February 14, 2003
Volume 47, Issue 7

Joint Finance Endorses Doyle Proposal to Fully Fund Medicaid in FY 03

On Thursday, February 13, the Joint Finance Committee voted 12-4 along party lines to pass Gov. Jim Doyle’s special session budget bill (SS SB1), a move that will cover part of the state’s budget deficit for fiscal year 2003 (FY03), which ends June 30. The bill fully funds a $64.5 million shortfall in Medicaid and BadgerCare. The proposal avoids an immediate freeze, cut or delay in provider reimbursements.

Joint Finance also adopted deeper immediate cuts in state agency budgets and will require more unspent agency funding to be lapsed immediately into the general fund. The latter move includes a lapse of $125,000 in unspent hospital and physician assessment revenue from the Bureau of Health Information (BHI), as proposed by Governor Doyle.

The emergency budget bill now must be approved by both houses of the Legislature and signed by Doyle to become law, which would seem likely given Republican control of the Joint Finance Committee and both houses of the Legislature. However, with the state facing a $3.2 billion shortfall, and the Legislature anxiously awaiting Governor Doyle’s biennial budget bill, SS SB1 could become sidetracked in the larger budget debate. Doyle has ruled out tax increases to fix the shortfall, which means even larger cuts will be needed to balance the budget in the 2003-05 biennium (see below).

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While the action by the Governor and Joint Finance earlier this week was lauded by WHA, Wisconsin Medicaid providers are preparing for what could be (very) bad news when Doyle releases his biennial budget proposal on the evening of Tuesday, February 18. Given the magnitude of the problem ($3.2 billion in the red), there is little doubt that Medicaid reductions are on the table. Exactly what form they will take remains to be seen.

Budget bills can be well over 1,000 pages in length and, in addition to the high profile issues such as Medicaid, always contain less conspicuous, yet very important, policy proposals. WHA staff will be combing the document immediately upon its release. Watch the next edition of Valued Voice for a detailed summary of all the pertinent hospital and health care related items included in the bill.

As the old saying goes — "Misery Loves Company." Well in this case, one need not look far to find good company as states across the country are bracing for massive Medicaid cuts. Here are a few examples:

— In Minnesota, Gov. Pawlenty has used administrative powers to immediately cut 5% from the MA budget in this fiscal year. The cuts will be permanent and equal a $55.4 million loss in state and federal MA funding for the 2003-05 biennium. Pawlenty also grabbed $3.2 million in unallocated anti-terrorism funding.

— In New York, Gov. Petaki has proposed over $1 billion (all funds) in MA cuts and new hospital taxes for the 2003-05 biennium. The package includes: a .7% non-reimbursable gross receipts tax on hospitals; cutting hospital medical education payments; eliminating various adjustments for length of stay, inflation, etc.; and cutting hospital payments by 5%.

— In Maine, where hospitals are reimbursed at 80% of cost (wouldn’t that be nice!), Governor Baldacci’s biennial budget cuts hospital payments by $60 million — far beyond the freeze (cut of $15 million) they were expecting. This comes on top of a one-time hospital tax that was recently implemented to support the Medicaid budget.

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The Department of Health and Family Services announced February 12 that Wisconsin has ordered the smallpox vaccine that will be used to immunize nearly 1,800 health care and public health workers. Based on the participation of more than 60% of the hospitals in the state, along with 66 local public health departments statewide, Herb Bostrom, director of the Bureau of Communicable Diseases in the Department of Public Health, said he is confident there is adequate coverage in every region of the state.

Starting the week of March 3, 25 vaccination clinics will be conducted around the state to vaccinate the volunteer preparedness teams. The first round of clinics is expected to take about two weeks.

Testifying before the Senate Committee on Health on February 13, Nick Turkal, MD, senior clinical vice president for Aurora Health Care and a practicing family physician, said hospitals in Wisconsin are participating in the smallpox pre-event planning process, in spite of the controversy and perceived risks.

From Aurora’s 12 hospitals, more than 260 employees have volunteered to be vaccinated to date.

Turkal did, however, point out the remaining concerns that hospitals have with the smallpox vaccination process:

1. Patient safety – Uncertainty whether patients who have compromised immune systems are completely safe in this scenario.

2. Employee safety – The federal government has not been clear about remuneration for those damaged by the vaccine. WHA is encouraged that Sen. Carol Roessler, chair of the Senate Health Committee, and WHA received a letter from the Department of Workforce Development indicating that in Wisconsin, workers compensation would likely cover injuries to hospital workers resulting from the smallpox vaccine.

3. Family safety – Family members of employees who are vaccinated are also at some risk, just as patients.

4. Cost – Planning and vaccination are costly processes. In an era when we are making our best efforts to control rising health care costs, additional burdens on hospitals are troublesome. There are no dollars flowing to hospitals to cover the costs associated with planning and carrying out the vaccination program at hospitals.

Turkal said in spite of these concerns, he believes that the statewide planning process to date has been helpful, and he thanked WHA and the state Department of Health for building a strong partnership.

"Finally, we need to look to the future. We must seriously consider whether additional health care workers need to be vaccinated and whether the general public should be vaccinated. Our belief at this time is that we should limit the vaccination program to moderate sized smallpox readiness teams, and that additional large scale vaccinations should be avoided until there is a credible threat or a safer vaccine," Turkal said.

Also testifying before the committee, Julie Willems Van Dijk, RN, MSN, and health officer of Marathon County Health Department, said the local public health response to bioterrorism is characterized by four principles; prevention, populations, partnerships, and now, preparedness.

"My mantra in Marathon County is plan aggressively, vaccinate cautiously," Willems Van Dijk said. "Every other vaccine we administer protects people against diseases that are actually circulating the world. We can not forget that as we expose people to the risks of the smallpox vaccine, we do so today to protect them against the THREAT of disease, not actual disease."

Willems Van Dijk noted her department released the results of a recent community assessment, and while the need to focus on a response to bioterrorism was certainly included, it was not the top priority. In Marathon County, which she characterized as fairly typical to the rest of the nation, the top public health priorities are alcohol misuse, tobacco exposure, poor nutrition, inactivity and depression.

"The temptation is before us to ignore these threats to our health and solely focus on smallpox and other bioterrorist threats. If we do, I believe, the terrorists have won without ever releasing a single biological agent," according to Willems Van Dijk.

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WHA members will soon be given the opportunity to rate the Association’s effectiveness and value. WHA will conduct a confidential membership satisfaction survey during March, the results of which will be shared with members as early as May and be used by the WHA Board during the summer planning session to create a new WHA strategic plan.

Survey questions will solicit feedback on issues associated with: appropriate WHA programming and issue priorities; quality of professional staff; understanding of where health care is going; "clout" as a political advocate on statewide and national issues; ability to mobilize grassroots support; leadership and policy development; source of timely, useful data and information; helping members anticipate and prepare for future challenges; emphasis on the "right" issues; and presenting a unified voice on behalf of hospitals and health systems.

WHA has contracted with the California-based organization, SatisfactionWorks. This organization undertakes similar benchmark surveys for state hospital associations across the country. In fact, SatisfactionWorks conducted a WHA member survey about seven years ago. Results from that survey will be benchmarked with results from the 2003 effort.

Member participation in the confidential survey will be critical to the success of this effort. Only 10-15 minutes will be needed to complete the survey instrument, which will then be forwarded directly to SatisfactionWorks. Significant participation, followed by incorporation of survey findings into WHA’s current and future programming, will enhance member value of WHA.

Rep. Don Friske (R-35) toured Good Samaritan Health Center, Merrill and spent over 90 minutes discussing a wide range of priority health care issues with Mike Hammer, president and CEO. From workforce development issues to tax exemptions for not for profits, Rep. Friske received local data and information about how these issues impact his local community.

After sharing Medicaid outpatient reimbursement data with Rep. Friske, Hammer noted Rep. Friske was surprised at the flat reimbursement rate regardless of the type of service rendered. "I told him we have been absorbing some of the underpayments, and as a not-for-profit hospital, we feel it is our duty to do so," said Hammer. "But we can’t take any deeper cuts in already inadequate rates."

Hammer "put a face" on how the policies and positions taken by legislators impact the local constituencies at home. Rep. Friske is no stranger to health care issues; his spouse is a practicing occupational therapist, and his mother is a practicing nurse.

"I enjoyed sharing our information with Rep. Friske. He wants to do a good job, and he was thankful for the local information we shared with him. I expect we will have continuing conversations as the budget unfolds," said Hammer.

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Late Thursday evening, February 13, final votes were cast by the Senate approving the 2003 omnibus spending bill. The House had voted their approval earlier in the day. This vote closes the debate on the FY 2003 budget, and finalizes important Medicare relief for many Wisconsin hospitals effective April 1, 2003, stops the physician payment cut and increases the physician reimbursement beginning March 1, 2003, and allocates $15 million for the nurse reinvestment act.

Each member of the Wisconsin delegation was instrumental in the inclusion of relief provisions that will result in additional Medicare payments to a majority of the state’s hospitals and physicians.

"This is important legislation for many of our hospitals and physicians," said Steve Brenton, WHA President. "Passage of this initiative represents a significant down payment on our larger Medicare/Medicaid equity and adequacy agenda. Those issues must remain on the front burner as the 2004 budget is developed. We are committed to working with our very engaged delegation to assure these gains do not slip away."

On Thursday, February 13, the U.S. Department of Health and Human Services announced the adoption of the final HIPAA security standards for protecting individually identifiable health information when it is maintained and transmitted electronically. Most covered entities will have until April 21, 2005 to comply with the new standards.

HHS also announced modifications to a number of the electronic transactions and code sets adopted as national standards. Covered entities must comply with these standards by October 16, 2003.

Links to both final rules are now available on the WHA Web site (and also below) and will also be published in the Federal Register on February 20, 2003.

Link to electronic transactions and code sets modifications:
http://www.cms.hhs.gov/regulations/hipaa/cms0003-5/0003ofr2-10.pdf

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The American Hospital Association and its outside HIPAA privacy counsel believe that device manufacturers are not business associates under HIPAA. Hogan and Hartson, LLP, AHA’s outside privacy counsel, prepared 11 Frequently Asked Questions about provider-vendor relationships under HIPAA, addressing some of the more common questions providers might have about their relationships with device manufacturers, including:

• Doesn’t HIPAA require a physician to keep manufacturer’s personnel from being in the office?

• Do I need a business associate agreement with manufacturers from whom I obtain drugs and supplies?

• Do providers need a business associate agreement with manufacturers for treatment consultations?

• Does HIPAA permit me to tell the manufacturer about a patient’s experiences that may help protect others but that are not for that patient’s treatment?

The answers to these and other questions on this important issue are available at: http://www.hlc.org/HH_revised_memo_manufacturer_relations_12_02.pdf

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"If there are ways we can trim on administration and direct resources into actually helping people - that’s a priority," Gassman said. "We know there are certain areas where there are going to be future worker shortages - health care and technology-related, the manufacturing jobs of tomorrow."
- - Roberta Gassman, recently appointed Secretary of the Department of Workforce Development in an interview with the Associated Press, February 13, 2002 published in the Pioneer Press

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Debra Standridge will serve as interim president at St. Francis Hospital.

Mile Bluff Medical Center, Mauston, is seeking a vice president, finance/CFO. This position will lead a team of professionals in providing general accounting and patient account services, budget and decision support analysis, and information technology systems.

The VP is an advisor on all financial matters to the CEO, the management team, and Board of Trustees. Qualified candidates should have a bachelor’s degree in accounting, preferably a master’s degree; CPA desirable. Experience to include a minimum of five years as a chief financial officer in a hospital, or in a high level position reporting to the CFO. Long-term care financial management experience desirable.

Mile Bluff Medical Center features JCAHO-accredited acute care hospital, two skilled nursing homes, two rural health clinics, retirement housing and a home health agency; $40 million net revenue with admissions and outpatient visits showing continued growth; located in a community of 3,500 on Interstate 90/94, 70 miles from Madison and La Crosse.

For more information about Mile Bluff Medical Center, visit our Web site at: www.milebluff.com.

Send resume with salary requirements to: Mile Bluff Medical Center, Sue Betthauser, Director Human Resources, 1050 Division Street, Mauston, WI 53948 or email: sbetthauser@milebluff.com.