February 9, 2004

MHA's Monday Executive Briefing
February 9, 2004

In this week's edition...
- State News -
1. White, Thomas stump for votes again
2.  McRae launches World Tour Web site
3. Hattiesburg lawyer being considered for federal bench
4. Tort reform to figure in Supreme Court races
5. LeSueur launches Web site
6. Federal officials to help trim State Medicaid costs
7. House votes to open meetings
8. Pickeringrenominated to appeals court to satisfy federal regulations
9. Congressional mail rooms closed due to Ricin discovery
- National News -
10. Powerful chair of house committee resigns top post
11. Medical liability overhaul takes a new course
12. President's budget takes aim at rural program funding
13. A Southern Strategy for Democrats
14. GAO to Probe Ads Publicizing Medicare Changes
15. White House Sets Price Tag Of Medicare Changes At $534 Billion
16. CMS Open Door Forum focusing on Ambulance
17. Panel reviews alleged bribery in Medicare vote
18. IOM calls for more racial diversity in healthcare 
19. Medicare psychiatric PPS rule could have major financial impact
20. Health care (mostly) spared in Bush's 2005 budget
21. CMS Sees $50 Billion Increase
22. Bioterrorism funding: A closer look
23. Women's rank in healthcare tops other industries

- State News -

1. White, Thomas stump for votes again
   Voting problems in last November's general election have led to a re-vote in Senate District 29. Republican Richard White held the seat during the past term. Democrat Dewayne Thomas was declared the winner for a short while, but the Senate has called for another vote to find the true will of the voters.   
   Both candidates for the Hinds County Senate seat are re-campaigning in hopes voters will take the time to re-cast their ballots. The governor, the senator, and campaign chairman Jim Herring are all campaigning in Terry, and Dewayne Thomas is hitting the campaign trail in Belhaven. Thomas is joined by his wife Linda.
   Governor Barbour is supporting White, a fellow Republican, even though they don't agree on all of the issues.   “When it comes to not raising taxes, tort reform, and the important family values, I know Richard White's gonna be there,” said Barbour.
   Governor Barbour points to this piece of campaign literature put out last year by the Thomas campaign. It illustrates the issues Barbour and Thomas have in common, but Barbour calls it deceptive and sneaky. Thomas says, “There's nothing sneaky about that. Does it say he endorses me? No. But it has his picture on it. All it says is what we have in common, and everything on there is true.”
   Both campaigns hope to invigorate voters and remind them of the issues. Voters are asked to return to the polls Tuesday to settle the District 29 dispute once and for all.

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2.   McRae launches World Tour Web site

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3. Hattiesburg lawyer being considered for federal bench
   It appears Hattiesburgattorney Mike Randolph has made the short list as the next U.S.district judge for the southern district, replacing federal Judge Charles Pickering. According to a published report out of Washington, Randolph and at least three others are under consideration by the White House for the Hattiesburg-based district judgeship. Also mentioned are circuit Judge Keith Starrett of Pike County, appeals court Judge Leslie Southwick, and Jacksonattorney Ermea Russell. The names were submitted to the White House by senators Thad Cochran and Trent Lott.   

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4. Tort reform to figure in Supreme Court races
   Four seats on the state's highest court are up for election this year. Tort reform will be a hot issue in the elections because of Mississippi's reputation as a lucrative place to win lawsuits. The Business and Industry Political Education Committee (BIPEC), of which MHA is a member, will release its annual report on the judges it considers to be helping to expand lawsuit abuse and those who are more conservative and don't soon.
   Moments after Hinds County Justice Court Judge Bill Skinner announced his candidacy last week for the post held by Justice James Graves Jr., a supporter who is a physician said Skinner will be pro tort reform. Two other candidates also are in the same race to unseat Graves. They are Samac Richardson, a circuit judge for Rankin and Madison counties, and former Washington County Chancery Judge Ceola James of Vicksburg.
   In addition to Graves' seat, those of Justices William Waller Jr., George Carlson and Chief Justice Edwin Pittman also are up. Pittman says he isn't seeking re-election, and Waller and Carlson have no opposition thus far.
   Four years ago, the last time voters had to pick four justices, nine candidates spent more than $3.2 million. Special interest groups spent more than a $1 million more in support of different candidates.
   The U.S. Chamber of Commerce spent about $1 million in ads in support of certain candidates in 2000. A lawsuit ensued over whether the chamber had to report its expenditures, based on the state's campaign finance reporting law. The chamber argued that the ads were exempt because they didn't contain words that express election advocacy, such as "vote for" or "defeat," nor exhort voters to do anything. The 5th Circuit Court of Appeals ruled in favor of the chamber. Mississippiappealed to the U.S. Supreme Court, but that court in 2002 refused to take up the appeal.

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5.   LeSueur launches Web site

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6. Federal officials to help trim State Medicaid costs
   Federal officials will be in Mississippithis week trying to help Medicaid leaders find ways to save money. "We want to make sure this program does not become so prohibitively expensive that we lose the safety net of health care," said Dr. Warren Jones in his second week as state Medicaid director. Jones said Thursday that the state needs permission from the federal Department of Health and Human Services to make changes that could improve patients' health and cut costs. Mississippi Medicaid faces about a $60 million deficit this year.
   Republican Gov. Haley Barbour, in a separate interview Thursday, said Medicaid should require physical exams to determine patients' height, weight and blood pressure and to screen for diseases such as diabetes or heart disease.  "If you can keep people out of the emergency room, what a savings right there," Barbour said. "Those are the kinds of things we would like to do."
   During the administration of Democratic Gov. Ronnie Musgrove, Medicaid had already started disease-management programs for patients with asthma, diabetes and hypertension. Barbour also has said he wants Mississippi's Medicaid program to do bulk purchasing of prescription drugs--a move he says could save millions of dollars. Under Musgrove, Medicaid also took steps to reduce prescription costs. The state established a preferred drug list, and companies had to bid to get their drugs on the list.

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7. House votes to open meetings
   The Mississippi House on Friday started the process of opening all legislative conference committees to the public, even those dealing with money. For the past three years, conferences on general bills were open, but those for spending bills were closed. The House voted 121-0 Friday to adopt the joint rules under which both the House and Senate will operate. The rules include a provision to open all conferences. The resolution moves to the Senate for further consideration. The joint rules adopted by the House on Friday include a ban on conferees using their cell phones or e-mail to communicate with lobbyists or other non-legislators during conferences.

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8. Pickering renominated to appeals court to satisfy federal regulations
   The White House nominated Charles Pickering on Friday for a seat on the 5th U.S. Circuit Court of Appeals, even though the judge already has the job. President Bush gave Pickeringa special appointment to the appeals court in January when Congress was in recess. But, according to federal regulations, the White House had to resubmit Pickering's nomination to the Senate within 40 days of his recess appointment for the judge to be paid.
    Pickeringwill get a yearly salary of $167,600, up slightly from the $158,100 he would have gotten if he remained on the bench in the Hattiesburg-based U.S. District Court for the Southern District of Mississippi. Even though Pickeringwas appointed to the New Orleans-based appellate court, his nomination continues to languish before the Senate, where it has been blocked from confirmation by a Senate filibuster.
   If Democrats continue to block Pickering's confirmation, he will have to leave the appeals court at the end of this Congress next January. Pickeringwas first nominated by Bush on May 25, 2001. But Democrats criticized his record on worker and civil rights and kept his nomination in limbo for more than two years.

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9. Congressional mail rooms closed due to Ricin discovery
   Congressional mail rooms in Washingtonhave been temporarily closed due to the discovery of the toxin ricin in the Senate mail room. It was found in the office of Senate Majority Leader Bill Frist on Monday. U. S. Capitol Police have issued a directive to halt all mail operations on Capitol Hill until this incident is fully investigated. There is no indication how long the mail service to U. S. House and Senate offices will be shut down.
   "Mississippiconstituents wishing to correspond with our offices in Washingtonshould use other forms of communication such as email, fax, or telephone during this disruption," stated U.S. Rep. Roger Wicker of Mississippi's First Congressional "Another option is to contact our Mississippidistrict offices while this mail suspension is in effect."
   It takes an average of seven to 10 days for mail from Mississippito clear the screening process and be delivered to Capitol Hill offices. "Anyone who has sent time-sensitive materials during the past 10 days should contact us to check on the status of that correspondence," Wicker said.

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- National News -

10. Powerful chair of house committee resigns top post
   Last week, House Energy and Commerce Committee Chairman Billy Tauzin (R-LA) resigned from his powerful chairmanship of the committee that has jurisdiction over the Medicaid program and Part B of the Medicare program. Tauzin came under sharp criticism in the press recently for openly considering multi-million dollar lobbying jobs at the Motion Picture Association of America and Pharmaceutical Research and Manufacturers Association (PhRMA) while he maintained his chairmanship. Although ethics rules would prevent him from lobbying members of congress for at least one year should he accept one of the positions, Tauzin still would be an influential strategist on issues like the new Medicare law. Representative Joe Barton (R-TX), a 20-year veteran of the House with a strong conservative voting history, will likely step in as Tauzin’s successor.

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11. Medical liability overhaul takes a new course
   Republican Party leaders have acknowledged the Senate will not have the votes to pass comprehensive medical liability reform during this session of congress. "Instead of trying to get a huge bill passed, we're going to focus on acute issues," said Senate Republican Conference Chairman Rick Santorum (R-PA). Santorum and other party leaders have decided to turn their focus to narrower pieces of medical liability reform legislation, including bills focused on obstetrical and emergency care. Santorum admitted piecemeal legislation is "not the best way to legislate," but added there simply was not enough support within the Senate to enact broader legislation. Senate Majority Bill Frist, MD, (R-TN) added that the reason the Senate would not pass comprehensive legislation was because senators were "up against some tough special interests."

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12. President's budget takes aim at rural program funding
   During its detailed review of President George W. Bush’s fiscal year 2005 (FY05) budget proposal, MHA has learned the administration is proposing to eliminate funding for several successful rural programs and drastically cut back other programs. Included in the cuts and reductions are:

• Rural Health Flexibility Grants: funding eliminated.
• SmallHospitalImprovement Program: funding eliminated.
• Community Access Program: funding cut by $94 million.
• Rural Health Outreach Grants: funding cut by $47 million.

Another area significantly cut by the Bush budget is the health professions program, which was reduced from $96 million to $11 million. Senate Majority Leader Bill Frist, MD, (R-TN) said on Friday that he would fight this provision when the Senate considers its budget resolution for FY05. MHA will be working with the delegation, American Hospital Association (AHA) and National Rural Health Association (NRHA) throughout the budget process to defeat the proposed cuts to critical rural health funding.

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13. A ‘Southern Strategy’ for Democrats
   When Howard Dean made his crack about appealing to "guys with Confederate flags on their pickup trucks," he invoked a stereotype of the South that sounded as irrelevant as it was politically incorrect. Some good ol' boys still roam the back roads in clapped-out Fords brandishing a bumper plate with the stars and bars and, for good measure, a gun rack in the cab. But as the presidential campaign moves into the South, any strategist who thinks the voting rolls are heavily populated with members of the cast of "Deliverance" will be going into battle woefully misinformed. To read the full story, click here.

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14. GAO to Probe Ads Publicizing Medicare Changes
   At the request of several congressional Democrats, the General Accounting Office has decided to investigate whether the Bush administration is using for political purposes a federally funded $9.5 million television advertising campaign and $10 million worth of brochures about the new Medicare prescription drug law. For the full story, click here.

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15. White House Sets Price Tag Of Medicare Changes At $534 Billion
   The Bush administration on February 2 forecast that the recently enacted Medicare law, which provides seniors and the disabled with a new prescription drug benefit, will cost $534 billion over ten years, a figure substantially higher than the $395 billion estimate projected by the Congressional Budget Office (CBO) during negotiations on the bill. Several Democrats led by Senate Minority Leader Tom Daschle (D-SD) called for hearings on the White House's new cost estimates of the Medicare program reforms. A number of conservatives also expressed dismay about the rising cost estimates for the new Medicare prescription drug benefit. During negotiations on the Medicare reform bill, House conservatives spoke out against expanding the program and argued for a more stringent cost containment mechanism than what eventually ended up in the bill. To read the Department of Health and Human Services (DHHS) Secretary's remarks on the Medicare cost estimates,   click here.

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16. CMS Open Door Forum focusing on Ambulance
   A CMS open door health forum conference call has been scheduled for this Wednesday, Feb. 11, at 1 p.m.The call-in telephone number for all forums is 800-837-1935, the conference ID number is 4354886 and participants are asked to call in 10 minutes prior to the start of the conference.

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17. Panel reviews alleged bribery in Medicare vote
   A House ethics panel said it is continuing an "informal fact-finding" regarding possible bribes offered to Rep. Nick Smith (R-Mich.) to secure his vote on the Medicare reform bill. On Dec. 8, 2003, the day President Bush signed the Medicare measure into law, the House Committee on Standards of Official Conduct initiated the inquiry following Smith's claims that GOP leaders promised financial support for his son's congressional campaign and other favors if he voted for the bill. The bill passed the House by a five-vote margin. A spokesman for Smith declined to comment today and would not say if Smith is standing by his allegation. A statement from the ethics committee said, "Our fact-finding activities are conducted on a confidential basis, and no further public comment will be made on this matter except in accordance with the committee rules." 

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18. IOM calls for more racial diversity in healthcare 
   A day after the Institute of Medicine said increasing racial diversity in healthcare is in the nation's "compelling interest," Senate Majority Leader Bill Frist (R-Tenn.) promised to introduce legislation to address both disparities in care and in representation in the industry. The IOM report -- arguing that diversity is associated with better access to care for minorities, among other benefits -- explored strategies to reduce institutional- and policy-level barriers to increasing diversity. Those include: revising admissions policies to health profession education programs, reviewing the standards accreditation agencies have regarding diversity and considering the relationship between "community benefits" and diversity. Read the IOM report   here.
   Meanwhile, Frist released a summary of legislation he said he would introduce next week. The summary outlined five areas of focus: uniform measures of healthcare quality; grants to community health centers, faith-based organizations and others for improving access to care and education; a greater role for HHS' Office of Minority Health; funding to increase the number of minority providers and foster cultural sensitivity in the profession; and research on the sources of disparities. Earlier this year, the Bush administration came under fire for allegedly watering down the conclusions of a government report on racial disparity in healthcare. 

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19. Medicare psychiatric PPS rule could have major financial impact
   The American Hospital Association held a conference call on the proposed Psychiatric Prospective Payment System last week. AHA Vice President of Policy Don May said the rule could have a significant financial impact on many hospitals with distinct-part psychiatric units and ultimately could result in unit closures.
   May outlined specific information regarding the comments and questions AHA will pose to the Centers for Medicare and Medicaid Services regarding the proposed rule published Nov. 28, 2003. As part of its advocacy efforts, AHA will be seeking an adjustment (ranging from 16 to 20 percent) to increase payments for all hospitals with emergency departments. There is currently a 16 percent adjustment proposed for rural hospitals. AHA will also recommend add-ons for co-morbid conditions (e.g., diabetes, urinary tract infections, pregnancy, alcohol abuse, etc.), as these typically represent the more "expensive" patients treated in the psychiatric setting. In addition, since electric convulsive therapy is conducted in the operating room, AHA will seek a coding change that would classify ECT as a valid operating procedure, which could increase payments up to 24 percent of the current DRG rate.
   On the issue of interrupted stays - in which a patient is readmitted to a psychiatric unit after a medical or surgical intervention, or when a patient leaves against medical advice - AHA will recommend language to clarify such situations, and also to provide direction on a hospital's ability to appeal.

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20. Health care (mostly) spared in Bush's 2005 budget
   President Bush unveiled his fiscal year 2005 budget blueprint to Congress last Monday. The $2.4 trillion spending plan aims to reduce the budget deficit from an estimated $521 billion FY04 to $237 billion by FY09. Bush said he aims to accomplish the reduction through a projected steady rise in tax revenues, coupled with spending restraint over the next several years. The 2005 budget would make expiring tax cuts permanent and create new tax-free savings accounts, while providing large increases for defense and homeland security programs, but slowing the growth of other discretionary spending to a 0.5 percent increase over 2004 levels.
   The AHA and MHA are still studying the budget's details, but an initial look indicates that health programs fare better than many other domestic programs. The Health and Human Services budget reflects a $15 billion, or 2.7 percent, increase over 2004, for a total appropriation of $580 billion. The overwhelming majority of HHS funding is for Medicare, Medicaid and other entitlement programs. The budget also assumes that $4.1 billion of HHS funds will be spent on bioterrorism preparedness, an increase of 3.8 percent. However, discretionary funding for all HHS programs would decrease 1.6 percent to $68.2 billion. Mandatory expenditures for Medicare and Medicaid account for more than 85 percent of the total budget.

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21. CMS Sees $50 Billion Increase
   The budget request for the Centers for Medicare and Medicaid Services is $482.1 billion, an increase over the $429.1 billion allocated in 2004. The President's budget allocates $324.5 billion for Medicare benefits for approximately 42.3 million beneficiaries. (This funding is broken down between health insurance benefits, funded at $181.3 billion; supplementary medical insurance benefits at $140.4 billion; and transitional drug assistance at $2.8 billion.) The majority of Medicare payments are allocated for hospital services (40 percent) and physician services and suppliers of other services (25 percent).  Managed care benefits are allocated 15 percent, nursing homes 15 percent, home health 3 percent, hospice 2 percent, prescription drug care benefits 1 percent and remaining benefits at 4 percent. The Administration is not proposing significant Medicare legislation; instead its focus will be on implementation of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 benefit.
   The Administration has proposed that Medicaid receive $183.2 billion, an increase of $6.1 billion or 3.4 percent over 2004. The budget does not mention the Administration's Medicaid reform plan, meaning no proposed cuts for that program, but does call for increased scrutiny into the use of intergovernmental transfers and upper payment limits as a means of drawing federal dollars into state Medicaid programs. It also encourages state flexibility through the use of Medicaid waivers.
   The FY 2005 budget request for the Health Resources and Services Administration is approximately $6.6 billion, a decrease of $610 million or 9.3 percent from FY 2004.  Included in this is the Health Centers program, which provides health care services to underserved and rural communities.  It would receive $1.8 billion, an increase of $219 million and would fund 1,200 new centers by the end of FY 2006.  The Ryan White program would receive $2.1 billion in FY 2005, an increase of $35 million or 1.7 percent over FY 2004.
   The budget request for the Centers for Disease Control and Prevention is $6.9 billion, a decrease of $58 million below 2004 funding levels. The appropriation includes $341 million in expansions of ongoing programs such as Steps to A Healthier US and the National Breast and Cervical Cancer Early Detection Program. Additional funding would also be provided for new detection initiatives for bioterrorism and naturally occurring infectious diseases, and improvements in childhood immunizations.
   The National Institutes of Health stands to receive $28.8 billion, a 2.7 percent increase over 2004. The Institute's priorities in 2005 include research on biodefense, obesity, nuclear and radiological threat countermeasures, as well as continuing research initiatives in the areas of HIV/AIDS, cancer, diabetes, Alzheimer's and Parkinson's disease.
Here's how the budget affects other hospital issues:
*Hospital bioterrorism preparedness: Proposes a reduction of $39 million for hospital preparedness, to $476 million;
*Children's graduate medical education: Recommends $303 million, the same as 2004.
*Health professions: Cuts spending from 2004's level of $294 million to $11 million.
*National Health Service Corps: Recommends an increase of $35 million, to $205 million.
*Nursing Education: Requests a total of $147 million for nursing education programs, which includes provisions of the Nurse Reinvestment Act. The budget increases support for basic nursing education and retention by $10 million, for a total of $42 million. Funding of $32 million, a $5 million increase, is for loan repayment and scholarships. The budget also includes $21 million for nursing workforce diversity; $44 million for advanced nursing education; and $8 million for nurse faculty and support for comprehensive geriatric education.
*Maternal-child health block grants: Funds this program at $730 million, the same as 2004.
*Community access program: Reduces funding for this program by $94 million, to $10 million from 2004's $104 million.
   Other new health initiatives include a $130 million increase to fight bioterrorism, including better surveillance methods to detect an attack early. The budget also proposes making premiums tax deductible for the high-deductible insurance to accompany new health savings accounts authorized in the Medicare law. The Administration also is proposing new tax credits to help the uninsured buy health coverage, with a $70 billion plan over 10 years that would cover an estimated 4.5 million Americans.

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22. Bioterrorism funding: A closer look
   At $476 million, President Bush's 2005 appropriation for bioterrorism hospital preparedness comes in $39 million less than 2004's total. Responsibility for distributing these funds rests with the Health Services and Resources Administration. The 2005 budget plan also proposes $28 million for bioterrorism medical training and curriculum development. The budget report states: "The FY 2005 budget requests $476 million to continue progress towards the goal of 100 percent of states having surge capacity plans. Specific areas of emphasis will include surge bed capacity, clinical personnel augmentation, isolation capacity and hospital-based pharmaceutical caches. (The Department of Health and Human Services) is developing a plan to review the funding allocation and will consider whether the current formula could be improved by including indicators such as level of risk, level of preparedness, or measures related to performance."
   Funding through the Centers for Disease Control and Prevention for state and local bioterrorism capacity was proposed at $829 million for 2005, $105 million less than 2004. These proposals do not become final until they are considered by Congress and enacted through the Labor/HHS appropriations process. Other 2004 HRSA funding will support stockpiling of pharmaceuticals for hospital mass casualty incident operations, enhancement of hospital burn care capabilities and emergency medical training simulators.

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23. Women's rank in healthcare tops other industries
   Healthcare has the highest proportion of female senior executives among 11 industries, according to Catalyst, New York, a research and advisory firm that works to advance women in business. Examining 353 Fortune 500 companies, Catalyst found that women make up 14.2% of top management teams in healthcare on average. Utilities had the second-highest percentage of women in top management at 12.4%.

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