March 7, 2005
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MHA's Monday Executive Briefing
March 7, 2005
In this week's edition...
State News
1. House passes bill to buy time for Medicaid
2. Mississippi case dismissed
3. Pickering joins Baker Donelson law firm
4. A glance at changes in House committee assignments
National News
5. Bill proposes constitutional right to healthcare
6. AHA comments on IRS proposal for tax-exempt filings
7. CAH lab service bill introduced in House
8. Panel backs stricter oversight of not-for-profits
9. Legal victory in Missouri
10. The outlook for national health spending
11. AHA lauds bill targeting shortage of allied health professionals
12. Leavitt encourages hospitals to participate in Medicaid reform debate
13. MedPAC's semi-annual report puts focus on quality
State News
1. House passes bill to buy time for Medicaid
The Mississippi House on March 3 passed a bill that put another $48 million into Medicaid — enough to carry the program through about early April, depending on patients' demand for services. The health care program for the needy and elderly is set to go broke March 11.
Three House members and three senators have been negotiating for more than a week on ways to solve Medicaid's budget problems, but they're still far from reaching a solution.
House Appropriations Committee Chairman Johnny Stringer, D-Montrose, says the $49 million would give negotiators more time to talk. Lawmakers said $19 million of the money would come from the state's rainy day fund and $30 million would come from the state general fund.
The Senate has proposed taking $200 million out of the roughly $500 million that's in the state health care trust fund. The bill is Senate Bill 3107.
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2. Mississippi case dismissed
The U.S. District Court of the Southern District of Mississippi dismissed all federal claims with prejudice against St. Dominic Health Services Inc., St. Dominic-Jackson Memorial Hospital and the AHA. In his decision, Judge Tom S. Lee cited numerous similar cases that have been dismissed, which alleged that hospitals violated certain state and federal laws, including those that govern tax-exempt organizations. He noted, “The conclusions reached in these decisions are based on sound, well-established legal principles, which no doubt explains why plaintiffs have failed to present any cases in which a contrary conclusion has been reached.” He also noted that the “notion that an implied charitable trust has arisen as a consequence of St. Dominic’s tax exemption has been repeatedly and soundly rejected by the courts that have considered it.” As in similar cases, the court declined to exercise jurisdiction over state claims and dismissed them without prejudice, leaving the door open for those claims to be refiled in state court.
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3. Pickering joins Baker Donelson law firm
Judge Charles W. Pickering, Sr. is joining the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz as of counsel in the firm's Jackson office. He will focus his practice on trial and appellate strategies, corporate compliance and internal investigations and alternative dispute resolution.
Pickering retired in December 2004 from his recess appointment by President George W. Bush to the U.S. Court of Appeals for the Fifth Circuit. He was previously a U.S. district judge for the Southern District of Mississippi. President George H.W. Bush appointed him to that position in 1990.
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4. A glance at changes in House committee assignments
Rep. Randy "Bubba" Pierce, D-Leakesville, resigned from the House recently after Gov. Haley Barbour appointed him to fill a vacant chancery judgeship.
Pierce's departure from the Legislature opened the chairmanship of the Education Committee and a slot on Appropriations. Speaker Billy McCoy recently announced several changes in House committee assignments:
- Rep. Cecil Brown, D-Jackson, becomes Education chairman and resigns his vice chairmanship of the Municipalities Committee.
- Rep. David Myers, D-McComb, becomes vice chairman of Municipalities.
- Rep. Kelvin Buck, D-Holly Springs, is appointed to fill a vacancy on Education.
- Rep. Joey Hudson, D-Monticello, is appointed to fill a vacancy on Appropriations. Hudson resigns from the Agriculture Committee
- Rep. Robert Johnson, D-Natchez, is appointed to the Judiciary A Committee and resigns from Universities and Colleges.
- Rep. Jessica Upshaw, R-Diamondhead, resigns from the Public Property Committee and Rep. Danny Guice, R-Ocean Springs is appointed to fill that slot.
- Guice resigns from the Transportation Committee and Upshaw is appointed to fill that slot.
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National News
5. Bill proposes constitutional right to healthcare
Reps. Pete Stark (D-Calif.) and Jesse Jackson Jr. (D-Ill.) proposed a constitutional amendment to establish healthcare as a basic right. The amendment -- "All persons shall enjoy the right to healthcare of equal high quality" -- must pass the House and Senate by a two-thirds majority. It would then require ratification by three-fourths of the states, and Congress would have to pass implementing legislation. Twenty-seven other House members co-sponsored the amendment legislation, Stark said in a news release. Stark said a constitutional guarantee to healthcare was necessary because of reductions in company-sponsored health benefits and proposed cuts to the federal Medicaid budget.
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6. AHA comments on IRS proposal for tax-exempt filings
In comments submitted to the Internal Revenue Service last week, AHA said proposed regulations that would require hospitals and other tax-exempt organizations to file certain tax returns electronically would reduce the administrative burden on the IRS while allowing the public to access information more quickly. However, the association urged the agency to ensure that the appropriate software and hardware are available and accessible to organizations subject to the new regulations, and that the regulations not impose any undue costs on hospitals’ “already formidable regulatory burden.” The regulations would require certain hospitals and other tax-exempt organizations to file their Form 990 returns electronically for taxable years ending on or after Dec. 31, 2005, or Dec. 31, 2006, depending on their assets and volume of tax return filings.
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7. CAH lab service bill introduced in House
Reps. C.L. Otter (R-ID) and Jim Oberstar (D-MN) on March 1 introduced The Critical Access to Clinical Lab Services Act, AHA-backed legislation that would assure cost-based Medicare reimbursement for critical access hospital (CAH) lab services, regardless of where the lab specimen is collected, to help ensure that rural Medicare patients continue to have access to lab services. The legislation already has 13 cosponsors. Similar legislation was introduced Feb. 1 in the Senate by Sens. Ben Nelson (D-NE) and Olympia Snowe (R-ME).
To receive daily updates on rural health issues, join the Rural Health Community at MyMHA.
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8. Panel backs stricter oversight of not-for-profits
A special panel representing the not-for-profit sector recommended stricter federal oversight of charitable organizations and harsher penalties against individuals who self-deal, omit or misrepresent information on Form 990 filings. The Panel on the Nonprofit Sector, in its first report to the Senate Finance Committee, advised Congress to increase the excise tax for self-dealing and make it easier for enforcement agencies to impose penalties on individuals. The panel also said that individuals who violate rules in preparing Form 990 filings should be subject to the same penalties applied to those who prepare personal and corporate tax returns.
Independent Sector, which represents not-for-profits, foundations and philanthropies, convened the panel in 2004 at the encouragement of Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking minority member Max Baucus (D-Mont.). Among other recommendations, the panel said the IRS should suspend the tax-exempt status of any organization that fails to comply with filing requirements for two or more consecutive years. It also urged the IRS to require charitable organizations with more than $2 million in annual revenue to submit audited financial reports with their Form 990s. Read the panel's report here. The panel will submit a second report to the committee in spring to address additional issues in governance, ethics and accountability.
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9. Legal victory in Missouri
The U.S. District Court of the Eastern District of Missouri dismissed all federal claims with prejudice against BJC Healthcare of St. Louis and the AHA. In responding to the plaintiffs' assertion that the hospital was in violation of EMTALA, Judge E. Richard Webber noted that "charging different rates based on one's status as insured or uninsured (i.e., giving 'volume discounts' to certain insured patients) is not a prohibited activity under EMTALA." As in similar cases, the court declined to exercise jurisdiction over state claims and dismissed them without prejudice, which leaves the door open for those claims to be refiled in state court.
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10. The outlook for national health spending
National health spending growth is anticipated to remain stable at just over 7.0 percent through 2006, the result of diverging public- and private-sector spending trends. The faster public-sector spending growth is exemplified by the introduction of the new Medicare drug benefit in 2006. While this benefit is anticipated to have only a minor impact on overall health spending, it will result in a significant shift in funding from private payers and Medicaid to Medicare. By 2014, total health spending is projected to constitute 18.7 percent of gross domestic product, from 15.3 percent in 2003. Read the full article in Health Affairs here.
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11. AHA lauds bill targeting shortage of allied health professionals
The AHA recently expressed its support for the Allied Health Reinvestment Act (S. 473), which would address the growing national shortage of allied health professionals such as occupational and physical therapists, clinical laboratory technologists, imaging technicians, pharmacy technicians and radiologist technologists. The bill would provide incentives for young people to enter and complete allied health care training, including recruitment grants; provisions to strengthen recruitment, retention and practice; and incentives to promote racial and ethnic diversity in allied health professions.
To receive daily updates on allied health issues, join the Workforce Community at MyMHA.
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12. Leavitt encourages hospitals to participate in Medicaid reform debate
Health and Human Services Secretary Mike Leavitt on March 1 urged hospital leaders to work with their governors and communities on strategies for reforming the Medicaid program, saying he hoped to see a broad national debate on the issue. Speaking at the Federation of American Hospitals’ annual meeting in Washington, the former Utah governor said many of the nation’s governors agree that Medicaid overpays for prescription drugs, must give states greater flexibility in constructing benefit plans, and should not serve as an “asset protection program” for those who need long-term care. He said many governors also would like Medicaid payment rates aligned with those of Medicare and tied to quality, and the option to set co-payments. He said Medicaid must not become the “default health plan” for America’s workers as employers cut coverage, but rather that alternatives are needed to help those in need while promoting personal responsibility and allowing the U.S. to rem ain economically competitive. A Web cast of the speech will be available soon at kaisernetwork.org.
To receive daily updates on Medicaid issues, join the Medicare/Medicaid Community at MyMHA.
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13. MedPAC's semi-annual report puts focus on quality
The Medicare Payment Advisory Commission in its semi-annual report to Congress said Medicare should adopt pay-for-performance incentives for hospitals, home health agencies and doctors, and include the use of clinical information systems as a component of its quality measurements. In addition, MedPAC urged the CMS to track physicians' use of resources and provide doctors with the results in confidential reports as another step toward better quality healthcare. And, the congressional advisory panel said diagnostic-imaging providers and physicians who interpret the images should be required to prove they meet certain quality standards as a condition of Medicare participation. Congress is not obliged to accept MedPAC's recommendations.
The report formalized recommendations approved by commissioners in January. Those included the quality improvement steps as well as suggested fiscal 2006 Medicare updates -- inflation minus 0.4 percentage points for hospital inpatient and outpatient services and minus 0.8 percentage points for doctors, as previously reported. MedPAC recommended that nursing homes receive no inflation update. Read the report here.
To receive daily updates on Medicare issues, join the Medicaid/Medicare Community at MyMHA.
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