This week Legislative leaders formally sent AB 766 to Governor Doyle for his signature or veto. Passed in the Assembly on October 25 and in the Senate on November 8, AB 766 would restore a cap on non-economic damages of $450,000 for adults and $550,000 for minors. However, at press time, and based on comments by members of his administration, AB 766 is almost certainly going to be vetoed very soon by Governor Jim Doyle.

This week, Assembly Speaker John Gard and Majority Leader Mike Huebsch held a press conference on the occasion of AB 766 being formally delivered to the Governor for his consideration. Both Gard and Huebsch commented on the deliberative process that went into crafting AB 766, the overwhelming and bipartisan manner in which the bills passed. But they also expressed their concerns with the consequences of a Doyle veto.

"We have some of the highest quality doctors in the country right here in Wisconsin due, in part, to the favorable medical liability climate we had," said Assembly Speaker John Gard. "If the Governor vetoes this bill, that means we will have no cap in this state and doctors will leave Wisconsin, or not come here at all, and that will be devastating, especially for rural communities."

And while a spokesperson for the Governor indicated a veto is likely, she did not shut the door on a cap ultimately being signed into law. "The Governor doesn’t see how (AB 766) is constitutional," said Doyle spokeswoman Melanie Fonder. "The Governor has always said he would be open to a constitutional cap, and that’s what the Legislature should do."

In the meantime, Wisconsin has been without a cap on non-economic damages since July 14, and the longer it remains that way the worse things will get, according to WHA.

"The impact of losing the cap is already being felt by hospitals struggling to recruit physicians; damage awards and lawsuits are on the rise, and liability insurance premiums for doctors and hospitals are increasing in massive increments," said WHA President Steve Brenton. "Doing nothing or only passing a symbolic cap are one and the same and simply not an option. The vast majority of the public and legislators know, deep down, that this must be addressed."

AB 766 passed the Assembly with the support of six Democrats. In the Senate, an amendment to reinstate the cap at $1 million had the support of all 14 Democrats. According to WHA’s Eric Borgerding, the will is there to reinstate a cap.

"There’s no question in my mind that a strong, bipartisan majority in both houses supports reinstating a meaningful cap –not one so high that it is ineffective," said Borgerding. "But we have to get about the work of getting it done, and in a meaningful way. If we are back here debating the merits of a symbolic and ineffective seven-figure cap as the alternative to AB 766, then we will accomplish nothing. My guess is it’s somewhere in between, and the votes will overwhelmingly be there to put a cap back on the Governor’s desk."

As The Valued Voice went to press, WHA Senior Vice President George Quinn was testifying before the House Ways and Means Committee Subcommittee on Health in Oak Creek. The hearing focused on a report issued by the General Accountability Office (GAO) in September of this year that claimed health care costs for hospital and physician services are higher in Wisconsin than in other similar metropolitan areas. WHA has sharply criticized the report because of its emphasis on the PRICE of health care instead of taking into account total health care SPENDING.

"Provider prices should not be confused with actual health care spending," said WHA Senior Vice President George Quinn in written testimony he provided in advance to the Ways and Means Committee. "Wisconsin providers lead the nation in practicing patient-centered care, which ensures that the right care is provided at the right time. This practice pattern in hospitals and clinics reduces duplicative tests and visits, which leads to lower overall health care spending and at the same time, improves quality."

WHA maintains that the report’s focus on physician and hospital prices, as opposed to actual health care costs, creates a misleading snapshot of overall Wisconsin health care spending. The GAO also failed to account for ongoing and worsening hospital and physician cost-shifting due to Medicaid underpayment. Wisconsin Medicaid payments are among the very worst in the country, reimbursing physicians and hospitals pennies on the dollar for actual costs incurred taking care of patients.

The number of federal employees, which was the group studied in Wisconsin by the GAO, comprises a tiny percentage of Wisconsin’s population (less than one percent, according to the Federal Employee Health Benefit Plan) and is not a representative sample of health care consumers.

"A national PPO will not have the same degree of negotiating clout that a payer with a local presence has in any local market," according to Quinn.

In July of this year, the Wisconsin Supreme Court struck down the cap on excessive awards associated with medical malpractice. Now, just five months after losing the cap on non-economic damages, Wisconsin hospitals and physicians are learning about what will likely be the first wave of substantial liability insurance rate hikes.

This week, the Injured Patients and Families Compensation Fund (IPFCF) Actuarial Committee recommended a 25 percent increase in the annual fees that hospitals and physicians are required to pay into the Fund.

George Quinn, WHA senior vice president, is a member of the IPFCF Actuarial Committee. "The reason for the unprecedented hike is solely attributed to the fact that the $447,000 cap on excessive pain and suffering awards is now gone," he explained.

According to Quinn, the Committee examined information provided by independent actuaries that showed Wisconsin providers are now at a higher risk of excessive damage awards due to the loss of Wisconsin’s cap on non-economic damages. Information also presented by the actuary suggests that additional and larger fee hikes may be needed in the future.

After hospitals and physicians have exhausted their private insurance funds following a successful medical malpractice suit, the plaintiff is compensated from IPFCF monies. The IPFCF is funded through mandatory premiums assessed on hospitals and doctors.

"We don’t need to speculate about the future impact of losing the cap—the future is right here and right now," said WHA Senior Vice President Eric Borgerding. "We’re following the same downward spiral witnessed in Illinois, Oregon, Texas, Washington and other states that lost caps. First, liability insurance rates for health care providers soar, then doctors start leaving the state. This is followed by hospitals having trouble providing essential services like trauma, obstetrics and neurosurgery. We’re already seeing doctors reconsider their plans to locate their practice in Wisconsin."

"The bottom line is this—we need to restore a cap on non-economic damages in Wisconsin, and soon," said Borgerding.

Wisconsin patients continue to have unlimited recovery of damages associated with lost wages, medical care and other out-of-pocket expenses following a successful medical malpractice suit. Wisconsin’s previous cap applied only to non-economic damages, most commonly awarded for pain, suffering or other intangible losses.

The recommended fee hike will be considered early next year by IPFCF. If approved, the increase will take effect July 1, 2006.

WHA alerted the statewide press to the proposed rate hike on December 1, 2005.

Companion legislation, Senate Bill 403 and Assembly Bill 763, allowing for the lawful carrying of concealed weapons in Wisconsin, continues to make its way through the legislative process. On Wednesday, November 30, the Legislature’s Joint Finance Committee (JFC) unanimously amended the bills to include a health care facility exemption as advocated by WHA.

As introduced, the bills included very few exceptions, and WHA opposed because of concern the bills jeopardized the ability of Wisconsin hospitals to provide a safe patient care environment. WHA worked with JFC members and bill authors, Sen. David Zien (R-Eau Claire) and Rep. Scott Gunderson (R-Waterford), to ensure the exemption. The JFC approved exempting health care facilities from the legislation by a vote of 14-0 during Joint Finance Committee action November 30.

"WHA thanks members of the Joint Finance Committee and bill authors, Sen. Zien and Rep. Gunderson, for working collaboratively to ensure our hospitals and health care facilities remain the safe patient care environment our patients deserve and expect," said Jenny Boese, vice president of external relations & member advocacy.

JFC members voting in support were: Senators Scott Fitzgerald (R-Juneau), Mary Lazich (R-New Berlin), Alberta Darling (R-Menomonee Falls), Rob Cowles (R-Green Bay), Joseph Leibham (R-Sheboygan), Luther Olsen (R-Ripon) and Russ Decker (D-Schofield); and Representatives Dean Kaufert (R-Neenah), David Ward (R-Fort Atkinson), Scott Jensen (R-Waukesha), Jeff Stone (R-Greendale), Kitty Rhoades (R-Hudson), Dan Meyer (R-Eagle River) and Mark Pocan (D-Madison).

The U.S. Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the U.S. Office of Management and Budget (OMB) will hold a public meeting in Chicago, Illinois, on Thursday, December 8, 2005, from 10 am—3 pm to solicit comment on quantifying the economic impact of major federal regulations governing the health care industry.

This meeting is the second in a series of four "town hall" style meetings HHS/ASPE and OMB are holding across the country to hear directly from health care administrators, institutional providers, physicians, practitioners, patients and others about quantifying the economic impact of federal health care regulations. Individuals may also submit written comments for consideration regardless of their ability to attend.

Additional public meetings will be held in Oklahoma City and San Francisco over the next few months. Tim Size, executive director for the Rural Wisconsin Health Cooperative, will be a panelist at the Oklahoma City meeting.

Confirmed panelists for the Chicago meeting are: Christopher Conover, PhD; David Dranove, PhD; Robert Helms, PhD; Michael Morrisey, PhD; Dan Mulholland, MA, JD; and Kevin Schulman, MD. The meeting will be held at the Millennium Knickerbocker Hotel Chicago located at 163 East Walton Place on North Michigan Avenue.

The media’s focus on health care costs might convince the not-so-casual observer that Wisconsin is a hell-hole for high health care spending. But a quick review of recent CMS data for the Medicare program can lead one to the opposite conclusion.

Consider the following:

• Wisconsin hospital discharges per 1,000 Medicare enrollees are 9 percent lower than the national average (317 days vs. 347 days).
• Wisconsin Part B (physician and hospital outpatient) Medicare payments per beneficiary total $560 annually compared to the national average of $751. That’s a 25 percent differential!
• Wisconsin Part A (inpatient hospital) payments per Medicare beneficiary annually total $2,229 compared to the national average of $2,706... an 18 percent differential!
• Total annual Medicare spending in Wisconsin is at $5,407 vs. the national average of $6,611... an 18 percent differential!

The following chart further illustrates these significant trends. The chart examines Wisconsin metropolitan area Medicare spending compared to the national average. Once again, the gaps are wide...in fact, they’re a chasm for the Fox Valley and La Crosse regions.

Location         Total Annual Medicare Payments

USA                 $6,611

Appleton           $4,364

Eau Claire         $5,783

Green Bay        $4,819

La Crosse         $4,444

Madison            $5,213

Marshfield         $5,779

Milwaukee         $5,995

Neenah             $4,974

Wausau            $5,150

Just why is Medicare spending so low in Wisconsin compared to the national average? The primary driver, without question, is the conservative practice of medicine in Wisconsin. Relatively low utilization of health care services resulting from judicious medical practice patterns drives variation in spending. And that’s a lesson to be learned by those who continue to confuse the issue of provider prices with actual health care spending.

Steve Brenton
President

Effective for dates of service on and after March 1, 2006, Medicaid reimbursement rates and program requirements will change for outpatient hospital physical therapy (PT), occupational therapy (OT), and speech and language pathology (SLP) services.

The following changes will occur:

• Providers will be reimbursed up to an established maximum allowable fee.
• Providers will be required to follow program requirements for PT, OT, and SLP services (instead of program requirements for outpatient hospital services). Therefore, providers will be required to:
• Submit claims using the CMS 1500 claim form or the 837 Health Care Claim: Professional transaction. The UB-92 claim form and 837 Health Care Claim: Institutional transaction will not be accepted when submitting claims for these services.
• Follow prior authorization requirements and procedures for PT, OT, and SLP services.
• Use Current Procedural Terminology and Healthcare Common Procedure Coding System procedure codes on claims submitted to Wisconsin Medicaid. Revenue codes will not be allowed when submitting claims for these services.

Beginning in December 2005, providers may access the new Physical Therapy, Occupational Therapy, and Speech and Language Pathology Services Handbook on the Medicaid Web site at dhfs.wisconsin.gov/medicaid. In addition, outpatient hospital PT, OT, and SLP providers will receive the handbook on CD. The CD will be mailed in December 2005.

DHFS will be providing training sessions in January at various sites across the state to familiarize providers with the new requirements and other Medicaid therapy-related topics.

Outpatient hospital PT, OT, and SLP providers with questions may submit questions to therapyquestions@dhfs.state.wi.us. Providers may also call Provider Services at 800-947-9627 or 608- 221-9883.

Outpatient hospital PT, OT, and SLP providers should receive invitations to training sessions. Providers who have not received invitations should refer to the Medicaid Web site at dhfs.wisconsin.gov/medicaid for information about the training sessions.

The Wisconsin Hospital Association and the Rural Wisconsin Health Cooperative (RWHC) had a very positive meeting with the Director of the Bureau of Quality Assurance, Otis Woods, and his staff this past week in the most recent Hospital Forum, a quarterly meeting during which the organizations discuss current regulatory issues with BQA.

As a result of the meetings, BQA has provided WHA and RWHC with a summary of the most frequent hospital citations that have been issued by BQA surveyors. The current quarterly report is on the WHA Web site at www.wha.org/legalAndRegulatory/BQAreport12-05.pdf. "We hope that the reports will shift the focus of the surveys from being solely punitive to being more educational for all hospitals, helping to achieve everyone’s goal of real quality improvement," said WHA Senior Vice President George Quinn.

The Forum participants also discussed the recent HFS 124 variance concerning physician authentication of verbal orders. WHA staff stressed that the variance should be consistent with the Medicare standards, including the flexibility provided by CMS when physicians are not available within 48 hours to authenticate the orders. BQA is preparing a new variance.

WHA and RWHC also outlined some of the problems hospitals have experienced during the survey process, including inconsistent interpretation of the Life Safety Code, "conditional" approvals, and surveyor demeanor. Woods appreciated the information and is committed to working with WHA and RWHC to resolve identified issues with the survey process. Woods asked that hospitals complete the post-survey questionnaire to aid BQA’s survey improvement efforts. The BQA post-survey questionnaire is available on the WHA Web site at www.wha.org/legalAndRegulatory/BQAsurvey12-05.pdf.

"We appreciate that the new BQA leadership is open to our suggestions and is customer focused. It is a welcomed change. We’re hopeful that BQA will be a strong partner in the provider community’s quality improvement efforts," observed Quinn.

The petition for a declaratory ruling filed by the Wisconsin Society of Anesthesiologists (WSA) with the Medical Examining Board (MEB) concerning the supervision requirements for nurse anesthetists in Wisconsin is continuing through the administrative process with a memorandum on a prehearing conference being issued by the administrative law judge (ALJ) on November 21, 2005.

According to the memorandum, the ALJ has requested that the parties engage in discussions that would resolve the issues relating to physician supervision of nurse anesthetists and avoid a need to litigate matters raised in the petition. The ALJ believes that such discussions should be encouraged because of important practical and public policy reasons, especially the need to protect the health, safety, and welfare of surgical patients and the importance of fostering cooperation among health care professionals.

The prehearing conference included a discussion of the need to clarify facts and issues raised in the petition, including what is the nature of the supervision that the WSA contends must be exercised by a physician over a nurse anesthetist under Wisconsin law and what is the legal authority of a CRNA who holds a credential as an advanced practice nurse prescriber to administer anesthesia.

The new year will be packed full of WHA Foundation-supported, statewide initiatives that support hospitals throughout Wisconsin. Some of those will include:

• The WHA Foundation Scholarship Program, which awards a total of 32 scholarships to technical college students in their final semester of a health care-related degree during the ’05-’06 school year.
• The Nurse Leadership Succession Project, designed to create interest in a career of nursing leadership for nurses who have the potential but have never considered taking the next step.
• The Global Vision Community Partnership Award, which recognizes collaborative projects between a hospital and its community to meet a health-related need.

The Foundation asks that if you have not yet made a donation, please consider making a contribution to its annual fundraising campaign and supporting these important initiatives.

All Saints Healthcare System, Racine
Aspirus – Wausau Hospital, Wausau
UW Hospital & Clinics, Madison
WHA Financial Solutions, Inc., Madison

Contributions from Organizations

Amery Regional Medical Center, Amery
Bellin Health, Green Bay
Black River Hospital, Black River Falls
Flambeau Hospital, Park Falls
Holy Family Hospital, New Richmond
Lakeview Medical Center, Rice Lake
Memorial Medical Center, Ashland
Mercy Health System, Janesville
Sacred Heart-Saint Mary’s Hospitals, Rhinelander/Tomahawk
Saint Joseph’s Hospital, Marshfield
SSM Health Care of Wisconsin, Madison
St. Vincent Hospital, Green Bay

Contributions from Individuals

Steve Brenton, Wisconsin Hospital Association
Daniel Fischer, in honor of Mrs. Lillian Fischer’s 85^th Birthday
Jennifer Frank, Wisconsin Hospital Association
Dan Hymans, Memorial Medical Center
Mike Karuschak, Amery Regional Medical Center
John Landdeck, Beaver Dam Community Hospital
John Marnell, Hudson Hospital
Tom Plantenberg, Friends of Froedtert

James O’Keefe was appointed president and chief executive officer for Mile Bluff Medical Center in Mauston, beginning December 1, 2005.

O’Keefe’s 22-year career includes 18 years as a CEO in rural health care. For the last six years he has served as the CEO for Woodlawn Hospital in Rochester, Indiana. Prior to that, he held the position of CEO for Cumberland Memorial Hospital in Wisconsin.

A native of the Milwaukee area, O’Keefe holds a Bachelors Degree in Business Administration from the University of Wisconsin-Oshkosh and a Masters in Business Administration from the University of St. Thomas, St. Paul, Minnesota. He is a Diplomat for the American College of Healthcare Executives and holds nursing home licenses in Minnesota and Wisconsin.

Duane L. Erwin has accepted the position of president and chief executive officer for Aspirus, Inc. Erwin currently serves as president of Parkview Hospital, a 650-bed tertiary care center in Fort Wayne, Indiana, and executive vice president of Parkview Health System in the same city. He will join Aspirus on January 16, 2006.

"Duane was the unanimous choice of the search committee," said Stu Carlson, Aspirus Board Chair. "We believe his three decades of health care leadership and his commitment to excellence and innovation will help him provide tremendous direction for Aspirus in the years ahead."

A native of Allentown, PA, Erwin completed his undergraduate studies at Kent State University in Kent, Ohio, and received a J.D. from Duquesne School of Law in Pittsburgh, PA. After several years of private legal practice, Erwin began his health care career in 1976 as legal counsel for a Blue Cross plan in Pennsylvania. Since then, he has served in various leadership positions for hospitals and health systems in Indiana, New York, Ohio, and Pennsylvania.

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