March 21, 2003
Volume 47, Issue 12

Governor Doyle to Keynote at Advocacy Day

Gather the health care and hospital supporters in your community and head to Madison for WHA’s Advocacy Day on April 8. Governor Doyle’s attendance is confirmed, and we are excited to have him as our keynote at 10:45 a.m.

A legislative panel starts the day featuring Senate Majority Leader Mary Panzer, Assembly Speaker John Gard, Senate Minority Leader Jon Erpenbach and Assembly Minority Leader Jim Kreuser. A full briefing on the issues facing Wisconsin hospitals will arm you with the facts and position papers, and leave you well prepared to visit your legislator in the Capitol after 2 p.m. All Capitol offices have been notified and are awaiting your call to set an appointment to meet with your elected official. (Go to www.wha.org , Speak Up, Legislative Directory, for phone numbers of legislators.)

Bring your grassroots team, key leaders, volunteers, and trustees to put a face on the issues facing your hospitals. It’s easy to register, and it’s free! Join the organizations already registered and help tell the hospital story on April 8.

You can register one of three ways: print the registration form from the Web site, complete it and fax it to 608-274-8554; email your registration information to Bridget Gifford at bgifford@wha.org; or call Bridget at 608-274-1820. Register today.

Join the organizations already registered!

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State Budget Hearings Begin
 WHA Members Encouraged to Testify

On Monday, March 24, the Legislature’s Joint Committee on Finance will hold the first of six public hearings on the proposed 2003-2005 state budget. As previously reported in The Valued Voice, the budget maintains current eligibility for Medicaid and BadgerCare, funds growing caseloads, and avoids across-the-board provider payment cuts. However, the proposal also eliminates the rural hospital adjustment and Graduate Medical Education funding, restricts Medicare crossover payments, and revamps the HIRSP program.

This amounts to an 11% cut in hospital reimbursement, or about $90 million over the biennium. Changes to HIRSP mean these numbers will only rise. It is crucial for the Finance Committee to understand the impacts of these proposals on cost of care and access to care, and what this means for their constituents and the long-term health of Wisconsin.

WHA staff is recruiting members to testify at hearings about the statewide impact of these funding cuts and, more importantly, to share their individual stories. If you are interested in attending or testifying, contact Jodi Jensen or Ann Lucas at 608-274-1820 or jjensen@wha.org or alucas@wha.org.

The Legislature’s Joint Committee on Finance public hearing schedule:

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WHA Hails Gov. Doyle and Sen. Jauch for Hospital Aid

Terry Jacobson, CEO, St. Mary’s Hospital in Superior, received word this week that St. Mary’s Hospital is now eligible for designation as a Critical Access Hospital (CAH). Jacobson pressed St. Mary’s case for eligibility with Governor Jim Doyle’s Administration, stressing that the funding would help ensure the fiscal stability of the hospital. Senator Bob Jauch (D-Poplar) worked tirelessly on behalf of St. Mary’s to achieve the eligibility, which has been accomplished through an emergency amendment to the hospital code.

"Like many hospitals serving rural areas, St. Mary’s is struggling to continue providing high quality care to the Superior area, while at the same time receiving less and less payment for their services," said WHA President Steve Brenton. "The actions of Senator Jauch and the Doyle Administration over the past few weeks will without question keep St. Mary’s a strong and viable resource for the city of Superior and its surrounding rural communities."

Upon learning of the action, Jacobson said, "We are extremely pleased with the quick action displayed by DHFS Secretary Helene Nelson in the creation and publication of the emergency rule. Secretary Nelson displayed a keen understanding of St. Mary’s plight during our recent trip to Madison. Senator Jauch was highly successful in having our cause be heard."

Jacobson anticipates the designation as a CAH will increase state and federal revenue to the hospital by nearly $2 million through higher Medicare and Medicaid reimbursements.

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President’s Message

The chart, Medicare Combined Cost and Quality Rankings-2003 (www.wha.org/pubArchive/friday_packet/2003medicarecost&quality.pdf), describes a state-by-state ranking based on benchmarkable cost and quality scores that are in the public domain right now! This state-by-state ranking was developed in order to demonstrate just who might benefit from a proposal discussed in last week’s column that would provide incentives to hospitals and physicians in states that provide high quality care in the most cost effective manner. In this case, the proposal would provide Medicare payment increases for physicians and hospitals located in states ranking in the top quartile (top 13 states).

The quality measurement uses rankings included annually in a report published in the Journal of the American Medical Association (JAMA) that uses Medicare’s current quality of care measurements. This report evaluates each state in terms of how frequently hospitals and physicians provide certain evidence-based, clinical procedures…procedures that have been shown by scientific evidence to be effective in enhancing outcomes of care. Wisconsin ranks No. 7 in the most recent series of state-by-state scores.

Cost rankings are based on the annual Centers for Medicare and Medicaid Services (CMS) report ranking states based on average Medicare spending per beneficiary. For 2003, this methodology found Wisconsin as the 8th lowest cost state. A combination of these two scores has Wisconsin ranking 5th best overall among the 50 states plus the District of Columbia.

Our proposal would provide incentive payments (we’ve arbitrarily chosen 5%) to providers (both hospitals and physicians) located in top ranked states annually. Importantly, the incentive payment would not become part of the base payment rate. This would allow states to move in and out of the top performance category annually.

WHA staff are currently shopping the notion of a value purchasing concept to state hospital association executives in other upper Midwestern states. The goal would be to then market this approach to friendly members of state congressional delegations who are already committed to addressing longstanding Medicare equity problems. This value purchasing concept would significantly "reform" fee-for-service Medicare by encouraging efficiency and quality enhancing behaviors. Payments would reward efficiency and add value to the Medicare program and beneficiaries served by that program. Importantly, the proposal would reward both hospitals and physicians…thus aligning incentives necessary to achieve and sustain high quality and cost effectiveness.

Steve Brenton, President

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House Passes 2004 Budget Blueprint

Late Thursday evening, March 20, the House passed the 2004 federal budget resolution which proposes deep spending cuts in many domestic programs. The vote, 215-212, spared Medicare from the 1% across the board cut. In addition, the resolution calls for spending $400 million for a prescription drug program for Medicare.

The Budget resolution provides spending targets and a broad outline to guide the development of the detailed spending plan which should result in a complete budget bill to take effect October 1, 2004. The budget resolution does not have the force of law, and many anticipate substantial revisions as the final budget develops.

Each member of the Wisconsin delegation was contacted and encouraged to "VOTE NO" on the resolution in an effort to stem proposed cuts to the Medicare and Medicaid programs.

The Senate is scheduled to debate the Senate version as we go to press today, March 21.

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Pride Program Submissions Due April 10 to WHA
 More than 75 Hospitals Expected to Participate

The WHA Employee Pride Program, a statewide recognition program that recognizes health care workers, is in full swing. Last year, more than 52 people were recognized in the program; this year WHA expects even greater participation. At this time, employees are writing and submitting their essays that will be used to determine their hospital’s representative to the May 8 recognition dinner at the Kalahari Resort in the Dells. Each hospital can submit one name of an employee to be recognized; systems may recognize an employee from each of their hospitals or health care settings. The deadline for submitting the name and essay of the health care employee who will be recognized is April 10. The essays are published in a book that WHA assembles and distributes to those recognized. Electronic copies of the essays are preferred and they can be sent to Mary Kay Grasmick at the email below.

If you or your representative plan to stay overnight May 8, call the Kalahari at 877-253-5466 to make your room reservations; mention WHA "We Care" program or Wisconsin Hospital Association to receive a special rate. The number of rooms available at the Kalahari the evening of May 8 is limited, so make reservations soon. Questions about room reservations should be directed to Jennifer Frank at WHA, 608-274-1820 or jfrank@wha.org. If the person representing your hospital has children, it might be worth mentioning to them that the Kalahari boasts one of the largest in-door water parks in the Dells.

WHA is pleased to sponsor this employee recognition program in cooperation with the Wisconsin Healthcare Public Relations and Marketing Society and the Wisconsin Society of Healthcare Human Resources Administration. Direct questions to Mary Kay Grasmick, 608-274-1820, mgrasmick@wha.org.

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WHA Members Purchase Medicare Revenue Forecaster
 Helps Hospitals Make Annual Medicare Budget Projections

Nearly 20 hospitals to date have purchased the Medicare Revenue Forecaster, a tool that will assist hospitals in making annual Medicare budget projections. Pre-loaded with available public use Medicare cost report data, this model projects annual payments for five years based on Medicare rules in effect each year, national estimates of market basket increases, and hospital estimates of volume changes.

The 2003 version of the Forecaster covers all aspects of Medicare inpatient and outpatient operations, swing bed reimbursement, and prospective payment for skilled nursing facility (SNF) services and home health. Additional elements of the model allow hospitals to determine the impact of medical education payments, as well as special Medicare payment designations, such as sole community hospital (SCH) and Medicare dependent hospital (MDH) status. The Forecaster incorporates all regulatory and legislative reimbursement factors, including changes associated with the Balanced Budget Act of 1997 (BBA), the Balanced Budget Refinement Act of 1999 (BBRA), and the Benefits Improvement and Protection Act of 2000 (BIPA). Any future legislative changes will be added to the model upon enactment.

The Forecaster is a product of the Healthcare Association of New York State (HANYS) and is just one of the many valuable products and services to provide advocacy information, membership education and operations support to Wisconsin hospitals as part of WHA’s new arrangement with HANYS. The APC reports provided last month to member hospitals is an example of this partnership. By purchasing this tool, Wisconsin hospitals will be better positioned to advocate the impact of Medicare reimbursement upon their facilities as well as develop more precise annual budget projections for Medicare.

The annual cost of this resource, with your hospital specific data loaded into it, is $1,000. The price includes any updates throughout the year and an educational session on how to use the model to be held sometime in April.

For more information, contact George Quinn (gquinn@wha.org) or Brian Potter (bpotter@wha.org) at WHA.

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FDA To Require Bar Codes on Meds in Hospitals
 UWHC Finds Bar-Coding Reduced Errors 80%

In a move they believe will reduce medical errors, the Food and Drug Administration (FDA) announced that it would require bar codes on all medications so hospitals could use scanners to ensure patients receive the correct dose of the right drug. The new requirement is one of several steps the agency said it was taking to fight medical errors, which it said claims "tens of thousands of lives a year in the US."

In a recent Wisconsin Patient Safety Institute survey of 76 hospitals, James Hoffman, a pharmacy graduate intern at the University of Wisconsin, found that 52% of those surveyed planned to implement bar coding before the FDA announced the federal requirement. Hoffman, speaking at the March 13 meeting of WHA’s Medical and Professional Affairs Council, said UW Hospital and Clinics saw an 80% decrease in medical errors after it implemented bar coding.

The food and drug commissioner, Dr. Mark B. McClellan, estimated that the bar-code requirement, introduced as a proposal expected to gain final adoption after a 90-day period of public comment, would prevent 400,000 bad drug reactions - from headaches to death - over the next 20 years.

Currently, hospitals that have implemented bar coding technology must print their own bar codes, but that would be too expensive for many hospitals. The FDA, which regulates drug makers, not hospitals, will order the pharmaceutical companies to come up with codes identifying each drug and dosage. Whether lot numbers and expiration dates will be included is still under consideration. The FDA estimated that it would cost pharmaceutical companies $50 million to put bar codes on every product and that hospitals would spend over $7 billion on scanners and computers.

"There is a concern that it will cost a lot of money," said John Combes, a spokesman for the American Hospital Association, who represents the organization on hospital safety panels. "But because it protects patients, there’s a lot of interest in getting this going," he said.

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Wisconsin Hospitals Continue to Improve Quality of Care
 Improvement Projects, Dedication to Mission Bolster Gains

Hospitals in Wisconsin continue to make strides in the quality of care provided, moving from 11 to 8 in national rank, according to MetaStar President Greg Simmons. Speaking at a WHA Medical and Professional Affairs meeting March 13, Simmons credited hospitals’ dedication to mission as they worked on MetaStar quality improvement projects.

Simmons said across all states, the relative improvement on all indicators was 15-17%. According to a study published in the Journal of the American Medical Association (JAMA), the states that have a more homogeneous population tended to start at a higher rank and move up. Those with less homogeneity started low and did not see much improvement.

Despite Wisconsin’s improvement, Simmons said there is still a quality gap. "We’ve been working on these indicators for ten years. If we keep improving at the same rate, it will take us a quarter century to meet 100% in some areas," Simmons noted. "There are all kinds of theories as to what stimulates improvement. I think becoming more public and encouraging hospitals to share improvement practices will stimulate more creativity so that we will break through the ceiling."

WHA is currently putting into a place a statewide hospital quality reporting program designed to provide data that is helpful to the public and to providers. "Taking this public will say this (quality) is about all of us, not just MetaStar." Simmons said.

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Joint Commission Public Policy Initiative

The Joint Commission has published a policy initiative paper entitled "Health Care at the Crossroads…Strategies for Creating and Sustaining Community-wide Preparedness Systems." This policy paper does not describe new Joint Commission requirements for health care organizations. Rather, the Joint Commission has devised a public policy action plan that involves the gathering of information and multiple perspectives on the issues around hospital and community-wide disaster preparedness, formulation of comprehensive solutions, and assignment of accountabilities for these solutions. The overall purpose of this report is to frame the issues that need to be addressed in developing community-wide preparedness and to outline federal and state responsibilities for eliminating barriers, and for facilitating and sustaining community-based emergency preparedness across the country. To access the policy paper, go to  www.jcaho.org/news+room/press+kits/emergency+prep.htm. The link is also available on www.wha.org under Disaster Preparedness.

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Education Offered on Chargemaster Maintenance

The educational seminar "Documentation, Billing and Claim Auditing Strategies" is scheduled for May 13 in Wisconsin Rapids. It’s a seminar that business office managers, coding directors, compliance officers, case managers, admission directors, and internal auditing staff should attend.

This program focuses on the impact of APC changes on finance, billing and operational processes. Clinical case scenarios will be used to provide examples of successful APC implementation, as well as to identify additional opportunities. Actual claims will be audited and reviewed to assist attendees in correctly implementing this vital process in their individual facilities.

The seminar will be held on May 13, 2003, from 9 a.m. to 4 p.m. at Hotel Mead in Wisconsin Rapids. A brochure and registration form are included in this week’s packet and on the Web site at www.wha.org, education. The American Health Information Management Association (AHIMA) has approved this seminar for six (6) continuing education hours.

For more information on the program content, contact Jennifer Frank at 608-274-1820 or email at jfrank@wha.org. For registration questions, contact Bridget Gifford at 608-274-1820 or email at bgifford@wha.org.

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WHA Financial Solutions, Inc.
 Terrorism Risk Insurance Act Gives Hospitals Option to Elect Coverage

The Terrorism Risk Insurance Act of 2002, which went into effect on February 24, 2003, states that all licensed U.S. insurance companies writing property and casualty lines must offer terrorism coverage on all commercial line of property and casualty insurance, including excess insurance, workers’ compensation, and surety insurance. This gives Wisconsin hospitals the opportunity to include terrorism risk insurance in its overall coverage package. The act has an expiration date of 12/31/05, albeit with a sunset provision.

Under the act, the U.S. Government will provide "back-stop" reimbursement, i.e. reinsurance, for 90% of losses following an overall annual deductible of $5 million, and then an annual individual insurance company deductible based on a percentage of their prior year’s earned premiums. Following the deductibles, the Government will pay 90% of all terrorism losses up to a $100 billion total annual limit.

Coverage applies only to foreign terrorist acts as certified by the Secretary of the Treasury and the Attorney General of the U.S. The Oklahoma City bombing would not be covered by the act, as that would be under a "named" perils policy. It also does not apply to acts of war.

Furthermore, the act responds only to losses that occur on U.S. soil (including protectorate, territories and possessions). If there is a separate premium charge for terrorism coverage, an insured may decline the coverage (in writing). However, with respect to workers’ compensation, the coverage may not be declined. In Wisconsin, it has been determined that the rate of 3% of total payroll will be added to current workers’ compensation premiums. This charge is over and above all other considerations and will be added upon renewal.

Punitive damages will not be included under third-party liability claims.

This is a complex and relatively recent act. As such, many questions exist throughout the industry at this time, and it will take some time to work out the details. WHA Financial Solutions, Inc. and Fitzgerald, Clayton, James and Kasten, partners in offering corporate insurance options, will keep you informed as more is learned about details of this act and any affect it may have on Wisconsin hospitals.

For more information on the act or on WHA Financial Solutions’ corporate insurance options, contact Jon Braddock at 800-362-7121 or at jbraddock@wha.org.

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New HRSA Grant Guidelines for 2003-2004

The Division of Public Health received the new Health Resources and Services Administration (HRSA) grant guidelines for 2003-04. The complete guidelines are found on WHA’s Web site under Disaster Preparedness. As in the previous grant, all requests will come through each of the seven hospital preparedness regions. The requests will be prioritized per the State Plan that has been submitted to HRSA. A grant-writing team will then do the actual grant writing that is expected to be completed April 15.

Each regional governance team was sent a copy of these guidelines for review and consultation. This input will go to the grant-writing team. Individual hospitals may not apply for grant dollars as per the guideline document. Contact Bill Bazan at bbazan@mailbag.com if you have any questions.

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