May 22, 2015
Volume 59, Issue 20

Joint Finance Committee Protects and Strengthens Medicaid DSH
Budget Committee adopts WHA recommendation for ongoing funding

During their meeting May 21, the Legislature’s Joint Committee on Finance adopted a WHA-backed amendment to the Governor’s budget bill making the Medicaid Disproportionate Share Hospital (DSH) program an ongoing, annual appropriation. In his proposed budget, Gov. Scott Walker included funding for the DSH program for the next two years, helping to prevent a cut of about $72 million in the upcoming biennium for hospitals in Wisconsin. The action on May 21 by the powerful budget committee strengthens the Governor’s proposal by making DSH an ongoing program into the future.

“We are very pleased that the Joint Committee on Finance recognizes that more must be done to stabilize funding in the Medicaid program,” said WHA President/CEO Eric Borgerding. “This is a welcome, ongoing acknowledgment of the challenges that confront Wisconsin’s hospitals, where care is provided to all who walk through their doors, every minute of every day of every year.”

While nearly every state in the country has a DSH program, Wisconsin’s program is one of the smallest. Under the provision adopted by the Committee, Wisconsin hospitals will be eligible to receive $15 million annually in state funding for enhanced Medicaid reimbursement through DSH, resulting in an all-funds amount of $36 million in 2016 alone.

Rep. Dean Knudson (R-Hudson) spoke to the Joint Finance Committee’s action, encouraging members to support this motion to make DSH a permanent appropriation.

“Budgets are about priorities,” said Knudson. “One good reason [to vote for the motion] is that we are putting in $30 million in payments to hospitals that provide lots of care to Medicaid patients, as a support to them.”

Democrats included an ongoing DSH program in the alternative motion they presented to the Committee. While this motion failed on party lines, the language on DSH mirrored the Republican motion that ultimately prevailed. This action showed that DSH had bipartisan support by Republican and Democratic members of the Committee.

Currently, Wisconsin’s Medicaid program reimburses hospitals at 65 percent of cost. When government programs pay poorly, providers must offset losses with revenue from commercial payers and employers—this is known as cost-shifting, or “the hidden health care tax.” The Medicaid Disproportionate Share Hospital program increases reimbursement for hospitals and helps to offset the $960 million Medicaid shortfall that Wisconsin hospitals experience on an annual basis.

See WHA’s memo to the Committee here: See WHA’s news release at

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Budget Committee Seeks Greater Oversight of Changes to State Employee Health Insurance
JFC approves budget amendment for changes to be approved by JCOER

The Legislature’s Joint Committee on Finance (JFC) approved a WHA-backed amendment to the state budget that will require any changes to state employee health insurance, including any effort to adopt a self-funded, single-carrier arrangement, to be approved by the Legislature’s Joint Committee on Employment Relations (JCOER). Some interpretations of current law indicate that the state Group Insurance Board can, unilaterally, make changes to the state employee health insurance program, including moving to a self-funded/single-carrier arrangement, without legislative approval or oversight. This amendment would clearly require any changes to be approved by JCOER, thus injecting a new and significant level of legislative approval and oversight into this massive issue.

In the past two years, the Department of Employee Trust Funds has hired two consultants, both with widely disparate estimates of the savings or costs of moving to a self-funded arrangement for the state employee group health insurance program. In addition, these consultants have made recommendations on important program changes designed to reduce overall costs. This amendment, adopted by a vote of 14-2, is a step toward confirming the Legislature’s oversight into modifications that could have significant impacts on insurers, providers, employees and the state budget. Additionally, an amendment changing the composition of the Group Insurance Board and requiring Senate confirmation of its members was unanimously adopted.

At the February 19 WHA Board meeting, JFC co-chairman Rep. John Nygren (R-Marinette) expressed his interest in injecting the Legislature into the decision about self-funding. Rep. Nygren, as he has on many occasions, kept his commitment by authoring this amendment in JFC and achieving a strong, bipartisan vote. WHA will continue to work with legislators and aligned partners to urge the Governor to sign these amendments into law.

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FQHC Cut Reduced, Payment Change Delayed by Joint Finance

The Joint Committee on Finance, in a meeting May 21, took action to change Gov. Scott Walker’s proposed reduction in federally-qualified health center (FQHC) spending in the 2015-17 biennial budget. The proposed budget bill would have reduced funding by $24.8 million over the 2015-17 biennium to reflect a proposed change in FQHC reimbursement from a cost-based methodology to a prospective payment system (PPS) rate. The Governor’s proposed budget would phase that reimbursement change in over a three-year period.

The Committee chose to delay this change in payment methodology for one year, resulting in a $15.8 million reduction in the proposed cuts to FQHCs. The budget motion also requires the Wisconsin Department of Health Services to consult with FQHCs as it develops the PPS payment methodology. FQHCs raised concerns that the PPS rate proposed by the Administration in the Governor’s budget did not include appropriate scope-of-service changes that are required to be considered under federal law.

Wisconsin has 17 federally-qualified health centers across the state. The Legislative Fiscal Bureau has indicated in its budget paper that 24 states are now reimbursing FQHCs through a PPS methodology.

To see the Legislative Fiscal Bureau’s paper on the proposed change, go to:

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Wisconsin Health Care Worker Influenza Immunization Rates Hit Record High

Wisconsin hospitals and health systems hit a record-setting 96 percent median influenza immunization rate for the 2014-2015 influenza season, as reported to the National Health Safety Network (NHSN). The median vaccination rate was only 78 percent prior to a WHA-led statewide initiative to raise immunization rates.

“Wisconsin hospitals and health systems have worked diligently to reduce health care-acquired infections,” said Kelly Court, WHA chief quality officer. “Immunizing health care workers is another great example of our state’s hospitals working to reduce infections and protect our patients.”

WHA’s Council on Medical and Professional Affairs launched a WHA-led multi-disciplinary task force in 2012 to prepare a toolkit to help members implement policies to increase influenza vaccination rates. The WHA Board of Directors endorsed the goal of every member having an immunization rate of greater than 95 percent when the toolkit was released. The 2014-2015 data shows 60 percent of WHA members met that goal in the 2014-2015 season.

Influenza results in an estimated 226,000 hospital admissions and 36,000 deaths each year.

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U.S. House Committee Passes “21st Century Cures” Legislation
340 B changes averted

On May 21, the U.S. House Committee on Energy & Commerce voted in an overwhelming bipartisan manner, 51-0, in support of legislation called the “21st Century Cures” bill, H.R. 6. The committee has been working for many months on drafting this legislation in order to, in its own words, take a “comprehensive look at what steps we can take to accelerate the pace of cures in America. We are looking at the full arc of this process—from the discovery of clues in basic science, to streamlining the drug and device development process, to unleashing the power of digital medicine and social media at the treatment delivery phase.”

While much of the legislation is directed at accelerating medical research and includes provisions to modernize the FDA process and fund the National Institutes for Health, other provisions included by the committee relate to interoperability and telehealth, which impact health care providers. The American Hospital Association provided the committee with the following comments, including several areas of concern: Read a general summary of H.R. 6 here

Potential substantive changes to the 340 B program were floated by the committee for inclusion in H.R. 6. Those changes had not previously been a part of the committee’s deliberate process and were substantive in nature. Several of the changes included:

The Wisconsin Hospital Association was concerned with these changes for both policy and process reasons. The American Hospital Association also expressed concerns to the committee over the past week on behalf of the hospital field. Due to concerns raised, the 340 B changes were not included in the legislation as passed by committee this week. However, it is an indication of the types of modifications that are being discussed. WHA strongly supports the 340 B program and continues to advocate in favor of the program with Wisconsin’s members of Congress. We anticipate additional regulatory guidance to emerge in the coming months and will watch for other legislation that may impact 340 B providers.

Another area of concern for hospitals and health systems was funding for H.R. 6. The list of pay-fors, which did not emerge until the last minute, did not include major hospital-related cuts. Funding for H.R. 6 includes: $8 billion from the Strategic Petroleum Reserve; $100 million from Part D provider and patient assignment; $200 million from accelerating the modernization of x-ray imaging; $2.8 billion from limiting federal Medicaid matching for durable medical equipment reimbursement to Medicare rate; and,
$1.8 billion from calculating the Federal Upper Limit reimbursement using generic drug prices.

H.R. 6 will next move to the full U.S. House of Representatives for action.

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Irish Tenor Ronan Tynan to Close Rural Health Conference

Participants of the 2015 Wisconsin Rural Health Conference will be in for a treat when Dr. Ronan Tynan, a member of the internationally-acclaimed trio “The Irish Tenors,” tells his inspirational story as the conference’s closing speaker. Rumor has it he may even perform, making this year’s conference a “can’t miss” experience!

Tynan is a physician specializing in orthopedic sports injuries, was the first disabled person ever admitted to the National College of Physical Education, and is a gold medalist and world record holding Paralympian, both in track and field and equestrian. He is now a member of the worldwide sensation “The Irish Tenors” and a successful solo recording artist.

Join your colleagues in Wisconsin Dells June 17-19 to hear the story of Tynan’s amazing life, his approach to facing challenges and more. A full agenda and online registration are available at Register today to make sure you hear this amazing presentation and performance. As a reminder, the cut-off date for hotel reservations is Wednesday, May 27, so make your reservations today.

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