November 11, 2011
Volume 55, Issue 43

Legislature’s Joint Finance Committee Approves DHS Medicaid Reforms

On November 10, the Legislature’s Joint Committee on Finance approved moving forward with changes to the Medicaid program proposed by the Wisconsin Department of Health Services (DHS). The approval came on a party line 11 to 4 vote and came after over two hours of testimony and Q & A between DHS Secretary Dennis Smith and Deputy Secretary Kitty Rhoades. The Committee’s approval allows DHS to now submit the waiver request to the federal Centers for Medicare and Medicaid Services (CMS) for its approval.

On September 30, DHS released it reform package containing 39 proposals for Medicaid program changes (see 10/7/11 article in The Valued Voice). The proposals include initiatives such as reducing provider payment variation and a hospital pay-for-performance program. DHS sought the committee’s endorsement for those provisions that need an approved waiver from CMS to move forward, including changes to eligibility and enrollment, expansion of the Benchmark Plan, and medical home models.

WHA has supported the reform approach as opposed to across-the-board cuts to enrollment or provider payments. WHA’s guiding principles for Medicaid include maintaining coverage for vulnerable populations encouraging employer-sponsored coverage and reducing cost shifting. However, in a letter to Joint Finance Committee members in advance of the meeting, WHA also expressed concern about certain aspects of the waiver proposal including standards used to determine Medicaid eligibility and an emergency room co-payment of $100 for benchmark plan enrollees (200,000+ people) not admitted to the hospital.

Committee members from both parties raised concerns about the impact of the emergency room co-payment on providers and recipients. Representative Dan LeMahieu (R-Cascade) questioned the effect of the co-payments and whether the co-payments would result in reduced abuse of the emergency room. Senator Bob Jauch (D-Poplar) said that many recipients would not be able to pay the co-payment, and recognized the "reality that high co-payments will be passed on as uncompensated care." Representative Cory Mason (D-Racine), citing data from his own high Medicaid hospitals, also asked DHS Secretary Dennis Smith about the emergency room co-payment provision and whether the DHS proposal shifts costs to providers and employers.

Secretary Smith responded by stating, "Our belief is that we will change behavior so people will not go into the emergency room for things that are non-emergencies." In his response, Secretary Smith noted that DHS will work to track co-payments. He also acknowledged the historical cost shift from un-reimbursed Medicaid costs.

"Co-pays may work in non-hospital settings, but it’s a much different reality in emergency rooms, where we know from the data that co-pays are largely uncollectible," said WHA Executive Vice President Eric Borgerding. "Hospitals are required under federal law to care for anyone presenting in an ER, regardless of whether a co-pay is required or paid. Hospitals cannot control who comes to the ER, or whether they come for a true emergency. Absent better care management in the Medicaid program, we are certain the new $100 emergency room co-pay will be another multi-million shift of costs to private sector employers."

DHS has indicated it intends to work with all parties involved to curb unnecessary ER usage, an effort WHA strongly supports and will participate in.

Some committee members expressed concern over added costs for Medicaid enrollees and a potential increase in uninsured, particularly as higher premiums are imposed on individuals with incomes above $27,800 for a family of three. Secretary Smith noted that the premiums they are proposing are less than what others with the same income and private insurance are paying, including under the Patient Protection and Affordable Care Act (PPACA). "We believe our waiver request is a much more equitable way," he added.

According to the Legislative Fiscal Bureau, over 22,500 people now enrolled in Medicaid may drop their coverage as a result of the new premium requirements. DHS’s premium approach is contrast to the enrollment-related cost-saving options afforded to states under PPACA. Under that law, states may reduce eligibility for Medicaid to people with incomes below 133 percent of the federal poverty level, which could result in some 53,000 losing coverage. Under either approach, a good portion of the state’s current 1.2 million Medicaid enrollees will lose Medicaid coverage.

All acknowledged that the state’s budget woes have forced many difficult choices, despite a major influx of new funding for the program. In June, the Legislature approved Governor Walker’s budget bill, which allocated all new revenue growth ($1.3 billion) over the biennium to the Medicaid program. The Administration also recently exempted Medicaid from millions in required state agency funding lapses. Many Committee members applauded the Department for setting the program on a more sustainable path. Members pointed out the historic cost growth in the Medicaid program and the significant expansion in eligibility.

Kitty Rhoades, Deputy Secretary of DHS, noted that the Department was attempting to avoid future needs for drastic cuts to the program, to protect seniors and people with disabilities, and to avoid across-the-board rate cuts to providers. "It becomes an access issue. Providers get to a point where they will not accept Medicaid… Keep cutting providers, and you will end up with no one willing to take the ForwardHealth card."

All members of the Committee voted in support of the part of the proposal that would allow DHS to implement new medical home models for various Medicaid population groups. Representative Robin Vos, co-chair of the Committee, praised such models as innovative, stating that, "We want coordinated care to improve health outcomes and that’s what medical homes are for." He also added, "… nobody wants somebody to stay sick or leave the emergency room and come right back."

Approval by the Joint Committee on Finance paves the way for the Department to now submit the waiver request to CMS for its approval.

The WHA memo to Joint Finance can be found at:

The Legislative Fiscal Bureau’s Analysis of the DHS request to the Joint Finance Committee can be found at:

A WHA summary of the entire DHS Medicaid Reform package can be found at:

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Tax Exemption for Adult Dependent Health Coverage Now Law
DOR issues detailed explanation for employers

Late last week, Governor Scott Walker approved a new law that will extend the federal income tax exemption for health benefits provided to adult dependents to Wisconsin state income tax. Provisions of the new law, viewed as a welcome fix for employers who faced the challenging requirement of imputing income associated with health insurance coverage provided to adult dependent children, are effective for taxable years beginning on or after January 1, 2011. As previously reported (see October 21, 2011 Valued Voice article), WHA supported the measure which received strong bipartisan support in the Legislature.

"This bill will reduce confusion for employers and provide tax relief for employees receiving certain health benefits," said Governor Walker as he signed Senate Bill 203 into law as 2011 Wisconsin Act 49. This week, the Wisconsin Department of Revenue (DOR) issued a press release on the new law as well as a detailed explanation for employers.

The press release and information can be found at: and

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Be Involved – Join a Council or Committee

WHA is currently soliciting appointment requests from WHA members to participate in WHA councils and committees. Now is your opportunity to participate on one of the councils that are at the forefront of identifying key policy issues for the membership and making recommendations on positions to the WHA Board. There are five councils and one committee for which we are looking for member participation:

  • Council on Finance and Payment
  • Council on Medical and Professional Affairs
  • Council on Public Policy
  • Council on Rural Health
  • Council on Workforce Development
  • Advocacy Committee

Additional information including council responsibilities and current member information is located on WHA’s website at Direct questions to Sherry Collins at or 608-274-1820.

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WHA Foundation Kicks Off Annual Fundraising Campaign

Throughout 2011, the WHA Foundation supported a variety of initiatives that have a statewide impact on health care and that meet its three funding priorities of workforce development, quality and patient safety, and community collaboration.

With the expectation of continuing their support for these and other initiatives in 2012, the WHA Foundation officially kicked off its 2011 annual fundraising campaign this week, asking WHA hospital members to consider supporting the WHA Foundation by making a contribution this fall.

According to Foundation Director Jennifer Frank, the funds raised for 2011 were used to award two Global Vision Awards with unrestricted grants to a free community dental clinic and a community collaborative focused on improving the health and wellness of its citizens. Also in 2011, the Foundation funded 32 scholarships, worth nearly $40,000, for technical college students finishing their final semester of a health care-related degree program, many of whom have gone on to work in WHA member hospitals. Funds raised in the 2011 campaign will be used to continue these initiatives and give the Foundation the opportunity to consider new initiatives for funding in 2012.

Each WHA hospital member executive received a direct appeal for the fundraising effort earlier in the week, but a brochure containing a contribution form is included in this week’s packet as well. To make a contribution, or for more information on the WHA Foundation’s annual fundraising campaign, contact Jennifer Frank at 608-274-1820 or at

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WHA Sponsors One-Day Seminar to "Get Your Chargemaster Ready for 2012"

WHA is sponsoring a one-day seminar December 15, "Getting the Chargemaster Ready for 2012." This seminar will focus on the 2012 reporting requirements, as well as CPT and HCPCS coding revisions and additions impacting the Chargemaster. It is being held at the Kalahari Resort in Wisconsin Dells.

There are over 500 known CPT changes for 2012, and it is anticipated that CMS will have an equal number of HCPCS changes. As in previous years, nearly every ancillary department of the hospital will be impacted by the coding changes, and this session will focus on the requirements for updating the facility’s Chargemaster and on strategies for educating your department staff.

Chargemaster/APC coordinators, coding staff, office managers, CFOs, and others who are responsible for charge generation processes are encouraged to attend this WHA-sponsored event. A full brochure and online registration are available at

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Guest Column: Hospitals Contribute to Physical and Economic Health in Wisconsin Communities
By Mary Kay Grasmick, WHA Vice President, Communications

The uncertainty of the economic times we live in affects nearly all the decisions that we make in our personal and professional lives. It is in this environment that WHA released two major reports that I believe give people living in Wisconsin reason to be optimistic about our state’s ability to weather this storm.

In spite of the downturn in the economy, Wisconsin hospitals employed 110,000 people and provided them with a stable source of employment and good benefits. In addition, for every job inside of a hospital, another is created out in the community. Stability in our health care delivery system is important as hospitals are the economic and social anchors of our communities. In 2009, hospitals spent millions of dollars caring for those who needed urgent medical care and had no other place to turn. Wisconsin hospitals provided $232 million in charity care, and spent millions more in supporting free clinics and backing community-wide initiatives aimed at improving the physical and mental health of people living in their communities.

Wisconsin is a state that is nationally recognized for the high quality and affordability of its health care. That reputation is in itself a factor that will help attract economic development. Combine that with the innovative efforts of our health care providers to connect their wellness outreach efforts with employers to raise the level of wellness of Wisconsin’s workforce. It is a formula for success.

Professor Steve Deller, an economist with the University of Wisconsin-Madison, and co-author of the report, "Healthy Hospitals. Healthy Communities: The Economic Impact of Wisconsin’s Hospitals," responded to many requests for interviews following the release of the report last week. I think he summed up the value that a hospital brings to the community best with the following statement:

"Increasingly, businesses looking to expand or locate in a community look at factors such as the quality of workforce, the availability of land, the business climate of the community and the community’s willingness to work them to provide special services," according to Deller. "However, business is also recognizing that access to health care is extremely important. They want their workers to be healthy, but the owners of the business also are looking at their own quality of life and if this is a good place to raise their family. That is where quality of life becomes important and access to quality health care is a big piece of that."

We know that Wisconsin hospitals are not immune to the recession, but have managed to weather it better than most industries. However, the perfect storm of increased demand for health care services coupled with very real cuts in reimbursement could threaten our ability to be the health care safety net and provide services that ultimately improve population health. We must stay focused in our advocacy efforts to ensure that policy makers understand the critical role that hospitals have in the social and economic health of our communities.

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CMS Offers New ICD-10 Implementation Handbooks

All entities covered under the Health Insurance Portability and Accountability Act (HIPAA) must transition to the ICD-10 code sets by October 1, 2013. CMS has developed four Implementation Handbooks to assist you with your transition to ICD-10. These handbooks are step-by-step guides specifically for small and medium provider practices, large provider practices, small hospitals, and payers.

The appendix of each handbook references relevant templates which are available for download in both Excel and PDF files below. The templates are customizable and have been created to help entities clarify staff roles, set internal deadlines/responsibilities and assess vendor readiness.

View the step-by-step plans and relevant templates for each of the following audiences:

Relevant templates:

Relevant templates:

Relevant templates:

Relevant templates:

The ICD-10 Implementation Handbooks outline suggested steps and processes to take for a smooth transition to ICD-10. Providers, hospitals, and payers may use the guides to:

Reminder—the Version 5010 compliance deadline is less than 60 days away!

All affected entities must first convert to Version 5010 by Sunday, January 1, 2012 in order for the ICD-10 medical code sets to work. In order to meet this compliance deadline, you need to conduct both Level I Internal Testing, and Level II External Testing of transactions. Once your practice is fully transitioned to Version 5010, take the necessary steps listed in the ICD-10 Implementation Handbooks to help you prepare for ICD-10.

Keep up to date on Version 5010 and ICD-10.

Please visit the ICD-10 website for the latest news and resources to help you prepare, and to download and share the implementation widget today!

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New Survey: Medical Residents Have "Buyer’s Remorse"

For medical residents about to complete their training, it appears that now is both the best of times and the worst of times to be entering the job market.

Merritt Hawkins’ 2011 Survey of Final-Year Medical Residents found that more than 75 percent of final-year medical residents received at least 50 job solicitations during the course of their training. Close to one half (47 percent) received 100 or more job solicitations.

Nevertheless, the survey also found that close to one-third of final-year residents (29 percent) would not choose medicine as their profession if they could have a career "do-over." They are about to enter their profession at a time when the health care system is undergoing profound change and uncertainty and when physicians are facing severe reimbursement cuts. Little wonder if, upon crossing the finish line, they question whether the race was worth the effort.

The survey also reflects the practice preferences and plans of today’s medical residents. The first consideration of most residents (81 percent) in practice selection is geographic location. This often is not the best basis for practice selection. Long-term satisfaction for residents (and for all physicians) is more likely to be tied to the compatibility and appropriateness of their practice than to the community in which they live.

Unfortunately, residents often are not equipped to assess practice opportunities because they have received little to no training in the business side of medicine. Only 9 percent of residents surveyed said they were "very prepared" to handle the business aspects of medicine, including contract evaluation and other skills necessary to assess a job opportunity. Recruiting residents therefore entails considerable front-end preparation and education regarding how physicians are compensated, how they are incentivized, and what constitutes a viable practice.

In an ominous sign for underserved rural areas, less than one percent of residents said they would prefer to practice in a community of 10,000 or less. And what is the greatest concern among residents regarding their first practice? The availability of personal time.

A copy of the report is available from Merritt Hawkins by emailing

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Regional Seminars Focus on Physician ICD-10 Documentation Improvement

When surveyed, 74 percent of WHA members indicated documentation improvement education for their physicians was their number one ICD-10 transition-related need. Based on this member feedback, WHA is offering five regional, one-day seminars in March 2012 focused on physician documentation improvement for ICD-10. Each session will be presented by Lynn Kuehn, a certified coding specialist for physicians (CCS-P) and an AHIMA certified ICD-10-CM/PCS trainer.

Attendees will learn how the ICD-10 regulation will affect physicians, their practices and their hospitals, and discuss specific examples of how physician documentation impacts ICD-10 coding accuracy. In addition, Kuehn will share the information needed from the various physician specialties and why this information is vital to code assignment. Most importantly, tools for physician leaders and others on the ICD-10 team to use in supporting the physician community with the ICD-10 transition will be identified, and each attendee will receive a packet of documentation quick references developed by Kuehn for AHIMA. One quick reference document per specialty and body system will be provided.

Hospital leaders should encourage their physician leaders, physician liaisons, clinic managers, coding supervisors and managers, clinical documentation specialists and other ICD-10 implementation team members to attend one of these regional sessions.

The seminar will be offered in five regional locations across Wisconsin, and will be identical, so attendees can choose the date and location most convenient for them. These sessions have been approved for continuing education units for use in fulfilling the continuing education requirements of AHIMA. In addition, this activity has been planned and implemented in accordance with the Essential Areas, Elements and Policies of the Accreditation Council for Continuing Medical Education (ACCME) through the joint sponsorship of the Wisconsin Medical Society (WMS) and WHA. WMS is accredited by the ACCME to provide continuing medical education for physicians. WMS designates this live activity for a maximum of 6.0 AMA PRA Category 1 Credits.TM Physicians should claim only the credit commensurate with the extent of their participation in the activity.

A brochure is included in this week’s packet and online registration is available at:

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Mark Your 2012 Calendar for These Important WHA Events

Physician Leadership Development Conference
March 9-10, The American Club in Kohler

Advocacy Day
April 24, Monona Terrace in Madison

Rural Health Conference
June 27-29, The Osthoff Resort in Elkhart Lake

Leadership Forum
September 21, Marriott Hotel in Madison

Visit for information on these and other events throughout 2012.

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