July 22, 2011
Volume 55, Issue 28

 

Supreme Court Preserves Hospital Property Tax Exemption for Outpatient Center
6-1 Decision Recognizes the Evolution of Health Care Delivery System

The Wisconsin Supreme Court this week released its decision in Covenant Healthcare System, Inc. v. City of Wauwatosa, the case in which the City of Wauwatosa challenged the property tax exemption of St. Joseph’s Hospital Outpatient Center. The Court ruled in favor of Covenant, finding that the freestanding hospital outpatient facility met the criteria for the hospital property tax exemption. Writing for the six-member majority, Justice Michael J. Gableman wrote:

We hold that the Outpatient Clinic is used for the primary purposes of a hospital and therefore qualifies as tax exempt property under [the hospital property tax exemption statute]. Additionally, we hold that the Outpatient Clinic is neither a doctor’s office nor a property used for commercial purposes within the meaning of [the hospital property tax exemption statute]. Finally, we conclude that no benefit inure to any member of St. Joseph because the term "member" under [the hospital property tax exemption statute] does not include not-for-profit entities.

In its press statement hailing the Court’s decision, WHA wrote, "The decision is crucial for preserving and expanding access to quality health care and bringing the latest cutting-edge technology from inside the hospital to outpatient settings in urban and in rural underserved areas." WHA continued, "The exemption has encouraged Wisconsin’s highly integrated health care delivery model, which has positioned the state well to excel in the emerging health care dynamic, where outcomes and efficiency are the measure of progress."

The sole dissenter, Chief Justice Shirley Abrahamson, agreed with the court of appeals that Covenant had not met its burden to prove that the facility is not used as a "doctor’s office." Responding to the dissent, the majority opinion said, "Put simply, the dissent is advocating a new, unworkable narrow ‘patient’s view’ approach to determine whether the Outpatient Clinic is a doctor’s office." The majority noted that the dissent did not cite authority for the patient view approach and did not apply the approach consistently to the facts in the case.

The majority relied on the extensive factual findings made by the circuit court after a nine-day bench trial. The circuit court concluded that the outpatient clinic was exempt from taxation as property used exclusively for the purposes of a hospital. The court of appeals reversed, holding that the outpatient clinic was a doctor’s office and, therefore, not eligible for the hospital property tax exemption. Wheaton asked the Supreme Court to reverse the court of appeals’ holding.

WHA filed an amicus brief with the court of appeals, another brief asking the Supreme Court to accept the case on appeal, and finally a brief with the Supreme Court arguing why the outpatient facility met the criteria for the property tax exemption. Writing for WHA, David Edquist, an attorney with von Briesen & Roper, encouraged the Court to analyze the doctor’s office exception in the hospital property tax exemption statute by considering when a facility is being used as a doctor’s office rather than as a hospital. Asking the Supreme Court to reverse the Court of Appeals’ decision, Edquist wrote, "The Legislature intended to provide a broad property tax exemption for the modern hospital. The Court of Appeals’ decision would constrict this broad exemption in a manner that is inconsistent with legislative intent, established hospital care delivery models, and common sense."

After the Court released its decision, WHA President Steve Brenton said, "Wisconsin hospitals have responded to our patients’ needs for quality care closer to home by locating services away from the traditional hospital campus. Advances in medical science and technology, and an increased understanding of health care quality improvement, have made it possible for modern hospitals to develop new, innovative ways to bring hospital care outside the walls of the traditional hospital and into their surrounding communities. We applaud the Court for recognizing the Legislature’s intent to support nonprofit hospitals in their missions and for recognizing the important evolution of the modern hospital."

See David Edquist’s Guest Column in this edition of Valued Voice for a more detailed summary of the Court’s decision.

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Covenant v. Wauwatosa:
Questions and Answers by David Edquist

This week’s Supreme Court decision in Covenant Healthcare System, Inc. v. City of Wauwatosa has come as welcome news to nonprofit hospitals and integrated healthcare systems in Wisconsin that were facing the potential loss of property tax exemptions for off-campus outpatient facilities. This article considers the questions and implications arising from the Supreme Court’s decision.

Give me the basics.

The case involved the St. Joseph Outpatient Center ("SJOC"), a freestanding outpatient facility owned by St. Joseph Regional Medical Center and located approximately five miles from its main hospital campus in Wauwatosa. Covenant Healthcare is the sole member of St. Joseph. Covenant requested a property tax exemption for the SJOC from the City of Wauwatosa under section 70.11(4m) of the Wisconsin Statutes, relating to nonprofit hospitals. After the city assessor denied the exemption, Covenant paid the tax and brought an action to recover the assessments. The trial court ruled in favor of Covenant in 2009 but the Court of Appeals reversed in 2010. The Wisconsin Supreme Court agreed to review the case late last year.

In its decision on Tuesday (July 19), the Supreme Court concluded that the SJOC met the criteria for exemption insofar as it was (a) used for the primary purposes of a nonprofit hospital, (b) not a doctor’s office, and (c) not used for a commercial purpose. The Court also concluded that although earnings of St. Joseph’s might inure to the benefit of Covenant, this did not violate the prohibition in section 70.11(4m) against earnings inuring to the benefit of a "member." Detailed background of this case, including a summary of the arguments before the Supreme Court, may be found at http://www.wha.org/Wheaton.htm.

What’s the test to determine whether an outpatient clinic is a "doctor’s office"?

The point of the Supreme Court’s decision, and perhaps one of its shortcomings, is that it does not identify a uniform set of criteria that can be used to determine whether outpatient hospital space is being used as a "doctor’s office." Instead, the Court stated that each situation must be reviewed on its own facts, and the circumstances that may be important in one case may not be determinative, or even considered, in another.

The Supreme Court noted several significant facts regarding the SJOC: the SJOC was constructed in conformity with standards applicable to facilities that provide hospital ambulatory services, a significantly higher standard than a typical medical office building; the SJOC operates under a hospital license, and is accredited by The Joint Commission; the SJOC has a gift shop and a cafeteria, and also provides space for community use, internal education, and support groups; the SJOC has an urgent care center staffed by board-certified emergency department physicians and nurses that is operated on a 24/7 basis; and the SJOC is integrated with the hospital in many ways, such as patient records, billing systems, and an on-line registration system. The Court also identified a number of factors that had been considered in earlier appellate decisions involving the "doctor’s office" question such as the facts that physicians received no variable compensation for their services or extra compensation for supervising non-physician staff; physicians did not actually have their own offices at the SJOC, and physicians did not own or lease the building or equipment at the SJOC. Taken as a whole, these facts convinced the Supreme Court that the SJOC was not a "doctor’s office" within the meaning of the statute.

What is the significance of the Supreme Court’s decision on "commercial purpose"?

When the SJOC was first constructed, Covenant’s financial considerations included improving revenues by qualifying for hospital-based reimbursement. The City of Wauwatosa argued that this consideration demonstrated a commercial motive that disqualified the SJOC from exemption. The Supreme Court rejected that argument since Covenant’s "primary aim" was not to make a profit, but rather to facilitate the diagnosis, care and treatment of the sick, injured and disabled. This common sense approach recognizes the adage that there is "no mission without a margin," and the nonprofit hospital exemption is not limited to those facilities operated at a loss.

What is the impact on integrated healthcare systems?

The exemption in question applies to property owned by nonprofit hospitals, not healthcare systems. The Covenant decision is still important for integrated systems, however, since the City had argued that intra-system cost allocations by the system parent disqualified the hospital from exemption – an argument that potentially could have disqualified St. Joseph Hospital from obtaining an exemption for any of its property, not just the SJOC. The City’s argument was based on language in the statute that disqualifies a hospital from exemption if any of its earnings "inures to the benefit of any … member." The City argued that intra-system allocations resulted in a benefit to Covenant, as the sole member of St. Joseph, therefore disqualifying St. Joseph under the express language of the statute. The Supreme Court dispensed with this argument by ruling that the inurement restriction was not intended to apply to a nonprofit member such as Covenant.

Did the Supreme Court break new ground with the Covenant decision?

For the most part, no. While the City argued that the exemption should not apply to outpatient facilities that are located off-campus rather than on-campus, the Court had already decided a case over forty years ago recognizing an exemption for off-campus hospital property; In Covenant, the Court confirmed that proximity to the main hospital campus is irrelevant. And while the Court acknowledged the increasing trend toward delivery of care on an outpatient basis, Wisconsin has recognized for a long time, both by statute and by administrative regulation, that hospitals operate freestanding outpatient departments; as the Court noted in its opinion, the fact that increasingly complex procedures can now be performed on an outpatient basis "does not automatically convert the [SJOC] into a doctor’s office." As the Supreme Court observed, the simplest definition of a "doctor’s office" is "the building where physicians have their offices." While SJOC made open cubicles available to physicians as temporary workspace, those spaces were not assigned to any particular physician, so it is no surprise that this space fell short of a "doctor’s office" as that phrase is commonly understood.

Rather than charting new territory, the Covenant decision might instead be viewed as getting the analysis back on course – rejecting the path that leads directly from "outpatient facility" to "doctor’s office." Nevertheless, this is still a significant decision that should remove a lot of doubt regarding the exempt status of freestanding hospital outpatient departments.

Does this mean that all hospital outpatient facilities are now exempt?

No. Many outpatient operations might still fail to qualify for exemption, and indeed, Covenant did not seek an exemption for a significant portion of the space in the SJOC. Hospitals will still need to justify their claims to an exemption based on all of the facts and circumstances surrounding the use of the facility. But the closer a facility is to the Covenant scenario, the greater the likelihood that it will be deemed exempt. And a fundamental result of Covenant is that these facilities will not be disqualified simply because they offer only outpatient services by appointment during normal business hours.

Does Covenant apply to facilities owned by Wisconsin hospitals in other states?
No. Whether an out-of-state property is subject to property tax depends on the law of the state where the property is located.

What is the procedure for getting an exemption?
Hospitals must remember that exemptions are not assumed, or automatically granted. The burden is always on the hospital to prove its entitlement to the exemption, and the first step is to file a request for an exemption with the assessor when a property is put into service or when there has been a change in use that may qualify the property for exemption. Applications are submitted using Department of Revenue form PR-230, with an application deadline of March 1. The form requests detailed information concerning the ownership and use of the property, the nature of the organization that is requesting the exemption, and the legal basis for the exemption.

We requested an exemption for our off-campus clinic but it was rejected because we do not treat inpatients at the facility. What should I be doing next?
As the result of an earlier Court of Appeals decision in the St. Clare Hospital case, many assessors understood that the "doctor’s office" language automatically disqualified freestanding hospital outpatient facilities from exemption, and either denied exemption applications on that basis or reserved on a final decision until the Covenant case was decided. The Supreme Court’s decision has now made it clear that outpatient facilities can qualify for exemption. The Wisconsin Association of Assessing Officers has closely followed this case, including the filing of an amicus brief with the Supreme Court, and it should be assumed that your local assessor is aware of the Covenant decision. Hospitals should revisit adverse assessment determinations with their local assessors in light of this development. It is important to initiate these discussions for the current year as soon as possible, as the local boards of review in most instances are currently considering the assessment rolls. Note that the ability to recover taxes paid in prior years is limited, such as in the event of a "palpable error" as defined in the statutes.

David J. Edquist, a shareholder with the law firm von Briesen & Roper and a prominent Wisconsin health care attorney, authored the Wisconsin Hospital Association’s amicus curiae brief.

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Political Action Fundraising Total Surpasses $117K

The Wisconsin Hospitals PAC and Conduit fundraising campaign has raised nearly $12,000 in the last two weeks from 26 additional contributors. This puts the total to date at $117,583 from 197 individuals contributing an average $612. This means the 2011 campaign is at 47 percent of the goal.

"So far the majority of participants like in recent years past have chosen to contribute to the Wisconsin Hospitals Conduit because those 80% want to be able to direct their contribution to candidate campaigns of their choice," according to WHA’s Jodi Bloch.

Individual contributors are listed in The Valued Voice by name and affiliated organization on a regular basis. 2011 contributors to date are listed below. Contributors are listed alphabetically by contribution category. The next publication of the contributor list will be in the August 5 edition of Valued Voice. For more information, contact Jodi Bloch at 608-217-9508 or Jenny Boese at 608-274-1820.

Contributions ranging from $1 - 499

Alstad, Nancy

Fort HealthCare

Ashenhurst, Karla

Ministry Health Care

Ayers, Mandy

Wisconsin Hospital Association

Bablitch, Steve

Aurora Health Care

Bailet, Jeffrey

Aurora Health Care

Banaszynski, Gregory

Aurora Health Care

Beall, Linda

Hudson Hospital

Bloom, Deborah

Sacred Heart Hospital

Boson, Ann

Ministry Saint Joseph’s Children’s Hospital

Boudreau, Jenny

Wisconsin Hospital Association

Braunschweig, Jennifer

Gundersen Lutheran Medical Center

Brenny, Terrence

Stoughton Hospital Association

Byrne, Frank

St. Mary's Hospital

Campbell-Kelz, Nancy

Aspirus Wausau Hospital

Casey, Candy

Columbia Center

Censky, Bill

Holy Family Memorial, Inc.

Clapp, Nicole

Grant Regional Health Center

Clark, Renee

Fort HealthCare

Connor, Michael

Aurora Health Care

Cooksey, Patricia

Hudson Hospital

Dahl, James

Fort HealthCare

Decker, Michael

Divine Savior Healthcare

DeMars, Nancy

Sacred Heart Hospital

DeRosa, Jody

St. Mary's Janesville Hospital

Devermann, Robert

Aurora Medical Center in Oshkosh

Dolohanty, Naomi

Aurora Health Care

Donlon, Marcia

Holy Family Memorial, Inc.

Elliott, Roger

St. Joseph's Hospital

Erickson, Susan

Meriter Hospital

Evans, Kim

Bellin Hospital

Facey, Alice

St. Clare Hospital and Health Services

Fielding, Laura

Holy Family Memorial, Inc.

From, Leland

Beloit Health System

Fuchs, Thomas

St. Joseph's Hospital

Furlong, Marian

Hudson Hospital

Giedd, Janice

St. Joseph's Hospital

Govier, Mary

Holy Family Memorial, Inc.

Grohskopf, Kevin

St. Clare Hospital and Health Services

Groskreutz, Kevin

St. Joseph's Hospital

Grunwald, Patricia

Meriter Hospital

Gullicksrud, Lynn

Sacred Heart Hospital

Gutsch, Mike

Southwest Health Center

Halida, Cheryl

St. Joseph's Hospital

Hemes, Jim

 

Hieb, Laura

Bellin Hospital

Hill, Nick

St. Joseph's Hospital

Hockers, Sara

Holy Family Memorial, Inc.

Hoege, Beverly

Reedsburg Area Medical Center

Holub, Gregory

Ministry Door County Medical Center

Jelle, Laura

St. Clare Hospital and Health Services

Keene, Kaaron

Memorial Health Center - An Aspirus Partner

Klay, Lois

St. Joseph's Hospital

Klein, Rick

Aurora Health Care

Kuehni-Flanagan, Tracy

St. Joseph's Hospital

Laird, Michael

Froedtert Health St. Joseph's Hospital

Lange, George

Westgate Medical Group, CSMCP

Margan, Rob

Wisconsin Hospital Association

Marquardt, Amy

 

Mason, Paul

Wheaton Franciscan Healthcare - All Saints

Maurer, Mary

Holy Family Memorial, Inc.

McKevett, Timothy

Beloit Health System

McNally, Maureen

Froedtert Health

Merline, Karen

 

Meyer, Jeffrey

Osceola Medical Center

Muellerleile, Steven

Westfields Hospital

Mulder, Doris

Beloit Health System

Myers, Lynne

Meriter Hospital

Niemer, Margaret

Children's Hospital and Health System

O'Keefe, James

Mile Bluff Medical Center

Olson, Bonnie

Sacred Heart Hospital

Ose, Peggy

Riverview Hospital Association

Page, Alison

Balwin Area Medical Center

Palecek, Steve

St. Joseph's Hospital

Peiffer, Susan

Sacred Heart Hospital

Penczykowski, James

St. Mary's Hospital

Peters, Kenneth

Bellin Hospital

Petonic, Mary Frances

Meriter Hospital

Potts, Dennis

Aurora Health Care

Powell, Stacey

Sacred Heart Hospital

Priest, Geoffrey

Meriter Hospital

Proehl, Sheila

Hudson Hospital

Radoszewski, Pat

Children's Hospital and Health System

Rambo, Kari

Hudson Hospital

Reinke, Mary

Aurora Health Care

Rickelman, Debbie

WHA Information Center

Roethle, Linda

Bellin Hospital

Roller, Rachel

Aurora Health Care

Rutkowski, Jennifer

Grant Regional Health Center

Samitt, Craig

Dean Health System

Saunaitis, Tamara

Meriter Hospital

Schaefer, Mark

Froedtert Health

Scieszinski, Robert

Ministry Door County Medical Center

Sheehan, Heather

Hayward Area Memorial Hospital and Water’s Edge

Stanford, Cynthia

 

Stelzer, Jason

St. Clare Hospital and Health Services

Stoffel, Julie

St. Joseph's Hospital

Sullivan, Gail

St. Joseph's Hospital

Tapper, Joy

Milwaukee Health Care Partnership

Taylor, Steve

Beloit Health System

Tews, Carol

Memorial Medical Center - Neillsville

Tincher, Pat

Langlade Hospital - An Aspirus Partner

Van Meeteren, Bob

Reedsburg Area Medical Center

VanDeVoort, John

Sacred Heart Hospital

Walker, Troy

St. Clare Hospital and Health Services

Worrick, Gerald

Ministry Door County Medical Center

Yaron, Rachel

Ministry St. Clare’s Hospital

Zeller, Brad

Hayward Area Memorial Hospital and Water’s Edge


Contributions ranging from $500 - 999
 

Anderson, Sandy

St. Clare Hospital and Health Services

Bjork, Tanya

 

Bukowski, Cathy

Ministry Eagle River Memorial Hospital

Bultema, Janice

 

Canter, Richard

Wheaton Franciscan Healthcare

Cardamone, Dr. Steve

Wheaton Franciscan Healthcare

Carlson, Dan

Bay Area Medical Center

Clough, Sheila

Ministry Health Care’s Howard Young Medical Center

Court, Kelly

Wisconsin Hospital Association

Deich, Faye

Sacred Heart Hospital

Dietsche, James

Bellin Hospital

Eckels, Timothy

Hospital Sisters Health System

Frank, Jennifer

Wisconsin Hospital Association

Garcia, Dawn

St. Joseph's Hospital

Granger, Lorna

ProHealth Care

Grundstrom, David

Flambeau Hospital

Guirl, Nadine

ProHealth Care

Heifetz, Michael

SSM Health Care-Wisconsin

Huettl, Patricia

Holy Family Memorial, Inc.

Johnson, Patricia

Hayward Area Memorial Hospital and Water’s Edge

Kerwin, George

Bellin Hospital

Lewis, Gordon

Burnett Medical Center

Mantei, Mary Jo

Bay Area Medical Center

Mohorek, Ronald

Ministry Health Care

Nelson, James

Fort HealthCare

Nelson, Nanine

ProHealth Care

Oberholtzer, Curt

Bay Area Medical Center

Rocole, Theresa

Wheaton Franciscan Healthcare

Russell, John

Columbus Community Hospital

Schafer, Michael

Spooner Health System

Selberg, Heidi

HSHS-Eastern Wisconsin Division

Shabino, Charles

Wisconsin Hospital Association

Swanson, Kerry

St. Mary's Janesville Hospital

VanCourt, Bernie

Bay Area Medical Center

Westrick, Paul

Columbia St. Mary's, Inc. - Milwaukee Campus

Zenk, Ann

Ministry Sacred Heart Saint Mary's


Contributions ranging from $1,000 - 1,499
 

Alig, Joanne

Wisconsin Hospital Association

Boese, Jennifer

Wisconsin Hospital Association

Brenton, Mary E.

 

Britton, Gregory

Beloit Health System

Buser, Kenneth

Wheaton Franciscan Healthcare - All Saints

Duncan, Robert

Children's Hospital and Health System

Fale, Robert

Agnesian HealthCare/St. Agnes Hospital

Francis, Jeff

Ministry Health Care

Hahn, Brad

Aurora Health Care

Harding, Edward

Bay Area Medical Center

Hilt, Monica

Ministry Saint Mary’s Hospital

Karuschak, Michael

Amery Regional Medical Center

Kerschner, Joseph

Children's Hospital and Health System

Kosanovich, John

UW Health Partners Watertown Regional Medical Center

Loftus, Philip

Aurora Health Care

Martin, Jeff

Ministry Saint Michael’s Hospital

Mohorek, Ronald

Ministry Health Care

Morgan, Dwight

Aurora Health Care

Normington, Jeremy

Moundview Memorial Hospital and Clinics

Olson, David

 

Potter, Brian

Wisconsin Hospital Association

Robertstad, John

ProHealth Care - Oconomowoc Memorial Hospital

Sexton, William

Prairie du Chien Memorial Hospital

Stanford, Matthew

Wisconsin Hospital Association

Troy, Peggy

Children's Hospital and Health System

Wallace, Michael

Fort HealthCare

Wolf, Edward

Lakeview Medical Center


Contributions ranging from $1,500 - 1,999
 

Bloch, Jodi

Wisconsin Hospital Association

Borgerding, Dana

 

Coffman, Joan

St. Joseph's Hospital

Eichman, Cynthia

Ministry Our Lady of Victory Hospital

Grasmick, Mary Kay

Wisconsin Hospital Association

Herzog, Mark

Holy Family Memorial, Inc.

Kammer, Peter

Essie Consulting Group

LePore, Michael

Wheaton Franciscan Healthcare

Mettner, Michelle

Children's Hospital and Health System

O'Brien, Mary

Aurora St. Luke's Medical Center

Olson, Edward

ProHealth Care

Starmann-Harrison, Mary

 

Warmuth, Judith

Wisconsin Hospital Association

Woodward, James

Meriter Hospital


Contributions ranging from $2,000 - 2,499
 

Fish, David

Hospital Sisters Health System

Kachelski, Joe

Wisconsin Statewide Health Information Network

Katen-Bahensky, Donna

 

Leitch, Laura

Wisconsin Hospital Association

Levin, Jeremy

Rural Wisconsin Health Cooperative

Merline, Paul

Wisconsin Hospital Association

Neufelder, Daniel

Affinity Health System

Pandl, Therese

HSHS-Eastern Wisconsin Division

Size, Tim

Rural Wisconsin Health Cooperative


Contributions ranging from $2,500 - 2,999
 

Borgerding, Eric

Wisconsin Hospital Association

Desien, Nicholas

Ministry Health Care


Contributions ranging from $3,000 - 3,999
 

Erwin, Duane

Aspirus Wausau Hospital

Turkal, Nick

Aurora Health Care


Contributions ranging from $4,000 - 4,999
 


Contributions $5,000 +
 

Brenton, Stephen

Wisconsin Hospital Association

Tyre, Scott

Capitol Navigators, Inc

 

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Senate Recall Elections Continue; Legislature Passes Redistricting Plans

Wisconsin’s Senate recall elections continued this week with a second round of primaries setting the stage for two more general elections in August, and another race deciding a final winner.

In the 30th Senate District, Senator Dave Hansen (D-Green Bay) retained his seat by defeating recall organizer and Republican challenger David VanderLeest in a race that did not require a primary.

With results from this week’s primaries now in, here’s how the general elections set for August 16 shape up:

District 12 — Senator Jim Holperin (D-Conover) – Senator Holperin will face Republican challenger and small business owner Kim Simac from Eagle River.

District 22 — Senator Bob Wirch (D-Pleasant Prairie) – Senator Wirch will face Republican challenger Jonathan Steitz, an attorney from Pleasant Prairie.

As previously reported (http://www.wha.org/pubArchive/valued_voice/vv7-15-11.htm), last week’s primaries in recalled Republican Senator districts will be held August 9.

Legislature Approves Redistricting Plans

After receiving committee approval last week, Republican majority plans for redrawing Wisconsin’s legislative districts were approved by both the Senate and Assembly.

Updated census numbers require new legislative district boundaries each decade to account for state demographic changes. With Republicans in control of both houses of the legislature this cycle, Democrats have little, if any, influence on the process.

The legislation now moves to Governor Walker who is expected to approve the plans.

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Federal Deficit: CEOs Talk Medicare/Medicaid Cuts In Their Local Papers

Across the state, hospital executives are writing to their local papers to express concern over the levels of Medicare and Medicaid cuts being discussed during ongoing federal debt ceiling/deficit reduction talks in Washington, DC. We wanted to make sure you saw excerpts of what they are saying in their opinion editorials and letters to the editor…

Therese Pandl, President & CEO HSHS-Eastern Wisconsin, in the Green Bay Press Gazette

Congress is debating the debt ceiling and proposals are being discussed that would drastically cut Medicare and Medicaid payments for hospital care. The proposed level of health care cuts range from $100 billion to $350 billion and beyond. As you can imagine, billions in cuts would be devastating to our community… Right now Wisconsin’s Medicaid program provides an essential health care safety net to more than 1.1 million people. And while enrollment in Medicaid has increased dramatically over the last decade, reimbursement rates in the program cover a diminishing percentage of the actual cost of providing care. Further cuts – like eliminating provider assessments or reducing the rates the federal government pays states for the Medicaid program – would jeopardize this fundamental health care safety net…We are also very concerned by changes to Medicaid payments for the very real impacts these cuts will have on our communities. Our hospitals have been proactive in efforts to increase quality and cost-effectiveness and will continue to strive for improvements, but hospitals cannot continue to face perennially declining reimbursements or be the default option to find "reform" savings. We ask our Members of Congress – Senators Kohl and Johnson and Representative Ribble – to oppose these cuts.

Consider this: This year it’s projected that Wisconsin hospitals will lose more than $428 million, or 13.8 percent of cost, serving Medicare patients. With additional hospital payments reductions, by 2019 that loss would reach nearly $1 billion or 28.1 percent of cost. Further reductions would have a devastating impact on our community…

Duane Erwin, President & CEO, Aspirus Inc in the Wausau Daily Herald

Enrollment in Wisconsin’s Medicaid program grew 16.8 percent in 2008 and 21.5 percent in 2009 resulting in the program now providing an essential health care safety net to more than 1.1 million people in the Wisconsin…Yet in 2010, that same program paid hospitals $725 million less than what hospitals spent caring for those Medicaid enrollees. The good news is that Wisconsin has been able to stabilize its Medicaid program in part through use of a provider assessment. The bad news is that that stability is in jeopardy with proposals being debated in Washington … I’ve asked our members of Congress to oppose any additional cuts. I ask you to support opposition to additional cuts to Medicare and Medicaid by calling your member of Congress at (866) 887-CARE. Tell them to "protect hospital care by opposing additional cuts."

Joan Coffman, President & CEO, St. Joseph’s Hospital in the Chippewa Herald

There are multiple proposals circulating in Washington, D.C., each of which would cut Medicare and Medicaid, negatively impacting Wisconsin’s ability to provide care to the elderly and the neediest. We understand the need for shared sacrifice, but hospitals already are facing billions in payment reductions from other federal policies. Yet, in spite of declining reimbursements, Wisconsin hospitals continue to work on innovative reform initiatives, including health homes, care coordination and continued quality improvement. All of these efforts and many, many others have been undertaken proactively by our hospitals while simultaneously continuing to deliver some of the highest quality, cost-effective care in the nation.

Joint letter from Jeff Martin, Regional CEO at Ministry Health Care, and Brian Kief, President of Ministry Saint Joseph’s Hospital, in the Marshfield News Herald

All of us have seen the news regarding the debate in Congress about raising the nation’s debt ceiling, the level of spending and potential tax increases. Each side in this debate has proposed numerous spending cuts, including potential reductions in Medicare and Medicaid payments to hospitals. Locally, these reductions could have a devastating impact on health care as it is provided to our community. I urge Senators Kohl and Johnson and Representative Baldwin to protect our patients and hospital care in our community during federal deficit discussions….

Sandy Anderson, President, St. Clare Hospital in the Baraboo News Republic

It’s anyone’s guess what ultimately will happen in Washington, DC as the president and Congress decide whether or not to raise the federal debt ceiling. By all accounts, these discussion include significant additional reductions to Medicare and Medicaid spending via massive healthcare provider payment cuts …Compounding this threat, the current proposed reductions, estimated in the $100 billion range, come on top of $2.6 billion in Medicare cuts Wisconsin hospitals will see over the next 10 years to finance recent federal health care legislation. Often, the care we provide to residents of Jefferson County and beyond costs us much more than these programs pay. These drastic cuts as proposed would negatively impact Fort Atkinson and surrounding communities

Mike Wallace, President & CEO, Fort Healthcare, in the Fort Atkinson Daily Union

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2011 WHA Annual Convention: Looking Toward Tomorrow’s Health Care
Full brochure and on-line registration available at www.wha.org

Make your plans now to attend WHA’s 2011 Annual Convention on September 14-16 at the Grand Geneva Resort in Lake Geneva.

Leaders in the health care industry must constantly be looking toward tomorrow’s health care, anticipating and planning for the changes to come. To assist in that, this year’s convention will include:

Health care executives are encouraged to bring members of your board of trustees, your nurse executives and physician leaders, and other members of your senior management team to gather in Lake Geneva to join the discussion as we look toward tomorrow’s health care.

The full conference brochure and on-line registration are now available at www.wha.org . A printed brochure will be included in the July 29 weekly packet. For registration information/questions, contact Lisa Littel at 608-274-1820 or email at llittel@wha.org .

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Low-Cost County Add-On Payments Released by CMS
40 Wisconsin hospitals to see temporary increase

This week 40 Wisconsin hospitals are to receive increased Medicare reimbursement payments under a provision enacted in the health care reform law. The $12.5 million in new payments seek to address inequities in Medicare hospital reimbursements for those counties that rank in the lowest quartile in the country in several areas.

The provision was included in the final health care reform law due to the efforts of legislators like Rep. Ron Kind (D-La Crosse). Others in Wisconsin’s delegation at that time, such as Senators Kohl and Feingold and Rep. Tammy Baldwin (D-Madison), were also supportive of the provision.

Hospitals qualifying for this year’s payments are to receive additional payments next year. A list of the 40 Wisconsin hospitals receiving the increased Medicare payment in Fiscal Year 2011 is available at: www.wha.org/WisHospitalPaymentsFY11.pdf

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Rep. Petri Meets With District Hospital CEOs, Discuss Drastic Cuts to Medicare/Medicaid
Petri: "It’s not going to be pleasant."

This week hospital executives in U.S. House Representative Tom Petri’s district met personally with him at Agnesian HealthCare to discuss federal debt ceiling negotiations and the impact proposed Medicare and Medicaid cuts would have on hospitals and area communities. The meeting was coordinated by WHA and is part of WHA’s grassroots campaign to push back against the proposed health care cuts.

"Every provider in this community is offering real, practical ways to move forward with providing value in health care," began host hospital Agnesian President & CEO Bob Fale. "Hospitals are already facing cuts. When combined with even more reductions, it makes for an untenable situation."

Area hospital CEOs participated in this meeting to share concerns with Rep. Petri over federal debt ceiling proposals that would cut Medicare and Medicaid upwards of $100 billion or more. For Wisconsin hospitals, this level of payment reduction comes on top of an estimated $2.6 billion loss Wisconsin hospitals are already facing due to cuts stemming from health care reform.

Rep. Petri acknowledged Wisconsin providers as some of the highest quality, cost-efficient providers in the nation and suggested they be recognized for these actions. "The truth is you’re going to have cuts," Petri began. "But you should get some additional flexibility because you’re a high value provider."

Sheboygan St. Nicholas Hospital President & CEO Andy Bagnall responded to Rep. Petri by saying, "We are already far down the ‘value’ path. If we make blanket cuts, as are being proposed in DC, that throws the whole equation off and we’ll have to look at everything, including services."

Holy Family Memorial Hospital (Manitowoc) President & CEO Mark Herzog followed up by saying, "The recession is still part of the reality for a lot of us. In Manitowoc and other areas, health care providers are a big economic engine and cuts will undermine this."

To that point, Holy Family’s Scott McMeans reminded Rep. Petri that "cuts will result in cost-shifting onto employers."

The meeting ended with an opportunity for Rep. Petri to see how area hospitals are already coordinating care, providing for those in need and managing increased Medicaid populations efficiently through tours of both the Agnesian Care Clinic and Agnesian Samaritan Health Clinic.

WHA is coordinating similar high-level CEO-legislator meetings across the state in the comings days.

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Medical Society CEO Turney takes national position

Susan L. Turney, MD, has accepted the position of chief executive officer (CEO) of the Medical Group Management Association (MGMA) based in Englewood, Colorado. Turney has served as the Wisconsin Medical Society’s CEO and Executive Vice President for seven years.

Society Board Chair Kevin Jessen, MD, said Turney has been a tireless advocate on behalf of physicians and patients in Wisconsin, and she leaves the Society well-positioned to continue its highly-respected leadership role at the local, state and national levels.

An internal medicine physician, Turney has served on state and national health care committees, including committees of the National Quality Forum. She was instrumental in the development of the Wisconsin Statewide Health Information Network (WISHIN) and serves as the organization’s chair.

"I am very proud of the Society’s achievements the past seven years," said Turney, the first woman and first physician to lead the organization during its 170-year history. "Wisconsin is consistently ranked among the top states for high quality health care, and I am excited to bring the great work of our state’s physicians and other health care professionals to the national level."

WHA President Steve Brenton offered his congratulations to Turney on her new position. Brenton said Turney fostered a strong working relationship between the Society and WHA.

"Dr. Turney’s strengths as a health care leader and her deep understanding of clinical issues have been assets as we developed strategies to improve the quality, reduce costs and increase access to care for Wisconsin’s residents," Brenton said. "We wish her all the best in her new position at MGMA.

The Medical Group Management Association is the largest national professional association representing medical practice managers and executives. Turney will begin her new role overseeing the strategy and operations of the 22,500-member MGMA and its credentialing and standard-setting body, American College of Medical Practice Executives, in October.

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Restriction Revised on Patient Lifting Device Use by Individuals Under 18
Senator Kohl Deserves Thanks

Restrictions on use of lift devices by individuals under age 18 promulgated by the federal Department of Labor (DoL) last year have created issues for health care facilities that participate in CNA programs for high school students and/or employ high school age students in caregiver roles. On July 19, 2010, the DoL’s Wage and Hour Division issued a restriction, known as Hazard Order #7, on the use of hoists and hoisting apparatuses. Under the order, minors under the age of 18 were banned from operating or assisting in the operation of most power-driven hoists, including those designed to lift and move patients.

WHA heard from members like Troy Marx of Upland Hills Health in Dodgeville about the negative impact this rule would have on training programs and contacted the office of U.S. Senator Herb Kohl, explaining the impact this rule would have on educational programs and health facilities. Due to Senator Kohl’s diligent work leading a bipartisan effort, this week the DoL issued a field assistance bulletin modifying the ban on younger workers operating patient lifts in nursing homes and other long-term care facilities.

Under the modified order, power-driven patient lifts of less than one ton can be used by 16- and 17-year olds under the following circumstances:

"We are pleased that the Department of Labor has recognized that there’s a big difference between large construction hoists and the safe and simple patient lifts found in nursing homes," Sen. Kohl said. "We know that manually lifting immobile, fragile people is a recipe for disaster – both for workers and residents. The Department is to be commended for modifying its hazard order with a new directive that strikes a balance between allowing younger workers to safely use patient lifts with appropriate supervision by a trained adult."

The order can be found at: http://www.dol.gov/whd/FieldBulletins/index.htm

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Reminder: Schedule H project for tax-exempt hospitals reopened

The AHA has been working with tax-exempt specialists at Ernst & Young to collect and analyze Schedule H forms filed with the Internal Revenue Service to pinpoint weakness in the form and advocate for necessary changes. AHA is reopening the project to allow tax-exempt hospitals that file on a fiscal year basis to participate in this project. Through September 15 hospitals that submit a copy of their filed Schedule H at the project’s secure website will receive a concise benchmark report summarizing the responses of similar hospitals to questions such as the amount of unreimbursed Medicaid expenses. No participant’s name or identifying information will be disclosed as part of any feedback or report. The project is the latest in a series of AHA resources to help hospitals understand and comply with the new reporting requirements. These include the Schedule H Practice Web site, which walks users through Schedule H questions, offering explanations, guidance and links to the IRS instructions for each one. For more information, contact AHA Member Relations at 800-424-4301.

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Joint Finance Committee Approves Wausau-area Federal Broadband Funds;
Telecommunications providers file lawsuit to stop statewide broadband projects

On Tuesday (July 19), the Joint Finance Committee (JFC) approved a request to commit funds that Wisconsin received from the federal Building Community Capacity through Broadband (BCCB) grant to expand broadband access and connectivity in the Wausau area. However, one day later, the Wisconsin Independent Telecommunications System filed a lawsuit seeking to block the BCCB grant project throughout Wisconsin. A preliminary hearing is scheduled August 30.

The Wausau area project is one part of the BCCB grant, which provides over $30 million to Wisconsin to help expand and improve broadband internet access in rural and underserved areas. The University of Wisconsin Extension is the fiscal agent for the grant.

The Joint Finance request, approved on a 14-0 vote with two Committee members absent, became necessary after provisions were included in the recently signed state budget requiring that funds from the BCCB grant not committed to projects prior to June 15, 2011, receive JFC approval to move forward.

In a memo to the joint finance committee, WHA supported the request for BCCB funding for the Wausau area broadband project.

"The expansion of broadband access and connectivity provides access to fast, dependable and affordable transmission of [health care information between health care providers in] areas of the state where before, this transmission – and the improved health care it provides – simply was not available," the WHA memo states. "In the Wausau area, another example of how infrastructure investments such as these will help improve health care is in the area of tele-psychiatry where the increased use of real-time video conferencing will enhance the delivery, efficiency and accessibility of patient care."

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Patient Experience Summit Scheduled September 30, La Crosse

WHA joins the Gundersen Lutheran Health System, Meriter Health Services, Prevea Health, the Wisconsin Collaborative for Healthcare Quality (WCHQ), and the Wisconsin Medical Society in offering a Patient Experience Summit in La Crosse on September 30. Plans are being finalized now for the Summit, which will feature best practices, resources and program that enhance the patient, family and care team experiences while also improving clinical outcomes.The summit will emphasize the Clinician and Group Consumer Assessment of Healthcare Providers and Systems (CG-CAHPS), Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), physician engagement, employee engagement and service recovery.Additional information, including an agenda and registration information, will be distributed via Valued Voice and WCHQ’s Online Community in the near future.

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Medical Examining Board Supports Physician Data Collection With Relicensure
MEB votes down increase in MD/PA ratio

The Medical Examining Board (MEB) unanimously approved directing the Department of Safety and Professional Services (DSPS), previously known as the Department of Regulation and Licensing, to conduct a survey at the same time as the MD license renewal this fall to collect workforce-related data. The survey will utilize a minimum data set recommended by HRSA that will address important questions that are necessary in determining Health Professional Shortage Area (HPSA) designations in Wisconsin. A work group, including DSPS staff, Examining Board members, and members of the Wisconsin Data Collaborative will work out details, review the proposed questionnaire and report back at the next meeting.

Physician data collection is critically important for new shortage area designations which provide federal resources for the physician workforce, but equally important is the need to understand the current physician workforce size, location and specialty to allow for planning and policy.

Also at the July 20 meeting, the Board moved forward on a proposal that will require new applicants for medical licenses to submit fingerprints and undergo a criminal background check as part of the application process. The MEB voted to not support a suggested change to the physician/physician assistant supervision ratio. The Physician Assistant Council recommended, with the agreement of the Wisconsin Hospital Association, a change from the current one physician to two physician assistant ratio to a one to five ratio. The Board asked about the experience of other states that had supervision ratios greater that 1 to 2, specifically changes in quality of care or patient outcomes seen by those states.

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Transforming Care at the Bedside Visits Continue

WHA’s Judy Warmuth, vice president, workforce, has been conducting site visits at the 18 medical-surgical nursing units participating in the Transforming Care at the Bedside project (TCAB). The major purpose of a site visit is to ensure that each team has successfully launched TCAB on their unit.

The medical-surgical staff at Monroe Clinic has collected data on the time RNs spend in various activities. This is a good way to measure the impact of efforts to increase time at the bedside. They have placed locators on vital sign carts and had early wins with dietary supplies. Hourly rounding is their current emphasis.

Bedside discharge planning was a featured innovation at the Reedsburg Area Memorial Hospital visit that also featured a new family/visitor lounge. This team has a large poster on the nursing unit that show projects and activities under each focus area of TCAB. This team did data collection using pedometers.

Nursing staff at Divine Savior Hospital began their work as a team by reorganizing the storage areas on the unit and designing a system for assuring that pillows are available for patients. They have begun to examine medication delivery on their unit. They are also collecting data on patient meal ordering and tray delivery. Since the team is comprised of nurses from all three shifts, it complicated the meeting schedule for the group, but they now report that they are "off and running" on their project.

The TCAB team at Froedtert, Community Memorial, Menomonee Falls has also studied how nurses spend their time. They utilized the PDA-based process used by earlier TCAB cohorts. Their team consists of CNA staff and a health unit coordinator. Small quick changes included changing telemetry monitoring process for RNs and a check sheet informing all staff what daily tasks have been completed. They have a team for each pillar and have a long-term goal of evaluating their model of nursing care delivery.

Teams have all been asked to provide feedback to WHA staff Judy Warmuth and Stephanie Sobczak. The most frequent request is that the many projects and ideas created by each team be available to all teams to facilitate sharing. WHA is currently developing a means of sharing the projects, a key element of success for the TCAB effort.

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Wisconsin Hospitals Community Benefits: Acute, Chronic and Communicable Disease Prevention and Control

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.

 

Over 1,600 receive a flu shot!

Combined efforts by Spooner Health System (SHS) and Indianhead Medical Center (IMC) resulted in over 1,600 people receiving a flu shot this fall.

      SHS and IMC held community flu shot clinics at the Washburn County Fairgrounds, Shell Lake United Methodist Church, Stone Lake Senior Center and Minong Village Hall.  Flu shots were offered to the employees of Jack Links, Washburn County, Bosch, Glenview, Care Partners, Shell Lake and Spooner School District.  They were also made available to all SHS and IMC employees as well as nursing home residents.

Spooner Health System, Spooner, and Indianhead Medical Center, Shell Lake

Chronic disease management

Living with a chronic disease can be stressful. Living well with a chronic disease can be empowering. Vicki Conte, coordinator of the Froedtert & Medical College of Wisconsin’s Parkinson’s and Movement Disorders program, has seen firsthand the improvements in health and quality of life that individuals can achieve through chronic disease self-management and workshops.

      Vicki is one of three trained facilitators at Froedtert who lead Living Well workshops for people with chronic medical conditions. Developed at Stanford University, the Chronic Disease Self Management Program, known here as Living Well, is an evidence based program designed to enhance standard treatment, such as cardiac rehabilitation or diabetes instruction. This self management approach provides positive outcomes in a variety of ways--improved exercise and cognitive symptom management, as well as communication with physicians. Participants typically spend fewer days in the hospital, and often require fewer outpatient visits.

      “After someone has received an accurate diagnosis and has started treatment and education for their illness, they must learn to manage the disease themselves,” says Vicki. Their physician and care team are their consultants, but day-to-day coping skills must be learned by the individual.”

      Offered free of charge to community members as well as Froedtert patients, Living Well workshops are conducted for two and a half hours, once per week, for six weeks, in various community settings. Participants include individuals with a great variety of chronic conditions, such as diabetes, heart disease, Parkinson’s and arthritis. Participants learn the tools to break “the symptom cycle,” i.e. problem solving, using your mind to manage symptoms, communication, understanding difficult emotions, managing fatigue, managing pain, better breathing, healthy eating and medications. Supplemental reading may be assigned as homework along with working on an individual action plan for the week. Participants are asked to report back to the group at the beginning of each session.

      “Frequently, people with chronic conditions label themselves with their disease,” explains Vicki. “This program is especially enlightening to participants when there is a mix of conditions, ages and experiences in the group. People begin to see themselves differently and they find support in each other. It can be very ‘freeing’ for them.”

      This last year, Froedtert offered 15 Living Well workshop series, with 12 to 15 participants per class. The cost of the workshop was free and included the use of an accompanying book for the duration of the class.

Froedtert Hospital, Milwaukee

 

Diabetes Fair provided valuable information

People with diabetes, their family members and the public attended the Diabetes Fair on Saturday, November 13, 2010, from 8:30 a.m. to Noon at the Country Inn and Suites in Black River Falls.  The event featured speakers, displays with diabetes educational information and supplies, blood sugar testing, door prizes and refreshments.  In addition, diabetes educators were available throughout the morning to answer questions.  There was no cost to attend.

      Speakers and topics included the following:  Kirk Lane, M.D. from Krohn Clinic, presented “Metabolic Syndrome”; Danielle Jacobs, MSW from Krohn Clinic, presented “Making Successful Lifestyle Changes”; and Angie Kohlwey, RDCD from Black River Memorial Hospital, presented “Nutrition for Life: The Power of One.”  Between the presentations, participants had the opportunity to visit the displays and enjoy refreshments.

      Planning Committee member and Krohn Clinic Diabetes Nurse Educator, Katie Edwards, RN, says, “We encourage people who have diabetes to attend the Diabetes Fair to learn how to take charge of their care and control their blood sugar levels.  We also encourage people who have not been diagnosed with diabetes but who have an increased risk of developing the disease to attend to learn as much as they can about this disease.”

      The Diabetes Fair is sponsored by Black River Memorial Hospital, Krohn Clinic, Ho-Chunk Nation Health Department, and the Jackson County Public Health – Health and Human Services Department.  It is funded through a grant from the Lunda Charitable Trust.

Black River Memorial Hospital, Black River Falls

 

Submit community benefit stories to Mary Kay Grasmick, editor, at mgrasmick@wha.org.

 

Read more about hospitals connecting with their communities at www.WiServePoint.org.

 

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