November 11, 2005
Volume 49, Issue 42



Medical Malpractice Legislation Heads to Governor’s Desk

After clearing the Assembly two weeks ago, this week the Senate passed legislation reinstating caps for non-economic damages (pain and suffering) awarded in medical malpractice cases. AB 766 reinstates caps on non-economic damages at $450,000 for adults and $550,000 for children (18 and under). The legislation is in response to the Wisconsin Supreme Court striking down Wisconsin’s cap on non-economic damages in July.

In making the case for reinstating the cap, Senator Scott Fitzgerald (R-Juneau) was quick to point out to his colleagues that, unlike some other states that limit both economic and non-economic damages, Wisconsin currently has no cap on economic damages and there is no effort to change that.

Sen. Fitzgerald said the legislation is designed to address Supreme Court Justice Crooks’ concerns about the lack of rationale behind the previous cap, when he indicated that the number seemed to be "plucked out of the sky." Fitzgerald described to his colleagues the thoughtful process that was undertaken in crafting this legislation. "The numbers were arrived at by claims’ experience, comparison to other states and a study by Pinnacle Actuarial Resources that indicates these numbers are very close to where we need to be."

The bill also establishes a biennial review process (every odd numbered year) for determining whether the amount of the caps is still appropriate or whether it needs to be adjusted. While six Democrats in the Assembly joined all of their Republican counterparts in voting for the bill, the vote in the Senate was strictly along party lines. However, Senator Mark Miller (D-Madison) offered an amendment to reinstate a cap at $1 million. Though the $1 million cap was not supported by WHA, and failed, it was a strong, bipartisan signal of a desire to address the issue.

"All 33 senators, Democrat and Republican, voted for a cap on Tuesday (November 8), because they recognize that Wisconsin needs damage limits to maintain access to high quality physicians and hospital care," said WHA’s Senior Vice President Eric Borgerding. "While the cap amounts differed, I think these votes sent a very strong message, and am hopeful that a cap will eventually be reinstated in Wisconsin."

The disagreement that remains seems to be over determining what the amount of the cap should be. Wisconsin’s Governor, Jim Doyle, in early media reports has indicated he will veto the bill. However, WHA will be working with members and the public by running radio ads asking people to contact Governor Doyle urging him to sign AB 766.

WHA’s Vice President of Government Affairs Jodi Bloch added, "We need only look to our neighbors in Illinois to witness the devastating consequences that having no caps on non-economic damages can do to health care access. We have to fight to maintain this access that up until now Wisconsinites have taken for granted."

For more information on AB 766 or any other legislation, contact WHA’s Eric Borgerding or Jodi Bloch at 608-274-1820.

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Hospital Association Rips Lautenschlager Over Price-Gouging Allegations

Within a few hours of learning that Attorney General Peg Lautenschlager had scheduled a Milwaukee news conference at 1:30 on November 7 to announce that "enforcement actions" would be taken against two Milwaukee hospitals, WHA was on the road heading to the event, press statement in hand.

During the news conference, Lautenschlager accused two Milwaukee hospitals of "price gouging" uninsured patients. The timing of her announcement was curious, as WHA Senior Vice President George Quinn observed after the news conference. "This really wasn’t about helping out the uninsured. It was a cheap stunt by a desperate politician."

Hospital spokesperson Anne Ballentine said one of the patients singled out during the news conference as being "over-charged," had been informed that she likely qualified for free care at the hospital, but never applied.

Joining Lautenschlager at the podium were trial attorneys Willard Techmeier from Milwaukee and Randy Hopper from a Minnesota-based law firm identified with the Scruggs lawsuits.

Techmeier said hospitals are "garnishing people’s wages," an allegation quickly questioned by a member of the media. Lautenschlager took to the microphone and said she knows of a case in "Fond du Lac, but it isn’t a Fond du Lac hospital" that is garnishing a wage. The garnishment allegation went unsubstantiated by both Techmeier and Lautenschlager.

Another puzzling comment came from Hopper who said not all charity cases can be sent to "Milwaukee General Hospital." That drew a guffaw from WHA Metro Milwaukee Vice President Bill Bazan. "Mentioning a hospital that has been closed for nearly five years just goes to show you what can happen when you try to shore up a news conference with an out-of-state trial attorney," Bazan quipped later.

Hopper described Mississippi trial attorney Scruggs as, "my colleague," and went on to remind the media that they have filed lawsuits against hospitals across the nation. Attorney General Lautenschlager’s actions parrot those suits, according to Quinn.

"Lautenschlager’s actions mimic the cookie-cutter lawsuits that have been filed across the country, promoted by a Mississippi trial attorney," Quinn said, noting that the suits have been consistently dismissed as baseless by trial courts across the nation. "The real numbers tell a far different story, with Wisconsin hospitals actually providing free or largely subsidized care to 2,315 patients a day at a price tag approaching $500 million annually. Those facts are hardly indicative of price gouging the uninsured."

"Despite this disappointing development, WHA remains open to undertaking a partnership initiative with the Attorney General’s office," WHA President Steve Brenton said. "Collaboration, not political theater, remains the preferred avenue to promote proactive hospital billing and collection guidelines."

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President’s Column: Attorney General Stages "News" Event

Flanked by trial lawyers this past Monday afternoon in Milwaukee, Wisconsin’s Attorney General tried to manufacture news by bashing Milwaukee hospitals for "price gouging" uninsured patients. But Attorney General Lautenschlager failed to generate the type of sensational headlines she wanted to create on the very day her Democratic Party Primary opponent was making statewide news a few miles away by announcing her own candidacy for Attorney General.

Facing a tough challenge from within her own party, Attorney General Lautenschlager tried to become a champion for patient "victims." Instead, she created real victims by trashing community hospitals that are 24/7 safety nets for uninsured patients and their families. Although the focus this week was on two Covenant Health System facilities, any Wisconsin hospital could have been singled out for attention given the slapdash and haphazard guidelines that must have been used to cobble together this publicity stunt.

The facts are that WHA unsuccessfully sought a meeting with the Attorney General well over a year ago. Our hope was to use that occasion as a launch pad to develop a collaborative initiative around the "billing and collection" issue. We naively believed that our proactive guidelines could serve as the catalyst for a meaningful information/education campaign that could be partnered with the AG’s office. After much persistency on our part, the AG’s office finally agreed to meet—and sent litigators…hardly an auspicious signal of forthcoming cooperation.

Instead of constructive dialogue, the AG’s office embraced the failed strategies of Mississippi trial attorney Dickey Scruggs and his ambulance chasing cohorts who have filed cookie-cutter lawsuits all across the country…lawsuits that have been consistently dismissed as baseless by trial courts, in some cases after harsh scolding by trial judges.

Wisconsin hospitals today will care for close to 2,500 patients who have no insurance. They’ll do it again tomorrow, and again the day after that. Ultimately, payment for that care will amount to something less than 20 cents on the dollar of costs. No matter how you cut it, that reality rebuts any notion of "price gouging." And no amount of political grandstanding will alter those very real facts.

Steve Brenton
President

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2006 Medicare Outpatient PPS Final Rule Released

The final Medicare Outpatient Prospective Payment System (OPPS) rule for calendar year (CY) 2006 increases outpatient payments for the nation by 2.2 percent.

Nationally, the rule provides a full marketbasket update of 3.7 percent. Note, this is .5 percent higher than the proposed update of 3.2 percent. This is offset by an overall 2.25 percent loss caused by the expiration of additional drug payments that were provided by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. This results in a 1.5 percent increase exclusive of outlier payments. However, the Centers for Medicare and Medicaid Services (CMS) estimates a 2.2 percent total increase nationally from CY 2005 to CY 2006 based on the fact that there was a shortfall in outlier payments in CY 2005 and CMS assumes there will be no shortfall in 2006.

WHA analysis shows that Wisconsin hospitals will follow the national average with an average increase in outpatient payments of 2.2 percent.

CMS is implementing a reduction in the target for aggregate outlier payments from 2 percent of total OPPS payments in 2005 to 1 percent in 2006. The 1 percent that is removed from outlier payments will be redirected to the payment rates through an increase in the conversion factor for 2006. This change is budget-neutral for the nation, but will result in an overall decrease in payments for major teaching hospitals, hospitals in large urban areas, and small rural hospitals.

In addition, "hold-harmless" payments for Sole Community Hospitals (SCHs) expire at the end of 2005. Based on an analysis required by the MMA, CMS will provide a 7.1 percent payment increase for rural SCHs in 2006 to adjust for their higher outpatient costs. This is an increase from the 6.6 percent adjustment included in the proposed rule. The impact on individual SCHs will depend on the relationship between the gain due to the 7.1 percent add-on and the loss due to the expiration of hold-harmless payments.

Hold-harmless payments for rural hospitals with 100 or fewer beds also expire this year. CMS rejected suggestions from WHA that small rural hospitals should receive an adjustment similar to the new SCH add-on.

CMS decided not to implement the following proposals:

The final rule was published in the November 10 Federal Register and is available at: www.wha.org/financeAndData/pps_outpatient.aspx.

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WHA Financial Solutions: "Talk to the Hand"

The IRS appears unmoved by industry arguments to revise proposed 403(b) changes that are expected to take effect in 2007.

Two organizations representing retirement plan providers received disappointing signals in separate summer meetings with IRS and Treasury Department officials on pending 403(b) regulations. Representatives of the Committee of Annuity Insurers and National Tax Sheltered Accounts Association (NTSAA) met with the officials in June and July, respectively, and apparently failed to win much "give" on two key issues.

This information and more in Solutions Spotlight, included in this week’s Packet.

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Member News: Lieutenant Governor Visits Meriter

Meriter Hospital hosted the March of Dimes statewide kickoff of Prematurity Awareness Month on November 1. Lt. Governor Barbara Lawton joined Meriter Hospital medical and health professional staff, families of premature babies, and March of Dimes volunteers to bring attention to the number one cause of newborn death in the U.S. and in Wisconsin - premature birth. Governor Doyle and 14 Wisconsin mayors have declared November Prematurity Awareness Month, taking action to help prevent this growing and serious health crisis.

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Member News: Fort HealthCare’s Banaszynski Appointed President and CEO at SynergyHealth

Fort HealthCare President and CEO Gregory Banaszynski has accepted a new position at SynergyHealth, Inc. effective February 1. SynergyHealth is a regional health system serving the greater Washington County community. The health system includes St. Joseph’s Hospital, West Bend Clinic and SynergyHealth Foundation.

Banaszynski has been at Fort HealthCare since July 2001. "I have truly enjoyed my time here at Fort HealthCare and as a resident of Jefferson County. The people here are some of the kindest and most generous I’ve ever encountered," said Banaszynski. "The employees and physicians at Fort HealthCare are exceptional as well."

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Member News: AMC Echocardiography Lab Receives Accreditation

Appleton Medical Center has been granted accreditation in adult transthoracic echocardiography by the Intersocietal Commission for the Accreditation of Echocardiography Laboratories (ICAEL). It is one of only 1,000 in the United States, Canada, Puerto Rico and the first in the Fox Valley to be recognized for its commitment to high quality patient care and diagnostic testing.

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