term Americans became all too familiar with last year. Our hospital supply chain leaders can verify that increasing the number of gloves, gowns, respirators, masks and face shields, both for immediate use and for the “new normal” stockpile requirements, is not only more expensive due to sheer quantity, but the prices have soared due to increased demand. To avoid dependence on the global supply chain, many organizations are now diversifying their network of suppliers and contracting with domestic companies. However, doing so comes at a cost, as domestic production is typically more expensive. This is just one of many factors that have driven hospital total expense per adjusted discharge higher by 19.6% over the past year, according to a recent analysis of national data from Kaufman Hall. Our own data and anecdotal evidence show that Michigan closely mirrors this trend.

Coupled with increased expenses is decreased revenue, as total patient volume has yet to recover to pre-pandemic levels. The same analysis from Kaufman Hall found that overall revenue (not including federal aid from the Provider Relief Fund) fell 4.6%, with emergency department visits decreasing 26.8%. As part of surge planning, hospitals have been forced to delay many nonemergency medical procedures.  Unfortunately, images of hospitals admitting COVID-19 patients and constructing temporary outdoor facilities also created a misplaced fear among a subset of the public that hospitals were no longer safe places of care. Much work, at both the state and federal level, has gone into correcting this misconception, but there remains a significant number of people who have legitimate healthcare needs who are still delaying care — to their own detriment. The resulting drop in patient volume and procedures has created a gap in hospital revenue that will take a long time to recover.

Lastly, the insurance coverage mix is also continuing to change for the patients utilizing our hospitals, specifically moving toward government programs or no coverage at all. According to the National Center for Coverage Innovation, Michigan had the sixth highest increase in newly uninsured adults, with 222,000 individuals becoming uninsured due to job losses, representing a 46% increase from 2018 levels. We’ve seen the growth borne out in the Healthy Michigan Plan (HMP), our state’s Medicaid expansion program, which has seen enrollment increase from a pre-pandemic level of approximately 650,000 beneficiaries to nearly 900,000 today. While continued coverage for all Michiganders is a top MHA priority, and we are incredibly thankful for the existence of the HMP, this transition from employer-sponsored health plans to government healthcare programs means more patient care is being reimbursed at a lower rate in contrast to the full cost of care.

To directly address all these challenges, the MHA has advocated strenuously for financial relief at the state and federal levels, and our members have been incredibly grateful for it. Federal funds such as the CARES Act helped to alleviate the immediate crisis, while providing a measure of financial stability to all hospitals (and serving as a real lifesaver for some). We have successfully delivered accelerated payments, targeted loans and grants, and more. One item of important relief that was implemented at the beginning of the pandemic was a moratorium on Medicare sequestration, the scheduled 2% cut to all Medicare payments that would have been a significant financial hit to hospitals and health systems at the worst possible time. Recently, legislation that delays these cuts through the end of the year passed the Senate with a bipartisan vote (thank you to our U.S. Sens. Debbie Stabenow and Gary Peters, for their support) and is expected to pass the House of Representatives once Congress returns from Easter recess. All of this is helpful — but none of this is a long-term solution to guarantee the financial viability of hospitals. Our members (even pre-pandemic) are doing their part to be innovative and increasingly focused on cost-effectiveness. But they need our continued support.

There is cause for optimism as we head down the road to recovery. Today, all adults 16 years and older are eligible to receive the COVID-19 vaccine in Michigan. Vaccine supply, which has increased dramatically in recent weeks, is expected to expand in the weeks ahead. In fact, we are very close to the day where the supply and demand curve flips and our efforts will need to focus on reaching vaccine-hesitant populations. The reasons to receive the safe and effective vaccines are many, as most importantly they prevent hospitalization and death and protect loved ones and those around you from contracting the disease. There is no better evidence than recent data the MHA released that shows hospitalizations are increasing the slowest among the age cohorts that have a higher percentage of vaccination.

Collectively, achieving our state’s goal of vaccinating 70% of the population allows our financial recovery to truly begin. To return to some sense of normal, everyone must do their part to mitigate the chance of future outbreaks. That tool is in our toolbox and it starts by scheduling a vaccine appointment. From there, restrictions and protocols placed on in-person office work, education instruction, and entertainment and leisure activities can be lifted. But we cannot trick ourselves into thinking that we can do all these things without reaching our vaccine goals first.

As Michigan hospitals deal with a legitimate third surge of COVID-19 patients, it takes everyone to do their part to put our state and communities on a path to recovery. By doing the right things, practicing preventive measures such as wearing a mask, social distancing, washing your hands and receiving a vaccine, we can protect both our physical health and the financial health of our hospitals that operate 24/7/365 to provide care when we need it. After all, the same hospitals that are needed to fight COVID-19 today are the hospitals that will be needed to treat auto accident victims, cancer patients and countless other loved ones in the future. They deserve our full support.

As always, I welcome your thoughts.

Chris Mitchell Discusses Legislative Priorities with State of Reform

Chris Mitchell

MHA Executive Vice President Chris MitchellState of Reform published a story March 10 with Chris Mitchell, executive vice president, advocacy & public affairs, discussing the MHA’s priorities for the current Michigan legislative session.

The story reviews several key funding areas that are historically included in the state budget, including support for graduate medical education, rural and critical access hospitals and the Healthy Michigan plan. Mitchell also advocated for the continued use of increased outpatient Medicaid reimbursement rates for all hospitals, which was new for the fiscal year 2020 budget.

“We want the continued investment in graduate medical education program (GME),” said Mitchell. “What we’ve learned from the pandemic is we cannot have enough caregivers in the pipeline. So, continuing to fund the GME program remains a top priority for us.”

Read the article

MHA Appreciates Continued Support of Healthcare Priorities in Executive Budget Presentation

MHA CEO Brian Peters

The following statement can be attributed to MHA CEO Brian Peters.    

MHA CEO Brian PetersHospitals and health systems throughout Michigan appreciate the protections for vital healthcare funding and access to care that Gov. Gretchen Whitmer included in her executive budget presentation. As we are near almost a year of combatting the COVID-19 pandemic in our state, it is crucial that support continues for rural and critical access hospitals, obstetrical services, graduate medical education and the Healthy Michigan Plan. Maintaining these programs allow hospitals to continue to focus on caring for patients and improving the wellness of our communities.

We also do not want to lose sight of the short- and long-term impacts created by the pandemic. We are thankful for the additional funding that has supported testing, personal protective equipment, vaccinations and more over the past year and encourage considerations to address other pandemic consequences, such as funding to improve behavioral health. The prompt allocation of state and federal funds allows front-line caregivers to operate at the highest level. We look forward to the budget process and working with the Legislature in ensuring the improved health and wellness of all Michiganders.

MHA Monday Report March 9, 2020

MHA Monday Report logo

Combating the 2019 Novel Coronavirus (COVID-19)

The MHA is working closely with the Michigan Department of Health and Human Services (MDHHS), the American Hospital Association (AHA), the Centers for Disease Control and Prevention (CDC), and other state and federal agencies and organizations to ensure …

U.S. Supreme Court Agrees to Review ACA Determination in Fall

The U.S. Supreme Court decided March 2 that it will review, during its term beginning in October, a federal appeals court decision that held the Affordable Care Act’s (ACA) individual mandate unconstitutional.The high court also granted many healthcare


Court Blocks Michigan’s Medicaid Work Requirements

A U.S. District Court ruling issued March 4 invalidated Michigan’s Medicaid work requirements, which posed a threat to healthcare coverage for tens of thousands of Healthy Michigan Plan recipients. Judge James Boasberg’s order blocks Michigan…


MHA Members Asked to Submit Comments on CMS 340B Survey by March 9

A proposed survey by the Centers for Medicare & Medicaid Services (CMS) seeks to collect pricing data on Specified Covered Outpatient Drugs from all hospitals that participate in the 340B Drug Pricing Program. …


Critical Incident Stress Management Bill Signed Into Law

Gov. Gretchen Whitmer signed House Bill 4862 into law March 3, which expands confidentiality protections for participants and providers at healthcare facilities performing Critical Incident Stress Management services. …


Bills to Expand Telehealth Services Reported from House Committee

Members of the House Health Policy Committee voted March 5 to report House Bills 5412 through 5416, which would expand opportunities for providers to receive Medicaid payment for telehealth services. The MHA has supported…


Celebrate Patient Safety Awareness Week

Patient Safety Awareness Week, hosted by the Institute for Healthcare Improvement, will be celebrated March 8-14 to increase awareness about patient safety and recognize the work that is already in-progress to reduce the risk of preventable patient harm …


Nominations Sought for Healthcare Leadership, Advancing Safe Care Awards

The MHA is seeking nominations for two awards that recognize healthcare professionals for their efforts to lead the way to healthier communities. The MHA Healthcare Leadership Award recognizes outstanding members of the healthcare governing boards…


Proposed Policy on Medicaid Payments for Rural Hospitals Released

The Medical Services Administration recently released a proposed policy to implement the supplemental budget appropriation for fiscal year 2020, which included additional general funds to increase critical access hospital reimbursement.  Pending approval by the …


Healthcare Leaders Explored Rural Healthcare Issues at Breakthrough Event

More than 100 chief executive officers and senior leaders attended MHA Breakthrough Feb. 27 and 28 to discuss the competitive landscape and tactics to reinforce long-term viability. In a special Town Hall on Michigan’s Rural Healthcare Strategy, a coalition of Tennessee providers and government outlined how they are making several ambitious …


The Keckley Report

Paul KeckleyThe Road to Value-based Care is Inevitable but Bumpy: The Realities that Must Be Addressed​

“The U.S. health delivery system is destined to replace its flawed volume-based incentives with value-based purchasing, but the process is proving difficult. That’s the consensus view from Chief Strategy Officers of major health systems convened by Lumeris over the weekend in Montana.”

Paul Keckley, Feb. 2, 2020


News to Know

Upcoming events and important healthcare news for the week of March 9:

  • The Institute for Healthcare Improvement (IHI) is celebrating Patient Safety Awareness Week March 8 through 14.
  • The MHA Michigan Green Healthcare Committee will meet from 9 a.m. to noon Tuesday at MHA headquarters, Okemos.
  • As part of the webinar series from the MHA Endorsed Business Partner program, a webinar titled 340B Regulatory Update – Past, Present and Future will be hosted with SUNRx from 2 to 3 p.m. Tuesday.
  • The 2020 Patient Safety Organization (PSO) Annual Meeting will take place from 8 a.m. to 3 p.m. Wednesday at the VisTaTech Center – Schoolcraft College, Livonia.

MHA in the News

Read recent coverage about the MHA, including articles from Crain’s Detroit Business, Bridge Magazine and Interlochen Public Radio about the MHA’s 2020 Economic Impact of Healthcare in Michigan report, Medicaid work requirements and rural healthcare.

Court Blocks Michigan’s Medicaid Work Requirements

Healthy Michigan Plan

A U.S. District Court ruling issued March 4 invalidated Michigan’s Medicaid work requirements, which posed a threat to healthcare coverage for tens of thousands of Healthy Michigan Plan recipients.

Healthy Michigan PlanJudge James Boasberg’s order blocks Michigan from enforcing work requirements for participants in the Healthy Michigan Plan, Michigan’s Medicaid expansion program. Work requirements took effect Jan. 1, 2020, and required Healthy Michigan Plan beneficiaries who are between 19 and 62 years old to complete 80 hours of work or work-related activities per month.

Prior to the court ruling, the Michigan Department of Health and Human Services (MDHHS) mailed 238,000 notices to individuals subject to reporting their work activities. An estimated 80,000 people were at risk of losing their healthcare coverage because they had not reported work activities that met the requirements. The MDHHS will now notify those individuals that they no longer have to report their work activities.

The MHA issued a statement praising the ruling and will keep members updated as the  MDHHS educates Healthy Michigan Plan beneficiaries about this change. Members with questions may contact Ruthanne Sudderth at the MHA.

Bridge Magazine: Judge blocks Michigan’s Medicaid work rules

Bridge Magazine published an article March 4 on the U.S. District Court’s ruling that invalidates Medicaid work requirements in Michigan. The ruling follows a decision by the U.S. Court of Appeals in February that upheld a lower court’s order striking down a work rules program in Arkansas.

Originally passed by the state Legislature and signed into law by Gov. Rick Snyder in 2018, the work rules required able-bodied individuals between 19 and 62 years of age to work an average of 80 hours per month to continue qualifying for healthcare coverage under the Healthy Michigan Plan.

Included in the piece is a statement from the MHA, which said “attaching additional personal responsibility requirements that have nothing to do with healthcare access fail to fulfill Medicaid’s objective of providing healthcare coverage to Michigan’s financially vulnerable population.”

Read the article

MHA Relieved Medicaid Work Requirements Ruled Invalid

MHA CEO Brian Peters

The following statement can be attributed to Brian Peters, CEO of the Michigan Health & Hospital Association.    

The MHA is relieved by the U.S. District Court’s ruling that invalidates Medicaid work requirements in Michigan, which posed a threat to the coverage of tens of thousands of Healthy Michigan Plan recipients. This decision shows that attaching additional personal responsibility requirements that have nothing to do with healthcare access fail to fulfill Medicaid’s objective of providing healthcare coverage to Michigan’s financially vulnerable population.

Ensuring coverage and access for our lower-income community members improves the health and wellness of our state, while having a positive effect on securing and maintaining employment. As a healthcare leader in many of Michigan’s communities, our hospitals will continue to work with patients to promote healthy behaviors that improve health outcomes. In Lansing, the MHA will maintain our efforts to improve and protect access to care for all Michiganders.