February 14, 2005

MHA's Monday Executive Briefing
February 14, 2005

In this week's edition...
State News
1. Medicaid files to seize $20M from anti-smoke group
2. House OKs Meth Reduction Act
3. Senate OKs Medicaid bill amid ire
National News
4. Dean pledges to reach out, rebuild party
5. Legislation to Study Medicaid Introduced in U.S. Senate
6. House panel debates medical liability reform
7. AMA wants new update formula before incentive pay
8. Bills address medical malpractice, nurse overtime
9. HHS outlines plan for implementing Medicare contracting reforms
10. Are you leading with purpose?
11. Making the business case for quality improvement
12. Tennessee, Connecticut lawsuits dismissed, state battles begin
13. Senate Takes Up Class-Action Restrictions
14. President's 2006 Budget: No Medicare cuts, but Medicaid funding targeted
15. Legislation filed to address emerging infectious diseases

State News 

1. Medicaid files to seize $20M from anti-smoke group
   Mississippi's Medicaid division filed a request in Jackson County Chancery Court on Feb. 10 to seize control of the $20 million going annually to the Partnership for a Healthy Mississippi. The motion asserts that a court order giving the money to the Partnership violates the Mississippi Constitution because the money is not appropriated by the Legislature. Gov. Haley Barbour filed a motion to intervene in the case.
   "The original intention of the tobacco settlement was to recoup dollars for the state," Medicaid director Warren Jones said in a statement. "We believe this motion will ultimately allow the Legislature to fulfill that intention." Jones said $20 million could be leveraged into $80 million for Medicaid with federal matching funds.
   Former Attorney General Mike Moore, who filed the tobacco lawsuit and negotiated the settlement, is the partnership's chairman. Moore said the original 1997 settlement authorized a two-year anti-smoking program, and the Jackson County Chancery Court agreed to amend the settlement in 2000 to extend the program indefinitely.
   The governor's office contends that the amended order is illegal because it violates the separation of powers provision in the Constitution that the legislative branch, and not the judicial branch, has the authority to spend money.
   Moore said court challenges could last two years and would fail to resolve this year's budget crisis. He also said the partnership is an award-winning program that has demonstrated lower smoking rates among teens.
   "The governor would like to see an anti-smoking program continue in Mississippi," Barbour Spokesman John Arledge said. "We just believe we can do that with less money."
   Mississippi received $4.1 billion in the tobacco settlement, which is paid annually in varying amounts. This year's payment was $116 million with $96 million going to the state Health Care Trust Fund and $20 million to the partnership.

Return to Top

2. House OKs Meth Reduction Act
   The House passed several measures, aimed at eliminating methamphetamine production in Mississippi, on Feb. 10. The measures are some of the dozens of bills lawmakers approved on the last day for general bills to be sent to the opposite chamber. Mississippi Bureau of Narcotics officials have said that toward the end of 2004, the number of meth cases rose 56 percent over last year.
   The Methamphetamine Reduction Act, or House Bill 607, limits a customer to two packages of medicine, or no more than 6 grams. Pharmacists must place the medicine either behind the counter, in a locked cabinet, within 30 feet of cashiers or under surveillance. Another measure requires customers to present photo ID and pharmacists to keep a log of buyers. The bill was held for reconsideration.

Return to Top

3. Senate OKs Medicaid bill amid ire
   The Mississippi Senate endorsed a Medicaid bill that reduces some services for recipients and saves up to $100 million by removing all state agencies from the Personnel Board.
   "Medicaid is in a crisis," said Senate Public Health Committee Chairman Alan Nunnelee, who said the bill passed Feb. 10 will help the agency solve some of its long-term problems.
   The Senate bill restores drug coverage for the 50,000 Poverty-Level, Aged and Disabled Program recipients through the year. Sen. Alice Harden, D-Jackson, a critic of the Senate plan, said she supports the PLAD recipients and state employees, and noted the bill forced her to choose between the two. The issue of state employees is separate from funding Medicaid, Harden said.
   The Senate inserted its own language in House Bill 1104 and approved it by a 33-19 vote. The measure heads to a legislative conference committee. The original House bill provided $27.7 million in savings by reducing the number of hospital days from 30 to 15 a year, emergency room visits from 6 to 3 and limiting prescriptions to less than five without prior approval, similar to the Senate plan.
   House Bill 1104 was tied to House Bill 410 — a 50-cent per pack hike on cigarettes. The tax is at 18 cents per pack, one of the lowest in the nation. The increase generates $40 million. The bill was referred to Senate committees, whose chairmen have not indicated they will take up the proposal. 
   House Bill 1579 also was approved recently to earmark $49.6 million from the general and rainy day funds this year. The money would bring $200 million with matching federal dollars.
   The Senate on Feb. 9 also approved a bill to grab $200 million from the tobacco trust fund and use it to shrink the $268 million Medicaid deficit. The tobacco trust once stood at $1 billion, but is now down to about $600 million.
Return to Top
National News

4. Dean pledges to reach out, rebuild party
   New national Democratic Chairman Howard Dean promised on Feb. 12 to rebuild the party in the most conservative regions of the country, help develop state and local organizations and let congressional Democrats set the tone on policy. Democrats elected Dean on a voice vote during their winter meeting.
   The physician told reporters, "I'll pretty much be living in red states in the South and West for quite a while. The way to get people not to be skeptical about you is to show up and say what you think."

Return to Top

5. Legislation to Study Medicaid Introduced in U.S. Senate
   U.S. Senators Gordon Smith (R-OR) and Jeff Bingaman (D-NM) this week introduced the Bipartisan Commission on Medicaid Act of 2005, which would establish a 23-member commission to make recommendations within 14 months of enactment on how to reform the Medicaid program. Senator Rick Santorum (R-PA) is an original cosponsor of the legislation, and companion legislation is expected to be introduced in the House of Representatives. The bill, S. 338, is supported by the American Hospital Association and the National Association of Public Hospitals and Health Systems.

Return to Top

6. House panel debates medical liability reform
   The House Energy and Commerce Committee’s health subcommittee on Feb. 10 hosted the first in a series of House and Senate committee hearings planned on medical liability reform. Members of the health panel heard from physicians, consumers, insurance industry representatives and health policy experts on the issue. Among those testifying was a woman who said the temporary closure of the only level-one trauma center in Las Vegas due to skyrocketing liability premiums contributed to her father’s death in 2002 from injuries suffered in a car accident. Witnesses’ written remarks are available online here.

Return to Top

7. AMA wants new update formula before incentive pay
   The American Medical Association said Medicare should not undertake pay-for-performance for doctors until the update formula has been revised to stabilize physician rate changes. The AMA outlined its views during a House Ways and Means Committee health subcommittee hearing that marked the beginning of congressional efforts this year to encourage doctors to deliver high-quality medicine more efficiently. The CMS will begin a pay-for-performance pilot program with 10 large medical groups April 1. AMA House of Delegates Speaker Nancy Nielsen told the subcommittee that pay-for-performance measures, while attractive in the long run, would require new investments in information technology and labor that could be unaffordable for many physicians "in light of current struggles to absorb past and projected steep Medicare pay cuts." The current Medicare formula for physician updates will result in a 4.3% reimbursement cut in 2006 and average annual cuts of about 5% over the next few years, according to the CMS.

Return to Top

8. Bills address medical malpractice, nurse overtime
   Medical malpractice reform and nurse overtime limits landed back on Congress' agenda. Senate Budget Committee Chairman Judd Gregg (R-N.H.) and Sen. John Ensign (R-Nev.) introduced a bill that would cap noneconomic damages in medical malpractice cases at $250,000, mirroring past legislation that has repeatedly failed in the Senate. The Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act would cap non-economic damages in health care lawsuits at $250,000 and place restrictions on punitive damages; impose a three-year statute of limitations on the filing of health care lawsuits, with an exception for children under six; and limit attorney contingency fees based on a sliding scale. The bill also includes a "fair share" provision that would hold defendants liable only for their share of damages, and allows for periodic payment of future damages of $50,000 or more. Gregg also said he plans to introduce liability reform legislation focused on obstetrics-gynecology and trauma care.
   Meanwhile, a bill introduced in the House by Reps. Pete Stark (D-Calif.) and Steven LaTourette (R-Ohio), similar to laws passed in several states, would limit mandatory overtime for nurses to 12 hours in a 24-hour period and 80 hours over 14 days. Sen. Edward Kennedy (D-Mass.) is expected to introduce companion legislation in the Senate.

Return to Top

9. HHS outlines plan for implementing Medicare contracting reforms
   HHS Secretary Mike Leavitt on Feb. 7 presented Congress with the Department of Health and Human Services’ plan for implementing Medicare contracting reforms mandated by the Medicare Modernization Act. By 2011, the plan would replace the 51 fiscal intermediaries and carriers that currently process Medicare fee-for-service claims with 23 Medicare administrative contractors, of which 15 would service the majority of health care providers through claims processing. Unlike the current contractors, which have overlapping jurisdictions and process either Part A or Part B claims, the MACs would operate in a single region and process both Part A and Part B claims. The change would give health care providers and Medicare beneficiaries a single point-of-contact for claims-related inquiries. HHS also plans to expand its use of functional contractors, which perform work related to a specific Medicare program function such as claims appeals, but said it may be cost-effective to consolidate into fewer contractors.

Return to Top

10. Are you leading with purpose?
Purpose-driven leaders:

• Turn challenges into opportunities
• Facilitate teamwork (and give credit to the team!)
• Know when they need outside help
• Have a realistic business plan/model
• Know how to deal with distractions
• Relentlessly focus on completion
• Look to stay ahead of the curb

Read the full article in HFMA magazine here.

Return to Top

11. Making the business case for quality improvement
   What is the most important software application for someone interested in leading quality improvement projects inside a hospital? Perhaps it's an electronic medical record, or a clinical data warehouse? Not according to one of the nation's most respected physician leaders in the areas of outcomes research and quality improvement. Dr. Brent James, the Executive Director of Intermountain Health Care's Institute for Health Care Delivery Research, believes that the most important application for quality improvement is an activity-based cost accounting system. But how can a hospital costing system, generally used by CPAs and MBAs rather than MDs and RNs, really be so important to the improvement of clinical quality? Read the full article in Healthcare Management Insight here.

Return to Top

12. Tennessee, Connecticut lawsuits dismissed, state battles begin
   The U.S. District Court in Nashville, TN, on Feb. 7 dismissed all federal claims in the not-for-profit lawsuit filed against St. Thomas Hospital, Inc. and the AHA. The court declined to retain jurisdiction over the state claims, dismissing them without prejudice, allowing plaintiffs to file the claims in state court. In issuing the dismissal, the judge adopted the reasoning and analysis of a decision issued by the U.S. District Court in Ohio in its Jan. 13 dismissal of a similar case against Catholic Health Partners. In that opinion, the court said, "permitting this claim to continue would require the court to make numerous jumps in logic that run counter to legal authority."
 In a ruling issued Feb. 8 directly from the bench, a federal district court judge in Connecticut dismissed federal and state claims against Yale-New Haven Hospital and the AHA. The federal claims were dismissed with prejudice and the state claims without prejudice, meaning they can be refiled in state court.
 Prior to the hearing, the plaintiffs moved to dismiss most of the federal claims, including the federal EMTALA claim, but did not move to dismiss claims related to federal tax-exempt status. In his ruling, the judge noted that there was no indication that Congress had intended for the tax laws to create a contract. He also noted that the plaintiffs' failed “wholly” in their attempt to draw any similarity between tax-exempt status and requirements under the Hill-Burton Act.
 During an afternoon conference call on Feb. 8 with the press, Richard Scruggs, the trial attorney who has led the way in filing lawsuits against not-for-profit hospitals and health systems, announced a "second legal offensive" and said that he would file these claims in state court. Mr. Scruggs said, "In state courts, the defendants will find themselves directly before their own communities in front of juries made of the very people whom they are supposed to be serving." AHA President Dick Davidson said, "Hospitals are judged by their communities every day, based on all they do for everyone who comes to their doors and everyone they reach out to. The federal courts have rejected Mr. Scruggs' attempt to use the courts to reform the health care system; he will fare no better in the state courts."

Return to Top

13. Senate Takes Up Class-Action Restrictions
   The Senate began debate Feb. 7 on a measure that would revise rules on class-action lawsuits -- a longtime goal of President Bush and his business supporters -- as consumer groups urgently tried to garner support for amendments they said would make an objectionable bill somewhat more palatable. For the full story from The Washington Post, click here.

Return to Top

14. President's 2006 Budget: No Medicare cuts, but Medicaid funding targeted
   President Bush will ask for about 2.2% more federal money for Medicaid in fiscal 2006, a $4.2 billion increase over fiscal 2005, and 17.2% more for Medicare, a $49.9 billion increase as the program's new drug benefit kicks in. Over the 10-year period, Bush proposed eliminating $60 billion in "inappropriate" Medicaid spending due to intergovernmental transfers, asset transfers for long-term-care eligibility and other "overpayments." And he proposed $125.7 billion in new federal spending over the 10 years for initiatives to make health coverage more affordable, including $74 billion for a health insurance tax credit and $28.5 billion for tax incentives for health savings accounts.
   Saying that Bush's fiscal 2006 budget plan did not include Medicaid cuts, HHS Secretary Mike Leavitt nonetheless made a financial case for overhauling the program. Medicaid will consume $5 trillion in state and federal dollars over the next decade, and Medicaid spending will grow more than 7% annually during that period, Leavitt said. The program "is rigidly inflexible and inefficient. And it is not financially sustainable," he said. In response, the National Governors Association called on the White House and Congress to work with states to reform Medicaid "in a way that makes the states' financial commitment sustainable over the long run."
   Overall, HHS funding would grow 9.9% in fiscal 2006, under Bush's budget request, to $642.5 billion. Medicare would account for $340.2 billion of the agency's budget, Medicaid $192.7 billion and the State Children's Health Insurance Program $6.2 billion (a $890 million increase over 2005). Discretionary spending would include $2 billion for community and migrant health centers in 2006, an increase of $304 million from 2005.. To view the budget proposal, click here.

Return to Top

15. Legislation filed to address emerging infectious diseases
   Several U.S. senators, including Sen. Judd Gregg (R-NH), on January 24 filed a bill that would prepare the nation for pandemic influenza and other emerging infectious diseases.
   The Infectious Diseases Society of America (IDSA) says it supports the homeland security bill and would work with Congress to enact comprehensive legislation to spur the development of new medicines, vaccines, and diagnostics for infectious diseases, particularly new antibiotics that target drug-resistant infections.
   The bill would extend patents for biodefense and infectious disease products, strengthen intellectual property rights, create tax incentives, and reform liability laws.
   “It’s a simple fact; infectious disease physicians are running out of the tools we desperately need to treat patients. At the same time that we are seeing an increase in drug-resistant infections, we are also seeing a decline in the development of new antibiotics to treat such infections,” IDSA President Walter E. Stamm, MD, said in a prepared statement.

Return to Top

Home | Back to Top