February 7, 2014
Volume 58, Issue 6


Providers United in Opposition to Workers Compensation Fee Schedule
WHA and growing coalition slam proposal

During a joint hearing of the Assembly and Senate labor committees on the biennial Worker’s Compensation bill (AB 711/SB 550), the health care community stood united against an effort by representatives of organized labor and business interests to impose prices unilaterally on the hospitals, physicians, chiropractors, physical therapists and other practitioners who provide health care to injured workers. During the hearing that stretched more than seven hours, health care practitioners from around the state encouraged the legislators to protect Wisconsin’s excellent Worker’s Compensation system by rejecting government price controls as a means to reduce costs and, instead, reduce costs by making the program more efficient and less administratively burdensome.

Testifying on behalf of the hospital community, Connie Kinsella, the recently retired vice president of revenue cycle for UW Health, noted government fee schedules have not worked in Medicare and Medicaid. "Those programs have added to the complexity of health care finance without improving health care quality or value," according to Kinsella.

Kinsella suggested the best way for the Worker’s Compensation system to reduce costs would be to address the administrative inefficiencies in the system, such as adopting 20th century technology. "We would like 21st century technology, prompt electronic claims and funds transfers, but even 20th century technology would be an improvement over the current paper-based system," she added.

Kinsella also pointed to claims payment delays as adding to the cost of the program. "There is a time value of money. When we spend $800,000 to reattach a limb, but wait over two years for reimbursement, it adds significantly to our costs. We’ve paid for the equipment. We’ve paid the nurses. And then we wait."

Kinsella said only Illinois Medicaid and self-pay take longer than Worker’s Compensation for payment, while noting that discounted prices offered to other payers come with mutual capitulations. "The discounts come with negotiated terms like prompt payment and electronic claims," she said.

Supporting the bill and the fee schedule, James Buchen, a member of the Worker’s Compensation Advisory Council and representing Wisconsin Manufacturers and Commerce, testified, "Nearly 70 cents out of every dollar spent in the Worker’s Compensation system goes to pay for health care" and 30 cents toward indemnity payments for injured workers. Asked for the percentage of premium dollars that go toward insurer costs, management and insurer representatives did not know.

The health care providers, including hospital systems, physicians, chiropractors and physical therapists, touted the high-value health care provided to injured workers in Wisconsin, resulting in the fastest return to work in the country and high satisfaction with the health care received for costs that are lower than most states and significantly lower than average.

After the hearing, WHA’s Executive Vice President Eric Borgerding said that hospitals and health systems question the push to adopt another government fee schedule given the examples of Medicaid and Medicare.

"We’ve been down this path before. It doesn’t lead to a good place," Borgerding said."Our members are engaged on this issue. They do not understand why some are pushing failed policies from one program onto a program that is a national model. It doesn’t make sense."

The Coalition to Protect Worker’s Compensation, which includes health care provider organizations large and small across the state, issued a press release after the hearing. The statement read, in part, "Wisconsin’s current Worker’s Compensation system produces excellent health care outcomes at a cost that is more competitive than most of the country," according to Steve Brenton, president, Wisconsin Hospital Association. "We can’t control how many workers are injured at their jobs in Wisconsin, but when they do arrive at our hospitals, and a lot of them do, we give them some of the best care in the country, get them back to their families sooner and back working faster than in most any other state."

A copy of the release is available at www.wha.org/Data/Sites/1/pubarchive/news_releases/Statement2-4-14Workerscomp.pdf.

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Wisconsin Hospitals, Clinics Help Reduce Employers’ Health Care Costs
"The most expensive employee is the one who is absent"

The fact that the health care reimbursement system is largely based on payment for treating illness has not deterred Ashok Rai, MD, president/CEO of Prevea Health in Green Bay, from implementing a medical home model of care at Prevea that is focused on keeping people well.

"We’re spending more to get less reimbursement. We have a medical model where our patients have as many visits as it takes to manage their health. Our goal is to change our model of care before we are told to change," Rai told an audience of health care leaders in Madison. "When we saw that with our model of care, employer spending per-member-per-month on their employees’ health care was reduced, we partnered with Dean Health Plan to launch our own health plan so we could capture the savings that were previously going to the insurers."

Assuming the risk of a health plan paid off, Rai said Prevea’s financial performance over the past two years has been the best in its history.

"By partnering with employers, Prevea has helped reduce their health care spending," Rai said.

Rai was joined by David Carpenter, president/CEO, Chr. Hansen, North America; Rebecca Larson, executive director, Alliance of Health Insurers; and Patrick Remington, MD, MPH, associate dean for public health at UW School of Medicine and Public Health, at a lunch briefing sponsored by Wisconsin Health News February 4. Dick Tillmar, owner, Tillmar Connect, moderated the panel.

About 70 percent of the employees participate in the employee wellness program at Chr. Hansen, and while Carpenter is clearly supportive of the program because of the positive impact it has on employee health, a "side benefit" last year was the company saw their health care costs drop one percent.

Larson said insurers, employers and providers are increasingly working together to promote prevention and wellness.

The positive impact of a work-based wellness program is bolstered when employees live in a community that values health, a point emphasized by Remington. "The role of public health is to assure that conditions in the community are making the healthy choice the easy choice," Remington said.

Tillmar said those who do not see a direct economic benefit of promoting and offering programs that improve health and prevent sick days need to take a deeper look.

"The most expensive employee is the one who is absent," according to Tillmar.

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WHIAC Launches Medicare "Enough is Enough" Statewide Radio Campaign
Message aligns with WHA strategy to protect hospitals from more cuts

On February 4, the Wisconsin Hospitals Issue Advocacy Council, Inc. (WHIAC), a 501(C)(4) organized to promote, develop, and encourage the distribution of information about Wisconsin’s health care climate and the importance of enabling high-quality health care, launched a radio campaign aimed at educating the public about the real impact that the ongoing policy and fiscal negotiations in Washington are having on health care in Wisconsin. WHIAC’s ads compliment WHA’s ongoing grassroots and advocacy efforts.

"In Wisconsin, we have some of the best hospitals in America. Study after study shows our hospitals are tops in quality of care…but in Washington, they keep cutting Medicare payments to our hospitals—across-the-board cuts that hurt leaders like Wisconsin the most," the narrator says. The radio message emphasizes the commitment that Wisconsin’s hospitals, physicians and nurses have to being the very best for their patients, 24/7, in a state where our health care systems are national leaders in quality.

The ad concludes by urging listeners to contact their member of Congress and urge them to "protect Wisconsin hospital quality and oppose more Medicare cuts."

"Slashing health system reimbursement has become the ‘painless’ way for Washington to pay for the latest budget deal, SGR patch, debt ceiling increase, and any other issue du jour," according to WHA Executive Vice President Eric Borgerding. "The WHIAC ads create public awareness of the more than $4 billion in cuts that have hit Wisconsin’s hospitals and the impact these have on our health care system. We cannot continue to be Washington’s ATM machine. We are asking our Congressional Delegation to protect Wisconsin’s high-quality, high-value health care system."

The ad, titled "Enough is Enough," will run for two weeks on radio stations statewide.

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Guest Column: ICD-10: Is Your Hospital/System in the Home Stretch?
By Debbie Rickelman, Vice President, WHA Information Center

Effective October 1, 2014 hospitals and health systems, public and private payers, and clearinghouses will use the new ICD-10 coding system on health care claims and for other data reporting. Hospitals and health systems that fail to comply will have their claims rejected by Medicare and other payers. Since it is predicted that coding production will decline with ICD-10, there could be a delay in submitting claims that could lead to cash flow problems.

Coding allows providers to communicate with payers. It translates medical documentation into standard codes that describe patient conditions and services. Used by the majority of clinical and billing operations nationwide, the codes are used to justify medical necessity and are the basis for most third-party payment methods. In addition the coded information is useful in public health policy, financial analysis, and quality and safety initiatives.

Most hospitals and health systems have already laid the foundation for ICD-10. At this stage of implementation, hospitals and health systems should have completed their internal assessment of system changes, made the required upgrades, installed new vendor product updates for claims processing and finished internal testing of these system changes. Hospitals should also be working with their EHR vendors to ensure that all stakeholders are moving forward with ICD-10. Plans to train coders, review areas for documentation improvements and provide instruction to physicians about ICD-10 codes should be in place.

Senior leaders can play a key role in the transition to ICD-10 and take advantage of more and better information. They should encourage and closely monitor progress. At the same time, they should help to develop a long-term plan of how to leverage the knowledge gained through greater code specificity. Risk mitigation approaches need to be defined to keep the hospital/health system on track to meet the implementation date and to reduce the harmful effects that might be associated with coders’, physicians’ and payers’ learning curves. A drop in productivity could affect the revenue cycle.

The Centers for Medicare & Medicaid Services have indicated that after accumulating one year of ICD-10 coding data, the agency will look at refining the DRG assignments, as it does now after new ICD-9-CM codes are introduced. Because ICD-10 provides greater detail, CMS will have the ability to look at the resources that typically are provided for the assigned ICD-10 code. Other payers likely will use a comparable methodology. Senior leaders should begin working on a post-implementation analysis that examines which new ICD-10 codes might cause major payment changes. The results should determine how the hospital plans to offset any decreases to existing payment. Additionally, results should include an assessment of the opportunities to improve operations and outcomes.

Hospital and health system leaders should consider how their organizations can benefit from the improved coding system. A greater understanding of the care associated with the treatment of diseases and illness will be critical to successful transition to new care delivery and payment models. The move to ICD-10 will bring challenges, but many opportunities. Supportive senior leaders will engage staff, monitor progress, ensure that risk mitigation strategies are available and help the hospital/health system to focus on the issues that are important to improving the health status of the communities they serve.

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Register Today for 2014 Advocacy Day
April 16, 2014 *** Monona Terrace, Madison

Make an impact in Madison for your hospital by attending Advocacy Day April 16. Register yourself and your hospital team today, including your senior leaders, trustees and volunteers, for this important event.

Online registration available at http://events.SignUp4.net/14AdvocacyDay0416

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WHA, RWHC in Washington, DC on Rural Issues, 96 Hour Rule
SGR agreement released; no offsets or extenders yet

The Wisconsin Hospital Association, Rural Wisconsin Health Cooperative and rural leaders from across the state were in Washington DC February 5 advocating for the importance of protecting rural health care.

The group met with the vast majority of Wisconsin’s Congressional Delegation to discuss the following issues:

        ·         Protecting the critical access hospital (CAH) designation, including opposing any changes to mileage requirements;
Fixing the CAH “96 hour rule,” including cosponsoring HR 3991; 
Addressing direct supervision policies, including cosponsoring HR 2801/S.1143; and,
Showcasing the great collaborative work going on throughout Wisconsin to educate the next generation of physicians and health professionals.

Sustainable Growth Rate (SGR) Agreement Released; No Offsets or Extenders Yet

While in DC, hospital leaders also heard details about a long-term solution to SGR’s Medicare physician reimbursement formula. That SGR agreement was then officially released February 6 by the three committees involved in negotiations: the Senate Finance Committee, House Ways & Means Committee, and House Energy & Commerce Committee.

A quick summary of the SGR agreement includes:

While the agreement demonstrates important progress to fixing this perennial problem, WHA remains concerned with two major issues. The first is that the agreement leaves to a later date the decisions on how to pay for the cost of repeal. Though no official estimate has been released, it is believed the SGR proposal will cost in the $125-130 billion range. WHA strongly opposes offsetting this legislation with reduced hospital payments.

Second, the legislation also defers to another day the debate on including Medicare extensions to programs like the Medicare-Dependent Hospital program and the Low-Volume Adjustment. WHA strongly supports including extensions of these programs in the SGR legislation, as has historically taken place.

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Legislation Would Remove Time-Keeping Requirement
WHA-backed legislation removes requirement for time-keeping of salaried employees

The Assembly Committee on Workforce Development voted on legislation February 6 to amend current Wisconsin law that requires employers to keep certain records of their employees.

Assembly Bill 712 amends current law by stating that an employer would not be required to keep a record of an employee’s hours worked when that employee is an exempt employee and is not compensated on an hourly rate basis. Exempt employees are defined in the Department of Workforce Development’s (DWD) administrative rules and include employees whose primary duty consists of administrative, executive, or professional work; outside salespersons; highly compensated employees; and computer professionals.

In testimony before the Committee February 4, Representative Mark Born (R-Beaver Dam) said, "This bill will help both employers and exempt employees stay focused on doing business, not managing records that DWD has deemed unnecessary." Born authored this legislation because of concerns from a business in his district and based upon recommendations from the Department of Workforce Development.

WHA registered in favor of the legislation at the Assembly’s committee hearing. The bill was recommended out of the Assembly Committee with a unanimous and bipartisan 14-0 vote. AB 712 is expected to be voted upon in the Assembly within the next few weeks.

See the text of AB 712 here: https://docs.legis.wisconsin.gov/2013/related/proposals/ab712.pdf.

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