March 14, 2005
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MHA's Monday Executive Briefing
March 14, 2005
In this week's edition...
State News
1. Lott's weekly radio address
2. Majority Leader Lott?
3. Judge extends court order to keep coverage for 50,000 on Medicaid
4. Lawmakers pass Medicaid bill
5. Lott targets '527' PACs to limit campaign spending
6. Nine candidates in race for Miss. House post
National News
7. Tort costs reach a record in 2003
8. Some G.O.P. Senators Resist Proposed Medicaid Cuts
9. Drug benefit cap proposed; Senate budget advances
10. AHA: Bill provides ‘common sense approach’ to improving patient safety
11. Leavitt to address AHA annual meeting
12. MedPAC discusses growth in critical access hospitals
13. Hospital Trends Perk Up
14. House, Senate Budget Committees Approve FY 2006 Budget Resolutions
15. Thompson takes not just one, but three industry jobs
16. CMS: General hospitals treat more severely ill patients
17. Ambulatory care competitive strategy-one size does not fit all
18. Ready for prime time? Make your financial assistance policy a class act
19. The View From The Boardroom
State News
1. Lott's weekly radio address
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2. Majority Leader Lott?
While Sen. Trent Lott has not decided whether to seek re-election from Mississippi in 2006, he is seriously considering an attempt to win back the post of Republican leader that he lost two years ago, if he does run, according to the National Ledger.
Sen. Bill Frist of Tennessee, who replaced Lott, is not running for re-election in 2006 under self-imposed term limits. Sen. Mitch McConnell of Kentucky, the current assistant leader, would have a clear path to succeed Frist unless Lott opposes him.
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3. Judge extends court order to keep coverage for 50,000 on Medicaid
U.S. District Judge Henry Wingate today extended a court order that is keeping Medicaid coverage in place for 50,000 Poverty-Level Aged & Disabled (PLAD) recipients while Mississippi lawmakers try to resolve the program's long-term financial problems. The extension is until March 31 or until the House and Senate agree to a compromise plan — whichever comes first. Lawyers for Medicaid and for plaintiffs who sued the state agreed on the extension before making a brief appearance before Wingate.
Lawmakers are expected to vote in the next few weeks to extend PLAD coverage until Jan. 1, 2006 — the date the federal Medicare prescription benefit is set to start.
To receive daily updates on Medicaid issues, join the Medicare/Medicaid Community at MyMHA.
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4. Lawmakers pass Medicaid bill
The House and Senate passed legislation late Sunday night to erase Medicaid's $268 million deficit.
House members introduced their own Medicaid proposal about 9 p.m in the House Appropriations Committee. Within an hour, House Bill 4 cleared the full chamber 92-12. In quick response, the full Senate unanimously approved the legislation about 11:10 p.m.
The House bill would borrow $240 million from the tobacco trust fund to be repaid from the rainy day fund over seven years starting July 2006. This countered Senate Bill 2002, which would have issued bonds and used tobacco trust fund money to repay the money over 20 years.
The governor plans to sign the Medicaid bill, Barbour spokesman John Arledge said Sunday night.
The House bill will cost taxpayers about $300 million versus $400 million for the Senate's version. The shorter term of the loan saves about $100 million in interest payments. The bill calls for six payments of $38 million with a $58 million payment in the final year to replenish the tobacco trust fund.
Barbour called a special session on March 11 after the House voted 57 to 55 to adjourn at 9:23 a.m. without considering further action to reduce the $268 million Medicaid deficit. Lawmakers adjourned the special session and will return for the regular session this afternoon.
To receive daily updates on Medicaid issues, join the Medicare/Medicaid Community at MyMHA.
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5. Lott targets '527' PACs to limit campaign spending
Sen. Trent Lott, as chairman of the Rules Committee, is directing debate on his bill to close a campaign finance loophole allowing certain political advocacy groups unlimited spending influencing federal elections. The advocacy groups, called "527s" after a section of the tax code, "have chosen to either ignore current law or found a way to circumvent it," according to Lott.
Lott heard from Republican Sen. John McCain of Arizona and Democratic Sen. Russell Feingold of Wisconsin, who wrote the 2002 campaign finance law that strictly limits the amount of money a person can give to political parties, committees and candidates.
But 527 groups, while claiming to be unbiased, can and do take in millions of dollars to finance partisan advertising, provided their ads do not explicitly recommend a vote for one candidate or party.
McCain and Feingold told Lott, 25 wealthy donors accounted for $146 million of the more than $400 million raised by both Democratic and Republican 527s in the 2004 election.
The new bill would require 527s involved in federal campaigns to register with the FEC as political committees. Their activities would have to be paid for with direct individual donations subject to strict limits.
FEC Commissioner David Mason was concerned nonprofit groups called 501©4s, after another section of the tax code, could be unintended beneficiaries of the new bill. Mason said 527 group donors easily could shift contributions to 501©4s, which are not required to report donations.
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6. Nine candidates in race for Miss. House post
Nine people have qualified to run in a March 22 special election for a vacant Mississippi House post. March 9 was the deadline for candidates to qualify for the election in House District 105. The district is comprised of portions of Greene, Perry, Forrest, George and Wayne counties. A runoff, if necessary, will be held April 5. The 2005 session is scheduled to end April 3.
The winner will complete the remainder of the term of former Rep. Bubba Pierce, D-Leakesville, who recently resigned after Gov. Haley Barbour named him to a chancery judge post.
Among the candidates are former Rep. Mack McInnis of Lucedale, who lost to Pierce in 1999; John "Wayne" Barrow Sr. of Lucedale; Howard G. Garrett Sr. of McLain; Noel "Cotton" Hillman of Neely; A.D. McLeod of Leakesville; Joseph Ladd Pulliam of Neely; Sue Turner of Leakesville; J. Shaun Walley of Leakesville and Paul D. Walley of Richton. Candidates will run without party affiliation in the special election.
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National News
7. Tort costs reach a record in 2003
U.S. tort costs reached a record $246 billion in 2003, or approximately $845 per person, according to a study by Tillinghast. Even though this represents a 5.4 percent increase in tort costs from 2002, it's a much slower growth rate than in 2001 and 2002. Tillinghast's U.S. Tort Costs: 2004 Update analyzes tort costs from 1950 through 2003, with projections into 2006. The study found that growth in commercial lines tort costs dropped significantly from 20 percent in 2001 to 5.5 percent in 2003. The study also found that U.S. medical malpractice tort costs totaled $27 billion, or $91 per person in 2003.
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8. Some G.O.P. Senators Resist Proposed Medicaid Cuts
President Bush's request that Congress slow the growth of Medicaid, a centerpiece of the White House budget for 2006, is drawing opposition from some Senate Republicans, who are caught between their desire to support the president and pressure from home-state governors resisting the cuts. For the full story from The New York Times, click here.
To receive daily updates on Medicaid issues, join the Medicare/Medicaid Community at MyMHA.
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9. Drug benefit cap proposed; Senate budget advances
Two Republican senators introduced a bill that would limit the cost of the Medicare prescription drug benefit to $395 billion over 10 years, the initial Congressional Budget Office estimate for 2004 to 2013. The latest CBO estimate pegs the benefit's 10-year cost at about $850 billion for a later period -- 2006, when the drug benefit takes effect, to 2015. The Bush administration has estimated the cost for the same period at $724 billion. The bill, sponsored by Sens. Lindsey Graham (S.C.) and Jeff Sessions (Ala.), would establish annual spending caps and require that the benefit be reduced if its cost exceeded the annual limit.
To receive daily updates on Medicaid issues, join the Medicare/Medicaid Community at MyMHA.
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10. AHA: Bill provides ‘common sense approach’ to improving patient safety
The Senate Health, Education, Labor & Pensions Committee last week approved legislation (S. 544) that "lays out a common sense approach to improving patient safety," the AHA said in a letter to committee Chairman Mike Enzi, R-WY. The bill would create patient safety organizations like those proposed by the Institute of Medicine in its 1999 "To Err is Human" report, which called on Congress to set up a system for voluntary, confidential reporting of medical errors. "This bill works toward this goal -- a goal the nation's hospitals strongly support," AHA Executive Vice President Rick Pollack wrote. "We look forward to continuing to work with you and your staff to enact patient safety legislation that creates a voluntary, protected system for sharing information that allows for the creation of a true culture of safety." Similar legislation last year cleared both the House and Senate, but Congress did not reach agreement on a compromise measure before adjournment.
To receive daily updates on patient safety issues, join the Patient Safety/Quality Community at MyMHA.
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11. Leavitt to address AHA annual meeting
Health and Human Services Secretary Mike Leavitt is scheduled to address the AHA’s Annual Membership Meeting May 1-4 in Washington, the association said. Leavitt, who took office in late January, has sought to advance the president's Medicaid budget on Capitol Hill, telling the Senate Finance Committee that Medicaid could save $60 billion over the next 10 years “without threatening the commitment we’ve made to our neediest citizens.” He also has said he hopes to see a broad national debate on Medicaid reform, encouraging hospital leaders to work with their governors and communities on reform strategies, and has expressed a commitment to health care information technology and “comprehensive medical liability reform.” To register or get additional meeting details, visit the AHA Web site.
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12. MedPAC discusses growth in critical access hospitals
The Medicare Payment Advisory Commission (MedPAC) on March 11 discussed the growth and costs of the critical access program, in preparation for a report due to Congress in June on the impact of recent changes to the program. According to data presented, there now are 1,075 critical access hospitals. Data also show that the program has helped improve payer margins for small, rural facilities. MedPAC staff expressed concern, however, about growth in costs of the program and discussed potential changes aimed at curbing costs. “The CAH program is vital to strengthening access to care and improving health in rural America,” said Don May, AHA vice president for policy, commenting on the discussion. “Small, rural facilities were not being adequately reimbursed under the Medicare payment system, as Congress recognized when it created the CAH program.” Critical access hospitals are small, isolated hospitals that are reimbursed under Medicare based on their actual costs to provide care, instead of through the prospective payment system. Congress introduced the CAH program in 1997 to bolster care in rural areas.
To receive daily updates on rural hospital issues, join the Rural Health Care Community at MyMHA.
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13. Hospital Trends Perk Up
The long-suffering hospital industry is feeling some relief. While clearly still on the mend, the sector has seen its vital signs grow stronger during the current quarter. Patient volumes are rising. Bad debts from the uninsured appear to be stabilizing. And further complications -- such as draconian cuts to Medicare -- seem to be less likely. For the full story from TheStreet.com, click here.
To receive daily updates on industry issues, join the Business/Finance Community at MyMHA.
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14. House, Senate Budget Committees Approve FY 2006 Budget Resolutions
The House Budget Committee approved March 9 and the Senate Budget Committee approved March 10 their fiscal year 2006 budget resolutions by party line votes. After unveiling his Chairman's Mark, Senate Budget Committee Chairman Judd Gregg (R-NH) called on Congress to begin addressing the nation's long term budget deficits. "This budget addresses short-term deficit reduction and takes modest, but important first steps toward acknowledging the looming long-term crisis," Gregg said. According to a statement released by the Senate Budget Committee, Medicare and Medicaid will consume nearly one-third of total federal spending by 2015. The Chairman's Mark calls on Congress to slow the Medicaid growth rate by $14 billion over five years. The Committee stated that there is significant potential for savings in the Medicaid program by cutting back on fraud and abuse. "At least 34 states are estimated to be receiving up to $6 billion a year in federal Medicaid dollars inappropriately," the statement said.
For more information, click here.
To receive daily updates on Medicare issues, join the Medicare/Medicaid Community at MyMHA.
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15. Thompson takes not just one, but three industry jobs
Former HHS Secretary Tommy Thompson got his post-government career in order. Thompson joined the Washington law offices of Akin Gump Strauss Hauer & Feld as a partner, focusing on healthcare; Deloitte & Touche as chairman of its Center for Health Care Management and Transformation; and Logistics Health, a disaster-readiness and security solutions firm, as president. Thompson, 63, left HHS in February after four years as head of the federal agency and was replaced by Mike Leavitt. He was governor of Wisconsin from 1986 to 2001.
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16. CMS: General hospitals treat more severely ill patients
A CMS official said preliminary findings showed that general acute-care hospitals treated more severely ill patients than competing speciality facilities, but specialty hospitals contributed a greater proportion of net revenue to uncompensated care and taxes. The official, Thomas Gustafson, deputy director for the CMS' Center for Medicare Management, was testifying during a Senate Finance Committee hearing on whether to extend a moratorium on physician self-referral to specialty hospitals past the scheduled June expiration. The House Ways and Means health subcommittee held a separate hearing on the matter. Gustafson said the CMS found that dollar-for-dollar, specialty hospitals provided less uncompensated care than general hospitals; however, when taxes were added, the combination significantly exceeded general hospitals' uncompensated care as a percentage of net revenue. The CMS has yet to submit to Congress its final report on specialty hospitals.
Separately, the Medicare Payment Advisory Commission, in its final report to Congress on physician-owned specialty hospitals, formally recommended extending the moratorium until Jan. 1, 2007. As previously reported, the commission voted in favor of the recommendation in January. The report also recommended refining DRGs to discourage "cherry-picking" of healthier and more profitable patients, and it said Congress should authorize HHS to allow and regulate gain-sharing arrangements between doctors and hospitals. The commission approved both recommendations in January. Read the MedPAC report here.
For more information on the Senate Finance Committee hearing, click here.
For more information on the House Ways and Means Committee hearing, click here.
To receive daily updates on Medicare issues, join the Medicare/Medicaid Community at MyMHA.
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17. Ambulatory care competitive strategy-one size does not fit all
Ambulatory care is a large, growing, and diverse business that attracts a myriad of competitors. Continued ambulatory growth is clearly on the horizon for most healthcare organizations, but is no guarantee for a bigger piece of the pie, and can be a significant source of competitive tension between physicians and hospitals. For some organizations, the mix of services may change dramatically due to competitor encroachment. Large blocks of hospital-based ambulatory business can shift overnight when physician-sponsored ventures or niche providers enter a market. Competitive strategy helps hospitals be more entrepreneurial to preempt competitor encroachment. Read the full article from Health Strategies & Solutions here.
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18. Ready for prime time? Make your financial assistance policy a class act
Today's regulatory climate makes it far from simple for hospitals to offer discounts to uninsured and indigent patients. Questions abound regarding whether offering such discounts might lead to reductions in Medicare payments for outliers, new technology, and bad debt. Offering waivers of coinsurance or deductibles may seem an attractive option, but routine waivers could implicate federal statutes regarding illegal remuneration and patient inducement. And across-the-board discounts to uninsured patients could change the calculation of a hospital's "usual charges," resulting in the hospital's violation of the statutory bar against having charges to Medicare that are "substantially in excess" of the "usual charges." The best course for hospitals is to have clearly defined financial assistance policies in place that reflect an awareness of all the related potential legal and regulatory concerns. Read the full article from the Healthcare Financial Management Association here.
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19. The View From The Boardroom
After years when accounting scandals and charges of inadequate governance put them on the defensive, corporate boards are looking to step up their engagement with core areas of corporate performance and value creation. For the full story from Forbes.com, click here.
