It will take a legislative remedy to fix the loophole in a law that allowed Dane County to dump the costs of caring for a prisoner on Meriter Hospital. The Wisconsin Hospital Association was disappointed with the Wisconsin Supreme Court’s decision this week that allows Dane County and other counties to impose yet another hidden tax on health care consumers.

Because of the ruling, Dane County is being permitted to walk away from a significant medical bill incurred when it sought hospital care for a county prisoner. The individual had become severely ill while in the custody of the Dane County Sherriff.

The County took the prisoner to Meriter Hospital in Madison for treatment. While receiving care in the hospital, the prisoner was released from custody after three days of the eventual 34-day hospital stay. Curiously, even though the charges were dropped against the patient, Meriter was asked to notify the Sheriff upon the patient’s discharge and the prisoner was eventually re-apprehended.

The prisoner’s hospital bill exceeded $187,000, of which Dane County will pay just $12,000.

"By walking away from its medical bills and its obligation to treat its prisoners, the County is knowingly forcing the hospital to shift these unpaid costs to others," according to WHA Senior Vice President Eric Borgerding. "It is a game, and employers and employees in Dane County who are struggling with health insurance costs will be the losers—it’s essentially a hidden tax."

In the opinion Justice Patrick Crooks wrote, "If the result in this case seems harsh, redress should come from the legislature, not from this court." He went on to say, "If a statute fails to cover a particular situation, and the omission should be cured, the remedy lies with the legislature, not the courts."

WHA is exploring legislation that will stop the practice of releasing prisoners when they are hospitalized to avoid payment. WHA’s memo to legislators is posted at www.wha.org/governmentRelations/pdf/prisoners12-10-04.pdf.

"If state and local officials want to curb costs and make health care more affordable, they must start with their own programs first. They have to bite the budget bullet, appropriate the funding necessary to pay hospitals at least something approaching what it costs to provide care, and quit shifting the cost of government health care programs onto the backs of employers, employees and their families," Borgerding added.

The Centers for Medicare and Medicaid Services (CMS) has announced the establishment of 26 Medicare Advantage (MA) PPO regions and 34 Prescription Drug Plan (PDP) regions. Wisconsin is in an MA region that is comprised of Wisconsin and Illinois, and our PDP region only includes Wisconsin.

Establishing the regions is the first step in implementing the Medicare Modernization Act (MMA). MMA will allow Medicare beneficiaries to choose between staying in traditional fee-for-service or enrolling in an MA or PDP and also receive drug benefits. The regulations implementing the plans will be released in January.

Earlier this year, WHA convened a work group to evaluate and comment on the proposed rules. In our comments to CMS, which are posted on our web site at www.wha.org/financeAndData/pdf/cms_drug10-1-04.pdf, we expressed the following concerns:

• The rules do not help to maintain our health care infrastructure because they do not include Critical Access Hospitals (CAH) in their definition of "essential hospital," thus allowing MA plans to leave them out of their networks. In addition, pharmacists in rural communities are not designated as "essential providers," even though they provide local pharmacy dispensing services as well as typically clinical services within the local community hospital.
  
• WHA was skeptical that the regulations would achieve their goal of providing universal access to all Medicare beneficiaries, because they proposed using a "loose" methodology in determining adequacy of access, which could leave many rural beneficiaries without a local pharmacist at "in-network" cost sharing levels.
  
• Wisconsin’s provider-sponsored health plans would be put at a disadvantage, because the rules set up a non-level playing field between local and regional health plans. This could have the effect of driving local plans out of the market. The local plans in Wisconsin tend to be provider-sponsored, and have served the purpose of making low-cost, high-quality health insurance available to many in their communities.
  
• Finally, WHA commented that it is unfortunate that Wisconsin beneficiaries, plans and providers continue to be disadvantaged because the proposed benchmarks for the health plans are significantly affected by our state’s historically lower utilization rates.

When the regulations are published in January, WHA will reconvene the work group to analyze the rules and communicate the findings to WHA members.

If you have any questions, call George Quinn at 608-274-1820.

On Thursday, December 9, Gov. Jim Doyle spoke at Aurora’s Parkinson Research Institute development breakfast. Doyle, who is dedicated to advancing stem cell research in the state of Wisconsin, told the group he would veto any bill that comes to his desk that limits stem cell research.

Doyle said while California is willing to assume a great deal of public debt, Wisconsin will find a way to fund advancements in this science in a manner compatible with the state budget.

"We are on the threshold of a wonderful opportunity to make significant advances in our understanding of the interrelationships among neurological diseases, such as Parkinson’s," said Ed Howe, president and CEO of Aurora Health Care. "We are delighted that the Governor supports our efforts in Parkinson’s research."

During his remarks, Doyle also mentioned his family’s experience with his mother’s Parkinson’s disease.

Milwaukee County Executive Scott Walker also addressed the group, saying, "As an anchor in the emerging medical research corridor between Madison and Milwaukee, programs such as the Parkinson Research Institute are critically important to the continued adaptability and vibrancy of the County’s economy."

Three recent U.S. District Court rulings provided initial victories for hospitals facing not-for-profit class action lawsuits when two U.S. District Court judges ruled, and one U.S. magistrate recommended, to dismiss federal claims in not-for-profit class action lawsuits filed against hospitals.

On November 30, William Alsup, U.S. District Court Judge for Northern California, ordered that all federal claims in a lawsuit against Sutter Health be dismissed on the merits and also declined to exercise jurisdiction over state claims. The suit alleged that Sutter Health’s hospitals’ billing and collection practices for the uninsured violate federal and state laws.

Three days later, on December 3, Avern Cohn, U.S. District Court Judge for Eastern Michigan ordered that several state claims and all federal claims against William Beaumont Hospital based on the tax-exempt status of the hospital be dismissed on the merits. Additionally, the judge commented that the plaintiffs must properly plead an EMTALA claim if they believe they have a stand-alone EMTALA claim.

These two rulings come on the heels of the recommendations made by a magistrate in the federal district court for Western Pennsylvania to dismiss federal claims on the merits and decline jurisdiction over state claims in a case against the University of Pittsburgh Medical Center. The claims were similar to those brought against Sutter Health in California. The magistrate’s recommendations are under advisement by the judge in the case.

• Has the Wisconsin Supreme Court given local units of government the "green light" to dump sick prisoners on not-for-profit community hospitals? That just may be the result of a puzzling and disturbing ruling this week effecting a Dane County "jail dump" that left Meriter Hospital with a large, unpaid patient bill.

Of course, the real victims here are purchasers of private health insurance who will see an increase in their premiums due to government failing to pay its bill. The Wisconsin Supreme Court has "passed" an increase in the "hidden tax" which increasingly is hardly "hidden" to beleaguered employers. Medicaid…Medicare…and now…Jailcare!

• In less than 13 months, the most significant Medicare reform in the 40-year history of the program is scheduled to begin. It’s also the most significant reform that just about no one knows much about.

In 2006, the implementation of the new prescription drug benefit and most of the new Medicare Advantage (MA) provisions take effect. Those MA provisions will have a significant impact on health plans, all Medicare providers, and all Medicare beneficiaries. And for a number of reasons, health plans and providers residing in Upper Midwestern states will be uniquely affected.

In addition to the new prescription drug benefit, perhaps the most significant provision within the larger Medicare reform initiative is the goal to create a new Medicare marketplace where seniors will have choices beyond traditional Medicare fee-for-service. Specifically, the nation will be divided into regions (Wisconsin is paired with Illinois) where multi-state regional health plans will compete with smaller local health plans and traditional fee-for-service for Medicare beneficiaries. While "choice" is a noble principle, the actual implementation of MA engenders numerous questions yet to be answered.

          Here are two significant questions/issues that may be particularly problematic in Wisconsin:

 The new law does not require that new Medicare health plans pay Critical Access Hospitals (CAHs) their "costs." Hence, the important gains of the rural "safety net" program may be lost in the dynamics of the new Medicare market environment.

 The new law, unless modified, will create a non-level playing field between local (potentially provider-owned/partnered) and regional multi-state health plans. This is due to the fact that the large regional plans are likely to be economically incented (paid more!) to enter the multi-state marketplace as long as they provide access to all beneficiaries…an impossibility, of course, for local plans like those currently operational in Wisconsin.

WHA will advocate for necessary Medicare Advantage changes. And we are likely to team up with at least one regional coalition designed to advance an agenda that is relevant in Upper Midwestern states. Here is a link to recent WHA comments on the Medicare Advantage law: www.wha.org/financeAndData/pdf/cms_drug10-1-04.pdf.

Steve Brenton
President

Long-term care (LTC) is expected to become as common an employee benefit as dental or medical care within the next decade. Unless medical and LTC costs suddenly stop skyrocketing, all of us will soon be seeking practical ways to manage these costs with the least impact on our financial stability.

LTC insurance can be offered by companies of any size - from one employee to thousands. Employers typically have a great deal of flexibility when deciding on plan objectives, eligibility, types of policies used, optional policy benefits and riders, coverage amounts and durations, guarantees, and payment options. So how does LTC work? Read Solutions Spotlight included in this week’s packet, or contact Michelle White at WHA Financial Solutions, Inc. at 800-362-7121 or mwhite@wha.org.

Innovations like electronic medical records, computerized drug order entry, and clinical decision support systems not only can improve the quality of patient care, they make medical practice far more efficient. But the cost of implementing such technologies and the lack of adequate national standards and knowledge necessary to use these tools in daily practice are preventing many providers from readily embracing them, say the authors of a new Commonwealth Fund study published today in the online journal Medscape General Medicine.

According to the article, which was based on a Commonwealth Fund/Harris Interactive survey of more than 1,800 U.S. physicians, only a quarter practice in a "high-tech office" where IT systems are in place to improve operational efficiency and clinical care. The only IT used routinely by doctors is electronic billing. Physicians in large group practices, moreover, are far more likely to work in a high-tech environment than their counterparts in solo or small group practices, the study finds.

Please note our new address: Mailing: P.O. Box 259038, Madison, WI 53725-9038
Street/shipping: 5510 Research Park Dr., Madison, WI 53711

Our phone and fax numbers have not changed. Phone: 608-274-1820 Fax: 608-274-8554

Please update your records for WHA, WHA Financial Solutions, Inc., and WHA Information Center, LLC.

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