ARKANSAS HOSPITAL STATISTICS, FACTS AND FIGURES

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1 SUMMER ARKANSAS HOSPITAL STATISTICS, FACTS AND FIGURES What These Statistics Mean for Your Hospital A Magazine for Arkansas healthcare Summer 2010 Professionals I Arkansas Hospitals 1

2 2 Summer 2010 I Arkansas Hospitals

3 w PAGE 11 PAGE 27 PAGE 34 PAGE 45 Arkansas Hospitals is published by Arkansas Hospital Association 419 Natural Resources Drive Little Rock, AR / FAX Beth H. Ingram, Editor Nancy Robertson Cook, Copy Editor/Contributing Writer Board of Directors James Magee, Piggott / Chairman Larry Morse, Clarksville / Chairman-Elect David Cicero, Camden / Treasurer Ray Montgomery, Searcy / Past-Chairman Kirk Reamey, Clinton / At-Large Robert Atkinson, Pine Bluff Darren Caldwell, DeWitt Jamie Carter, West Memphis Kristy Estrem, Berryville Randy Fortner, Benton Bob Gant, Conway Carolyn Hannon, Mountain Home Tim Johnsen, Hot Springs Jeff Johnston, Fort Smith Ed Lacy, Heber Springs Jim Lambert, Conway Ron Peterson, Mountain Home Doug Weeks, Little Rock Executive Team Phil E. Matthews / President and CEO Robert Bo Ryall / Executive Vice President W. Paul Cunningham / Senior Vice President Elisa M. White / Vice President and General Counsel Beth H. Ingram / Vice President Don Adams / Vice President Distribution Arkansas Hospitals is distributed quarterly to hospital executives, managers, and trustees throughout the United States; to physicians, state legislators, the congressional delegation, and other friends of the hospitals of Arkansas. To advertise contact Greg Jones Publishing Concepts, Inc. 501/ ext.105 gjones@pcipublishing.com ThinkNurse.com Edition 71 FEATURED SECTION Arkansas Hospital Statistics, Facts and Figures Statistical Information 8 Arkansas Hospitals by the Numbers 8 Distribution of Arkansas Licensed Hospitals 9 Key Numbers Behind Important Facts 10 AHA Members by Congressional District 11 A Snapshot of Arkansas Hospitals 12 Charges by Payer Category 13 Comparative Utilization Indicators 14 Community Hospital Indicators 15 Community Hospital Summary Financial Data 16 AHA Member Hospitals 18 Comparative Financial Indicators 20 Hospital Ownership - Investors 21 Hospital Ownership - Not-for-Profits 22 Member Organizations: Public Hospitals 22 AHA Member Organizations 23 Charges and Lengths of Stay for Top 30 DRGs 25 Hospital Uncompensated Care Costs Features 26 AHA Accomplishments Scrub Those Copier Hard Drives 28 AHA Annual Meeting Announcement 29 Award Nominations Being Accepted 30 Mid-Management Series Resumes Sept AHA Services, Inc. Announces New Services 34 Hospitals Complete Trauma Application Process 34 Crucial Conversations Training: Get Unstuck 35 Proposal Being Considered for Charity Care 36 Advisory on K2 Marijuana Use Symptoms 36 Protecting Patient Data Report Available Cover Photo Lake Sylvia in Perryville, Arkansas Photo courtesy Arkansas Dept. of Parks and Tourism Legal Notes 32 RAC Medical Record Requests 32 EMTALA and Selective Call 33 Presidential Memorandum on Hospital Visits Advocacy/Legislation 37 Grassroots Champion Award to James Cicero 38 Washington, D.C. Meeting Highlights Meet with Congressional Delegation Quality/Patient Safety 40 TeamSTEPPS in Arkansas Quality Awards 42 Robbins AFMC Interim President and CEO Healthcare Reform 43 Real Measure of Health Reform Success? 44 Healthcare Reform Highlights 44 Historic Health Reform Now Law 46 HHS is Building Health Insurance Portal Medicare/Medicaid 47 Berwick s Innovative Approach Seen as Asset 47 CMS Preparing For J-7 MAC Implementation 48 CMS Proposes FY 2011 IPPS Reductions 48 Law Changes 3-Day Window Bundling 50 Aetna Medicare Advantage/Drug Plans 50 Medicaid Hospital Access Payments Begin 51 CAH Direct Supervision Policy Clarification 51 New Initiative to Reduce Radiation Exposure 51 Medicare FFS Filing Time Period is Amended 52 State Medicaid Reforms Under Exploration 52 RAC Posts New Validation Issues Emergency Preparedness 53 Arkansas Withdraws from NDMS 53 Active Shooter Guidance HIT Meaningful Use 54 Proposed Rule for EHR Certification 54 You re Hiring - IT Staff Departments 4 From the President 5 Education Calendar 7 Arkansas Newsmakers and Newcomers Summer 2010 I Arkansas Hospitals 3

4 From the President Healthcare Reform s Long and Winding Road Healthcare reform is still uppermost in our minds, and we are just beginning to walk down its long and winding road. We know the reform process will not be easy, but I am so glad that we have started walking down this reform road. This is something we had to do; it was the right thing to do. But doing the right thing doesn t always mean doing the easy thing, and we know there are difficult challenges and adjustments ahead. As we went to Washington, D.C. for the annual meeting of the American Hospital Association in late spring, your Arkansas Hospital Association (AHA) was pleased to be accompanied by a group of hospital administrators, personnel, nursing staff members, trustees and auxilians from across the state. At that national meeting, healthcare reform was the main topic of conversation. Government leaders like Health and Human Services Secretary Kathleen Sebelius and legislators from both parties discussed the issue and what they expect to see as it unfolds. There is a tremendous effort going into writing the rules and regulations of the new law, and all of us realize we are into only the first steps of this journey, a journey that will be with us throughout the entirety of our careers in the healthcare field. While in Washington, perhaps our most important meetings were those held with our congressional delegation and their staff members. We held a breakfast meeting with Senators Lincoln and Pryor to discuss our concerns regarding hospitals of all sizes, from urban healthcare facilities to critical access hospitals. Also on the agenda were meetings with each of our representatives, who still have time to make some accomplishments before three of the four retire at the end of this term. We held a reception and meetings with delegation aides and staff members. These are the people we regularly work with on healthcare issues; they are our main contacts and we have developed excellent working relationships with them. They take our local concerns to our senators and representatives, and explain the local impact proposed legislation will have back home. Regarding healthcare reform, I can tell you that the mood in the healthcare community is and remains good. We know we must be a vocal part of the road ahead. We have many new hospital CEOs in Arkansas. We want these new CEOs to know about the association and let us help them keep abreast of legislative issues relating to hospitals, specifically Medicare and Medicaid issues, at both the federal and state levels. As an organization representing the state s member hospitals, we realize not everyone will always agree on everything, but the AHA continues to be a unifying force when it comes to the big issues in healthcare. As always, we encourage every hospital leader to get to know their state legislators now, so that as the next legislative session begins, they will know their local hospital s concerns and challenges. Healthcare reform may, indeed, become an issue in the national mid-term elections, and could well have an impact on our state elections come November. Please support those candidates that support healthcare, and remember to make your voice heard. In the meantime, the AHA will continue to speak for Arkansas hospitals, and to keep you informed as to the major issues at hand. Phil E. Matthews President and CEO Arkansas Hospital Association 4 Summer 2010 I Arkansas Hospitals

5 Education Calendar August 11-13, Hot Springs Healthcare Financial Management Association (HFMA) Quarterly Education Meeting August 20, Little Rock Proactive Strategies for Managing Inpatient MS-DRG RAC Targets August 20, North Little Rock Arkansas Organization of Nurse Executives Summer Conference August 26-27, Little Rock Crucial Conversations Training August 31, Little Rock Arkansas Society for Healthcare Marketing and Public Relations (ASHMPR) Summer Conference September 16, Little Rock 2010 Mid-Management Healthcare Leadership Series: Legal Aspects of Management September 28, Little Rock Arkansas Health Executives Forum (AHEF) Quarterly Meeting October 6, Little Rock 2010 Mid-Management Healthcare Leadership Series: Executive Leadership Workshop (Achieving a Culture of Excellence, Listening Bootcamp, The Credibility/Likeability Makeover, and Service Recovery Skills to Restore Patient Satisfaction) October 6-8, Little Rock Arkansas Hospital Association 80 th Annual Meeting and Trade Show October 14, Little Rock Society for Arkansas Hospital Purchasing and Materials Management Fall Educational Meeting October 21, Little Rock 2010 Mid-Management Healthcare Leadership Series: Leading Through Reform Without Losing Your Work Force October 22, (Location TBD) Arkansas Association of Healthcare Engineering Fall Conference October 27-29, Little Rock Healthcare Financial Management Association (HFMA) Quarterly Education Meeting Program information available at Webinars and audio conference information available at We SUPPORT Healthcare... SYNERGY can help...» Created by U.S. Foodservice for the healthcare operator.» Provides a comprehensive approach to foodservice cost management.» Provides tools for customers to manage many of the services they offer.» Focuses on the key cost drivers in the operation.» Helps customers identify opportunities to achieve their service delivery and customer satisfaction goals.» For more information contact Kevin It s not about finding an angle. IT S ABOUT EXAMINING ALL THE ANGLES. We understand that no two hospitals are alike. That s why we always consider every possible solution to meeting an institution s unique insurance needs. In fact, as one of the largest independent agencies in the United States, Stephens Insurance is able to consider the widest possible range of solutions and carriers. To explore all the angles, visit Stephens Insurance at or call John Harbour Jr. at stephensinsurance.com Summer 2010 I Arkansas Hospitals 5

6 You may be eligible for bonus payments Arkansas now has a Health Information Technology Regional Extension Center, set up to offer technical assistance, guidance and information on best practices to help health care providers achieve meaningful use of certified EHR technology. You and your practice may be eligible for incentive payments or reimbursements of $44,000 to $63,750 from the federal government s stimulus program to offset the costs of launching an EHR system. As the state s designated HITREC, the Arkansas Foundation for Medical Care will provide: n On-site technical assistance with EHR adoption n Education on selection, implementation and use of an EHR system n Group purchasing of EHR systems and technical support to leverage volume discounts n End-to-end project management support of EHR implementation n Access to current information regarding meaningful use and best practices from around the country through the National Learning Consortium n Support for practice and workflow redesign to achieve meaningful use of EHR system Go to to find out more! This material was prepared by the Arkansas Foundation for Medical Care Inc. (AFMC) in partnership with University of Arkansas for Medical Sciences. 6 Summer 2010 I Arkansas Hospitals

7 Arkansas Newsmakers and Newcomers Jeff Johnston, president and CEO of St. Edward Mercy Health System in Fort Smith, has named Steve Loveless, COO, to lead a regional team responsible for the oversight and management of the system s three critical access hospitals in Waldron, Ozark and Paris. Loveless succeeds Ron Summerhill who retired April 1 as regional administrator of the facilities. He had been with the system for 35 years and succeeded Jim Maddox upon his retirement one year ago. Dan McKay has been named CEO of Northwest Health System in Springdale. He succeeds Doug Arnold who resigned in March. McKay previously served as interim CEO at the Springdale system in He most recently served as vice president of operations for Division IV at Community Health Systems, which owns Northwest Health System, and held CEO positions at hospitals in Missouri and South Carolina. John Robbins, FACHE, has been named interim president and CEO of the Arkansas Foundation for Medical Care, the state s quality improvement organization. He succeeds Dr. Nick Paslidis who resigned that position March 22. Robbins is a former CEO of Conway Regional Health System and served as the Arkansas Hospital Association s representative on the AFMC Board of Directors. Michael Givens, FACHE, has been named COO at St. Bernards Medical Center in Jonesboro. Givens has served in various capacities at St. Bernards since Most recently, he was vice president for patient services. As COO, he will be responsible for planning, organizing and directing operations at the 438-bed acute-care medical center. Givens is a board member of the Arkansas Health Executives Forum and received the ACHE Regent s Early Career Healthcare Executive Award in Mike Schimming has been named CEO of North Metro Medical Center in Jacksonville, succeeding interim CEO Don Cameron. Schimming was the hospital s CFO for the past year before moving into his new role. He has more than 15 years of senior healthcare and 27 years financial experience and has directed financial and administrative operations in hospitals in Arkansas, Texas, Missouri and Florida. Joe Mitchell, CEO of River Valley Medical Center in Dardanelle, has assumed interim CEO duties at Eureka Springs Hospital following the departure of David Wheeler. A search is being conducted for a permanent CEO at the facility. John Heard, CEO of McGehee Desha County Hospital, and Christy Hockaday, CEO of St. Anthony s Medical Center in Morrilton, were recently reappointed to the Arkansas Rural Medical Practice Student Loan and Scholarship Board for l. Walter Johnson, president and CEO of Jefferson Regional Medical Center (JRMC) in Pine Bluff, has announced that Brian Thomas has been named senior vice president and COO. In 1998, Thomas served as administrative director of operations and physician practices at JRMC. Following his time in Pine Bluff, Thomas served as COO at J.F.K. Memorial Hospital in Indio, California, and as COO at Crestwood Medical Center in Huntsville, Alabama. Summer 2010 I Arkansas Hospitals 7

8 statistics ARKANSAS HOSPITALS by the NUMBERS - What These Statistics Mean for Your Hospital Healthcare reform means many changes for Arkansas hospitals, and in a time of flux, knowing the statistics relating to the state s hospital scene is a must. With the economy still in a state of recovery, those of us in the healthcare field are constantly reviewing every available resource to keep Arkansas hospitals efficient, effective and afloat. This makes it vital to have hospital-related statistics close at hand. To that end, we present your annual Arkansas Hospitals statistical issue, a useful resource and communication tool in one concise guide. The information provided in this issue is important to all who participate or have interest in the healthcare field. Please use it as you communicate about your hospital and its place in your area s economy, social structure, and care-giving network. As you review the information gathered here, you gain a sense of where our nation s, region s and state s hospitals stand in the areas of financial strength and utilization. You also see how legislation and regulation continue to change hospitals day-to-day operations and policy-making. This guide will help you explain your hospital s financial situation to those who don t understand today s challenges. It provides background information as you discuss with elected officials how their vote may affect local healthcare back home. It could help you defend the launch of new services or the purchase of new equipment. Many of you have told us that the comparative statistics offered here give you the background and resources you need to discuss the health of healthcare as you visit with people in your communities. In speaking engagements before civic clubs and organizations, in discussions with your trustees, and in visiting with friends and neighbors these statistics are the most up-todate resources available, and offer you the background you need to knowledgeably discuss current healthcare trends and dilemmas faced in Arkansas today. Whenever you find yourself in need of communicating the facts about healthcare in today s marketplace, you can rely on this information as your most trusted and valued resource. Compiled by Paul Cunningham, Arkansas Hospital Association senior vice president, these useful statistics derive from the most recent information available from the American Hospital Association and other sources. His goal is to provide Arkansas hospitals with a valuable informational and communication tool, especially useful in these tough economic times and at this time of great change on the healthcare front. Please use it, and let us know how it helps you communicate the healthcare message. Distribution of Arkansas Licensed Hospitals By Type, Size and Control, 2010 Bed Size Number Licensed Beds Number Licensed Beds Number Licensed Beds Number Licensed Beds Number Licensed Beds Number Licensed Beds 0-49* , , , , , , , , ,219 Hospital Control Community Hospitals Psychiatric Hospitals Rehabilitation Hospitals Specialty Hospitals** LTAC Hospitals All Hospitals Not-for-Profit 44 7, ,690 Investor-owned 17 1, ,891 Governmental ,788 Total 73 9, , ,369 Source: Arkansas Hospital Association *Includes 29 Critical Access Hospitals ** Includes Pediatric, Cardiac, Women s, Surgical and VA Facilities 8 Summer 2010 I Arkansas Hospitals

9 statistics Arkansas Hospitals: Key Numbers Behind Important Facts 105 Hospitals of all types are located in cities, towns and communities throughout Arkansas. That group is composed of 73 general acute care community hospitals (including 29 critical access hospitals), nine long term acute care hospitals, eight psychiatric hospitals, eight rehabilitation hospitals, two hospitals that specialize in certain types of surgical procedures, two Veterans Affairs hospitals, as well as a pediatric hospital, a cardiac hospital and a women s hospital. 102 Hospitals and other healthcare organizations belong to the Arkansas Hospital Association. They include 97 Arkansas hospitals, two out-ofstate, border city hospitals (Memphis and Texarkana), an outpatient cancer treatment center, one inpatient hospice and a United States Air Force medical clinic. 46 Arkansas counties are served by a single hospital. 43 Arkansas community hospitals have fewer than 100 beds. Twenty-nine of them are designated by the federal government as critical access hospitals, having no more than 25 acute care beds. 22 Arkansas counties almost 30 percent of all counties in the state do not have a local hospital (however, two hospitals are located in Bowie County, Texas, which borders Miller County, Arkansas). Those counties are: Calhoun Lee Miller Perry Sharp Clay Lincoln Monroe Pike Woodruff Cleveland Lonoke Montgomery Prairie Grant Madison Newton Poinsett Lafayette Marion Nevada Searcy 4 Arkansas community hospitals have closed their doors since January % Of AHA member hospitals are charitable, not-for-profit organizations, while 30 percent of the hospitals are owned and operated by private, for-profit companies, and 14 percent are public hospitals owned and operated a city, county, state or federal government. 14,654 Arkansans sought inpatient or outpatient care from Arkansas hospitals each day in 2008 for illnesses, injuries and other conditions requiring medical attention. 39,013 Newborns were delivered in Arkansas hospitals in The Arkansas Medicaid program covered more than 60 percent of them. 43,727 Arkansans are employed by hospitals across the state, which have a combined annual payroll of $1.7 billion that helps to support about 7.7 percent of all non-farm jobs in the state through direct and indirect purchases of goods and services. $185 Million The amount Arkansas hospitals spent in 2008 providing charity care for patients without health insurance coverage. $9.6 Billion The estimated overall economic impact that Arkansas hospitals provided for the state in 2008, based on direct spending on goods and services, their impact on other businesses throughout the economy, jobs, and employees spending. *2008 is the latest year for which information is available Summer 2010 I Arkansas Hospitals 9

10 statistics AHA Members by Congressional District 1 st Congressional District Arkansas Methodist Medical Center Baptist Health Med. Center - Heber Springs Baptist Health Medical Center - Stuttgart Baxter Regional Medical Center Community Medical Center of Izard County Crittenden Regional Hospital CrossRidge Community Hospital DeWitt Hospital Five Rivers Medical Center Forrest City Medical Center Fulton County Hospital Great River Medical Center Harris Hospital Helena Regional Medical Center Lawrence Memorial Hospital NEA Baptist Memorial Hospital Piggott Community Hospital SMC Regional Medical Center St. Bernards Medical Center Stone County Medical Center White River Health System Total = 21 2 nd Congressional District Advanced Care Hospital of White County Allegiance Specialty Hospital of Little Rock Arkansas Children s Hospital Arkansas Heart Hospital Arkansas Hospice* Arkansas State Hospital Arkansas Surgical Hospital, LLC Baptist Health Medical Center - Little Rock Baptist Health Medical Center - North Little Rock Baptist Health Extended Care Hospital Baptist Health Rehabilitation Institute The BridgeWay CARTI * Central Arkansas Veterans Healthcare System Chambers Memorial Hospital Conway Regional Health System Conway Regional Rehabilitation Hospital Methodist Behavioral Hospital North Metro Medical Center Ozark Health Medical Center Pinnacle Pointe Behavioral HealthCare System Rivendell Behavioral Health Services River Valley Medical Center Saline Memorial Hospital St. Anthony s Medical Center St. Vincent Infirmary Medical Center St. Vincent Medical Center/North St. Vincent Rehabilitation Hospital UAMS Medical Center White County Medical Center 19 th Medical Group, LRAFB * Total = 31 *Non-hospital member 3 rd Congressional District Advance Care Hospital of Fort Smith Eureka Springs Hospital HEALTHSOUTH Rehab. Hosp. of Fayetteville Johnson Regional Medical Center Mercy Health System of Northwest Arkansas Mercy/Turner Memorial Hospital North Arkansas Regional Medical Center Northwest Medical Center Bentonville Northwest Medical Center Springdale Ozarks Community Hospital Saint Mary s Regional Medical Center Siloam Springs Memorial Hospital Sparks Health System St. Edward Mercy Medical Center St. John s Hospital - Berryville Springwoods Behavioral Health Hospital Summit Medical Center Veterans Healthcare System of the Ozarks Vista Health Fayetteville Vista Health Fort Smith Washington Regional Medical System Willow Creek Women s Hospital Total = 22 4 th Congressional District Advance Care Hospital of Hot Springs Ashley County Medical Center Baptist Health Med. Center - Arkadelphia Booneville Community Hospital Bradley County Medical Center Chicot Memorial Hospital Dallas County Medical Center Delta Medical Center DeQueen Medical Center Drew Memorial Hospital HealthPark Hospital Howard Memorial Hospital HSC Medical Center Jefferson Regional Medical Center Levi Hospital Little River Memorial Hospital Magnolia Regional Medical Center McGehee/Desha County Hospital Medical Center of South Arkansas Medical Park Hospital Mena Regional Health System Mercy Hospital of Scott County National Park Medical Center North Logan Mercy Hospital Ouachita County Medical Center St. Joseph s Mercy Health Center Total = Summer 2010 I Arkansas Hospitals

11 statistics A Snapshot of Arkansas Hospital Association Members Number of Arkansas Licensed AHA-member hospitals 97 Breakdown of AHA member hospitals by type Community Hospitals Urban Rural Critical Access Psychiatric... 8 Long-Term Care... 5 Rehabilitation... 4 Special Focus*... 7 Number of Arkansas-based non-hospital AHA-member organizations Arkansas-based AHA member organizations Number of AHA member organizations per Congressional District 1 st nd rd th Number of border city AHA member hospitals Total AHA member organizations Other Arkansas-licensed hospitals 8 (non-aha members) Rehabilitation hospitals... 4 Long-Term Care hospitals... 4 Total Arkansas licensed hospitals 105 Utilization and Financial Indicators, Community Hospitals, 2008 Admissions...376,158 Inpatient Days... 1,989,969 Outpatient Visits...4,972,752 Births... 39,013 Total Employees... 43,727 Payroll...$1,956,438,189 Billed Charges... $13,818,991,625 Total Amount Collected...$4,807,626,026 Operating Costs... $4,921,858,438 Cost of Charity Care Provided... $185,069,581 Patient Service Margin % Other Operating Revenues...$169,341,834 Operating Margin % *Cardiac, Pediatric, Surgical, Women s, VA Summer 2010 I Arkansas Hospitals 11

12 statistics Arkansas Hospital Charges by Payer Category Payer Categories # Discharges % Discharges Total Charges Average Charges per Stay % Total Charges Average Length of Stay Average Charge per day 1 - Medicare 186, % $4,602,073,788 $24, % 6.17 $4, HMO/Comm. Ins. 100, % $2,018,944,692 $20, % 4.16 $4, Medicaid 87, % $1,256,115,195 $14, % 4.76 $3, Self Pay 30, % $517,610,127 $17, % 4.88 $3, Other/Unknown 15, % $343,116,775 $22, % 4.48 $5, Other Gov. Programs 6, % $88,747,549 $14, % 4.09 $3,574 All Categories 425, % $8,826,608,126 $20, % 5.23 $3,968 Source: Arkansas Department of Health Hospital Discharge Data System Charges Stay Daily Rate 12 Summer 2010 I Arkansas Hospitals

13 statistics Comparative Utilization Indicators Per 1,000 Population U.S. Community Hospitals, 2008 Rank Hospital Beds Admissions Inpatient Days Outpatient Visits 1 Washington 1.7 Vermont 82.6 Utah Nevada 1, Utah 1.8 Utah 82.7 Washington Arizona 1, Oregon 1.8 Alaska 84.8 New Mexico South Carolina 1, California 1.9 Hawaii 86.4 Oregon California 1, Nevada 2.0 New Mexico 87.8 Idaho Florida 1, New Mexico 2.0 Washington 88.4 Colorado Texas 1, Arizona 2.0 Idaho 89.0 California Maryland 1, Colorado 2.0 Colorado 89.5 Arizona Georgia 1, Vermont 2.1 Oregon 92.0 Nevada Oklahoma 1, Maryland 2.1 California 94.2 New Hampshire Hawaii 1, New Hampshire 2.2 New Hampshire 94.4 Alaska WSC Region 1, Idaho 2.2 Nevada 95.1 Vermont Colorado 1, Connecticut 2.3 Wyoming 98.7 Texas Mississippi 1, Alaska 2.3 Georgia 99.0 Wisconsin Virginia 1, Virginia 2.3 Virginia Virginia Washington 1, Rhode Island 2.3 Texas Maryland Arkansas 1, Delaware 2.4 Montana Indiana Tennessee 1, Hawaii 2.4 Wisconsin WSC Region Wyoming 1, New Jersey 2.4 Arizona Illinois Minnesota 1, Massachusetts 2.4 Maine Rhode Island North Carolina 1, Wisconsin 2.4 North Carolina Michigan Delaware 1, Texas 2.5 Connecticut Georgia Idaho 1, North Carolina 2.5 Indiana Maine Alabama 1, Michigan 2.5 WSC Region New Jersey Utah 1, Georgia 2.6 Kansas U.S U.S. 2, U.S. 2.7 U.S Massachusetts New Jersey 2, Maine 2.7 South Carolina North Carolina New Mexico 2, Illinois 2.7 Delaware Connecticut Oregon 2, Indiana 2.8 Nebraska Hawaii Kentucky 2, WSC Region 2.8 Rhode Island South Carolina Connecticut 2, South Carolina 2.8 Michigan Florida South Dakota 2, Florida 2.9 Minnesota Oklahoma Kansas 2, Ohio 2.9 Iowa Ohio Illinois 2, Minnesota 3.0 Massachusetts Arkansas Alaska 2, Oklahoma 3.0 Illinois Delaware Rhode Island 2, New York 3.1 New Jersey Minnesota Wisconsin 2, Missouri 3.2 Maryland Kansas Louisiana 2, Pennsylvania 3.2 South Dakota Missouri Nebraska 2, Alabama 3.3 Oklahoma Iowa North Dakota 2, Kentucky 3.3 New York Kentucky Indiana 2, Arkansas 3.4 Florida Alabama New York 2, Tennessee 3.4 Arkansas Louisiana Michigan 2, Iowa 3.5 Ohio Wyoming Ohio 2, Louisiana 3.6 Tennessee Tennessee Pennsylvania 3, Kansas 3.7 North Dakota Pennsylvania Massachusetts 3, Wyoming 3.9 Missouri Nebraska Missouri 3, Montana 3.9 Kentucky West Virginia Montana 3, Nebraska 4.1 Louisiana New York New Hampshire 3, West Virginia 4.1 Mississippi Montana Iowa 3, Mississippi 4.5 Alabama Mississippi West Virginia 3, South Dakota 5.1 Pennsylvania North Dakota 1, Maine 3, North Dakota 5.4 West Virginia South Dakota 1, District of Columbia 3, District of Columbia 5.7 District of Columbia District of Columbia 1, Vermont 5, West South Central (WSC) Region: Arkansas, Lousiana, New Mexico, Oklahoma, Texas Source: American Hospital Association, Hospital Statistics, 2010 Summer 2010 I Arkansas Hospitals 13

14 statistics Arkansas Hospitals: Community Hospital Financial And Utilization Indicators, Indicator BEDS AVAILABLE 9,909 9,580 9,389 9,309 9,502 9, % ADMISSIONS 388, , , , , , % PATIENT DAYS 2,088,391 2,050,766 2,002,721 1,943,363 1,908,909 1,989, % AVG. LENGTH OF STAY % NON-EMERGENCY OP VISITS 3,330,691 3,621,645 3,707,485 3,818,276 3,942,397 3,671, % OUTPATIENT VISITS 4,852,352 4,842,303 4,971,307 5,085,474 5,236,516 4,972, % NON-EMERGENCY AS A % OF TOTAL OP VISITS 68.6% 74.8% 74.6% 75.1% 75.3% 73.8% 9.68% ADJUSTED PATIENT DAYS 3,315,086 3,266,473 3,269,871 3,174,935 3,153,839 3,332, % OCCUPANCY RATE 58.1% 58.6% 58.4% 57.2% 55.0% 56.3% -5.27% INPATIENT SURGERIES 117, , , , , , % OUTPATIENT SURGERIES 151, , , , , , % TOTAL SURGERIES 268, , , , , , % OUTPATIENT AS % OF TOTAL SURGERIES 56.41% 55.84% 52.75% 57.10% 55.93% 57.08% -0.86% TOTAL FTE EMPLOYEES 43,492 42,629 42,802 43,074 42,540 43, % FTEs PER ADJUSTED OCCUPIED BED % GROSS REVENUE, INPATIENT $6,115,623,287 $6,513,778,911 $6,962,421,549 $7,346,539,305 $7,750,748,662 $8,250,771, % GROSS REVENUE, OUTPATIENT $3,592,960,043 $3,861,410,128 $4,238,194,924 $4,655,737,561 $5,054,791,861 $5,568,220, % GROSS PATIENT REVENUE $9,708,583,330 $10,375,189,039 $11,200,616,473 $12,002,276,866 $12,805,540,523 $13,818,991, % BAD DEBTS $531,161,829 $565,220,366 $566,152,497 $596,842,333 $628,063,918 $681,259, % CHARITY $206,995,046 $239,575,478 $293,504,071 $309,914,742 $326,126,835 $360,456, % TOTAL DEDUCTIONS $5,790,602,643 $6,360,783,014 $6,945,017,078 $7,572,665,742 $8,220,632,392 $9,011,385, % MEDICARE, MEDICAID & OTHER PAYER WRITEOFFS $5,052,445,768 $5,555,987,170 $6,085,360,510 $6,665,908,667 $7,266,441,639 $7,969,669, % NET PATIENT REVENUE $3,917,980,687 $4,014,406,025 $4,255,599,395 $4,429,611,124 $4,584,908,131 $4,807,606, % OTHER OPERATING REVENUE $127,642,206 $134,780,857 $153,253,789 $154,744,439 $162,135,731 $169,341, % NONOPERATING REVENUE $49,276,715 $57,186,707 $51,496,442 $74,174,385 $56,666,788 $31,674, % TOTAL NET REVENUE $4,094,899,608 $4,206,373,589 $4,460,349,626 $4,658,529,948 $4,803,710,650 $5,008,622, % PAYROLL EXPENSE $1,510,600,000 $1,528,324,259 $1,608,181,270 $1,688,987,123 $1,825,435,512 $1,956,438, % TOTAL EXPENSE $3,947,107,676 $4,015,475,758 $4,225,289,800 $4,437,596,804 $4,585,732,810 $4,921,858, % PATIENT REVENUE MARGIN -0.74% -0.03% 0.71% -0.18% -0.02% -2.38% % TOTAL MARGIN 3.61% 4.54% 5.27% 4.74% 4.54% 1.73% 25.73% CHARGE PER ADJUSTED INPATIENT DAY $2, $3, $3, $3, $4, $4, % RECEIPTS PER ADJUSTED INPATIENT DAY $1, $1, $1, $1, $1, $1, % EXPENSE PER ADJUSTED INPATIENT DAY $1, $1, $1, $1, $1, $1, % PAYROLL PER ADJUSTED INPATIENT DAY $ $ $ $ $ $ % PAYROLL AS % OF TOTAL EXPENSE 38.3% 38.1% 38.1% 38.1% 39.8% 39.8% 4.01% BAD DEBT AND CHARITY AS % OF TOTAL CHARGE 7.6% 7.8% 7.7% 7.6% 7.5% 7.5% -2.00% TOTAL DEDUCTIONS AS % OF TOTAL CHARGE 59.6% 61.3% 62.0% 63.1% 64.2% 65.2% 7.63% OUTPT. REVENUE AS % TOTAL PATIENT REVENUE 37.0% 37.2% 37.8% 38.8% 39.5% 40.3% 6.66% ADMISSIONS PER BED % PATIENT DAYS PER 1,000 POPULATION % ADMISSIONS PER 1,000 POPULATION % POPULATION (000's) 2,726 2,753 2,779 2,811 2,811 2, % Source: American Hospital Association, Hospital Statistics, 2010 Percent Change 14 Summer 2010 I Arkansas Hospitals

15 statistics Community Hospital Summary Financial Data Arkansas and Surrounding States, 2008 Arkansas Louisiana Mississippi Missouri Oklahoma Tennessee Texas United States Hospitals charged this amount for the inpatient and outpatient care they provided in 2008: $13,818,991,625 $26,052,700,386 $18,556,618,273 $40,129,059,468 $19,181,795,806 $39,744,329,666 $136,968,066,154 $1,802,516,774,632 But, patients and payer groups didn t pay the full amount of billed charges for various reasons. Government programs like Medicare and Medicaid, workers comp programs and others never pay the full hospital bill. Managed care plans and other insurers typically pay discounted amounts only and individual patients often can t afford to pay some or any of the out-of-pocket costs related to their hospital bills. For those reasons, hospitals had to forfeit this much of their billed charges: 9,011,385,599 17,411,142,732 12,632,981,913 24,102,018,264 12,656,733,800 27,469,500,901 97,866,719,468 1,191,615,889,365 As a result, actual payments to hospitals were: 4,807,606,026 8,641,557,654 5,923,636,360 16,027,041,204 6,525,062,006 12,274,828,765 39,101,346, ,900,885,267 At the same time, hospitals spent this much providing patient care services 4,921,858,438 9,014,212,755 5,817,368,267 15,824,162,545 6,361,690,040 11,996,245,958 40,396,037, ,576,957,912 So, the revenue excess (loss) was: ($114,252,412) ($372,655,101) $106,268,093 $202,878,659 $163,371,966 $278,582,807 ($1,294,690,791) ($15,676,072,645) In other words, hospitals made (or lost) this much on each of the equivalent days of care they provided to inpatients and outpatients: ($34.28) ($66.09) $22.51 $26.12 $41.11 $34.27 ($61.33) ($48.37) Yielding a patient service margin of: -2.38% -4.31% 1.79% 1.27% 2.50% 2.27% -3.31% -2.57% In addition, hospitals also received revenues from other operating sources, such as cafeteria and gift shop sales, adding this much to their revenues: $169,341,834 $521,425,542 $319,430,782 $985,155,809 $211,578,156 $496,258,779 $4,040,612,362 $37,136,577,114 Which raised total operating income to: $55,089,422 $148,770,441 $425,698,875 $1,188,034,468 $374,950,122 $774,841,586 $2,745,921,571 $21,460,504,469 As a result, the operating margin rose to: 1.15% 1.72% 7.19% 7.41% 5.75% 6.31% 7.02% 3.51% Hospitals also collected other types of revenue from sources including contributions, tax appropriations, investments and the rental of office space. Those amounted to: $31,674,701 $33,327,586 $36,224,687 ($360,477,386) $37,213,785 $81,614,397 $310,546,108 ($4,453,107,631) That resulted in total funds available to reinvest in new equipment, update facilities, expand programs and repay debt equaling: $86,764,123 $182,098,027 $461,923,562 $827,557,082 $412,163,907 $856,455,983 $3,056,467,679 $17,007,396,838 For a return on investment totaling: 1.80% 2.11% 7.80% 5.16% 6.32% 6.98% 7.82% 2.78% Source: American Hospital Association, Hospital Statistics, 2010 Summer 2010 I Arkansas Hospitals 15

16 statistics AHA Member organizations 2010: Home Licensed Swing Recup. A&D Unit Psych.Unit Rehab. Unit Health City Hospital Medicare Classification Beds Bed Unit Care Unit # Beds # Beds # Beds Agency Control Ashdown Little River Memorial Hospital Critical Access 25 x x County Batesville White River Medical Center Rural, SCH/RRC x PNP Benton Rivendell Behavioral Health Services Psychiatric Corporate Benton Saline Memorial Hospital Urban x PNP Bentonville Northwest Medical Center, Bentonville Urban 128 x Corporate Berryville St. John's Hospital - Berryville Critical Access 25 x x PNP Blytheville Great River Medical Center Rural Corporate Booneville Booneville Community Hospital Critical Access 25 x x City Calico Rock Community Medical Center of Izard County Critical Access 25 x x PNP Camden Ouachita County Medical Center Rural 98 x x PNP Clarksville Johnson Regional Medical Center Rural 80 x x PNP Clinton Ozark Health Medical Center Critical Access 25 x x PNP Conway Conway Regional Health System Urban x PNP Conway Conway Regional Rehabilitation Hospital Rehabilitation PNP Crossett Ashley County Medical Center Critical Access 25 x 8 x PNP Danville Chambers Memorial Hospital Rural 41 x x PNP Dardanelle River Valley Medical Center Critical Access 25 x Corporate DeQueen DeQueen Medical Center, Inc. Critical Access 25 x 10 Corporate DeWitt DeWitt Hospital Critical Access 25 x x PNP Dumas Delta Memorial Hospital Critical Access 25 x PNP El Dorado Medical Center of South Arkansas Rural PNP Eureka Springs Eureka Springs Hospital Critical Access 22 x x Corporate Fayetteville HEALTHSOUTH Rehab. Hospital of Fayetteville Rehabilitation 60 Corporate Fayetteville Springwoods Behavioral Health Hospital Psychiatric 80 Corporate Fayetteville Veterans Healthcare System of the Ozarks Veterans Admin. 51 Federal Fayetteville Vista Health Fayetteville Psychiatric 92 Corporate Fayetteville Washington Regional Medical Center Urban x PNP Fordyce Dallas County Medical Center Critical Access 25 x x County Forrest City Forrest City Medical Center Rural 118 x 18 x Corporate Fort Smith Advance Care Hospital of Ft. Smith Long Term Care 25 PNP Fort Smith Sparks Health System Urban x PNP Fort Smith St. Edward Mercy Medical Center Urban x PNP Fort Smith Vista Health Fort Smith Psychiatric 57 Corporate Gravette Ozarks Community Hospital Critical Access 25 Corporate Harrison North Arkansas Regional Medical Center Rural, SCH x PNP Heber Springs Baptist Health Medical Center-Heber Springs Critical Access 25 x x PNP Helena Helena Regional Medical Center Rural 155 x 18 x Corporate Hope Medical Park Hospital Urban 79 x 12 Corporate Hot Springs Advance Care Hospital of Hot Springs Long Term Care 27 PNP Hot Springs HealthPark Hospital Urban (Surgical) 20 Corporate Hot Springs Levi Hospital Urban PNP Hot Springs National Park Medical Center Urban x Corporate Hot Springs St. Joseph's Mercy Health Center Urban x PNP Jacksonville 19th Medical Group, LRAFB Dept. of Defense 0 DoD Jacksonville North Metro Medical Center Urban x PNP Johnson Willow Creek Women's Hospital Urban (Women's) 64 Corporate Jonesboro NEA Baptist Memorial Hospital Rural-MDH 88 x Corporate Jonesboro St. Bernards Medical Center Urban x PNP Lake Village Chicot Memorial Hospital Critical Access 25 x x PNP Little Rock Allegiance Specialty Hospital of Little Rock Long Term Care 40 Corporate Little Rock Arkansas Children's Hospital Urban (Pediatric) PNP Little Rock Arkansas Heart Hospital Urban 112 Corporate 16 Summer 2010 I Arkansas Hospitals

17 statistics Location, Medicare Classification, Facilities and Services Home Licensed Swing Recup. A&D Unit Psych.Unit Rehab. Unit Health City Hospital Medicare Classification Beds Bed Unit Care Unit # Beds # Beds # Beds Agency Control Little Rock Arkansas Hospice Inpatient Hospice 40 PNP Little Rock Arkansas State Hospital Psychiatric 345 State Little Rock Baptist Health Extended Care Hospital Long Term Care 37 PNP Little Rock Baptist Health Medical Center-Little Rock Urban x PNP Little Rock Baptist Health Rehabilitation Institute Rehabilitation PNP Little Rock CARTI OP Cancer Center 0 PNP Little Rock Central Arkansas Veterans Healthcare System Veterans Affairs Federal Little Rock Pinnacle Pointe Behavioral HealthCare System Psychiatric Corporate Little Rock St. Vincent Infirmary Medical Center Urban x PNP Little Rock UAMS Medical Center Urban 400 State Magnolia Magnolia Regional Medical Center Rural 49 x x City Malvern HSC Medical Center Rural x PNP Maumelle Methodist Behavioral Hospital Psychiatric PNP McGehee McGehee-Desha County Hospital Critical Access 25 x x PNP Memphis, TN Regional Medical Center at Memphis Urban 620 PNP Mena Mena Regional Health System Rural 65 x City Monticello Drew Memorial Hospital Rural 49 x x County Morrilton St. Anthony's Medical Center Critical Access 25 x x PNP Mountain Home Baxter Regional Medical Center Rural, RRC/SCH x PNP Mountain View Stone County Medical Center Critical Access 25 x PNP Nashville Howard Memorial Hospital Critical Access 20 x x PNP Newport Harris Hospital Rural 133 x 12 Corporate North Little Rock Arkansas Surgical Hospital, LLC Urban (Surgical) 51 Corporate North Little Rock Baptist Health Medical Center-North Little Rock Urban x PNP North Little Rock The BridgeWay Psychiatric Corporate Osceola SMC Regional Medical Center Critical Access 25 x 10 Corporate Ozark Mercy Hospital/Turner Memorial Critical Access 25 x County Paragould Arkansas Methodist Medical Center Rural 129 x 15 x PNP Paris North Logan Mercy Hospital Critical Access 16 x PNP Piggott Piggott Community Hospital Critical Access 25 x x City Pine Bluff Jefferson Regional Medical Center Urban x PNP Pocahontas Five Rivers Medical Center Rural x City Rogers Mercy Health System of Northwest Arkansas Urban 165 x PNP Russellville Saint Mary's Regional Medical Center Rural, RRC x Corporate Salem Fulton County Hospital Critical Access 25 x County Searcy Advanced Care Hospital of White County Long Term Care 27 PNP Searcy White County Medical Center Rural, RRC x PNP Sherwood St. Vincent Medical Center/North Urban 69 x PNP Sherwood St. Vincent Rehabilitation Hospital Rehabilitation Corporate Siloam Springs Siloam Springs Memorial Hospital Urban 73 x Corporate Springdale Northwest Medical Center, Springdale Urban x Corporate Stuttgart Baptist Health Medical Center-Stuttgart Rural 49 x PNP Texarkana, TX CHRISTUS St. Michael Health System Urban 312 PNP Van Buren Summit Medical Center Urban 103 Corporate Waldron Mercy Hospital of Scott County Critical Access 24 x PNP Walnut Ridge Lawrence Memorial Hospital Critical Access 25 x County Warren Bradley County Medical Center Critical Access 35 x 10 x PNP West Memphis Crittenden Regional Hospital Urban x PNP Wynne CrossRidge Community Hospital Critical Access 25 x x PNP PNP = Private Not-for-Profit DoD = Department of Defense RRC = Rural Referral Center SCH = Sole Community Hospital Summer 2010 I Arkansas Hospitals 17

18 statistics Comparative Financial Indicators U.S. Community Hospitals, 2008 Rank Average Charge Per Hospital Stay Average Operating Cost Per Hospital Stay Average Payment Per Hospital Stay Margin on Patient Care Services 1 New Jersey $50,628 District of Columbia $16,493 District of Columbia $15,658 Utah 8.04% 2 California 43,441 Alaska 15,048 Alaska 15,463 Idaho 4.80% 3 District of Columbia 41,426 New York 13,358 New Hampshire 12,299 New Hampshire 4.61% 4 Nevada 40,975 Massachusetts 12,702 Washington 12,250 New Mexico 3.49% 5 Pennsylvania 38,365 California 12,459 Delaware 12,156 South Dakota 3.11% 6 Colorado 36,856 Delaware 12,328 Nebraska 12,030 Alaska 2.69% 7 Alaska 35,142 Washington 12,074 New York 12,015 Oklahoma 2.50% 8 Texas 33,701 Colorado 11,854 California 11,936 Virginia 2.35% 9 Florida 33,450 Nebraska 11,817 Colorado 11,812 Tennessee 2.27% 10 Arizona 33,068 Hawaii 11,755 Massachusetts 11,364 Mississippi 1.79% 11 South Carolina 31,659 New Hampshire 11,733 Oregon 11,270 Nebraska 1.76% 12 Washington 30,892 Oregon 11,715 Minnesota 11,223 Washington 1.44% 13 U.S. 30,497 Connecticut 11,397 Hawaii 11,191 Missouri 1.27% 14 WSC Region 30,225 New Jersey 11,354 Utah 11,106 Kentucky 1.23% 15 New York 30,122 Minnesota 11,342 Maine 11,048 Wisconsin 1.08% 16 Hawaii 28,834 Maine 11,095 Connecticut 11,030 Florida 0.57% 17 Connecticut 28,666 Rhode Island 10,906 Missouri 10,785 Pennsylvania 0.41% 18 New Mexico 28,452 Nevada 10,845 Wisconsin 10,760 South Carolina 0.40% 19 Virginia 28,351 Indiana 10,718 Nevada 10,687 Wyoming 0.19% 20 Illinois 28,300 Missouri 10,649 South Dakota 10,674 Montana 0.00% 21 Tennessee 27,942 Wisconsin 10,644 New Jersey 10,665 Kansas -0.15% 22 Nebraska 27,907 U.S. 10,601 Indiana 10,464 Colorado -0.35% 23 New Hampshire 27,848 South Carolina 10,421 South Carolina 10,463 Maine -0.43% 24 Ohio 27,068 South Dakota 10,342 U.S. 10,336 Arizona -0.45% 25 Missouri 27,004 Maryland 10,335 Pennsylvania 10,322 West Virginia -0.69% 26 Massachusetts 26,925 Pennsylvania 10,280 Maryland 10,234 North Carolina -0.96% 27 Alabama 26,819 Ohio 10,220 Virginia 10,119 Maryland -0.98% 28 Rhode Island 26,553 Utah 10,213 New Mexico 10,024 Minnesota -1.06% 29 Minnesota 26,535 Michigan 10,146 Rhode Island 10,014 Georgia -1.13% 30 Georgia 26,204 Montana 9,974 Ohio 9,991 Vermont -1.40% 31 Mississippi 25,626 Texas 9,940 Montana 9,974 Delaware -1.41% 32 Indiana 25,573 Virginia 9,881 Michigan 9,867 Nevada -1.49% 33 Kansas 25,427 Illinois 9,879 Wyoming 9,813 Ohio -2.29% 34 Oklahoma 25,399 Wyoming 9,794 Arizona 9,626 Arkansas -2.38% 35 Louisiana 24,514 New Mexico 9,675 Texas 9,621 Indiana -2.43% 36 Michigan 24,444 Arizona 9,669 Idaho 9,518 U.S % 37 Utah 23,979 Vermont 9,396 Illinois 9,475 WSC Region -2.74% 38 Delaware 23,003 WSC Region 9,358 Vermont 9,266 Michigan -2.83% 39 Kentucky 22,842 North Carolina 9,233 Kansas 9,213 Texas -3.31% 40 Oregon 22,783 Kansas 9,227 North Carolina 9,145 Connecticut -3.33% 41 North Carolina 22,741 Georgia 9,089 WSC Region 9,109 Oregon -3.94% 42 South Dakota 22,456 Idaho 9,061 Georgia 8,987 Iowa -4.09% 43 Wisconsin 22,051 North Dakota 8,966 Florida 8,957 Illinois -4.27% 44 Arkansas 21,934 Florida 8,905 Oklahoma 8,640 Louisiana -4.31% 45 Maine 20,479 Iowa 8,831 Tennessee 8,630 California -4.38% 46 Iowa 19,214 Louisiana 8,482 North Dakota 8,493 Hawaii -5.04% 47 Idaho 18,875 Tennessee 8,434 Iowa 8,484 District of Columbia -5.33% 48 Wyoming 18,088 Oklahoma 8,424 Mississippi 8,180 North Dakota -5.57% 49 Montana 17,991 Mississippi 8,033 Louisiana 8,131 Alabama -5.77% 50 Vermont 17,607 Kentucky 7,941 Kentucky 8,039 New Jersey -6.47% 51 West Virginia 17,369 West Virginia 7,877 West Virginia 7,823 Rhode Island -8.90% 52 North Dakota 16,623 Arkansas 7,812 Arkansas 7,631 New York % 53 Maryland 12,590 Alabama 7,316 Alabama 6,916 Massachusetts % West South Central (WSC) Region: Arkansas, Louisiana, New Mexico, Oklahoma, Texas Source: American Hospital Association, Hospital Statistics, Summer 2010 I Arkansas Hospitals

19 In 2007 Arkansas Hospitals provided over $485 million dollars in services to self pay Arkansas patients. Most of it was uncompensated. In 2007 self pay Arkansans: Accounted for 30,000 hospital admissions annually. Cost $15,994 for the average hospital stay. Averaged 5.29 days length of stay. ARHealthNetworks is a Department of Human Services program that can help your hospital get paid for the services it performs for hard-working Arkansans who don't have medical coverage. We can show your hospital how to improve its collection rate with little or no financial investment! Call NovaSys Health's marketing department at (501) to tailor a plan for your facility. Visit our website to find out more information about this program - Request a FREE DVD from NovaSys Health which will explain the opportunities in greater detail. Help reduce your bad debt by suggesting ARHealthNetworks to your patients who have no other way to pay! ARHealthNetworks.com TDD Summer 2010 I Arkansas Hospitals 19

20 statistics Arkansas Hospitals: Investor Owned, Operated and/or Managed Hospitals Investor Owner/Manager Hospital City Allegiance Health Management Allegiance Specialty Hospital of Little Rock Delta Memorial Hospital Eureka Springs Hospital North Metro Medical Center River Valley Medical Center Little Rock Dumas Eureka Springs Jacksonville Dardanelle Arkansas Surgical Hospital, LLC Arkansas Surgical Hospital North Little Rock Capella Healthcare Community Health Systems Inc. QHR (Managed Only) Health Management Associates National Park Medical Center Saint Mary s Regional Medical Center Forrest City Medical Center Harris Hospital Helena Regional Medical Center Medical Center of South Arkansas Northwest Medical Center Bentonville Northwest Medical Center Springdale Siloam Springs Memorial Hospital Willow Creek Women s Hospital Great River Medical Center South Mississippi Regional Medical Center Summit Medical Center Sparks Health System Hot Springs Russellville Forrest City Newport Helena El Dorado Bentonville Springdale Siloam Springs Johnson Blytheville Osceola Van Buren Fort Smith HealthSouth Corporation HealthSouth Rehab. Hospital of Fort Smith # HealthSouth Rehab. Hospital of Jonesboro # HealthSouth Rehab. Hospital of Fayetteville ** St. Vincent Rehabilitation Hospital * Fort Smith Jonesboro Fayetteville Sherwood Hospital Management Consultants Booneville Community Hospital Booneville JCE Healthcare Group DeQueen Regional Medical Center, Inc. DeQueen MedCath Arkansas Heart Hospital Little Rock Physicians Specialty Hospital Physicians Specialty Hospital # Fayetteville Psychiatric Solutions Pinnacle Pointe Behavioral HealthCare System Little Rock Ouachita Diagnostic and Surgical Center, Inc. HealthPark Hospital Hot Springs Regency Hospital Company Regency Hospital of Northwest Arkansas # Regency Hospital of Springdale # Select Medical Corporation Select Specialty Hospital - Fort Smith # Select Specialty Hospital - Little Rock # Fayetteville Springdale Fort Smith Little Rock Shiloh Health Services Medical Park Hospital Hope Texarkana Behavioral Health Services Universal Health Services Vista Health Fayetteville Vista Health Fort Smith The BridgeWay Rivendell Behavioral Health Services Springwoods Behavioral Health Hospital Fayetteville Fort Smith North Little Rock Benton Fayetteville # Not an AHA-member hospital * Partnership with St. Vincent Health System ** Partnership with Washington Regional Medical System 20 Summer 2010 I Arkansas Hospitals

21 statistics Arkansas Hospitals: Members/Affiliates of Not-For-Profit Multi-Hospital Systems Not-for-Profit System Hospital City Baptist Health Baptist Health Extended Care Hospital Baptist Health Medical Center - Little Rock Baptist Health Medical Center - Arkadelphia Baptist Health Medical Center - Heber Springs Baptist Health Medical Center - North Little Rock Baptist Health Rehabilitation Institute Baptist Health Medical Center - Stuttgart Little Rock Little Rock Arkadelphia Heber Springs North Little Rock Little Rock Stuttgart Baptist Memorial Healthcare Corp. NEA Baptist Memorial Hospital Jonesboro Catholic Health Initiatives Conway Regional Health System Dubuis Health System Olivetan Benedictine Sisters Sisters of Mercy Health System White County Medical Center White River Health System St. Anthony's Medical Center St. Vincent Infirmary Medical Center St. Vincent Rehabilitation Hospital * St. Vincent Medical Center North Conway Regional Medical Center Conway Regional Rehabilitation Hospital Advance Care Hospital of Hot Springs Advance Care Hospital Fort Smith St. Bernards Medical Center Lawrence Memorial Hospital CrossRidge Community Hospital St. Edward Mercy Medical Center St. Joseph s Mercy Health System Mercy Health System of NW Arkansas St. John s Hospital North Logan Mercy Hospital Mercy Hospital of Scott County Mercy Hospital/Turner Memorial Advanced Care Hospital of White County White County Medical Center White River Medical Center Stone County Medical Center Morrilton Little Rock Sherwood Sherwood Conway Conway Hot Springs Fort Smith Jonesboro Walnut Ridge Wynne Fort Smith Hot Springs Rogers Berryville Paris Waldron Ozark Searcy Searcy Batesville Mountain View * A joint venture between St. Vincent Health System and HealthSouth Impact of Self-Pay (Uninsured) Inpatients On Arkansas Hospitals, Indicator Percent Increase Number Self-Pay Patients Admitted 20,545 26,843 28,899 30,063 29,364 27,638 27,963 30,296 30, % Self-Pay As Percent of All Patients Admitted 5.50% 6.80% 7.30% 7.01% 6.82% 6.44% 6.50% 7.08% 7.08% 28.73% Total Uncovered Charges ($ Millions) $168 $248 $307 $354 $398 $419 $439 $485 $ % Total Uncovered Costs ($ Millions)* $78 $108 $129 $144 $154 $158 $162 $174 $ % Source: Arkansas Department of Health, Hospital Discharge Data Program 2008 * Estimate based on statewide cost-to-charge ratio Summer 2010 I Arkansas Hospitals 21

22 statistics AHA-Member Organizations: Public Hospitals Hospital Governmental Entity Hospital Governmental Entity Arkansas State Hospital State of Arkansas Little River Memorial Hospital Little River County Dallas County Medical Center Dallas County Magnolia Regional Medical Center City of Magnolia, AR Drew Memorial Hospital Drew County Mena Regional Health System City of Mena, AR Five Rivers Medical Center City of Pocahontas, AR Piggott Community Hospital City of Piggott, AR Fulton County Hospital Fulton County UAMS Medical Center State of Arkansas Lawrence Memorial Hospital Lawrence County AHA Member Organizations by Hospital Type General Acute Care Hospitals (44) Arkansas Methodist Medical Center Baptist Health Medical Center - Little Rock Baptist Health Medical Center - North Little Rock Baptist Health Medical Center - Stuttgart Baxter Regional Medical Center Chambers Memorial Hospital Conway Regional Health System Crittenden Regional Hospital Drew Memorial Hospital Five Rivers Medical Center Forrest City Medical Center Great River Medical Center Harris Hospital Helena Regional Medical Center HSC Medical Center Jefferson Regional Medical Center Johnson Regional Medical Center Levi Hospital Magnolia Regional Medical Center Medical Center of South Arkansas Medical Park Hospital Mena Regional Health System Mercy Health System of NW Arkansas National Park Medical Center NEA Baptist Memorial Hospital North Arkansas Regional Medical Center North Metro Medical Center Northwest Medical Center - Bentonville Northwest Medical Center - Springdale Ouachita County Medical Center Saint Mary s Regional Medical Center Saline Memorial Hospital Siloam Springs Memorial Hospital Sparks Health System St. Bernards Medical Center St. Edward Mercy Medical Center St. Joseph s Mercy Health Center St. Vincent Infirmary Medical Center St. Vincent Medical Center/North Summit Medical Center UAMS Medical Center Washington Regional Medical System White County Medical Center White River Health System Critical Access Hospitals (29) Ashley County Medical Center Baptist Health Med. Center - Arkadelphia Baptist Health Med. Cntr. - Heber Springs Booneville Community Hospital Bradley County Medical Center Chicot Memorial Hospital Community Medical Center of Izard Co. CrossRidge Community Hospital Dallas County Medical Center Delta Medical Center DeQueen Medical Center DeWitt Hospital Eureka Springs Hospital Fulton County Hospital Howard Memorial Hospital Lawrence Memorial Hospital Little River Memorial Hospital McGehee/Desha County Hospital Mercy/Turner Memorial Hospital Mercy Hospital of Scott County North Logan Mercy Hospital Ozarks Community Hospital Ozark Health Medical Center Piggott Community Hospital River Valley Medical Center SMC Medical Center St. Anthony s Medical Center St. John s Hospital Stone County Medical Center Psychiatric Hospitals (8) Arkansas State Hospital The BridgeWay Methodist Behavioral Hospital Pinnacle Pointe Behavioral HealthCare System Rivendell Behavioral Health Services Springwoods Behavioral Health Hospital Vista Health - Fayetteville Vista Health - Fort Smith Long Term Acute Care Hospitals (5) Advance Care Hospital - Hot Springs Advance Care Hospital - Fort Smith Advanced Care Hospital of White County Allegiance Specialty Care Hospital of LR Baptist Health Extended Care Hospital Specialty Service Hospitals (5) Arkansas Children s Hospital Arkansas Heart Hospital Arkansas Surgical Hospital, LLP HealthPark Hospital Willow Creek Women s Hospital Rehabilitation Hospitals (4) Baptist Health Rehabilitation Institute HEALTHSOUTH Rehab. Hospital of Fayetteville Conway Regional Rehabilitation Hospital St. Vincent Rehabilitation Hospital Non-Hospitals (3) 19 th Medical Group, LRAFB Arkansas Hospice CARTI VA Hospitals (2) Central Arkansas Veterans HC System Veterans HC System of the Ozarks 22 Summer 2010 I Arkansas Hospitals

23 statistics Charges and Lengths of Stay for Top 30 DRGs Billings Days Daily rate # Discharges Total Charges Mean Charges per Discharge Mean Stay per Discharge Mean Daily Rate Diagnosis-Related Group NORMAL NEWBORN 27,760 $53,792,788 $1, $1, VAGINAL DELIVERY W/O COMPLICATING DIAGNOSES 21, ,620,686 6, , PSYCHOSES 17, ,024,621 14, , REHABILITATION W CC/MCC 10, ,501,745 23, , ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 10, ,488,652 10, , CESAREAN SECTION W/O CC/MCC 9, ,955,086 11, , MAJ JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 8, ,754,721 33, , SIMPLE PNEUMONIA & PLEURISY W CC 7, ,981,144 14, , SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 6,497 61,776,053 9, , NEONATE W OTHER SIGNIFICANT PROBLEMS 6,324 24,775,152 3, , NUTRITIONAL & MISC METABOLIC DISORDERS W/O MCC 5,822 52,697,398 9, , CHEST PAIN 5,348 52,188,485 9, , KIDNEY & URINARY TRACT INFECTIONS W/O MCC 5,171 53,486,634 10, , CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W/O MCC 5, ,126,079 21, , CELLULITIS W/O MCC 5,030 52,555,274 10, , UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC 4,930 71,015,051 14, , PERC CARDIOVASC PROC W DRUG-ELUTING STENT W/O MCC 4, ,890,758 39, , CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 4,444 46,936,704 10, , SEPTICEMIA W/O MV 96+ HOURS W MCC 4, ,267,879 29, , HEART FAILURE & SHOCK W CC 3,971 55,143,353 13, , REHABILITATION W/O CC/MCC 3,970 76,451,948 19, , CESAREAN SECTION W CC/MCC 3,909 51,630,845 13, , HEART FAILURE & SHOCK W/O CC/MCC 3,645 35,946,054 9, , PERC CARDIOVASC PROC W NON-DRUG-ELUTING STENT W/O MCC 3, ,984,996 38, , HEART FAILURE & SHOCK W MCC 3,213 70,775,565 22, , CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W/O CC/MCC 3,033 26,459,599 8, , DEPRESSIVE NEUROSES 2,998 29,677,896 9, , BRONCHITIS & ASTHMA W/O CC/MCC 2,879 20,444,340 7, , RED BLOOD CELL DISORDERS W/O MCC 2,719 31,691,525 11, , DEGENERATIVE NERVOUS SYSTEM DISORDERS W/O MCC 2,687 45,600,419 16, ,554 All 30 DRGs 206,355 $2,683,641, $13, $2, Source: Arkansas Hospital Discharge Data System Summer 2010 I Arkansas Hospitals 23

24 statistics Hospital Uncompensated Care Costs More than 500,000 Arkansans wake up each morning with an uneasy feeling that they or members of their families could need some kind of healthcare service before the day is done. Their concerns are well founded. Illness and injury are largely unpredictable, and the plain and simple truth is they can t afford either one. For them and another 46 million uninsured Americans, healthcare coverage is provided by a frayed patchwork quilt of safety net providers that is becoming more worn and threadbare by the year. Community health centers, a shrinking number of private physicians willing to offer some care for little or no pay, free clinics, primary care centers and rural health clinics all shoulder part of the burden of providing uncompensated care to those who can t pay. But none plays a greater role in providing healthcare to self-pay patients than local hospitals, which, because of the 24/7 nature of their operations, tend to be the uninsured s most accessible and traversed gateway to the healthcare system. The cost of uncompensated care in Arkansas hospitals alone exceeded $382 million in 2008 (the charges were close to $1 billion). That was up by more than 27 percent over the previous five years. The real impact of uncompensated care affects not just the poor and uninsured, but also everyone else in the community. To fully understand requires a general agreement on what uncompensated care is; or, rather, what it is not. Uncompensated care doesn t necessarily refer to care that nobody pays for. In fact, much of the uncompensated care tally is paid for; but usually it s paid by someone the patient who actually receives the care does not know. A sizeable portion of the costs related to uncompensated bills are shifted to individuals and businesses in the form of higher health plan premiums, which are nothing more than hidden taxes. Generally, uncompensated hospital costs are classified as charity care and bad debt, depending on the hospital s policies for determining whether a patient is deemed able to pay for services. Charity care is the cost of services (net of any contrac- 24 Summer 2010 I Arkansas Hospitals

25 statistics tual allowances) that patients have been deemed unable to pay prior to receiving care. Bad debt constitutes all other unpaid services for which a hospital expected but did not receive payment. It excludes Medicare bad debt, but deductible and co-pay amounts left unpaid by patients who have coverage are part of the total. In 2008, more than 30,000 patients who had no insurance coverage were admitted to Arkansas hospitals. That represented about 7.1 percent of all inpatients (up 29 percent since 2000). Those patients rang up $518 million in charges, an average of $17,200 per patient. Needless to say, few could afford to pay those bills or even a very small percentage. Thousands more uninsured came or were brought to hospital emergency rooms seeking treatment for conditions ranging from major trauma to fevers and ear infections. Some required immediate attention, while others came simply to see a doctor, because they don t have a family physician to take care of less urgent medical needs. All received the needed care, accounting for millions of dollars more in care. That s a stunning total, but the story doesn t end there. Counting all the insured patients who received care but could not cover all their deductibles or co-pays, Arkansas hospitals, which are consistently among those with the highest uncompensated care costs, provided more than $1 billion in uncompensated care in That converts to roughly $382 million in uncovered costs which had to be picked up by other patients. Those amounts reflect just 2008 numbers. The cumulative amounts are staggering. Charity care and bad debt amounts share common ground when it comes to their astounding growth. Between 1998 and 2008, hospital charity care and bad debt costs in Arkansas hospitals jumped 68 percent and are a root cause of the overall hospital cost increase of 75 percent for the same period. Things are poised to get better, with the recent passage of health reform legislation designed to cover another 30 million people. But that s still a few years away, and at best there will still be 15 million to 25 million uninsured who will continue to need care that they can t afford. Year Arkansas Community Hospitals Uncompensated Care Costs, Total Billed Charges Net Charges Collected Other Operating Revenue Source: American Hospital Association, Hospital Statistics, 2010 Total Operating Revenue Operating Costs Cost/ Charge Ratio Total Uncollected Bills Bad Debt Charity Uncompensated Care Charges Uncompensated Care Costs ,581,832,069 2,859,625,078 83,252,406 5,665,084,475 2,802,389, % 2,722,206, ,070, ,302, ,373, ,116, % ,096,135,975 2,933,364,021 95,687,603 6,191,823,578 2,972,492, % 3,162,771, ,960, ,664, ,624, ,519, % ,840,121,635 3,117,677,033 95,650,547 6,935,772,182 3,176,562, % 3,722,444, ,358, ,956, ,315, ,923, % ,445,452,895 3,300,453, ,461,117 7,548,914,012 3,249,943, % 4,144,999, ,812, ,217, ,030, ,747, % ,623,946,905 3,703,886, ,677,549 8,758,624,454 3,612,279, % 4,920,059, ,582, ,429, ,012, ,739, % ,708,583,330 3,917,980, ,642,206 9,836,225,536 3,947,107, % 5,790,602, ,161, ,995, ,156, ,103, % ,375,189,439 4,014,406, ,780,857 10,509,970,296 4,015,475, % 6,360,783, ,220, ,575, ,795, ,477, % ,200,616,473 4,255,599, ,253,789 11,353,870,262 4,225,289, % 6,945,017, ,192, ,504, ,696, ,309, % ,002,276,866 4,429,611, ,744,439 12,157,021,305 4,437,596, % 7,572,665, ,842, ,914, ,757, ,254, % ,805,540,523 4,584,908, ,165,731 12,967,706,254 4,585,732, % 8,220,632, ,063, ,126, ,190, ,700, % ,818,991,625 4,807,626, ,341,834 13,988,333,459 4,921,858, % 9,011,385, ,032, ,231,835 1,073,264, ,260, % Increase % 68.12% % % 75.63% % % % % 68.31% Percent of Total Costs Summer 2010 I Arkansas Hospitals 25

26 On Behalf of Our Members: Arkansas Hospital Association Accomplishments ) Led the successful implementation of Arkansas new Medicaid Hospital Assessment program and the $125 million in supplemental quarterly hospital access payments now available to be shared among most acute care and inpatient psychiatric hospitals. 2) Coordinated hospitals participation with the newly established statewide trauma care network. 72 hospitals have expressed intent to be a part of the system. 3) Implemented an Arkansas-specific Stop BSI project in conjunction with Johns Hopkins that focuses on reducing central line-associated bloodstream infections. The project, in which 27 Arkansas hospitals are participating, has a goal of adopting evidence-based best practice interventions aimed at reducing or eliminating blood stream infections. 4) Actively pursued changes in National Disaster Medical System (NDMS) policies affecting logistical and reimbursement issues impacting patient evacuations and definitive medical (inpatient) care provided by host state hospitals during times of national emergencies. 5) Worked with the Arkansas Department of Health to coordinate a statewide effort to ensure the availability of sufficient hospital resources to prepare for an expected significant H1N1 swine flu outbreak within the state. This included a pandemic preparedness communications kit for hospital public information officers, in addition to providing daily/weekly electronic updates regarding the pandemic. 6) Conducted a series of workshops and teleconferences to inform and educate Arkansas hospitals about the implementation issues related to Medicare Recovery Audit Contractor (RAC) and Medicaid Integrity Program (MIP) reviews in the state. 7) Ensured that Arkansas hospitals were directly represented on the Executive Committee of the Statewide Health Information Technology Task Force, which will spearhead the development of a health information exchange for the state. 8) Conducted a membership satisfaction survey, with results showing the following member perceptions of the AHA: 93 percent said the Board of Directors represented their best interests in developing policy 92 percent reported the AHA s effectiveness as advocate 91 percent preferred the AHA s educational program over other organizations 92 percent reported the AHA staff s responsiveness above average 95 percent agreed that the AHA publications met or exceeded their needs 93 percent indicated the AHA s educational programs provided opportunities for respondents improvement in their particular field 85 percent indicated AHA would meet their needs and be relevant into the foreseeable future 9) Provided legal guidance for members in complying with a host of statutory, regulatory, and accreditation requirements, which included adapting to the new Joint Commission standards and survey process, and providing support with scope of practice, regulatory compliance, emergency preparedness, emergency medical services, and Medicare Conditions of Participation issues. 10) Provided in-state education for more than 4,000 hospital employees through workshops and Web-based instruction on subjects including compliance, revenue cycle improvement, CPT and ICD-9 coding, supervisory skills, case management, chargemaster maintenance, ambulatory payment classifications, quality and patient safety, legal issues, emergency readiness, governance matters, information technology and Medicare updates. 11) Conducted a comprehensive wage and salary survey covering more than 115 jobs/positions typically found in hospitals and made the report available at no charge as a member service to participating hospitals. 12) Communicated on an ongoing basis with the AHA membership, trustees, state legislators and government leaders, and the Arkansas congressional delegation on issues impacting the state s hospitals and healthcare systems through the weekly newsletter, The Notebook, the quarterly Arkansas Hospitals magazine, and the quarterly The Arkansas Trustee. 13) Offered a summer leadership conference and annual membership meeting to educate hospital CEOs and management teams about federal issues, primary care physician shortages, leadership, evidence-based medicine, quality and patient safety, social networking, local politics, decision making and healthcare reform. 14) Conducted a series of regional 26 Summer 2010 I Arkansas Hospitals

27 meetings for hospital trustees to discuss state and federal regulations and health reform issues. 15) Strengthened relationships between the AHA and offices of members of the state s congressional delegation and their chief health aides, ensuring that they were continually updated and briefed on hospitals issues and concerns. 16) Convened a special ad hoc committee composed to explore a suspected $400 million Medicaid shortfall and recommend options for an AHA response to Medicaid s request for input on the budget issue. 17) Initiated communications with the new director of the Arkansas Medicaid program to establish the framework for a strong working relationship. 18) Worked with Arkansas Medicaid program representatives to resolve concerns raised by the state s hospitals relating to inequities in Medicaid s SFY 2010 Inpatient Quality Initiative. 19) Coordinated efforts between the state s freestanding inpatient psych hospitals and DHS to make community mental health centers (CMHCs) more accountable for covering payments for adult inpatient psychiatric care provided to their clients. 20) Worked in conjunction with AHA Services, Inc. to obtain an agreement with a Californiabased company on details for a product designed to assist hospitals in negotiating contracts with third-party payers. 21) Gained cooperation from Arkansas Insurance Commissioner Jay Bradford to review a worsening set of complaints regarding payment practices of some Medicare Advantage plans operating in the state. 22) Conducted an in-state Mid- Management Hospital Leadership Series of eight workshops conducted throughout the year to help groom hospitals employees for advancement into mid-level management positions and awarded certificates to 30 individuals who participated in at least five courses in the eight-course series. 23) Sponsored a program recognizing hospitals for their excellence in marketing. 24) Provided up to $1,000 to help cover the costs for any hospital CEO who attended the American Hospital Association s 2010 Annual Membership Meeting. 25) Distributed an orientation manual for hospital governance leaders. 26) Approved a partnership with Best on Board to offer governance education, testing and certification. Scrub Those Copier Hard Drives! On a recent CBS News report, a story was aired about digital copy machines that are leased and returned, or sold outright. What many of us don t realize is that a copy machine contains an internal hard drive which stores an image of every copy it makes. So the next time you return a copy machine that you have leased, or sell your copy machine to a third party, make sure the hard drive is scrubbed to get rid of all the data that it has stored. Personal health information, social security numbers and other sensitive data in the wrong hands can put your facility in a legal and compliance world of hurt. Consider options like getting an encryption feature on your copiers, adding a section to your copier contract mandating your vendor to scrub the copier hard drive before it is reused, or obtaining software that totally scrubs hard drives such as CyberScrub, Active@Killdisk, InfoSweep, Comodo or WipeDrive. The CBS News story, Digital Photocopiers Loaded With Secrets, and a video are available at: eveningnews/main shtml?tag=cur rentvideoinfo;videometainfo. Summer 2010 I Arkansas Hospitals 27

28 Arkansas Hospital Association 80 th Annual Meeting and Trade Show October 6-8, 2010 Peabody Hotel and Statehouse Convention Center, Little Rock Mark your calendar now for these exciting events! HCAHPS Booster: What Leaders Need to Do Now Leadership Workshop, Wednesday, October 6 The Florence Prescription: Building a Culture of Ownership Keynote Address by Joe Tye, CEO and Head Coach, Values Coach, Inc. The Future of the Healthcare Marketplace: Life in the Gap and Life in the Game Keynote Address by Ian Morrison, Healthcare Futurist Executive Leadership Luncheon: Point/Counterpoint Elections 2010 Readmissions What Can and Cannot Be Prevented? Who Cares? How to Get Your Community Engaged and Supportive Leadership Lessons from Around the World ACHE Breakfast by Charles Evans Are Medical Groups in Your Portfolio? Critical Factors to Manage Your Investment ACHE Category I Workshop, Friday, October 8 And, don t forget the Annual Trade Show with more than 100 exhibiting companies and many fabulous door prizes! Printed brochures will be mailed August 2; program and registration information will soon be available online at We hope to see you October 6-8! Employee Benefits Administrators Claims Administration HIPAA & COBRA Administration Actuarial Services Fully Insured & Self Insured Products Contact Randy McIntosh to prepare an Employee Benefit Package that best suits your company. Employee Benefits Simplified. For more than 30 years, the professionals of Hagan Newkirk have partnered with healthcare providers throughout Arkansas to make administering employee benefits simple. With our online enrollment and HR management systems, ALL your benefit information is just a key stroke away. Online Enrollment/ HR Management Systems Cafeteria Plans Health Insurance Life Insurance Short/Long Term Disability Long Term Care Insurance Medicare Planning & Advice Supplemental Insurance Cancer, Critical Illness, Accident Vision Insurance Group Auto & Home Insurance Group Legal Deferred Compensation Plans Identity Theft Plans Retirement Plans 401k, 457 and 403b Endorsed by Benefit Management Systems, Inc Highway 51 North Madison, Mississippi AHA SERVICES, INC. A Subsidiary of the Arkansas Hospital Association Securities & Advisory Services Offered Through InterSecurities, Inc. Member NASD, SIPC Form #LD / Ranch Drive Little Rock, AR (501) hagan-newkirk.com 28 Summer 2010 I Arkansas Hospitals

29 2010 AHA Award Nominations Accepted through August 6 Nominations are open for the 2010 Arkansas Hospital Association (AHA) awards program. Awards will honor distinguished service by hospital chief executives, elected officials, healthcare-related professionals and hospital marketing and public information programs. The A. Allen Weintraub Memorial Award and Distinguished Service Award will be presented during the Association s 80 th Annual Meeting Awards Dinner Thursday, Oct. 7, at the Peabody Hotel in Little Rock. Arkansas C. E. Melville Young Administrator of the Year will be recognized by the Arkansas Health Executives Forum (AHEF). The Diamond Awards, cosponsored by the Arkansas Society for Healthcare Marketing and Public Relations, also will be presented at the 80 th annual Awards Dinner. In addition, the ACHE Regent s Awards will be presented at the ACHE Breakfast meeting that same morning. Criteria for each award follow: The A. Allen Weintraub Memorial Award, named for Allen Weintraub, long-time administrator of St. Vincent Infirmary Medical Center in Little Rock, is the highest honor bestowed upon an individual by the AHA. Those nominated for this honor should be hospital chief executive officers who are contributing to their hospitals and communities in much the same manner as did Allen. Those who remember him always mention his care and concern, not only for hospital patients, but also for his employees, his passion for quality healthcare for Arkansans, his recognition Awards will honor distinguished service by hospital administrators, elected officials, healthcare-related professionals and hospital marketing and public information programs. of duty to the community, and his visionary influence. The AHA s Distinguished Service Award is presented to individuals who, while not necessarily AHA members, have promoted a cause of the healthcare industry, thereby becoming entitled to special recognition. Examples of those eligible for this award are physicians, nurses, trustees, auxilians, community leaders and other deserving individuals. The 2010 recipients of the Weintraub and Distinguished Service Awards will be chosen by the AHA Board of Directors from those nominated. The C. E. Melville Young Administrator of the Year Award is named for the late C. E. Melville, administrator of Jefferson Regional Medical Center in Pine Bluff. The award recipient is selected by AHEF s Awards Committee. The award recipient must be under the age of 40, a resident of Arkansas for at least two years, employed by an Arkansas healthcare institution and meet requirements for active membership in AHEF. The 2010 Diamond Awards honoring excellence in hospital marketing and public relations will be presented in several categories, including advertising, annual report, Internet Web site, publications, special video production, and writing. Diamond Awards (for hospitals with 0-99 beds, beds, and 250 or more beds) will be presented in each category. Entries were accepted in April and will be judged individually by a panel of judges not affiliated with any Arkansas hospital. The 2010 ACHE Regent s Awards will honor outstanding healthcare executive leadership in two areas early career and senior level. The two recipients, selected by AHEF s Awards Committee, will be presented their awards at the ACHE Breakfast during the AHA Annual Meeting. Nominations and entries, accompanied by appropriate documentation, must arrive at AHA headquarters no later than August 6, Informational brochures providing details of all awards have been mailed to each hospital CEO and public relations/marketing officer. Please call Beth Ingram or Lyndsey Dumas at (501) with questions about the awards or the award process. Summer 2010 I Arkansas Hospitals 29

30 Mid-Management Series Resumes in September; Only Three Courses Remain in 2010 Plan now to attend the fall series of workshops in the AHA s Mid- Management Series, designed for individuals new to hospital supervisory or mid-level management positions, those being groomed for possible movement into middle-management positions, and experienced managers seeking a refresher course in the latest trends and topics. Class sizes are limited to 40 individuals to ensure effective interaction and learning. Sept. 16 s workshop is titled The Legal Aspects of Management. Course leaders Guy Wade and Dan Herrington, partners in the Little Rock law firm Friday, Eldredge and Clark, are experts in labor and employment law, regulation and commercial litigation, and workers compensation. The course is designed to help managers know the laws and regulations affected by each decision made. Many new managers are unfamiliar with the guidelines for the Family Medical Leave Act (FMLA) and what action needs to be taken in the case that they must discipline or dismiss an employee. This program will provide valuable information for new managers on the legal aspects of their jobs. In addition to FMLA, topics covered will include disciplinary action, interviewing questions, workers compensation, and legal strategies pertinent to day-to-day work force issues, including ADA. Susan Keane Baker, MHA, a nationally recognized healthcare professional with more than 30 years experience as a hospital administrator, director of a quality initiatives program for a national PPO with 19 million members, author of Managing Patient Expectations: The Art of Finding & Keeping Loyal Patients, and owner of her own company, will lead the October 6 Executive Leadership Workshop. This program is the pre-conference program associated with the AHA s annual meeting. (Participants may register to attend the entire threeday meeting, or simply the one-day Executive Leadership Workshop.) The one-day program will offer four separate leadership topics: Getting to 99 - Achieving a Culture of Service Excellence (inspiring your staff to interact with others in a positive manner), Listening Boot Camp (practical applications for effective listening), The Credibility/Likeability Makeover (developing the social skills and credibility needed to lead effectively), and I m Sorry to Hear That - Service Recovery Skills to Restore Patient Satisfaction (learning to resolve complaints with service recovery skills that help preserve the patient/hospital relationship). The final workshop of the year will be held October 21. John Baird, PhD, and Marsha Borling, RN, MA, will coach participants in Leading through Reform Without Losing Your Workforce. The course focuses on factors known to thwart meaningful change in the workplace and illustrates such unintended consequences as midlevel leader disengagement, union organizing activity and employee turnover. Participants will be encouraged to share their own experiences regarding the unique challenges they face in their efforts to enact organizational and cultural reform in the workplace. Baird and Borling are partners in Baird/Borling Associates, a group of experienced labor relations and human resources consultants. Those interested in the series may attend one or any number of programs. Individuals seeking an AHA Mid-Management certificate must attend and complete at least five of the seven programs offered during 2010, and also must complete one of two online courses. For more information or to register for these workshops, please contact Beth Ingram or Anna Sroczynski at , or Anna at asroczynski@arkhospitals.org. 30 Summer 2010 I Arkansas Hospitals

31 Growth of AHA Services Means More Savings Options for Arkansas Hospitals Celebrating its 25 th year, AHA Services, Inc. (AHASI) was organized in 1985 primarily to help member hospitals with group-purchasing discounts on insurance products. Since that time, AHA Services has expanded, at member hospitals requests, to span a number of services including management, purchasing, insurance, human resources and education resources. As a wholly owned subsidiary of the Arkansas Hospital Association, AHA Services negotiates group discounts across many areas for its member hospitals, saving hospitals thousands of dollars every year. If you have not recently examined the wide range of discounted services available to AHA member hospitals through AHASI, you may be pleasantly surprised at the many money-saving options available to your facility. We are often asked how we select the vendors AHASI chooses to endorse, says Tina Creel, Vice President of AHA Services, Inc. Often, AHA member hospitals come to us with a need, or we know of a need arising within several of our member hospitals. When this happens, we seek vendors that are willing to offer deep discounts to those hospitals wishing to participate in AHASI s group purchasing advantages. In other situations, vendors themselves present ideas to the AHASI board for its consideration. These are vendors that want to offer deeper discounts than they can offer to single hospitals alone, Creel says. They seek our endorsement so that they may offer their services to all Arkansas Hospital Association member hospitals, making these discounts available. AHASI exists to save member hospitals money. Through AHA, the member hospitals own AHASI, and there is no cost to AHA-member hospitals for participation in these programs for discounted services. If there is a service you have seen offered and you feel it would help your hospital, let us know, Creel says. We will examine it, work with vendor(s) to seek beneficial group purchasing discounts, and when value-added services are negotiated we will add the vendor to our list of endorsed companies. Profits earned by AHASI are returned to the AHA; since its inception in 1985, AHASI has returned more than $2 million to the AHA for assistance in its operations, in turn lowering member hospital dues. AHASI also helps sponsor educational meetings including the AHA Annual Meeting, the Summer Leadership Conference, and Affiliated Group sponsorships. New companies recently endorsed by AHASI and highly utilized by member hospitals include: Audit-Trax (RAC and MIC audit management), Background Information Systems of America (pre-employment background checks), ControlPay Advanced (automated accounts payable solutions), Denial Management Services (review and appeal of QIO, MAC, CERT, RAC and commercial insurance denials as well as DRG/coding changes), HealtheCAREERS Network (online recruitment, advertising and career solutions utilizing hundreds of healthcare recruitment sites), and Professional Data Services (revenue cycle management tools). Also highly utilized is carelearning, an education management solution offering Webinars, re-credentialing courses, nursing education courses, hospital-specific private courses, reporting and documentation, as well as mandatory education required by the Joint Commission and OSHA. Related to carelearning is careskills, a competency management system. Member hospitals also continue to utilize these endorsed vendors: AHA Workers Compensation Self-Insured Trust (Workers Compensation) Amerinet (Group Purchasing) BancorpSouth Insurance Services, Inc. (Liability Insurance Products and Services) Credit Guard (Protection Against Identity Theft) DocuVoice, LLC (Coding and Transcription) Guldmann, Inc. (Safe Patient Handling and Movement) Hagan Newkirk Financial Services, Inc. (Employee Benefit Programs) Harbour Resources (Leadership Recruiting Services) Life Insurance Company of North America (Volunteer Insurance Plan) Med Travelers (Temporary Allied Health Professional Staffing) MediTract (Contract Compliance Monitoring) Merritt Hawkins (Permanent Physician and Allied Health Professional Placement) Press Ganey (Satisfaction Measurement Services) Staff Care, Inc. (Locum Tenens) Utility Management Corporation (Gas and Power Management) Vision Service Plan (Vision Care) The Arkansas Hospital Association encourages its member hospitals to take advantage, wherever practical, of the lower prices and valuable benefits offered by AHA Services, Inc. and its service providers. As AHA member hospitals, you own AHASI, Creel says. Please remember to use it! Summer 2010 I Arkansas Hospitals 31

32 LEgal notes by Elisa M. White, Vice President and General Counsel, Arkansas Hospital Association RAC Medical Record Requests Because Connolly Healthcare, the Recovery Audit Contractor (RAC) for Region C, has begun sending Additional Documentation Requests for medical records in Arkansas, hospitals will want to review the maximum number of medical records that the RAC is allowed to request from institutional providers during Each fiscal year, CMS will establish a per campus maximum number of medical records that may be requested within a 45-day period. The record limitations for fiscal year (FY) 2010 are set out in the CMS publication entitled, Additional Documentation Limits for FY 2010 for Institutional Providers (as of Jan. 28, 2010). [In that publication, CMS notes that the definition of a campus for RAC documentation request limits differs significantly from the definition in 42 CFR (a)(2) used to determine eligibility for providerbased billing.] For RAC medical record request limit purposes, a campus is established based upon the healthcare provider s Tax Identification Number (TIN) and the first three positions of the ZIP code where they are physically located. Healthcare providers with different TINs will be treated as distinct entities and each will have its own medical record limit. However, if several different types of providers operate under one TIN, they may be grouped together as one campus if they share the same first three zip code digits. All Medicare providers that fall within this definition of hospital campus, including non-inpatient providers and units, will be subject to one RAC medical record request limit. Here are a couple of examples from the CMS publication that may help clarify this definition: Provider A has a TIN and two physical locations in ZIP codes and The two locations would qualify as a single campus for purposes of the medical record request limit. Provider B has a TIN and is physically located in as well as This provider would be treated as two distinct entities for purposes of the medical record request limit, and each location would have its own limit. The medical record limit for a campus is equal to 1 percent of all claims submitted for the previous calendar year (2008) divided by eight. So, for a provider that filed 50,000 inpatient claims and 70,000 outpatient claims, the limit would be (120,000 x.01) 8 or 150 medical records per 45 days. CMS has stated that a provider s limit will be applied across all claim types, including professional services. The medical record limit also is subject to an overall cap of 200 records per 45 days, subject to two exceptions. For providers that bill in excess of 100,000 claims (per TIN), the cap is 300 medical records per 45 days. Under the second exception, after the first six months of the fiscal year, the RACs may request to exceed the cap, but CMS must approve this request on a case-by-case basis. In addition, hospitals may want to consider the following pointers for submitting documents to the RACs: 1. Send the records, on a timely basis to avoid denials, by certified mail so that you can confirm that the RAC has received your response in case the records are misplaced after they are delivered. 2. Group the records by patient in chronological order so that they will make sense when reviewed. Do this regardless of whether you are sending the records on paper or on CD/DVD. 3. Clearly separate the records for each patient. One way you might do this is to put a colored sheet of paper at the beginning of each patient s record. It is recommended that you not rely only on rubber bands or paper clips to separate the records of each patient. We have been informed that the RACs scan the records when they are received, so the rubber bands and clips are removed immediately. Having a different colored cover sheet may help safeguard against pages of one patient s record being scanned as part of another patient s record. EMTALA and Selective Call A member hospital recently contacted the AHA to ask about EMTALA issues that may arise when physicians who are not on-call come to the emergency room to see their own patients. Importantly, in this case, the physician regularly took call at the hospital, but on the night in question, neither that physician nor any other physician of her specialty was on-call. EMTALA requires that each hospital maintain a list of physicians who are on-call to provide stabilizing treatment (or further evaluation) after the initial medical screening 32 Summer 2010 I Arkansas Hospitals

33 examination has been completed. See 42 C.F.R (r)(2). CMS has no requirements regarding how frequently on-call physicians are expected to be available to provide oncall coverage. For example, CMS has no rule stating that whenever there are at least three physicians in a specialty, the hospital must provide 24-hour/ seven-day coverage in that specialty. See CMS Survey & Certification Letter on pg. 1. Each hospital has the discretion to maintain the on-call list in order to best meet the needs of its patients according to the resources available to the hospital. 42 C.F.R (j) (1). However, CMS has indicated that hospitals should ensure that any services it offers to the general public during regular working hours are available through on-call coverage of the emergency department. See CMS Survey & Certification Letter at Tag A-2404/C Despite the flexibility offered by CMS with regard to on-call requirements, EMTALA issues may LEgal notes arise when a physician engages in selective call by refusing to participate in the call list at all and coming into the hospital to see her own patients. In that case, an EMTALA violation may occur. CMS has informed the AHA, however, that an EMTALA violation does not occur when the physician (1) regularly takes call but also (2) comes into the emergency department when she is not on-call to see a patient with whom she has an established doctor-patient relationship. Presidential Memorandum on Hospital Visits On April 15, the White House issued a Presidential Memorandum to the Secretary of Health and Human Services (the secretary) on hospital visitation. In recognition of patients need for compassion and companionship when they are admitted to the hospital, President Obama s memorandum calls for rulemaking by the secretary to ensure that patients wishes about who may visit and make medical decisions for them be respected. In contrast to the standard bureaucratic legalese typically contained in these types of statements, this Memorandum contained plain language explaining the president s reasoning: [E]very day, all across America, patients are denied the kindnesses and caring of a loved one at their sides whether in a sudden medical emergency or a prolonged hospital stay. Often, a widow or widower with no children is denied the support and comfort of a good friend. Members of religious orders are sometimes unable to choose someone other than an immediate family member to visit them and make medical decisions on their behalf. Also uniquely affected are gay and lesbian Americans who are often barred from the bedsides of the partners with whom they may have spent decades of their lives unable to be there for the person they love, and unable to act as a legal surrogate if their partner is incapacitated. For all of these Americans, the failure to have their wishes respected concerning who may visit them or make medical decisions on their behalf has real consequences. Accordingly, the president directed the secretary to issue regulations to ensure that hospitals participating in Medicare or Medicaid respect the rights of patients to designate visitors, including those identified in advance directives, and that visitors designated by the patient have the same visitation privileges as immediate family members. The regulations also must ensure that hospitals cannot deny visitation privileges based upon race, color, national origin, religion, sex, sexual orientation, gender identity, or disability. However, the regulations must take into account the need for hospitals to restrict visitation in medically appropriate circumstances. The Memorandum also instructed the secretary to take steps to ensure that hospitals are in compliance with existing regulations guaranteeing that patients have the right to designate an individual to make healthcare decisions on his or her behalf and ensuring that advance directives (such as durable powers of attorney for healthcare and healthcare proxies) are respected. The president also requested the secretary to issue guidelines and technical assistance on how hospitals can best comply with these regulations. The Memorandum concluded with a request for additional recommendations from the secretary within 180 days of addressing these issues. It is important to note that this Memorandum, standing alone, does not change existing laws or regulations. The secretary must issue regulations to implement the directives contained in the Memorandum. In the meantime, hospitals should take steps to ensure that their policies and procedures comply with the existing rules found at 42 C.F.R and 42 C.F.R (a). As always, the AHA will keep its members posted as additional regulations are published and implemented. Suggested topics for the Legal Note may be submitted to elisawhite@arkhospitals.org. The Legal Note is provided solely for informational purposes and does not constitute legal advice. Readers are encouraged to consult with their own attorneys about any legal issues, including those discussed in these articles. Summer 2010 I Arkansas Hospitals 33

34 30+ Hospitals Complete Trauma System Application Process Arkansas statewide trauma system is moving forward at a rapid pace. By June 30, more than 66 hospitals had received their start-up grants to go toward the establishment of a trauma center. In the fall, the survey and designation process begins for level 1, 2 and 3 hospitals. These surveys will ensure that those hospitals have the capabilities and services needed to be assigned their designated level. The Arkansas Department of Health will establish a trauma call center in the next year that will provide direction to hospitals and ambulances on transfers. The call center will be able to direct patients to the nearest hospitals with the most appropriate physician available. While the statewide trauma system is a work in progress, vast improvements are being made in Arkansas trauma patient care. Bob Langston, Director, Emergency Services; Dr. Bryan Clardy, Sebastian County Health Officer; Jo Wester, Administrator, Sebastian County Health Unit; and Jeff Johnston, CEO of St. Edward Mercy Health System in Fort Smith, accept a check from the Arkansas Department of Health for startup funds of St. Edward s trauma center. Crucial Conversations Training: Get Unstuck and Rapidly Improve the Results You Care About Most Join us Aug , 2010, at the Arkansas Hospital Association in Little Rock as we host an important and innovative course designed to help hospitals lift their performance across the board. Organizations mired in mediocre results (or perhaps not achieving the heights leaders had hoped for) can generally count on a predictable and correctable root cause: their employees are either not willing or not able to bring up touchy, controversial or high-stakes issues and handle these discussions well. Based on more than 25 years of research, Crucial Conversations training asserts one thing: If you can transfer skills that top performers routinely use to effectively handle crucial conversations particularly in the presence of authority then you can create more positive results across an entire organization (everything from quality to customer satisfaction to morale). The Arkansas Hospital Association will offer Crucial Conversations training, a two-day, 14-hour workshop that will include original video clips of before and after situations, in-class practice, group Based on more than 25 years of research, Crucial Conversations training asserts one thing: If you can transfer skills that top performers routinely use to effectively handle crucial conversations particularly in the presence of authority then you can create more positive results across an entire organization (everything from quality to customer satisfaction to morale). participation and personal reflection designed to explore and master these crucial skills. Crucial Conversations training teaches individuals and teams from different backgrounds, departments and specialties how to willingly and effectively surface and discuss ideas in a way that leads to virtually everyone buying into the decisions creating broad alignment, maximizing synergy and ensuring commitment to the best ideas. When taught, these skills inevitably result in rapid, sustainable and wide-reaching positive changes in the results that you care about most. During the workshop, participants will learn the following lessons: get unstuck, start with heart, learn to look, make it safe, master stories, state your path, explore others paths and move to action. Each attendee will receive a valuable toolkit including a 224-page training workbook; action planner; contact cards; Crucial Conversations: Tools for Talking When Stakes are High, the New York Times bestseller based upon this training course; an audio CD companion course; subscription to the Crucial Skills Reminder, a weekly service; Web resources; and more. Program and registration information is available at For more information, please contact Beth Ingram at the AHA, , or her at bingram@arkhospitals.org. 34 Summer 2010 I Arkansas Hospitals

35 Proposal Being Considered for Charity Care Disclosure Standards The Financial Accounting Standards Board accepted comments through May 17 on a proposed accounting standard for disclosing measures of charity care in financial statements. Proposed by the Board s task force on emerging issues, the standard would measure charity care based on the direct and indirect costs of providing charity care services. It said many healthcare entities already track the costs of providing charity care for regulatory or management purposes. The Board said the standard would enhance comparability, because some healthcare providers currently use a cost-based measure while others use a revenuebased measure. It said many healthcare entities already track the costs of providing charity care for regulatory or management purposes. For example, entities that file a Form 990 with the [Internal Revenue Service] are required to report a measure of charity care that is based on the entity s direct and indirect costs to provide those services, the proposal notes. See ContentServer?c=Page&pagen ame=fasb%2fpage%2fsecti onpage&cid= to find the proposal. YOUR OWN CUSTOMIZED HOSPITAL PATIENT GUIDE Our coverages include: Medical Professional Liability for hospitals, PHOs, IPAs, Surgery Centers, Clinics and Nursing Homes Medical Professional Liability for Physicians and Surgeons-- all specialties protected Specialized programs for group practices within networks and allied healthcare professionals Health Care Entity Employment Practices and Managed Care Liability Health Care Organization Directors and Officers and all related corporate and personal needs LOCAL Claims Handling 24/7 and LOCAL expert legal services Our Risk Management and claim specialists are experts in medical professional, general liability and property loss control. If you are self-insured, our Risk Management staff can provide services as part of a third party administrator. Call Tom Hesselbein for more information rkfl.com YOUR ospital patient information & Visitor Guide Free l 1 for your hospital No Cost To You. Fiscal restraints and budget line item cancellations have hospitals cutting back in all areas. Here s help. Our Patient Guides are an excellent perceived patient benefit saving your hospital time and money while informing and educating patients about your facility and their care. Best of all, there s no effect on your bottom line, we produce them at absolutely no cost to you. Your full-color, glossy, Patient Guide is completely customized for your hospital. You also get an easy-to-use epub version to send to patients with -also at no cost. Inform and educate your patients quickly and efficiently. Your professional staff can now spend less time answering routine questions. Your hospital needs one and you can get it free. For complete, no obligation, information on how we can provide your Hospital Patient Guide, call or today Gary Reynolds or greynolds@pcipublishing.com The professional liability and property protection for your healthcare facility deserves the expertise of specialists. The full time healthcare division of Ramsey, Krug, Farrell & Lensing is the largest and most experienced group of medical professional liability and property specialists in Arkansas and one of the largest in the Southeast. RKFL is a sponsored service provider of the Arkansas Hospital Association and administrator for the AHA Worker s Compensation self Insurance Trust. P.O. Box Little Rock, Arkansas (501)

36 From the Arkansas Department of Health Arkansas Department of Health Issues Advisory on K2 Synthetic Marijuana Use Healthcare providers should be aware of signs and symptoms reported among some users of K2, a synthetic marijuana product that is legal and readily obtainable in Arkansas. Providers should note that use of this substance, alone or in combination with other substances, may cause symptoms including anxiety coupled with agitation, tachycardia, elevated blood pressure, pallor, vomiting, tremors, hallucinations, and possibly seizures. The Arkansas Department of Health asks healthcare providers to report to the Arkansas Poison and Drug Control Information Center at any patient with compatible signs and symptoms that are thought to result from K2 use. K2 also known as K2 Spice, Spice, K2 Summit, Genie, Zohai and various other names is an unregulated mixture of dried herbs that are sprayed with a synthetic cannabinoid-like substance and sold as incense. The product is typically burned, and the smoke is inhaled for effect. The cannabinoid-like substance in this product acts on the same brain receptors as does marijuana. A great many of these substances have been synthesized, and it would not be possible to know how much or which, if any, of these many synthetics are present in K2 without doing an extensive chemical analysis. K2 and similar products do not test positive as marijuana or as any other illicit substance when subjected to urine drug testing. K2 is sold legally in Arkansas and it is available for purchase from retailers in many parts of the state. The product is also widely available on the Internet. Since early February 2010, poison control centers in other states have received questions from emergency department (ED) physicians regarding management of patients who have had adverse reactions after smoking K2. The Arkansas Poison and Drug Control Information Center has received calls about K2. Signs and symptoms associated with smoking K2 as reported from other states are: tachycardia, elevated blood pressure, anxiety, pallor, numbness and tingling, vomiting, agitation, hallucinations, and, less commonly in some cases, tremors and seizures. Although these are not the usual responses associated with marijuana use, most have been reported with some frequency as adverse effects in naive marijuana users or in some cases when highly potent marijuana products are used. It is also possible that some of these reactions are a result of the other unrecognized chemicals present in the smoked K2 that are not related to the cannabinoid receptor system. The Arkansas Department of Health recommends the following: Ask about K2 use in patients who present for care with compatible symptoms (anxiety coupled with agitation, tachycardia, elevated blood pressure, pallor, vomiting, tremors, hallucinations, and possibly seizures) and when substance use is suspected. Be aware that these chemically-related cannabinoids do NOT cross-react with delta-9-tetrahydrocannabinol (THC) on the standard urine immunoassay (UDS) tests that reference laboratories use for comprehensive drug screens. Executive Summary of Protecting Patient Data Report Available from AHA The American Health Lawyers Association s (AHLA) Executive Summary of the report Protecting Patient Data New Rules, New Headaches; Risk Management: What Board Members and Senior Managers Need to Know has been made available to the Arkansas Hospital Association to share with its member hospitals. The 17-page summary, written by Steven J. Fox, Peter D. Hardy and Vadim M. Schick of the AHLA s Health Information and Technology and Business Law and Governance Practice Groups, discusses the Red Flags Act, HIPAA and the HITECH Act, steps to minimize exposure to a data breach, and responses to a detected Red Flag or to an intentional data breach. Also included is an appendix outlining the HITECH Act s breach notification requirements. If any AHA-member hospital would like a copy of the executive summary, you may contact AHA Vice President and General Counsel Elisa M. White at Summer 2010 I Arkansas Hospitals

37 ADVOCACY/Legislation Grassroots Champion Award Presented to Camden s James David Cicero David Cicero (left), President of Ouachita County Medical Center in Camden, received the American Hospital Association s Grassroots Champion Award during the association s annual meeting in Washington, D.C. With Cicero is Robert Bo Ryall, Executive Vice President and Chief Lobbyist for the Arkansas Hospital Association. The American Hospital Association (AHA), in partnership with state hospital associations, in April awarded 52 individuals with the American Hospital Association Grassroots Champion Award. The Arkansas award went to James David Cicero, president of Ouachita Medical Center in Camden. As a 2010 Grassroots Champion, Cicero is recognized for exceptional leadership in generating grassroots and community activity in support of a hospital s mission. The American Hospital Association Grassroots Champion Award was created to recognize those hospital leaders who most effectively educate elected officials on how major issues affect the hospital s vital role in the community, who have done an exemplary job in broadening the base of community support for the hospital, and who are tireless advocates for hospitals and their patients. We depend upon strong local voices to help tell the story of hospitals as cornerstones of the communities they serve, said Rich Umbdenstock, AHA president and CEO. This award is a small token of our appreciation for the hard work and dedication of these individuals to improving health and healthcare in America. Summer 2010 I Arkansas Hospitals 37

38 ADVOCACY/Legislation Reform, Health IT, Cost Containment Major Topics at American Hospital Association Annual Meeting The 2010 Annual Membership Meeting of the American Hospital Association (AHA) April brought together hospital leaders from across the country to Washington, D.C., to hear from key policy-makers and experts and to advocate for patients and communities. General sessions included a Federal Forum, where lawmakers from both sides of the aisle discussed healthcare reform and revising the Health IT rule. Though there was disagreement between the party representatives over the recently enacted healthcare reform legislation, bipartisan support was voiced for revision of the Centers for Medicare & Medicaid Services (CMS) proposed rule on meaningful use of electronic health records (EHR). House Speaker Nancy Pelosi (D-CA) thanked the AHA for its leadership and support in enacting the recent health reform legislation, saying, In backing reform, you stood up for the well-being of all Americans. She told AHA members, You gave us the confidence that this could be done. Thank you for the role you played in passing this historic legislation. Senator John Cornyn (R-TX) told AHA members that congressional Republicans will seek to repeal and replace the healthcare law. The Senate Finance Committee member said Republicans will advocate for changes to the current legislation. Representatives Chris Van Hollen (D-MD) and Michael Burgess (R-TX) both strongly criticized CMS s proposed rule on meaningful use of EHR and the proposed penalties for hospitals failing to meet the final requirements drafted by CMS. Burgess urged Hospital leaders, including the Arkansas delegation to the annual meeting, delivered that stopthe-cuts message in meetings with their legislators and staff on Capitol Hill. hospital leaders to stay involved in the rulemaking process, saying hospital advocacy can affect the course of future regulatory policy. He co-sponsored a bipartisan letter signed by 249 U.S. representatives, including Van Hollen, who urged CMS to revise its proposal that hospitals meet 23 requirements to qualify as meaningful users of EHR systems. Speaking on healthcare reform, Health and Human Services Secretary Kathleen Sebelius said passage was the first step, but now the real work begins at transforming our healthcare delivery system. She stressed the need to change the incentives in our healthcare system so doctors and hospitals get rewarded for providing high-quality care, saying that too often, payments are made based on quantity, not quality... volume, not value. She said the new law s Medicare demonstration projects are intended to spur more coordinated care, and said it s never been more important for HHS and hospitals to work together to improve the quality of care for all Americans. Speaking specifically to those demonstration programs, former Senate Majority Leaders Tom Daschle (D-SD) and Bill Frist (R-TN) told hospital leaders that demonstration programs could urge delivery system and payment reforms that control health spending far more effectively than cutting provider payments. Both said success of cost containment efforts may largely depend on CMS s commitment to experimentation in Medicare. AHA President and CEO Rich Umbdenstock told AHA members that the hospital field must make sure healthcare reform s foundation supports and advances what hospitals are doing across the country to make care safer and more efficient, effective and transparent. He observed that the recently enacted healthcare legislation contains key principles from the AHA s Health for Life reform framework. The healthcare mantra used to be to do more with less, he said. That s changing to do better with less. He said many hospitals are jumping ahead of this wave of change... delivering higher quality more efficiently and lowering costs to improve value. Speakers at the meeting also issued a call for CMS to reverse course on PPS cuts. In his remarks at the meeting, AHA Executive Vice President Rick Pollack urged hospital leaders to let lawmakers know that the cuts in the proposed inpatient prospective payment system (PPS) rule for fiscal year (FY) 2011 are unacceptable. He said the proposal ignores the reality that hospital patients are getting sicker and would undermine care in communities across the country. Hospital leaders, including the Arkansas delegation to the annual meeting, delivered that stopthe-cuts message in meetings with their legislators and staff on Capitol Hill. 38 Summer 2010 I Arkansas Hospitals

39 ADVOCACY/Legislation 27 Represent Arkansas Hospitals in Meetings with Congressional Delegation Arkansans visit with U.S. Senator Blanche Lincoln while in Washington for the American Hospital Association Annual Meeting April A group of 27 hospital CEOs, administrative team members, medical staff, trustees, auxilians and Arkansas Hospital Association (AHA) staff members made the trip to Washington, DC in April for the annual membership meeting of the American Hospital Association, and more importantly, took part in individual meetings with members of Arkansas congressional delegation. Two main concerns discussed with Senators Blanche Lincoln and Mark Pryor and Representatives Marion Berry, Vic Snyder, Mike Ross and John Boozman were the need to guard against widespread unionization among hospital employees and securing an extension of the increased FMAP rate allowed for states under the American Recovery and Reinvestment Act of 2009 (ARRA). Other major points were addressed as well, including support for changes in Medicare policy regarding reimbursement for hospitals that accept patients evacuated from other states hospitals during a time of national emergency and reducing burdensome reporting requirements of the current Meaningful Use rule pertaining to Electronic Health Records. The Arkansas group also met with aides and staff members from the offices of the state s senators and representatives regarding the issues. These meetings help solidify our ongoing positive relationships with our congressional delegation, says Phil Matthews, president and CEO of the AHA. It is vital that we keep in close communication with these aides and staff members, as they are key in relaying the local message to our elected officials. Arkansas Issues Discussed with Congressional Delegation The approval and signing of the Patient Protection and Affordable Care Act of 2010 and its companion, the Reconciliation Act of 2010 addressed many concerns of Arkansas hospitals involving healthcare access and payment issues. However, reforming healthcare insurance, financing and delivery systems was not the cure-all for hospitals. Other items requiring attention are: 1) The Employee Free Choice Act (H.R. 1409/S. 560) These companion bills are still in the legislative queue. While we do not know when, or if, they will be further considered, the Arkansas Hospital Association remains firmly opposed to both. We asked that our delegation preserve secret ballot union elections, as the AHA believes this to be in the best interest of Arkansas hospitals and our state. We asked that members oppose efforts to pass the bills. 2) Extending the ARRA s Enhanced FMAP Percentages The length and depth of the recession means that states will continue to face significant budget shortfalls long after the enhanced FMAP provisions expire on Dec. 31, Governor Mike Beebe has already called for state Medicaid reductions during SFY Extending the FMAP boost, even for another six months, would limit those cuts and assist hospitals in maintaining services and further stabilizing the economy. We asked that our delegation vote in favor of extending the enhanced FMAP provision before it expires. 3) NDMS Changes Several hospitals in the Metropolitan Little Rock area participated as part of the National Disaster Medical System (NDMS) following Hurricane Katrina in August- September 2005 and again during and after Hurricanes Gustav and Ike in September-October On both occasions, they received many patients evacuated from Louisiana hospitals in the storms paths. Reimbursement problems have not been resolved. Hospitals have, in many cases, been left to absorb the costs of caring for these patients. We asked our delegation s support for changing Medicare policies to recognize that during disaster-related evacuations when the NDMS is activated, NDMS can be the primary payer for all evacuated patients, in essence suspending Medicare s coverage for those patients during the evacuation period until the patient is returned to the hospital from which he/she came. continued on page 40 Summer 2010 I Arkansas Hospitals 39

40 ADVOCACY/Legislation 4) Access to Capital An increased difficulty in securing debt financing from banks and other financial institutions and other payment pressures are leading to a decline in hospitals financial health at a time when demand for healthcare services is growing. We asked our delegation to help by supporting various steps to improve hospitals access to capital. 5) Meaningful Use and EHR Incentives CMS proposed rule on the Medicare and Medicaid electronic health record (EHR) incentive programs lays out the expectations for healthcare providers who will qualify for Medicare and Medicaid payments established under the American Recovery and Reinvestment Act of 2009 (ARRA). If successfully implemented, the law should improve EHR capabilities, leading to better clinical care, improved coordination of care, fully informed and engaged patients, and improved public health. The proposed rule overlooks the fact that constructing a nationwide health information network interconnecting multiple healthcare providers across a region, state or country and equipping them with the capability to exchange key clinical information to improve patient care will require buy-in and cooperation from all parties. For that reason, the AHA is very concerned about the definition of meaningful use, the short transition times and other conditions for accessing the HIT funds as outlined in the proposed rule. We asked our delegation to press for changes in the proposed rule to: Lengthen the timeframe for achieving meaningful use. Limit applicable objectives to ensure that CMS takes a phased approach, allowing hospitals to be considered meaningful users while meeting fewer requirements in the earlier years and gradually complying with the more stringent requirements. Reduce burdensome reporting requirements on 23 HIT functionality measures, at the same time that reporting on an additional 35 Medicare quality measures is being mandated. Q u a l i t y / P a t i e n t S a f e t y by Pamela Brown, RN, BSN, CPHQ TeamSTEPPS in Arkansas: Changing Attitudes Toward Healthcare In this time of economic upheaval, pressure remains strong in the healthcare industry to increase efficiency and keep quality high. The responsibility for quality spans all levels of the hierarchy of healthcare: physicians, nurses, technicians, lab techs, housekeeping, administration, etc. All have a role in the care of the patient. The Arkansas Foundation for Medical Care has recently become a part of a unique national effort to improve quality and reduce medical errors. TeamSTEPPS (Team Strategies and Tools to Enhance Performance and Patient Safety) was developed by the U.S. Department of Defense in collaboration with the Agency for Healthcare Research and Quality. The program, which is part of the National Patient Safety Initiative, focuses on improving patient safety. Since before the Institute of Medicine issued its landmark report on medical errors 10 years ago, there has been much study regarding the cause of errors in hospitals. Many of the quality experts who conducted these studies concluded that the systems and organizations themselves are the cause, not individual persons. Communication and care team dysfunction seem to be the root cause of many medical errors. The TeamSTEPPS program is designed to improve patient safety by teaching healthcare professionals key communication strategies and specific teamwork skills. As part of the Centers for Medicare & Medicaid Services (CMS) 9 th Scope of Work for Quality Improvement Organizations, AFMC is providing TeamSTEPPS training for hospitals participating in the methicillin-resistant Staphylococcus aureus (MRSA) quality improvement project. CMS has funded QIOs across the country to provide this training to hospitals participating in this project as a strategy to reduce MRSA in their organizations. During a two-and-a-halfday master trainer seminar, hospital staff members receive comprehensive training that allows them to return to their organization and train others. The program in Arkansas has been very well received thus far, with 83 individuals from 11 hospitals participating. The core curriculum includes strategies to optimize the use of information, people, and resources to achieve the best clinical outcomes for patients, increase team awareness, and clarify team roles and responsibilities. The training uses a team competency model, which focuses on the skills required to create a high-performing team and is centered on team knowledge, attitudes and performance. Participants develop skills in the areas of lead- 40 Summer 2010 I Arkansas Hospitals

41 Q u a l i t y / P a t i e n t S a f e t y This diagram illustrates the fundamental concepts and processes of the TeamSTEPPS program. ership, mutual support, communication and situation monitoring. They learn tools to resolve conflict, improve information sharing, and eliminate barriers to quality and safety. One such tool is a huddle, which is used for reinforcing the plans already in place for treatment of a patient in response to changes in the environment of care so that all team members can adapt appropriately. A physician, for example, might call a huddle before performing a bedside procedure. It helps all team members develop a shared understanding of the plan of care. TeamSTEPPS training is divided into three phases: a pre-training assessment for site readiness, training for onsite trainers and healthcare staff, and a plan for implementation and sustainment, the TeamSTEPPS term for ongoing use of the program. PRE-TRAINING ASSESSMENT Before an organization takes on any initiative that involves a change in culture, it must determine its readiness. The pre-training assessment is sometimes referred to as a training needs analysis, and can be done through a site assessment. This process helps to identify the focus of the training and to address any teamwork gaps. The information from the assessment is then used to identify critical training needs and develop training objectives. It is also used to determine the organization s patient safety culture imperative in implementing TeamSTEPPS key staff to be involved (the ChangeTeam) and resources. During this phase, some organizations determine that they must focus on creating a culture conducive to patient safety before implementing TeamSTEPPS. TRAINING FOR ONSITE TRAINERS AND HEALTHCARE STAFF TeamSTEPPS training should include all members of the healthcare team: doctors, nurses, unit clerks, LPNs, aides, pharmacy and administration. Some organizations choose to implement the program gradually, starting with the surgical department or the emergency department, for example, before broadening it to the whole organization. TeamSTEPPS training involves both a train-the-trainer course and a train-the-participant course. The train-the-trainer (Master TeamSTEPPS Course) seminar teaches the fundamental concepts of the program and how participants can successfully implement it in their own organizations. It also focuses on providing them with the skills for training others and requires a teach back of material during the training. The train-the-participant training (referred to as the Fundamental Course), which lasts four to six hours, teaches staff the basic fundamentals and how to implement TeamSTEPPS within their organization. IMPLEMENTATION AND SUSTAINMENT As part of this phase, AFMC offers support and technical assistance to participants during the initial training at their organization. Providers are charged with developing a plan for implementation that allows testing of actual strategy implementation, assessing whether the aim of the implementation is being achieved and providing organizational progress updates. To create sustainment of these strategies within the organization, progress must be monitored. Ongoing involvement by both administrative and clinical leadership is key. Organizations that have successfully implemented and sustained the TeamSTEPPS program have used continued training of new staff and periodic in-services to refresh existing staff. According to the official TeamSTEPPS Web site ( The designated change team manages sustaining interventions through coaching and observing team performance. An effective sustainment plan should account for ongoing assessment of the effectiveness of the intervention, continued on page 42 Summer 2010 I Arkansas Hospitals 41

42 Q u a l i t y / P a t i e n t S a f e t y sustainment of positive changes, and identification of opportunities for further improvements. Other key sustainable features include: Provide a supportive practice environment Ensure leaders emphasize new skills Provide regular feedback and coaching Celebrate wins Measure success Update the plan While the future of healthcare may seem to be in turmoil, TeamSTEPPS serves as a great base on which to build and maintain an environment that promotes good practice as well as sustainability. Whether your institution has a huddle before a procedure, or a nurse uses a communication tool when calling a physician, Arkansas patients can truly benefit when an organization implements a program such as TeamSTEPPS. For more information, contact AFMC at or Pamela Brown, RN, BSN, CPHQ, is the Arkansas Foundation for Medical Care s assistant vice president for the Health Care Quality Improvement Program Quality Awards Go to 43 Facilities Representatives of Saline Memorial Hospital accept their quality award. A total of 43 hospitals, nursing homes, doctor s offices and home health agencies earned recognition recently in the Arkansas Foundation for Medical Care s annual Quality Awards program. The awards are designed to recognize individual performance improvement in AFMC s quality improvement projects. They spotlight several facets of quality healthcare, from creating innovative community projects to using electronic health records to identify and close gaps in the quality and amount of healthcare received by various ethnic and socioeconomic groups. Barry M. Straube, MD, director of the Office of Clinical Standards and Quality (OCSQ) and the chief medical officer at the Centers for Medicare & Medicaid Services (CMS), presented the awards at a luncheon Friday, May 21, as part of AFMC s annual Quality Conference in Little Rock. A complete list of award winners and award criteria is available at AFMC Leadership Changes: John Robbins Named Interim President and CEO John Robbins John N. Robbins, FACHE, has been named the Arkansas Foundation for Medical Care s interim president and chief executive officer. Robbins replaces Dr. Nick Paslidis, who recently resigned to pursue other career interests. Robbins is currently president of Robbins and Associates Consulting of Germantown, Tennessee, and is past president and CEO of Conway Regional Health System. He previously served as executive vice president of the Baptist Memorial Health Care Corporation, Inc., in Memphis. He has more than 40 years of experience in healthcare administration in Arkansas, Tennessee, Florida and Mississippi, and is board-certified in healthcare management as a fellow in the American College of Healthcare Executives. He has also served on a number of boards, including the Arkansas Foundation for Medical Care and Arkansas Hospital Association. Robbins has also been a Regent for Arkansas to the American College of Healthcare Executives. He holds a master s degree in healthcare administration. With the recent passage of healthcare reform legislation, this is an exciting time to lead an organization like AFMC, Robbins said. I look forward to meeting the challenges of our industry s changing landscape while we continue to provide healthcare improvement services to the citizens of Arkansas. 42 Summer 2010 I Arkansas Hospitals

43 The Real Measure of Health Reform Success? Changing Opposition to Approval HEALTHCARE REFORM by Paul Cunningham, Senior Vice President, Arkansas Hospital Association HP Enterprise Services, an arm of Hewlett-Packard, the American multinational information technology corporation that contracts to operate Medicaid Management Information Systems in Arkansas and several other states, hosted a one-day healthcare symposium in May for its clients and a few other invited guests. The highlight of the day was back-to-back appearances by former Senate Majority Leader Tom Daschle and former Massachusetts Governor Mitt Romney, both of whom offered their takes on the recent health reform legislation. The presentations, though separate, brought to mind the old point/ counterpoint segments which occupied the closing slot on CBS s 60 Minutes for a few years during the 1970s. Daschle aptly filled the role of Newsweek columnist (no, not communist) Shana Alexander, who always expressed a more liberal voice, and Romney did a fine job of channeling the conservative viewpoint of James J. Kilpatrick, a columnist at the time for the nowdefunct Washington Star. Daschle and Romney weren t on stage together, so there was none of the catty back-and-forth that characterized the on-tube relationship between Alexander and Kilpatrick ( Oh, come on, Jack! Now, see here, Shana! ). But, like the two writers on so many issues, and particularly like the American people on the subject of health reform, their views of the law were so diametrically opposed that you had to wonder if the pols were both talking about the same thing. Knowing the divisive nature of the debate over reform during the past year, it s more than likely that, had the barbs been thrown, they might have taken on an air of those exaggerated Saturday Night Live point/counterpoint parodies where Jane Curtain first presented the liberal side of an issue before Dan Aykroyd began his response saying, Jane, you ignorant slut. Curtain s lead-in to a defense of her position would be, Dan, you pompous ass. It would have been like a mini health reform town hall meeting. One thing which both men agreed on is that in spite of the legislation, health reform is a work in progress. Success or failure, security or intrusion, balance or disproportion: those things lay in the hands of the secretary of HHS, who eventually will attach many working parts onto the legislative framework. The phrase the secretary shall appears regularly throughout the law more than 1,000 times by some counts often followed by a directive to develop regulations for everything from coverage and affordability to delivery system changes, quality and transparency. That translates into a lot of new rules and regulations. The devil really is in the details. It remains to be seen whether the general public will eventually warm to the idea of health reform in the years ahead, but the fact is that the status quo 46 million uninsured, arbitrary coverage denials and the prospects that health costs could surpass 34 percent of GDP in a matter of years is clearly unacceptable. There s an odds-on chance that even folks most adamantly opposed to the law today would never let go of their coverage benefits down the road. If the reform measures prove to reduce the deficit significantly over the next 20 years, as predicted, then all the better. During the symposium, Sen. Daschle told a story about the 1908 Democratic National Convention in Denver where William Jennings Bryan received his third and final presidential nomination. At the time, the U.S. was bogged down fighting an insurgency in a distant land (the Philippines), Americans were worried about the flood of immigrants (from Europe), and greedy Wall Street bankers were getting the blame for a tanking economy. Bryan supposedly commented during the gathering that he wished he could return in 100 years to see how the nation survived. Had he been able to attend the 2008 convention in Denver 100 years later, he would have found the U.S. bogged down fighting insurgencies in two distant lands, Americans worried about the flood of immigrants and a tanking economy, with greedy Wall Street bankers still footing the blame. But, he also would have found an America strengthened through fights to preserve freedom in two World Wars, Korea, Vietnam, Iraq and Afghanistan, the Great Depression, a battle over civil rights, the assassination of one president, the resignation of another and the impeachment of yet another, and too many political scandals to count. And, Bryan may have been surprised at current day programs like the Federal Reserve, Social Security, Medicare and Medicaid. All were controversial in the beginning for their perceived insidious nature. But, they were later not only accepted, but embraced by the same people who once fought them tooth and nail. Don t be surprised if a similar fate awaits healthcare reform. Summer 2010 I Arkansas Hospitals 43

44 HEALTHCARE REFORM Health Reform Highlights The year-long national debate over health reform ended in March, when President Obama separately signed into law the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA), which made modifications to the PPACA. Together, this historic legislation constitutes the largest change to America s healthcare system since the creation of Medicare and Medicaid. The law addresses changes to be made over the next decade in the following areas; Consumers and Purchasers: The PPACA expands coverage to 32 million people through a combination of public program and private-sector health insurance expansions. Key insurance reforms include a mandate for individuals to have insurance; employer responsibility to provide or contribute to health insurance; low-income subsidies to help individuals purchase insurance; an expansion of Medicaid eligibility; and the creation of state-based health insurance exchanges. Payment and Revenue: A number of steps will be taken to reduce the rate of increase in Medicare and Medicaid spending through reduced payment updates, decreases in disproportionate share hospital payments, and financial penalties. Additional financing is provided through a combination of taxing high-premium health insurance plans, raising the Medicare tax for high-income individuals and imposing annual fees on the pharmaceutical, medical device, clinical laboratory and health insurance industries. Delivery System Reform and Quality: Key delivery system reforms are employed to better align provider incentives to improve care coordination and quality and reduce costs. These reforms include value-based purchasing; pilot projects to test bundled Medicare payments; voluntary pilot programs where qualifying providers - including hospitals - can form Accountable Care Organizations and share in Medicare cost savings; and financial penalties for hospitals with excessive readmissions. Wellness and Work Force: Grants and loans will enhance work force education and training to support and strengthen the existing work force and to help ease healthcare work force shortages. Public and private insurers to cover recommended preventive services, immunizations and other screenings with zero enrollee cost sharing (no co-payment or deductible). It also initiates policies to encourage wellness in schools, workplaces and communities, and takes steps to modernize the public healthcare system. Other: The law includes provisions to reduce waste, fraud and abuse in the Medicare and Medicaid programs, and new reporting requirements are imposed on taxexempt hospitals. In addition, the law also incorporates several oversight programs including new requirements for physician-owned hospitals. Historic Health Reform Law: What it Means to Local Hospitals On March 23, President Obama signed into law H.R. 3590, The Patient Protection and Affordable Care Act. A companion bill, H.R. 4872, The Health Care and Education Affordability Reconciliation Act of 2010, passed both chambers of Congress on March 25. Together, the two pieces of legislation combine to form the Affordable Care Act of The historic legislation contains an individual coverage mandate, low-income subsidies, an expansion of Medicaid, insurance reforms and the creation of state-based health insurance exchanges. The law also calls for new, non-profit, consumer-operated and -oriented plans (or co-ops), as well as multi-state health plans overseen by the federal Office of Personnel Management, to compete with other private health plans in the insurance exchanges. Financing includes taxing high-premium health insurance plans, raising the Medicare tax for high-income individuals and imposing annual fees on the pharmaceutical, medical device, clinical laboratory and health insurance industries, as well as reducing Medicare and Medicaid provider payments. Among its many provisions, the healthcare reform package: Expands access to coverage to 32 million individuals by 2019 through a combination of Medicaid expansions and private section health insurance reforms. That means many patients who currently have no health insurance will have a source of payment for care they receive. Decreases Medicaid DSH payments by $14 billion and Medicare DSH payments by $22.1 billion, with reductions beginning in fiscal year (FY) Reduces hospital Medicare PPS payment updates by approximately $112.6 billion over 10 years. For 2010 (effective April 1) and 2011, the hospital payment update would be reduced by 0.25 percentage point. Beginning in 2012, the market basket would be reduced by an estimate of productivity, with added reductions of 0.1 percentage point in 2012 and 2013, 0.3 percentage point in 2014, 0.2 percentage point in 2015 and 2016, and 0.75 percentage point in 2017, 2018 and In 2020 and beyond, hospital payment updates would be reduced by productivity. The final bill eliminates a provision in the Senate bill 44 Summer 2010 I Arkansas Hospitals

45 HEALTHCARE REFORM calling for the reductions not to occur if certain coverage targets are not met in Establishes the following programs tied to hospital payments: 1. A national, voluntary, five-year pilot program on bundling payments to providers around 10 conditions. If successful, the Secretary of Health and Human Services (HHS) may expand the pilots after 2015; 2. Financial penalties on hospitals for excess readmissions when compared to expected levels of readmissions based on the 30-day readmission measures for heart attack, heart failure and pneumonia that are currently part of the Medicare pay for reporting program (excluding critical access hospitals [CAH] and post-acute care providers); 3. A Value-Based Purchasing (VBP) program for hospital payments beginning in FY 2013 based on hospitals performance in 2012 on measures that are part of the hospital quality reporting program. The program is budget neutral, with 1 percent of payments allocated to the program in FY 2013, growing over time to 2 percent in 2017 and beyond; and, 4. An additional 1 percent penalty for hospitals in the top quartile of rates for hospital acquired conditions. Includes $400 million for payments for FYs 2011 and 2012 to section 1886(d) hospitals located in counties that rank in the lowest quartile for age, sex and race adjusted per enrollee spending for Medicare Parts A and B. The payments would be proportional to each hospital s share of the sum of Medicare inpatient PPS payments for all qualifying hospitals. Eliminates the exception for physician-owned hospitals under the Stark Law and grandfathered existing hospitals with a Medicare provider number as of Dec. 31, But, it provides limited exceptions to the growth restrictions for grandfathered physicianowned hospitals, including a new exception for hospitals that treat the highest percentage of Medicaid patients in their county (and are not the sole hospital in a county). Creates a new, independent board that would make binding recommendations on Medicare payment policy and non-binding recommendations for changes in private payer payments to providers. It excludes Medicare PPS hospitals (but not CAHs) through Extends eligibility for the 340B drug discount outpatient program to children s, cancer and CAHs, as well as certain sole community hospitals and rural referral centers. It does not expand the program for existing 340B hospitals to cover inpatient drugs, and it exempts orphan drugs from required discounts for new 340B entities. Sustains and improves access to care in rural areas through these various improvements: 1. Extending the outpatient hold-harmless payments for certain hospitals in rural areas 2. Improving payments for low-volume hospitals 3. Ensuring that CAHs are paid 101 percent of costs for all outpatient services regardless of the billing methods elected 4. Extending and expanding the Rural Community Hospital Demonstration Program 5. Extending the Medicare Dependent Hospital program for one year 6. Extending the Medicare Rural Hospital Flexibility Program through Extending reasonable cost reimbursement for laboratory services in small rural hospitals Includes one-year extensions of certain Medicare provisions, including Section 508 wage index reclassifications; increasing the work geographic index to 1.0; grandfathering direct billing for anatomic pathology technical component services; add-on payments for ground ambulance; and a 5 percent increase in physician payment for certain psychiatric therapeutic procedures. Extends for two years selected long-term acute care hospital (LTCH) provisions in the Medicare, Medicaid and SCHIP Extension Act of It further delays full implementation of the 25 percent Rule, the short-stay outlier cuts, and the one-time budgetneutrality adjustments planned by CMS. Extends current moratorium on new LTCH beds and facilities, with exceptions. Creates a 3 percent add-on to payments made for home health services to patients in rural areas. The add-on applies to episodes ending on or after April 1, 2010, through Dec. 31, Extends the exceptions process for outpatient therapy caps (see Section 3103). Outpatient therapy service providers may continue to submit claims with the KX modifier, when an exception is appropriate, for services furnished on or after Jan. 1, 2010, through Dec. 31, The therapy caps are determined on a calendar year basis, so all patients began a new cap year on Jan. 1, Summer 2010 I Arkansas Hospitals 45

46 Over 70% of Hospitals in AHA UseTeletouch Paging Delivering over One Million messages daily Phone HHS is Building Health Insurance Portal The Department of Health and Human Services (HHS) plans to unveil by July 1 the first version of a Web site designed to help individuals and small businesses get information about health insurance options in their state. HHS Office of Consumer Information and Insurance Oversight will oversee the Web portal (HealthCare.gov) that will provide consumers with information about private insurance, high-risk pools, Medicaid and the Children s Health Insurance Program. The site will not have pricing information, which is often based on insurers proprietary algorithms that factor in numerous health-related characteristics of the potential subscriber. A second launch of the site on October 1 is expected to include price estimates. HHS hopes the new portal will influence states creation of health insurance exchanges; increase enrollment in Medicaid, CHIP and highrisk pools; and boost the sale of private policies to the uninsured. Details are included in an interim final rule at Summer 2010 I Arkansas Hospitals

47 Medicare/medicaid Berwick s Innovative Approach Seen as an Asset for CMS Head Donald Berwick The American Hospital Association (AHA) has expressed strong support for President Obama s recent nomination of Donald Berwick, MD, as administrator of the Centers for Medicare & Medicaid Services (CMS). Berwick is president and CEO of the Institute for Healthcare Improvement (IHI), and served as an independent member of the AHA Board from 1996 to Berwick co-founded IHI, a nonprofit Boston area consulting and research group, in The tools and advice made available through IHI under his leadership have been used by hospitals and healthcare-givers around the world, and as a result, have touched the lives of thousands of patients, said AHA President and CEO Rich Umbdenstock. As the changes made by healthcare reform are put in place, we look forward to working with Don (Berwick) and the administration to continue finding new ways that hospitals can improve care for the patients and the communities they serve. Berwick, a pediatrician, is an adjunct staff member in the Department of Medicine at Boston s Children s Hospital and a consultant in pediatrics at Massachusetts General Hospital. He also serves as a professor at Harvard Medical School and its School of Public Health. Berwick would carry out major provisions of the new healthcare reform legislation the largest rollout of a social program since the 1960s. As administrator, Berwick would manage a bureaucracy of 4,500 that serves nearly one in three Americans and has an annual budget of about $780 billion. The Senate must confirm his nomination as CMS administrator, a position that has been filled through temporary appointments since CMS Preparing For J-7 MAC Implementation The Centers for Medicare & Medicaid (CMS) on May 28 directed Pinnacle Business Solutions, Inc. (PBSI) to merge the Fiscal Intermediary Shared System (FISS) into one system in preparation for the Jurisdiction 7 (J-7) A/B Medicare Administrative Contractor (MAC) implementation. The merge will move existing Part A workloads for the states of Arkansas, Mississippi and Louisiana into a single Customer Information Control System (CICS) region. Providers will need to be aware of several significant changes with this merger. According to the CMS directive, providers will be impacted in the following ways: The payment cycle will change from a weekly payment to a daily payment. The Local Coverage Determinations (LCDs) will merge into a common set for all three states. Some LCDs will be new, some revised and some will be retired. The merge will move existing Part A workloads for the states of Arkansas, Mississippi and Louisiana into a single CICS region. Providers will need to be aware of several significant changes with this merger. The claims processing system edits will merge into a common set for all three states. The Direct Data Entry (DDE) system will have some screen changes. Monday, Aug. 2, 2010, will be a dark day in which the FISS, DDE and Interactive Voice Response System (IVRS) will not be available. There will be consolidation of information on the PBSI Web site. The cutover date will be Monday, Aug. 2, PBSI staff is working closely with all stakeholders including the FISS, the Enterprise Data Center (EDC), Palmetto GBA, and CMS regional and central offices to ensure a successful changeover. Additional information will be published as it becomes available. There also will be special teleconferences scheduled for providers to learn more about these changes. The most current information concerning these changes can be found on the PBSI Web sites, and com. Questions may be submitted via through the Web site s Contact Us feature or by calling Greg Hart, Senior Coordinator of Professional Relations, at (501) Read CMS Change Request 6919 at Summer 2010 I Arkansas Hospitals 47

48 Medicare/medicaid CMS Proposes FY 2011 IPPS Reductions Hospitals stand to lose ground in their pursuit of fair payments under CMS s proposed rule for the fiscal year (FY) 2011 Medicare Inpatient Prospective Payment System (IPPS). While CMS proposes a full market-basket update (2.4 percent) for the Medicare base rate, there is also a 2.9 percent behavioral offset reduction to the update factor, pushing the overall rate update into negative territory. CMS says the offset is designed to recoup half of what the agency believes are excess payments that relate to improvements in the coding and classification of patients brought about by the switch in FYs 2008 and 2009 to a Medicare Severity Diagnosis Related Group (MS-DRG) system. Hospitals argue that any additional payments were warranted due to real case-mix changes reflecting actual patient characteristics and treatment patterns. Not included in the proposed rule is recognition that the FY 2011 update factor must be reduced by an additional 0.25 percentage points as mandated by the new healthcare reform legislation (the market-basket update provided in FY 2010 must also be reduced by 0.25 percentage points retroactive to April 1, 2010). The net impact of these adjustments yields a FY 2011 Medicare IPPS standard payment amount that will be about 0.8 percent lower than the FY 2010 version. Due to timing of the recent legislation, the proposed rule does not include any regulatory language regarding implementation of related reform provisions contained in the law affecting FY 2011 Medicare IPPS payment rates. Those will be handled via separate rules. In addition to the coding adjustment, highlights of the proposed IPPS rule include: Quality Measures Used for the Hospital Pay-for-Reporting Program: To receive a full market-basket update in FY 2011, hospitals will be required to successfully report data on 45 quality measures. Hospitals that don t successfully submit their quality data will be subject to a 2.0 percentage point reduction to their IPPS update. Outlier Threshold: CMS is proposing to increase the outlier threshold by 3.6 percent, from $23,140 in FY 2010 to $23,970 in FY 2011, in order to maintain estimated outlier payments at 5.1 percent of total payments under the IPPS. Consideration of Costs of Provider Taxes as Allowable Costs for CAHs: CMS wants to clarify which provider taxes assessed by states may be considered allowable reasonable costs and paid under Medicare to address concerns that some provider taxes may not be related to the care of beneficiaries and that some, if not all, of the costs of these taxes might not be actually incurred by providers. The clarification, which could affect Medicare reimbursement to CAHs, will require Medicare fiscal intermediaries to determine if the provider taxes are allowable on a case-by-case basis, based on reasonable cost principles. Medicare-Dependent Hospital (MDH) Qualification Criteria: CMS is proposing to modify the MDH qualification criterion that requires 60 percent of a hospital s inpatient days/discharges to be attributable to individuals receiving Medicare Part A benefits during the hospital s cost report period by replacing the word receiving with the phrase entitled to. It would allow hospitals seeking MDH status to include all days or discharges attributable to individuals entitled to the Medicare Part A insurance benefit. A display copy of the proposed rule is available on the CMS Web site at: IPPS/list.asp#TopOfPage. Click on Show only items whose Year is 2011 and refer to CMS-1498-P. Please note that the display copy is double-spaced and more than 1,000 pages long. CMS has also posted a fact sheet on the proposed rule at: fact_sheets.asp. Law Changes 3-Day Window Bundling New legislation signed June 25 by President Obama spares physicians from a percent cut in Medicare payments for another six months, but will cost the nation s hospitals about $4 billion in coming years. In passing H.R. 3962, the U.S. House of Representatives agreed with the Senate to delay for six months the Medicare pay cut for physicians and replace it with 2.2 percent increase in the Medicare physician fee schedule through November 30. It marks the 10 th time a cut in the fee schedule has been blocked in the last 8 years, including four times this year. The bill, approved by a 417 to 1 vote, also will reduce hospital payments by prohibiting them from retrospectively billing to unbundle payments for outpatient therapeutic services provided prior to date of enactment of the legislation if they were performed within 72 hours of a hospital admission and were unrelated to that admission. The provision was opposed by the 48 Summer 2010 I Arkansas Hospitals

49 The American Medical Association (AMA) came out against the bill s attempt to address the chronic uncertainty surrounding Medicare physician fees. AMA wants Congress to permanently fix the Medicare payment system for physicians by doing something to address the related solvency issues. Snyder Environmental removes and abates asbestos, lead-based paint, and mold contaminants. We remove the problem. Snyder Environmental & Construction, Inc., Little Rock, AR Toll Free (888) snyderenvironmental.com American Hospital Association (AHA) due to concerns that the secretary could broaden the definition, forcing hospitals to bundle even more services than currently required. The American Medical Association (AMA) had hoped that Congress would permanently fix the Medicare payment system for physicians by doing something to address the related solvency issues. The law only pushes the problem a few years down the road. AMA has argued that the failure for a permanent fix to the issue by repealing the Sustainable Growth Rate (SGR), which governs physicians fees, is shortsighted. REST EASY. Let us manage your sleep program. Sleep Management Services, Inc. offers turnkey sleep services at no risk to the hospital. We are locally owned and operate in 11 locations statewide. We provide sleep testing equipment, technicians, scoring services, scheduling and insurance verification. sleepmanagement@sbcglobal.net Summer 2010 I Arkansas Hospitals 49

50 Aetna Medicare Advantage/Drug Plans Earn Sanction On April 5, 2010, CMS issued a notice to Aetna Insurance Company of its intent to impose an intermediate sanction to ensure that Medicare beneficiaries continue to have access to prescription drugs under Medicare s requirements. Aetna was served with the intermediate sanction notice because it has continued to improperly administer the Medicare drug benefit in the plan s national stand-alone prescription drug plan (PDP) and its 25 Medicare Advantage prescription drug (MAPD) contracts. Approximately 400,000 Medicare beneficiaries are enrolled in the organization s MAPD plans and another 600,000 are enrolled in the Aetna PDP. The intermediate sanction, which will prevent Aetna from marketing to and enrolling new beneficiaries, was effective April 21 and will remain in effect until Aetna demonstrates to CMS that it has corrected its deficiencies and they are not likely to recur. To read the entire CMS press release on the action, go to releases.asp. Medicaid Hospital Access Payments Begin Arkansas hospitals participating in the new Medicaid hospital assessment program received their initial quarterly supplemental hospital access payments on April 16, along with an invoice from the Medicaid program for the assessment fee. The second quarterly payments were made on June 4. Invoiced amounts are payable to Medicaid within 10 days of receipt. Under the assessment program, which the Legislature enacted during its 2009 session, hospitals will pay assessment fees to the state totaling about $34 million. Those revenues will be used to support new federal Medicaid dollars that will add to Medicaid payments for inpatient and outpatient care and will help to offset more than $100 million annually in losses that accrue to the state s hospitals due to Medicaid underpayments. The assessments and access payments will be made quarterly. The April batch covered the first quarter of State Fiscal Year (SFY) 2010 (July-September 2009). Separate payments and the associated assessments covering the second and third quarters of that fiscal year (October-December 2009 and January-March 2010) were to be made before the June 30 fiscal year end. Beginning with the final quarter of SFY 2010 (April-June), future payments will be paid closely following the end of each quarter. FOR EVERY OFFICE, THERE S AN furniture access floors moveable walls design installation repair Innerplan has a history of providing prescriptions that improve every type of healthcare environment. We help patients recover, families feel welcome and your staff perform better by offering furniture and accessories that create a visual signature from the reception area to the patient room and all stops in between. For more than 30 years, our award-winning team of expert planners and designers has created lasting relationships by creating a plan that works for you Innerplan Drive North Little Rock, AR W. Center, Suite 303 Fayetteville, AR innerplan.com

51 Medicare/medicaid CAH Direct Supervision Policy Clarification New Initiative Seeks to Reduce Unnecessary Radiation from Medical Imaging The U.S. Food and Drug Administration recently announced an initiative to reduce unnecessary radiation exposure from three types of medical imaging procedures: computed tomography (CT), nuclear medicine studies, and fluoroscopy. These procedures are the greatest contributors to total radiation exposure within the U.S. population and use much higher radiation doses than other radiographic procedures, such as standard X-rays, dental X-rays, and mammography. The amount of radiation Americans are exposed to from medical imaging has dramatically increased over the past 20 years, said Jeffrey Shuren, MD, JD, director of the FDA s Center for Devices and Radiological Health. The goal of FDA s initiative is to support the benefits associated with medical imaging while minimizing the risks. The three-pronged initiative the FDA is announcing will promote The Centers for Medicare & Medicaid Services (CMS) has instructed its Medicare contractors not to evaluate or enforce the direct supervision requirement for therapeutic services furnished in calendar year 2010 to outpatients in critical access hospitals (CAH). In a March 15 notice to congressional committees, the agency said, CMS believed this requirement to be a clarification of longstanding policy, but the rule has generated concern among some rural providers who had previously interpreted the CMS policy to require only general supervision and who believe that it may be difficult to meet this requirement. CMS plans to revisit the issue of supervision for therapeutic servic- CMS plans to revisit the issue of supervision for therapeutic services provided to hospital outpatients in CAHs through the annual rulemaking cycle for CY es provided to hospital outpatients in CAHs through the annual rulemaking cycle for CY The final 2010 hospital outpatient prospective payment system rule included a direct supervision policy that requires a supervisory physician or non-physician practitioner to be present on a hospital or CAH campus when outpatient therapeutic services are performed and that they be immediately available to provide assistance and direction throughout the duration of procedures. the safe use of medical imaging devices, support informed clinical decision-making, and increase patient awareness of their own exposure. In addition, the FDA and the Centers for Medicare & Medicaid Services are collaborating to incorporate key quality assurance practices into the mandatory accreditation and conditions of participation survey processes for imaging facilities and hospitals. These quality assurance practices will improve the quality of oversight and promote the safe use of advanced imaging technologies in those facilities. The FDA recommends that healthcare professional organiz a t i o n s c o n t i n u e t o d e v e l o p, i n collaboration with the agency, diagnostic radiation reference levels for medical imaging procedures, and increase efforts to develop one or more national registries for radiation doses. Medicare FFS Filing Time Period is Amended The new Patient Protection and Affordable Care Act (PPACA) includes an amended time period for filing Medicare fee-for-service (FFS) claims as one of many provisions aimed at curbing fraud, waste and abuse in the Medicare program. The time period is specified in Sections 1814(a), 1835(a)(1), and 1842(b)(3) of the Social Security Act and in the Code of Federal Regulations (CFR), 42 CFR Section Section 6404 of the PPACA changes the requirements by reducing the maximum time period for submission of all Medicare FFS claims to one calendar year after the date of service. Under the new law, claims for services furnished on or after Jan. 1, 2010, must be filed within one calendar year after the date of service. In addition, Section 6404 mandates that Medicare claims for services furnished before Jan. 1, 2010, must be filed no later than Dec. 31, For claims with dates of service before Oct. 1, 2009, Medicare providers must follow the pre-ppaca timely filing rules. Claims with dates of service Oct. 1, 2009, through Dec. 31, 2009, must be submitted by Dec. 31, Section 6404 of the PPACA also permits the secretary of Health and Human Services to make certain exceptions to the one-year filing deadline. At this time, no exceptions have been established. However, proposals for exceptions will be specified in future proposed rulemaking. Summer 2010 I Arkansas Hospitals 51

52 Medicare/medicaid State Medicaid Reforms Under Exploration Since the February 3, 2010, meeting when Arkansas Department of Human Services (DHS) officials informed a room full of Medicaid provider groups of an immediate need to cut $400 million from the program for State Fiscal Year (SFY) 2011, the outlook has improved, at least to a degree. In mid-april, the same groups gathered again to hear the latest on DHS s budgeting plans for SFY 2011 and beyond. They learned that a combination of favorable developments had provided relief that will allow DHS s primary focus to turn toward exploring and implementing long-term Medicaid program reforms, rather than relying on expedient short-term cuts. Medicaid Director Eugene Gessow on April 14 reviewed a list of 27 potential reforms that he and his staff will explore. Several are related to provisions found in the recently enacted Patient Protection and Affordable Care Act, the new healthcare reform law. Five items affecting acute care hospital services included on the menu are: A demonstration project that would evaluate an episodes of care approach for provision of Medicaid services. The episodes would group a hospitalization along with concurrent physician services provided during the hospital stay; A demonstration project for a global payment system; The development of a DRG hospital inpatient payment system and an Ambulatory Patient Group (APG) system for outpatient care; Health homes for Medicaid enrollees with chronic conditions; and Payment adjustments for care provided to Medicaid patients with healthcare acquired conditions. To address behavioral health issues which impact psychiatric hospitals, Gessow said that the Medicaid office would pursue a state waiver to provide support services to individuals with chronic health conditions, implement new licensing and training requirements for mental health paraprofessionals and seek to obtain a Medicaid emergency psychiatric demonstration grant. Other steps involve changes in the Medicaid long term care program, more intense fraud and abuse protections, implementing a Web-based electronic medical record system that will allow Medicaid providers to see and review claims for their Medicaid patients, and working to improve the current primary care case management program. DHS Director John Selig cautioned that while the improved outlook buys additional time for the state to address Medicaid s chronic funding issues, it does not resolve the underlying systemic problems. He and Gessow said that they will enlist the assistance and input from specific provider groups as they work on the individual reforms. RAC Posts New Validation Issues MARCH: The Region C Recovery Audit Contractor (RAC), Connolly Healthcare, posted 25 new DRG Validation Issues to their list of CMS-approved audit issues on March 16, plus another five on Friday, March 19. Once again, Connolly has been approved for even more MS-DRGs with high Relative Weights (which equates to high dollar reimbursements) and high discharge volumes (which equates to large number of claims to potentially audit). The 13 states affected by the new approved issues are: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. To see the complete set of Connolly Healthcare s New Issues listings, click on com/rac-new-issues-pages/ APRIL: Connolly Healthcare, CMS Recovery Audit Contractor (RAC) for Region C, which includes Arkansas, posted 20 new DRG Validation Issues to the company s list of CMS-approved audit issues on Friday, April 16. The new issues include eight MS-DRGs with very high Relative Weights (RW), which equate to high dollar reimbursements and thereby potentially high RAC fees, should the payments be denied. Six of the new issues have claim volumes in the top 25 percent of all DRGs (a high volume of discharges provides a corresponding large number of claims for the RAC to potentially audit), and four are for MS-DRGs with RWs in excess of 10.0 (one of them MS-DRGs 001, Heart Transplant has one of the highest weights: 24.85), which produces a high dollar reimbursement, since the RW of a DRG is used to calculate a facility s payment. 52 Summer 2010 I Arkansas Hospitals

53 Emergency Preparedness Because of Continued Inaction on Major Concerns, Arkansas Withdraws from NDMS Frustration over fruitless efforts to get officials to effectively address concerns identified during activations related to hurricanes that hit the Louisiana Gulf Coast in 2005 and 2008 has prompted Little Rock area hospitals to withdraw their voluntary participation from the National Disaster Medical System (NDMS), effective June 1. The withdrawal does not apply to Arkansas Children s Hospital, which participates in a network that serves children. At issue is the failure to act in a timely manner on revisions to the Memorandum of Agreement (MOA) between hospitals and the NDMS aimed at improving logistical and reimbursement components of the agreement. The suggested revisions were submitted to NDMS leaders by the Arkansas Hospital Association (AHA) on behalf of the Metropolitan area NDMS hospitals in June 2009 with hope that at least some of the changes could be incorporated before the 2010 hurricane season began June 1. Throughout its history, NDMS, which was established in 1984 as backup medical support for the Department of Defense (DoD) and the Veterans Administration during conventional overseas conflicts and to supplement state and local emergency resources during disasters, has had only three significant activations for definitive care of hospital inpatients. All were non-dod activations. They were related to Hurricanes Katrina/Rita (2005), Hurricanes Gustav/Ike (2008) and following the earthquake in Haiti earlier this year. The Metropolitan Little Rock area hospitals were actively involved with the 2008 deployment. During the activation, those hospitals encountered situations where capacity limits created a need to postpone local patients elective admissions and procedures for days and weeks while trying to accommodate NDMS patients from Louisiana who experienced extended stays beyond their control. The hospitals also found themselves battling with NDMS, FEMA and CMS for more than a year to recoup even a portion of the costs associated with their good faith efforts. In an April 15 letter to Dr. Nicole Lurie, the Department of Health and Human Services assistant secretary for preparedness and response (ASPR) who has NDMS oversight, AHA President Phil Matthews wrote, While Little Rock area hospitals want to do the right thing in assisting with care for inpatients subject to unexpected emergency evacuations from other states, they can t place patients in their own community, or themselves, at risk when doing so. The MOA must get closer attention, because the success of NDMS s federal/state partnership hinges on an agreement which creates no obstacles to hospitals voluntary participation. The array of problems incurred by Arkansas hospitals during NDMS patient evacuations in 2008 should be sufficient grounds to conclude that the current MOA fails to meet that standard. At press time, the Arkansas Hospital Association and Metro members were working through Dr. Kevin Yeskey, deputy assistant secretary of ASPR, toward improvements in the MOA. Dr. Yeskey continues to provide Arkansas hospitals with updates on changes being implemented for the movement of patients during disasters. Those updates included transportation contracts, provisions for alternate care sites, patient tracking and service access teams. It is the hope of the AHA and the Metropolitan Hospital Association that Arkansas hospitals will once again be able to participate in NDMS patient movement. Active Shooter In-Hospital Guidance The May 20 episode of the ABC TV series Grey s Anatomy dealt with an active shooter situation in the hospital as the theme of its season finale. With the April 19 hospital shooting incident that occurred in Knoxville, Tennessee, and previous incidents that have occurred in and around Arkansas, the show spawned questions and inquiries within the healthcare community about preparedness for a similar situation. The following information may be helpful for hospitals seeking improvement in their response to such situations: 1. Hospital Active Shooter Guidance: Several years ago, after the Virginia Tech shooting, Dr. Earl Motzer, chair of the Kentucky Hospital Association s Emergency Preparedness Committee, created some general guidance for hospitals to consider if reviewing or developing their own internal policies and procedures. That guidance is posted on the Arkansas Hospital Association s Web site under disaster resources. 2. U.S. DHS Guidance: The U.S. Department of Homeland Security s National Protection and Programs has developed a new resource package called Active Shooter: How to Respond. A pocket printable version, along continued on page 54 Summer 2010 I Arkansas Hospitals 53

54 HIT Meaningful use and how it affects hospitals with other information, is downloadable from the Web at: programs/gc_ shtm#3 (Look under the Retail Subsector heading.) 3. Employee Handout: An Active Shooter: How to Respond information brochure also is available on the AHA Web site. It is in PDF format, and creates a double-sided color flyer on standard paper. 4. Training Video: The Center for Personal Protection and Safety (CPPS) has a good training video entitled, Shots Fired: When Lightning Strikes that in less than 20 minutes uses a typical office scenario to present clear guidance for surviving an active shooter situation. To learn more about the video and training materials, go to: More on CPPS: cppssite.com/2,aboutcpps. All of the above information was ed to Arkansas hospital preparedness coordinators on May 19. While this information is not intended to be alarmist, sometimes TV reflects real-life and can be a catalyst for change. We would like to make sure that as a preparedness community our members have some tools and materials available to handle questions that could surface as the result of this program from leadership or members of a healthcare facility s staff. Our thanks to Richard Bartlett at the Kentucky Hospital Association for major portions of this article. Proposed Rule for EHR Certification The Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) has issued a proposed rule to establish a temporary and permanent certification program for electronic health record (EHR) systems. See 75 Fed. Reg (March 10, 2010). EHR technology must be certified for providers to receive incentive payments under Medicare and Medicaid for the adoption and meaningful use of EHRs under the- Health Information Technology for Economic and Clinical Health Act (HITECH), which was enacted as part of the American Recovery and Reinvestment Act of The proposed rule covers both the temporary and permanent certification programs, but ONC anticipates You re Hiring issuing separate final rules for each of the programs. The temporary certification program would allow organizations to test and certify complete EHRs or EHR modules so that they can begin demonstrating meaningful use and receive incentive payments. The second proposed rule would establish a permanent certification program to replace the temporary program. ONC expects to issue separate final rules for each program. ONC plans to issue the final rule for the temporary certification program around the same time as HHS issues final rules for meaningful use stage 1 and standards and certification criteria. The final rule for the permanent certification program is expected by the fall of this year. Excerpted from an article by Matthew Weinstock, H&HN (Hospitals & Health Networks) Online In case you didn t know it, your hospital is planning a major uptick in hiring IT staff, and you can thank the seemingly ubiquitous ARRA (American Recovery and Reinvestment Act). That s one of the findings from the Healthcare Information and Management Systems Society (HIMSS) annual survey, officially released March 1. According to the survey, nearly 70 percent of respondents said they planned to increase hiring in 2010, compared with 42 percent last year. Survey respondents also predicted a major boost to IT operating budgets with 72 percent projecting an influx of capital. Of that, 49 percent said meaningful use is the driver. Here are some other notable results: 41% said meeting meaningful use criteria is their top IT priority. 38% said governmental issues will have the most impact on healthcare, followed by financial considerations at 23%. 41% said they have no plans to participate in a health information exchange, down from 52% last year. Our Advertisers, Our Friends AHA Services Alpha Medical Equipment, Inc Arkansas Blue Cross Blue Shield... 2 Arkansas Foundation for Medical Care... 6 Arkansas Health Networks Benefit Management Systems, Inc Crews & Associates Hagan Newkirk Financial Services, Inc Hughes Welch & Milligan Innerplan Nabholz Construction Ramsey, Krug, Farrell & Lensing Sleep Management Services, Inc Snyder Environmental Stephens Insurance, LLC... 5 Teletouch Paging U.S. Foods Summer 2010 I Arkansas Hospitals

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