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Physician Edition

07-19-2017


July 19, 2017

Volume 5-Issue 13


Court of Appeals Removes Non-Economic Damage Cap

WHA: Court decision risks patient access to health care

A three-judge panel of the Wisconsin Court of Appeals on July 5 released an opinion in Ascaris Mayo v. IPFCF holding that Wisconsin’s $750,000 cap on non-economic damages in medical malpractice cases is unconstitutional for all injured patients because the Legislature lacked a rational basis for enacting the non-economic damage cap. It is expected the decision will be appealed and heard by the Wisconsin Supreme Court.

The case does not impact economic damages, and unlike successful plaintiffs in non-medical liability suits who must rely on the solvency of the defendant to recover economic damages, Wisconsin patients who are injured by medical malpractice are guaranteed recovery of an unlimited amount of economic damages through the Injured Patient and Family Compensation Fund (IPFCF) funded by provider assessments.

The Court of Appeals decision overturns the non-economic damage cap passed with significant bipartisan support in the Legislature and signed into law by Governor Jim Doyle in 2006. WHA, together with the Wisconsin Medical Society and American Medical Association filed a joint amicus brief (http://www.wha.org/pdf/WHA_WMS-AmicusCuriaeBrief-Mayo.pdf) with the Court of Appeals in 2015 supporting the constitutionality of the non-economic damage cap.

Within two hours of the decision, WHA issued a press release (http://www.wha.org/whanr7-5-17ctappnonecondamagecap.aspx)  expressing concern about the impact of the decision on future physician shortages and patient access to health care should the decision be upheld by the Wisconsin Supreme Court. That press release appears below.

“WHA fought hard several years ago to enact bipartisan legislation establishing the current cap,” said WHA President/CEO Eric Borgerding. “The Legislature held multiple hearings and received ample, credible supporting information as it debated this important public policy that impacts the accessibility of health care throughout Wisconsin. We are frustrated the Court of Appeals dismissed the multiple sources of information supporting the Legislature’s rational basis of the non-economic damage cap both when it was enacted in 2006 and today.”

“WHA will file an amicus brief with the Supreme Court and is working with other partners who share our concerns with the Court of Appeals’ decision,” said Borgerding.

In writing the Court of Appeals’ majority opinion, Judge Joan Kessler wrote, “We are left with literally no rational factual basis in the record before us which supports the Legislature’s determination that the $750,000 limitation on noneconomic damages is necessary or appropriate to promote any of the stated legislative objectives.”

The Court of Appeals decision overturns the lower court decision in this case by Milwaukee County Circuit Court Judge Jeffrey Cohen that found the non-economic damage cap generally constitutional but unconstitutional for the particular plaintiff in this case. Judge Cohen reached a different conclusion than the Court of Appeals regarding whether the Legislature had a rational, factual basis for establishing the non-economic damage cap.

“[T]he Court has conducted a thoughtful examination of the statutory scheme and determined that the Cap is rationally related to the Legislature’s goals,” stated Judge Cohen in the 2014 lower court decision in this case on the facial constitutionality of the caps. “Studies, reports, and testimony were considered by the Legislature, which then saw fit to advance four specific goals supported by this evidence. That some studies were inconclusive is not enough to show there is no rational basis here. Plaintiffs must disprove the basis for every ‘plausible policy reason’ for the challenged classification. Having reviewed the documentation on which the Legislature relied, the Court cannot say that the goals articulated are ‘wholly irrelevant.’ The documents on which the Legislature relied contain evidence to reasonably support each goal.”

Relatedly, the U.S. House of Representatives last week passed a bill that would cap non-economic damages in medical malpractice lawsuits at $250,000 and is modeled off of California’s non-economic damage cap established in 1975. The Congressional Budget Office concluded the legislation would reduce the federal deficit by almost $50 billion over 10 years by lowering medical liability premiums and reducing defensive medicine.

Currently, Wisconsin’s noneconomic damage cap is technically now unconstitutional statewide as a result of the Court of Appeals decision. However, should the Wisconsin Supreme Court overturn the Court of Appeals decision, any cases filed between now and a Supreme Court decision upholding the constitutionality of the cap will remain subject to the cap.
 

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High Risk Pools Could Help Stabilize Individual Insurance Market if Done Right

WHA analysis says federal reform bills should include sufficient funding, allow flexibility for states, and not penalize Wisconsin

As concerns about the sustainability of the individual insurance market continue to mount, high risk pools, if properly structured, funded and focused on preserving coverage for individuals with higher cost chronic conditions, can help bring relative stability to the individual insurance market.

That’s according to comments submitted July 12 by the Wisconsin Hospital Association (WHA) in response to the federal Department of Health and Human Services (HHS) request for information about how to stabilize the insurance market. Among several recommendations, WHA says the Centers for Medicare and Medicaid Services (CMS) should support high risk pools and work with Congress to develop and fund pools to meet states’ needs. (See WHA's comments at http://www.wha.org/pdf/WHAComment-HHS-RFI-Improving-Health-Insurance-Options7-12-17.pdf.)

Wisconsin’s former high risk pool program, the Health Insurance Risk Sharing Plan (HIRSP), has been touted both here and in Washington as an example of a successful high risk pool and potential model as Congress grapples with ways to stabilize volatile individual insurance markets.

WHA’s comments to HHS are based on its own analysis of the impact and effectiveness of Washington-crafted high risk pools in Wisconsin. The report (http://www.wha.org/pdf/WHAReport-High-Risk-Pools-and-the-AHCA-BCRA-SummaryRecommendationsAnalysis7-12-17.pdf) draws on Wisconsin’s extensive experience and cautions that market dynamics have changed since HIRSP sunset in December 2013, including the potential impacts of new insurance market policies contained in both the American Health Care Act (AHCA) and the Better Care Reconciliation Act (BCRA).

"We had a good experience with our high risk pool in Wisconsin, in large part because it was actually administered by a separate board of directors that included provider, insurer and patient representatives who understood its singular purpose," said WHA President/CEO Eric Borgerding. "What we know from the Wisconsin experience is that to be successful, these pools must be adequately funded, but as important, the population in the pool must be stable so the care can be well coordinated and effective. If there is a lot of jumping in and out, a lot of churn in these pools caused by other provisions in the BCRA it could lead to instability and unsustainability."

While many are pointing to high risk pools as the solution to concerns about pre-existing conditions and waivers of essential health benefits, the report describes why creating risk pools solely to address those concerns could be unsustainable. Certain elements of both the AHCA and BCRA could incent individuals to enroll in a high risk pool for a short-term or specific need, and revert back to the individual market. As a result, this "churn" could cause the pool to become less manageable and unstable.

"What we know from Wisconsin’s experience is that if adequately resourced and properly focused and structured, risk pools can help address some of the instability now threatening the individual market," Borgerding said. "But saying and doing are two different things when it comes to sustaining high risk pools; the details really matter here."

The WHA report notes the individual market has historically faced challenges in maintaining stability. Risk pools could be created to take some of the higher costs and volatility out of the individual market, thus lowering premiums across the board. That risk, however, would have to be subsidized. While the AHCA and BCRA include some funding for high risk pools, neither includes sufficient resources for states to establish risk pools that can be sustained.

While the BCRA is largely silent about how funding is distributed among states, WHA says the AHCA’s funding formula for the largest block of funding—the Patient Safety and Stability Fund—would penalize states like Wisconsin and exacerbate concerns about state equity that are increasingly surfacing in the Obamacare repeal debate. The formula distributes funding based on incurred claims, on the number of uninsured with income below 100 percent of the federal poverty level (FPL), and it gives more funding to states that have fewer than three insurers in the exchange.

"The funding formula should be revamped," Borgerding said. "Wisconsin is nationally known for its high-quality care, which results in lower overall utilization. Distributing funding based on incurred claims disadvantages states like Wisconsin that have lower utilization." Wisconsin has a low uninsured rate for those below the FPL, largely due to Wisconsin’s hybrid approach to Medicaid expansion. Wisconsin also has a very competitive insurance market. All of these factors will actually work to Wisconsin’s disadvantage when it comes to distributing funding for high risk pools under the AHCA and BCRA.

"In other words, Wisconsin would be penalized for having high-quality care, providing coverage to those with income below 100 percent and having a competitive insurance market," Borgerding said. "Everywhere we turn in these two bills, Wisconsin is essentially being penalized."

Over the past several months, WHA has advocated for premium tax credits based on income rather than age and to ensure cost sharing reduction subsidies are maintained. WHA says their analysis on risk pools does not change their recommendations in this area. WHA continues to advocate that the bills recognize states like Wisconsin for "partial" Medicaid expansions.
 

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CMS Releases 2018 OPPS/ASC and Physician Payment Proposed Rules


On July 13, the Centers for Medicare & Medicaid Services (CMS) released 2018 proposed rules regarding the Outpatient Prospective Payment System (OPPS) and the physician fee schedule. The following is a brief synopsis of the key points in the rules.

The OPPS rule proposes to update payment rates by 1.75 percent in calendar year 2018 compared to CY 2017. The rule also would drastically cut Medicare payment for drugs that are acquired under the 340B Drug Pricing Program. Specifically, CMS proposes to pay separately payable, non pass-through drugs (other than vaccines) purchased through the 340B program at the average sales price (ASP) minus 22.5 percent, rather than ASP plus 6 percent.

The OPPS rule also proposes changes to site-neutral policies under Section 603 of the Bipartisan Budget Act of 2015. Section 603 requires that, with the exception of dedicated emergency department services, services furnished in off-campus provider-based departments that began billing under the OPPS on or after November 2, 2015 no longer be paid under the OPPS, but under another applicable Part B payment systems. Under the physician fee schedule proposed rule, those services would now be paid at 25 percent rather than 50 percent of the OPPS rate for non-excepted services in 2018.

The OPPS proposed rule would also reinstate for CYs 2018 and 2019 the moratorium on enforcement of the direct supervision policy for outpatient therapeutic services for critical access hospitals and small rural hospitals with 100 or fewer beds. In addition, CMS proposes to delay implementation of the outpatient and ASC CAHPS survey-based measures in the Outpatient Quality Reporting (OQR) program until further notice. The rule also would remove six quality measures from the OQR. CMS does not propose relief from the Stage 3 reporting requirements that begin on January 1, 2018.

The rule on the physician fee schedule for calendar year 2018 proposes an estimated 0.31 percent increase in physician payment rates for 2018 compared to 2017, after applying a 0.5 percent payment increase required by the Medicare Access and CHIP Reauthorization Act of 2015 and a misvalued code adjustment required under the Achieving a Better Life Experience Act of 2014. CMS proposes to pay for new telehealth services, including psychotherapy for crisis, health risk assessments and care planning for chronic care management. In addition, the rule would delay until January 1, 2019, the appropriate use criteria program for advanced diagnostic imaging services; and establish payment to rural health clinics and federally qualified health clinics for regular and complex chronic care management services, general behavioral health integration services and psychiatric collaborative care model services.

While data submission for the CY 2018 Physician Quality Reporting System has passed, CMS proposes to retroactively lower the number of required measures from nine to six to more closely align the program with the new Merit-based Incentive Payment System that will affect payment starting in CY 2019. CMS also proposes to lower the maximum amount of payment at risk under the CY 2018 value modifier program from 4.0 percent to 1.0 percent for individual clinicians and groups of under 10 clinicians, and to 2.0 percent for groups of 10 or more clinicians.

Both proposed rules have comment due dates of September 11. WHA will put out a more detailed summary and will comment on the rules, concentrating on the problematic areas regarding the 340B program and the site neutral payment changes.
 

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Wisconsin Hospitals State PAC & Conduit at $175,000

PAC fundraising graphicAs of July 14, the Wisconsin Hospitals PAC and Conduit is just shy of $175,000 in contributions from 183 individuals. This puts the 2017 campaign at 56 percent of its goal of raising $312,500. The average contribution per individual is $956 with over $6,200 contributed each week.

In 2016, the Wisconsin Hospitals State PAC & Conduit launched three contributor levels beginning at $1,500 and up: Leaders Circle, Platinum Club and the Gold Club. There are 61 individuals who have contributed at one of these levels. All contributions, large or small, are appreciated.

To ensure your name is on future contributor lists, make your personal contribution today at www.whconduit.com or contact WHA’s Jenny Boese at 608-268-1816 or jboese@wha.org or Nora Statsick at 608-239-4535 or nstatsick@wha.org.

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Registration Now Available for WCMEW Fall Conference

WCMEW logoThis fall, the Wisconsin Council on Medical Education & Workforce (WCMEW) will host a statewide conference focusing on Wisconsin health care workforce issues. At the full-day event September 27 in Wisconsin Dells, participants will engage in topics ranging from public policy to provider retention and training clinicians for evolving models of care delivery. The conference is designed to bring stakeholders from across Wisconsin’s business, government, and non-profit areas together to look toward the future, recognizing the urgent demand for creative and cross-sector solutions to health care workforce challenges. The event will feature a keynote by Michael Munger, MD, president-elect of the American Academy of Family Physicians.

Panels and breakout sessions will feature discussions by Wisconsin leaders including: Ann Zenk, WHA vice president, workforce and clinical practice; Bruce Palzkill, deputy administrator, Department of Workforce Development; Jim Wood, strategic counsel, Competitive Wisconsin; Rep. Mike Rohrkaste (R-Neenah); Peter Sanderson, medical director, informatics and ambulatory regulation, Ascension Wisconsin; Nancy Nankivil, director, practice transformation and professional satisfaction, American Medical Association; Charisse Oland, CEO, Rusk County Memorial Hospital; and Marilyn Frenn, director, PhD nursing program, Marquette University.

Registration for the conference is now available at www.cvent.com/d/85qxys. If you have questions, contact George Quinn, executive director, WCMEW, at gquinn@wcmew.org or 608-516-5189. The full conference brochure is included in this week’s packet and is also available at www.wha.org/education/2017wcmew9-27.pdf.

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Recent Announcements on Public Health Reporting for Meaningful Use & MIPS

DPH, CDC announce readiness to accept certain public health data from hospitals, physicians
 

On June 30, the Wisconsin Division of Public Health (DPH) announced it has the technical capacity to receive electronic case reporting data from hospitals and physicians attesting to Stage 3 of the Medicare or Medicaid EHR Incentive Program in 2017.

Under Stage 3, which is optional in 2017 but mandatory starting in 2018, hospitals and physicians must select and report on a certain number of public health and clinical data registry measures. Submitting case reporting to a public health authority such as DPH can be counted toward this reporting requirement.

DPH’s announcement, as well as further information on how to register to submit electronic case reporting data to DPH may be found at: www.dhs.wisconsin.gov/phmu/electroniccasereporting.htm.

Also last week, the federal Centers for Disease Control & Prevention (CDC) announced that for hospitals and physicians attesting to Stage 3 of the Medicare or Medicaid EHR Incentive Program in 2017 and for clinicians participating in the Merit-Based Incentive Payment System (MIPS) in 2017, the CDC is accepting registration from such providers of their intent to submit data to the CDC’s National Health Care Surveys. According to the CDC, such surveys include the National Hospital Care Survey, the National Hospital Ambulatory Medical Care Survey, and the National Ambulatory Medical Care Survey.

Under Stage 3 and under MIPS, providers must select and report on a certain number of public health and clinical data registry measures, and submitting data to public health registries such as the CDC’s National Health Care Surveys can be counted toward meeting this reporting requirement.

Additional information regarding the National Health Care Surveys and how to register to submit data is available here: www.cdc.gov/nchs/dhcs/meaningful_use.htm.

For additional information, contact Andrew Brenton, WHA assistant general counsel, at 608-274-1820 or abrenton@wha.org.

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WHA Offers Active Shooter Response Training September 20

International Risk Communications Expert Vincent Covello will also keynote event

Christopher Sonne and Billy Castellano

It is a reality in today’s world that hospitals must be prepared to respond to the threat of an active shooter on their campus. On September 20, the Wisconsin Hospital Association is sponsoring the "WHA Emergency Preparedness Conference: Ready to Respond." This important, one-day conference will feature Chris Sonne and William Castellano, both of HSS EM Solutions, who will share best practices and lessons learned from live active shooter scenarios, as well as direct tabletop exercises and a practical, scenario-based training exercise, during a special afternoon session focused on preparing for an active shooter.

Hospitals are encouraged to take advantage of this in-state training opportunity designed for hospital emergency preparedness directors, emergency department directors and physicians, infection prevention staff, department directors, public relations professionals and public information officers.

The conference will also feature national experts who will share communication and preparedness lessons learned from real world events and focus on current threats facing health care organizations, including workplace and community violence and highly infectious diseases. Attendees will have the opportunity to collect strategies to enhance their current emergency management programs, practice them through interactive exercises, and integrate those preparedness and communication strategies into daily operations.

Vincent Covello, PhD, will keynote the conference and offer a deep-dive session in the afternoon specifically for public information officers and health care public relations professionals.

Covello is a nationally and internationally recognized trainer, researcher, consultant and expert in crisis, conflict, change and risk communications. Over the past 25 years, he has held numerous positions in academia and government. Covello was a senior scientist at the White House Council on Environmental Quality in Washington, D.C., a study director at the National Research Council/National Academy of Sciences and the director of the risk assessment program at the National Science Foundation. Covello has authored or edited more than 25 books and published over 75 articles on risk assessment, management and communication. Covello will share principles, strategies and practical tools for communicating effectively in a high stress situation.

Additional sessions include a look at infectious disease outbreaks and what hospitals can do to better prepare; as well as the role of governmental agencies, including the Department of Health Services and the Department of Public Health during an emergency.

This conference is September 20 at the Sheraton Hotel in Madison. The registration fee is $225 per person. The full agenda and online registration are available at www.cvent.com/d/b5qw08. An event brochure is also included in this week’s packet. Seating is limited—WHA highly recommends registering early.

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