WHA is partnering with Meriter Hospital to appeal a court decision that interprets a state statute as permitting counties to avoid paying for the health care costs of county inmates.

The dispute arose after the Dane County Sheriff’s Department brought one of the County’s very ill indigent inmates to Meriter. The inmate was comatose and, as the Sheriff’s office stated in a note, was "on life support and not a threat of flight at this time." The County informed the State that the inmate had been hospitalized and the prosecutor moved to dismiss the charges against the inmate. In addition, the Department of Probation and Parole cancelled an order to detain the inmate. The inmate, however, was subject to an "Apprehension Request," stating that Meriter was to contact the Sheriff or the inmate’s probation agent prior to releasing the inmate from the hospital.

The inmate was at Meriter for a total of 34 days; his medical bills totaled more than $187,000. And how much did Dane County pay for the care delivered to its prisoner? — $4,463!

The County claimed that because the inmate had been released from custody after the third day of hospitalization, the County was not responsible for the inmate’s medical bills beyond the first three days. "The County claims that its only financial motivation was to avoid the costs of paying a guard overtime to sit with a comatose patient – avoiding the payment of a large medical bill was apparently viewed as a side benefit," said WHA President Steve Brenton.

Meriter and WHA argued that the state statute requires the payment of the inmate’s medical bill because the County’s obligation is determined at time of admission; the County must pay for all appropriate care its sick prisoners require when brought in for treatment; and the DRG calculations are not amenable to parsing out as was done by the trial court.

The Court of Appeals held that the statute requires counties to pay only for persons held under the state criminal laws or for contempt of court. Because the prisoner in this case was not being held after the third day, the county was not obligated pay beyond that time.

"It’s one thing when Medicaid underfunding results in cost-shifting and higher health insurance premiums for employers," said WHA’s Eric Borgerding. "But this appears to be an intentional strategy by Dane County to leave a community hospital and, ultimately, local employers holding the bag for government health care costs. This is something hospitals statewide should be concerned with — we cannot allow this to become a new budgeting strategy for counties across the state."

The next step in addressing the situation comes, hopefully, at the Wisconsin Supreme Court. WHA is assisting Meriter in requesting that the Wisconsin Supreme Court review the Court of Appeal’s decision and provide a rational interpretation of the statute created to require counties to pay for the cost of their prisoners’ health care. If that effort is unsuccessful, WHA may look to the legislature to strengthen the law. For more information, contact WHA General Counsel Laura Leitch at 608-274-1820 or lleitch@wha.org .

WHA submitted testimony opposing the Department of Health and Family Services’ (DHFS) proposed administrative rule that would establish maximum fees health care providers could charge for furnishing copies of health care records. WHA opposes the proposed rule because the rule does not reflect the actual costs of providing copies of health care records.

The proposed administrative rule is the result of a statutory mandate that DHFS establish fees that providers may charge for copies of health care records; the established fees must be based on the actual costs of furnishing copies. DHFS is proposing a per page fee of 31 cents and a per request fee of $12.50 or $15. As proposed, providers could not charge patients or their personal representative the per request fee (in other words, patients and their personal representative could be charged only 31 cents per page). WHA asked DHFS to reconsider its proposal.

In a memo to DHFS commenting on the proposed rule, WHA General Counsel Laura Leitch states:

"If the prescribed fees do not reflect the actual costs of furnishing the service, Wisconsin health care providers could lose the oftentimes most cost-efficient option of outsourcing this service, would be forced to shift the costs of providing this service to other payers, and may struggle to furnish the service in an efficient and reliable manner. WHA opposes the proposed rule because the rule does not reflect the actual costs of furnishing the service.

It is important to note DHFS’s statutory authority for promulgating the proposed rule requires the rule to reflect an approximation of actual costs."

After DHFS considers the comments it receives on the proposed rule and makes any amendments, DHFS must submit the rule to the standing committee in each house legislature for review. If DHFS does not make the requested changes, WHA may ask the committees to hold hearings on the proposed rule. A copy of WHA’s testimony is available on the WHA website.

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The Centers for Medicare & Medicaid Services (CMS) has put on display at the Federal Register two interim final rules that implement provisions of the recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The first rule implements mandated changes to the 2004 hospital outpatient prospective payment system (OPPS), originally issued November 7, 2003 as a final rule. The other rule implements changes to the 2004 physician fee schedule, and payment for drugs and biologics. These rules - available soon at www.cms.hhs.gov/providers/default.asp and expected to be published in the Federal Register on January 6 - take effect January 1, 2004. The interim final rules include at least a 1.5% increase in payment for physician services; changes in the way Medicare pays for prescription drugs in physician offices and hospital outpatient settings; and an extension for two years the OPPS "hold harmless" provision for small rural hospitals with less than 100 beds and sole community hospitals of any size.

CMS’ year-end activity also includes two additional notices. The first, published in the Federal Register, is an OPPS technical correction notice, correcting errors in the November 7 final rule. These corrections include increasing the payment for observation services from $209.27 to $365.35. The second notice provides instructions for hospitals to apply for a one-time appeal for geographic reclassification of the hospital wage index. This notice will be published in the Federal Register on January 6.

Watch the finance and data section of the WHA website (http://www.wha.org/financeAndData/default.aspx) for postings of the rules as they become available.

Medicaid payment shortfalls will increase again in 2004…at a percentage rate that will easily surpass Medicare’s sorry track record…at least for this calendar year.

Consider this: In 2002, the State of Wisconsin paid hospitals about 62 cents for every dollar spent on patient care. Although the numbers are not yet in for 2003, that payment-to-cost ratio undoubtedly dipped by another penny or two…or three. And for 2004, new Medicaid cuts—especially significant and very difficult reductions for teaching hospitals—take full effect.

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In 2001—the last year with available data—Wisconsin’s Medicaid program ranked 49th in the nation in percent of hospital costs paid. Even with recent Medicaid cuts and payment reductions enacted across the nation, it’s unlikely that our sorry ranking has improved over the past two years.

Another way of looking at this gloomy picture is that the current and worsening Medicaid cost-shift is now at about $269 million annually. This is a huge and growing "hidden tax" on health insurance premiums from the State’s Medicaid program and its partner…BadgerCare.

An option that’s completely unacceptable…totally a non-starter…is another round of provider payment cuts. And that’s not debatable. In fact, WHA’s focus will be on restoring Graduate Medical Education dollars and supporting a targeted and sustainable commitment to improving payments while reducing current shortfalls.

The task, of course, will be difficult. Unlike new roads and new schools, the medically indigent have but a meager constituency. But, there is a constituency that cares about rising health insurance costs and they must become engaged on this issue.

Steve Brenton, President

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The 2004 Annual Education Calendar is included in this week’s packet. WHA members can choose from a variety of educational seminars that cover issues such as billing and coding, operations, quality, leadership development and others. Also included are dates for WHA’s important annual events.

As member needs change, so will the WHA educational offerings. The calendar includes all planned events as of December 29, 2003, but continue to watch for information on additional educational programming throughout 2004.

Specific seminar/event brochures and registration information will be distributed approximately eight weeks prior to the event dates via direct mailing and WHA’s weekly newsletter and packet. The same information will also be available on the web site at www.wha.org. Remember that you can register on-line for most 2004 programs.

For more information about educational programming for 2004, contact Jennifer Frank at 608-274-1820 or jfrank@wha.org . For registration information, contact Jenny Boudreau at 608-274-1820 or jboudreau@wha.org .