July 15, 2011
Volume 55, Issue 27
IPPS Coding Offset: WHA Thanks Wisconsin Delegation Members
The Wisconsin Hospital Association continues to push back against the flawed "coding offset" policy the Centers for Medicare and Medicaid Services (CMS) included in the proposed inpatient prospective payment system (IPPS) rule for FY 2012. WHA thanks Wisconsin U.S. Representatives Tammy Baldwin (D-2nd District), Sean Duffy (R-7th District), Ron Kind (D-3rd District), Gwen Moore (D-4th District), Tom Petri (R-6th District) and Reid Ribble (R-8th District), who have each signed on to a "Dear Colleague" letter to CMS opposing this policy.
"We are grateful for the bipartisan effort against this flawed policy," said WHA President Steve Brenton. "Our appreciation goes out to Reps. Baldwin, Duffy, Kind, Moore, Petri and Ribble for standing with their community hospitals."
The proposed "coding offset" would reduce hospital payments for FY 12 nationwide an estimated $6.3 billion and for Wisconsin hospital payments $100 million ($50 million in FY 12 added onto the $50 million decrease to the base from the FY 11 cut). The American Hospital Association (AHA), WHA and many others opposed CMS’ policy when it was first offered under the FY 2011 IPPS rule and continue to strongly oppose its continuation under the FY 2012 IPPS proposed rule. Both AHA and the Wisconsin Hospital Association submitted comment letters to CMS earlier this year.
CMS implemented this policy in response to moving to the Medicare severity diagnosis-related groups (MS-DRGs) several years ago. CMS claims hospitals were upcoding under the new coding system and that this activity warranted payment reduction. The AHA conducted analyses that indicate much of the change CMS found is actually the continuation of historical increases in the case-mix index, not the effect of documentation and coding changes due to the implementation of the MS-DRGs.
In a letter sent to Wisconsin’s Congressional Delegation in June, Brenton highlighted the fact that a national health economics expert—Joseph P. Newhouse, Ph.D., the John D. MacArthur Professor of Health Policy and Management at Harvard University and Faculty Research Associate of the National Bureau of Economic Research—found that the methodology CMS employed could not separate documentation and coding effects from true case-mix change because it used claims data alone.
"[Newhouse] states that the best one can do with claims data alone is to calculate the upper and lower bounds of the combined effect of documentation and coding and true case-mix change," read Brenton’s letter. "Dr. Newhouse goes on to say that he ‘cannot interpret what exactly is measured by what CMS terms the documentation and coding effect.’"
This analysis along with others undertaken by the AHA supports the industry’s contention that this policy is fundamentally flawed and should not be implemented.
"CMS has not heeded any of the industry’s concerns over the methodology used to calculate the coding adjustment. We continue to object to a methodology that is flawed and purports to reveal a decrease in real case-mix," said Brenton. "The paper by J. Newhouse supports our position that CMS’ approach is incorrect. In addition, the cuts would pile onto an already under-funded Medicare payment system as well as cuts hospitals are already facing due to the health reform law."
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Congressional leaders and President Obama continue meeting in the hopes of cobbling together a debt ceiling/deficit reduction deal before an August 2 deadline. New areas for cuts surfaced this week from Republican U.S. Rep. Eric Cantor, one of the original participants in the negotiations led by Vice President Biden.
Cantor left discussions last week, but released a list of items the Biden group had been vetting. Some of the provisions had previously bubbled out from negotiations, but others caught various groups by surprise. All total, the proposals would cut health care programs or providers by an estimated $334-$353 billion over 10 years.
"Negotiators seem to see cuts to hospitals as the easier target to go after," said WHA President Brenton. "Whether it’s Medicaid matching rate reductions or Medicare bad debt cuts, Congress and the President have to remember that these will be felt by Wisconsin communities and by Wisconsin employers. The hospital field gave up $155 billion in future payment reductions in 2009. Enough is enough."
Among the items released in the Cantor memo are:
Regardless of whether its $100 billion, $350 billion or more in cuts to health care, we know for certain hospital payments are in the crosshairs. To fight back against these cuts, the WHA continues its extensive grassroots and media campaign. These efforts include:
There is a lot of activity taking place and WHA thanks our members for all of their efforts. We know this level of involvement and activity is the only way we will be able to stop or mitigate the cuts. WHA will continue to partner with each of you and the American Hospital Association in this fight. For more information or questions, contact WHA’s Eric Borgerding or Jenny Boese at 608-274-1820.
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The political environment in Madison has quieted significantly since the turmoil that followed the controversial introduction of proposals affecting state employee unions. But two significant issues continue to move forward—one will shape Wisconsin’s political landscape for the rest of the legislative session, the other for the remainder of the next decade.
The first of two primary elections were held this week, continuing the efforts of an unprecedented number of recalls of Wisconsin legislators. The second primary will be held next week before general elections are set to take place next month. Republicans currently hold a 19-14 majority in the Senate.
Driven by the reaction of legislators to the controversial union proposals, the recall challenges against nine state senators mounted by factions of Wisconsin’s electorate are the result of overall recall efforts targeted against every state senator—Republican and Democrat—that could be subjected to the process. An elected official must be in office for a minimum of one year before being eligible for recall.
This week’s primaries, held in the districts of the six Republican senators facing recall, were necessary after Republican Party leaders were successful in recruiting and fielding Democratic protest candidates to force the primaries, allowing more time for campaigning prior to an August general election.
With the general election set for August 9, here’s how those races will look:
District 2 -- Senator Robert Cowles (R-Green Bay) – Senator Cowles will face former Brown County Executive Nancy Nuhsbaum (D).
District 8 -- Senator Alberta Darling (R-River Hills) – Senator Darling will face current State Representative Sandy Pasch (D-Whitefish Bay).
District 10 -- Senator Sheila Harsdorf (R-River Falls) – Senator Harsdorf will face River Falls teacher Shelly Moore (D).
District 14 -- Senator Luther Olsen (R-Ripon) – Senator Olsen will face current State Representative Fred Clark (D-Baraboo).
District 18 -- Senator Randy Hopper (R-Fond du Lac) – Senator Hopper will face Oshkosh City Councilwoman Jessica King (D).
District 32 -- Senator Dan Kapanke (R-La Crosse) – Senator Kapanke will face current State Representative Jennifer Shilling (D-La Crosse).
The second set of primaries is scheduled for the Democratic senators facing recall challenges for July 19. Senators Jim Holperin (D-Conover) and Bob Wirch (D-Pleasant Prairie) will then face general elections scheduled for August 16. With only one Republican challenger, the election involving Senator Dave Hansen (D-Green Bay) next week will decide that race.
Republican redistricting proposals receive hearing
This week the Senate Committee on Judiciary, Utilities, Commerce and Government Operations and the Assembly Committee on Homeland Security and State Affairs held a joint public hearing on Republican-proposed legislative redistricting bills.
As is the case every decade, each state must draw new lines for congressional and legislative districts based on updated U.S. census data. As the state’s demographics change—since 2000, Wisconsin has gained more than 300,000 residents—new boundaries are needed to ensure the districts include equal population.
Because control of the Legislature was split between Republicans and Democrats over the past three redistricting cycles, the courts have ultimately decided how the districts should be redrawn after the parties were unable to agree.
This cycle with Republicans controlling both the Senate and Assembly, Democrats will have little, if any, influence on how the lines are redrawn. Republicans are also acting with some urgency because of the potential impact of the recall elections changing the majority in the Senate.
Once approved, the new legislative district boundaries will be in effect until after the next U.S. census. A committee vote is expected before the end of the week with action by the full Legislature expected next week.
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Last Friday (July 8), Wisconsin Governor Scott Walker signed Act 35 into law which permits individuals to carry a concealed weapon if the individual undergoes training and receives a license to do so. However, in general, businesses (including hospitals) may prohibit an individual from carrying a concealed weapon on their property outside of the individual’s vehicle if the business posts signs providing such notice.
The first date in which licensees may carry a concealed weapon and businesses must post their property in order to make it a crime to carry a firearm on their property is November 1, 2011.
WHA has created a summary of key aspects of the law as well as model signage that hospitals may choose to use or modify. The summary and model signage can be found at: www.wha.org/SummaryKeyIssuesConcealedCarryAct7-11.pdf and www.wha.org/NoWeaponsPoster.ppt.
WHA will also be holding a webinar to provide hospitals with an overview of the new law on Wednesday, August 3, from 12:00 to 12:30 PM. To attend the webinar you must register at http://events.SignUp4.com/ConcealCarry. If multiple individuals from your hospital wish to participate in this webinar, please arrange to call in to the webinar using a single phone line.
In brief, key provisions of the law include:
For more information contact Matthew Stanford, VP Policy & Regulatory Affairs, Associate Counsel at firstname.lastname@example.org or 608-274-1820, or Paul Merline, VP Government Affairs at email@example.com or 608-274-1820.
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The Independent Payment Advisory Board (IPAB) is envisioned to be a 15-member panel of appointed national "experts" intended to shield Congress from the tough decisions needed to control Medicare spending beginning in just three years. The initiative was slipped into the health reform law a year and a half ago but until recently it has largely flown under the radar screen. Over time, IPAB is also given expanded jurisdiction to control spending that will be the almost certain byproduct of government-funded subsidies provided to enrollees via state insurance exchanges that will be up and running in 2014. So in other words, the IPAB will be a very big deal!
Remarkably just eight of IPAB’s 15 voting members will have the power to enforce a Medicare global budget, free from the normal legislative, administrative, and judicial processes. The new group will be something akin to MedPAC on steroids, but with real power to circumvent the traditional legislative process. The prospects for serious damage, especially to providers, cannot be understated.
Just a few weeks ago, a key Obama Administration official described IPAB as "a key part" of the Accountable Care Act. That same official, when grilled this week before the House Budget Committee, defended the plan and noted that IPAB members won’t be able to cut Medicare benefits or impose new costs on Medicare beneficiaries. Responding to that claim, Wisconsin Congressman and Budget Committee Chair Paul Ryan said that that dynamic means that IPAB’s sole cost-cutting tool will be to impose further cuts on already below cost provider payment rates. Ryan said that means hospitals, physicians and nursing homes will absorb all of the hits. The end result will most certainly be a combination of reduced access, massive job and service cuts and a further explosion of commercial payer cost-shifting.
The good news is that an increasing number of Democrats are calling out the awful public policy implications of IPAB. Frank Pallone (D-NJ) says "I never supported it and I certainly would be in favor of abolishing it." And former House Majority Leader Dick Gephardt has blasted IPAB as an "unelected and unaccountable group whose sole charge is to reduce Medicare spending based on an arbitrary target growth rate." OUCH!
The IPAB discussion has been somewhat lost in our more immediate effort to oppose huge Medicare and Medicaid cuts envisioned to achieve federal budget savings necessary to pass a debt ceiling increase in early August. But IPAB ultimately will emerge again as a clear and dangerous threat to access. Repeal of IPAB must be a priority for WHA and a bipartisan priority for the Wisconsin Congressional Delegation.
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Wisconsin employers recently received a notice from the Department of Workforce Development that they will be required to pay an assessment to cover the cost of interest on the $1.3 billion loan the federal government provided the state to pay benefits under the state unemployment insurance program.
The state program is entirely funded by taxes paid by Wisconsin employers. The tax revenues are used to pay up to 26 weeks of benefits to unemployed workers. During the recent recession, Congress passed legislation creating and funding a series of extended benefit programs that ultimately allowed unemployed workers to receive up to 99 weeks of benefits. These federal extended benefit programs are completely funded by the federal government and do not affect the taxes paid by Wisconsin employers or contribute to the debt we owe on our state program.
The debt incurred in the state unemployment program results from the recent recession—a rapid increase in unemployment which in turn dramatically increased demand for benefits. Up until the year 2000 cash receipts in the state program exceeded benefits paid. As a result, the program developed a surplus of $1.8 billion as of the year 2000. The recession that began in 2001 caused a spike in benefit demand so that by 2003 more than $900 million in benefits were paid out while cash receipts were less than $600 million. That began to draw down the surplus. As the recession eased, income and expense came back into line and the program essentially broke even in 2006.
The unprecedented magnitude of the recent recession caused a huge spike in benefit demand for the state program. In 2010, benefit payments peaked at nearly $1.7 billion (this does not include benefits paid out of the various federally-funded extended benefits programs) while cash receipts were only around $900 million that year. As a result, the surplus was used up and the state program began automatically borrowing from the federal government.
State Unemployment Taxes
The state unemployment program is funded entirely by employer taxes and interest earned when there is a surplus. The tax system is experience rated so that employers who lay off more employees pay higher taxes than those that are able to avoid layoffs. There are 24 separate tax rates that apply depending on the ratio between an employer’s taxable payroll and the amount of money in their company’s unemployment account. Currently, taxes range from $35.10 per employee to $1,274.00 per employee for employers with payrolls under $500,000, and $91.00 to $1,274.00 per employee for employers with payrolls over $500,000. As more employers laid off more people due to the recession, tax collections increased as these same employers moved into higher tax rates on the schedule. That explains some of the dramatic increase in cash receipts from 2009 to 2011.
There are also four separate tax schedules that go into effect depending on the balance in the state unemployment insurance fund. Because the fund balance is now in negative territory, employers are subject to the highest of the four tax schedules. When the system returns to solvency and begins to build a surplus the lower tax schedules will automatically go into effect—reducing employer taxes.
When they established the various extended benefit programs, Congress also approved a temporary suspension of interest on unemployment insurance loans made to states. The suspension only lasted through 2010, so now we will likely be charged interest until the loans are paid off. The interest for 2011 amounts to approximately $50 million and under federal law it must be paid from an assessment on employers that is separate from the regular tax system. The notice of assessment was recently sent to all employers. Under current law it is established as a flat rate per employee. The amount should be in the range of $20 to $25 per employee.
Unfortunately there is more bad news. The principal of the loan must also be paid. This year, (2011) the program is projected to break even. Barring another downturn in the economy, we should be able to begin paying off the loan in 2012. However, under federal law, if the state has an outstanding balance on its loan in 2012 and thereafter, the federal government will essentially increase the federal unemployment taxes (by reducing the FUTA tax credit) each year until the loan is paid off. This federal tax hike will come in increments of roughly $50 million—$50 million in 2012, $100 million in 2013, and $150 million in 2014—increasing until the loan is paid off. It will essentially be assessed as a flat rate on a per employee basis.
While we cannot escape the fact that the loan has to be paid off, we may be able to find an alternative approach that does not place such a heavy burden on all employers. The Unemployment Insurance Advisory Council is considering a number of options for loan repayment.
One approach would be to issue bonds and pay off the Federal loan. This would allow us to structure the repayment plan on our own terms and would save approximately $15 million per year in interest. The Council is also looking at ways we could reap savings from the benefit side of the program and use them to help pay down the debt. For example, the recently-enacted state budget included a provision that establishes a one-week waiting period before a claimant can collect benefits. This will save between $41 and $56 million per year depending on the economy. Other options include strengthening qualifying requirements as well as misconduct and related exclusions.
The Unemployment Insurance Advisory Council will be working through these issues over the next few months with the objective of having a legislative package for consideration during the fall legislative session. We will continue to keep you apprised of developments in this area in the months ahead.
For more information, please refer to the DWD Web site at:http://dwd.wisconsin.gov/ui/safi.
Did you Know:
Watch The Valued Voice for more information on this developing issue.
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An American Hospital Association (AHA) survey of 820 hospitals across the nation found that almost all of them reported a drug shortage in the last six months, and nearly half of them reported 21 or more drug shortages.
That growing shortfall has prompted some patients to take less-effective drugs or delay treatment because of drug shortages, the survey showed.
"The number of drugs in short supply is increasing at an alarming rate, and hospitals are working diligently to reduce the impact to the patients they care for," AHA President and CEO Rich Umbdenstock said in a statement July 12 that came with the survey’s release. "Clinicians need more notice about drug shortages so they have time to act to ensure that patient care is not disrupted."
About 25 percent of Wisconsin hospitals responded to the AHA survey. The top concerns nationally tracked closely with Wisconsin’s results. WHA President Steve Brenton said the Association staff is tracking the issue, but federal action is required.
"Providers are looking at higher pharmaceutical costs in the face of unprecedented shortages. We thought 2010 was bad—2011 is proving to be worse," Brenton said. "Our hospitals are deeply concerned that continued shortages of key drugs will threaten patient care."
Earlier this year Premier Inc., a hospital purchasing alliance, reported that the near-crisis shortage of drugs had reached a 10-year high. The lack of chemotherapy, sedation, and pain relief medications endangers patient safety and costs hospitals more than $200 million annually for higher priced substitutes, a Premier survey found.
The AHA survey found that in the last six months:
WISHIN to Host Informational Meetings
The Wisconsin Statewide Health Insurance Exchange (WISHIN) is continuing its work to develop a health information exchange in Wisconsin. WISHIN is a not-for-profit organization founded in late 2010 by WHA, the Wisconsin Medical Society, Wisconsin Health Information Organization (WHIO) and Wisconsin Collaborative for Health Care Quality (WCHQ). WISHIN’s purpose is to bring the benefits of widespread, secure, interoperable health information technology to Wisconsin health care providers and others. The first step in establishing an exchange, WISHIN’s Direct secure messaging service, will begin in September.
WISHIN will host two informational meetings—August 9 at the Kalahari Resort, Wisconsin Dells, and August 10 at Stoney Creek Inn, Rothschild (Wausau area)—to introduce the organization and its plans concerning electronic health information exchange services in Wisconsin. More details on these meetings will be made available soon.
"WISHIN’s goal is to help health care organizations advance Meaningful Use compliance, reduce administrative costs, improve clinical decisions, and facilitate transitions of care," said WISHIN CEO Joe Kachelski. "We’re very much looking forward to introducing our new organization and discussing with the health care community the needs for robust health information exchange services in Wisconsin."
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Community Memorial Hospital Administrator and CEO Jim Van Dornick announced he will retire in August after 39 years of service to the hospital. Van Dornick was appointed CEO in 1999.
Under Van Dornick’s leadership, Community Memorial Hospital (CMH) has enjoyed significant growth, greatly expanding its medical staff, facility, and scope of services in order to meet community health care needs, including the establishment of CMH Primary Care Clinics throughout Oconto County. Most recently at CMH, he led the development of a strategic affiliation with St. Vincent and St. Mary’s Hospitals and Prevea Health.
"It has been an honor and privilege to serve the community as a part of this great organization. I feel very blessed and fortunate to have been given the opportunity to make positive changes in the lives of those we serve," Van Dornick said.
Van Dornick will continue to serve Community Memorial Hospital in retirement by joining the CMH Board of Directors. Throughout his career at Community Memorial Hospital, Van Dornick has been active in many organizations aimed at improving the Oconto County community, including the Oconto Falls Chamber of Commerce and Oconto County Economic Development Corporation. He was inducted into the Oconto Falls High School Wall of Fame in 2008 and received an Outstanding Vietnam Veteran Achievement Award in 2003 from the Wisconsin Council of Vietnam Veterans of America, having served in the United States Marine Corps. He is currently a member of the American College of Healthcare Executives.
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Hospitals are well aware of the critical role they have in protecting public health. Whether it is working with public health agencies to develop protocols and responses to pandemic flu outbreaks, teaching children proper hand-washing techniques or educating people about how to live with chronic conditions, Wisconsin hospitals partner with key stakeholders to improve the health status of their communities.
Palliative Care: Patient and Caregiver Perspectives
As she faces her own illness, patient Dianne Rhein wants to help others.
That’s why this Eau Claire woman worked with Mayo Clinic Health System (formerly Luther Midelfort) to create a video about the support she has found in palliative care. (http://www.youtube.com/watch?v=5rhVr2-wfg4)
For Dianne — who has advanced appendix cancer that has spread and is no longer considered curable — palliative care has provided pain management and facilitated communication about her wishes with her doctors and family. Whether discussing Power of Attorney documents or speaking with a chaplain about concerns over her two daughters, Dianne said she has found comfort and helpful resources.
"They have a way to help give you permission to talk about some of the deeper things that you really don’t think you can talk about with your family but are definitely on your mind," Dianne said. "It’s another safe haven. They’re just so compassionate."
To "palliate" means to ease suffering physically, emotionally and spiritually. At Mayo Clinic Health System in Eau Claire since 2008, Palliative Care’s interdisciplinary team of caregivers helps the patient achieve the best quality of life possible — as defined by the patient. By working together with patients, chaplains, social workers, therapists, pharmacists, nurses and doctors address:
• Symptom management
• Emotional and spiritual support
• Community resources
• Advance planning
"Palliative care ensures that a patient’s treatment plan is aligned with his or her preferences and goals," said Mary Thelen, registered nurse and coordinator of Palliative Care. "We help people understand their illness now and in the future."
Palliative care also focuses on the needs of the patients’ families. Serious illness affects not only the person with the illness but those close to the patient, as well. Palliative Care team members provide emotional support, education about illness and treatment options, help with arranging the right care for after discharge, and follow-up after a patient’s death.
The proven benefit of palliative care to patients and staff has allowed the program to expand to include a nurse practitioner. With a larger Palliative Care staff, services also are able to be offered in the clinic setting of this integrated health system, as well as in the hospital.
Mayo Clinic Health System hospitals in Barron, Bloomer and Osseo also are developing palliative care services. "We want to ensure that our patients, no matter where they are, have access to the care they want and need," Thelen said.
In addition to serving as a caregiver, Thelen also teaches others about palliative care, logging more than 35 hours of presentations for more than 400 participants in 2010 alone.
"It’s important to educate the caregiver community, as well as the general public, about palliative care," Thelen said. "We want people to understand the resources available through palliative care."
Mayo Clinic Health System, Eau Claire
Sleep disturbances in midlife are not okay
Dr. Laurie Bailey is the director of the Aurora Women’s Pavilion Center for Optimal Health and Wellness. She, along with Mary Meyer, manager of Aurora’s Sleep Disorders Center, met with area women to discuss the links between sleep cycles, sleep disturbances and possible midlife/menopausal issues, such as night sweat, hot flashes, and just plain old worrying.
Attendees learned that not sleeping enough or sleeping well is not okay – no matter how busy a woman’s life is. Chronic sleep deprivation, for whatever reason, significantly affects health, performance, safety and – when lost wages are factored in – even one’s pocketbook.
Attendees also learned new strategies to make sleep more restful.
Aurora West Allis Medical Center
Alcohol and Other Drug Abuse
Alcohol and substance abuse has a devastating toll on individuals, families, and society. Armed with expertise and determination, Wisconsin hospitals are fighting the war on drugs and alcohol in their communities with counseling and services aimed at prevention and treatment.
The adult substance abuse program at the Dewey Center
The road to recovery from addiction requires life-long vigilance and support. The Adult Substance Abuse Program at Aurora Psychiatric Hospital provides evidence-based therapy built on three proven treatment approaches: Motivational Interviewing, Cognitive-Behavioral Therapy, and Community Reinforcement. The program helps instill the hope, motivation, and self-management skills needed for successful recovery. It offers individual, group and family therapy, education, medication management and support groups that help to develop these skills.
David—a story of success!
David was a gentleman in his mid 40s when he arrived at the Aurora Psychiatric Hospital several years ago. He had used alcohol recreationally since his late teens, but in the past five years his pattern of use had intensified to the point where he needed to drink every day. His job was in jeopardy and he was estranged from his family and many of his friends. He had been in treatment elsewhere before and wanted to stop drinking, but found himself unable to do so on his own.
After an assessment in the intake department at Aurora Psychiatric Hospital, it was determined that David was alcohol dependent and needed detoxification to minimize withdrawal and begin his recovery.
David spent several days in the hospital and completed the detoxification portion of his treatment. Given that he did not have a strong support system and that the probability of relapse was high, he was admitted to the residential program for Substance Abuse at Aurora Psychiatric Hospital.
He spent several weeks in the residential program, participating in group therapy, education, psychotherapy and family therapy. While in treatment, he developed a plan to prevent relapse, which involved creating and connecting with a sober support system. He also reconnected with some of his estranged family members through family sessions and the family program. Upon completing the residential part of his treatment, David began therapy with an outpatient therapist at the hospital and also became involved with a support group on the campus.
Today, David is gainfully employed in his profession and has reconnected with his family. He has also maintained his sobriety since completing treatment and is committed to his recovery. He is one of the leaders for the 12 step community at the Aurora Psychiatric Hospital campus and has sponsored several other individuals in their journey for recovery from alcohol and drug abuse.
Aurora Psychiatric Hospital, Wauwatosa
Submit community benefit stories to Mary Kay Grasmick, editor, at firstname.lastname@example.org.
Read more about hospitals connecting with their communities at www.WiServePoint.org.
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