CMS Seeks Arkansas UPL Changes

. October 19, 2004 Volume 11, Number 39 CMS Seeks Arkansas UPL Changes The Centers for Medicare & Medicaid Services (CMS) has been closely studying Medicaid upper payment limit (UPL) programs in states across the country, including Arkansas. A part of this scrutiny concerns the definition of non-state public hospital, which are facilities that can use intergovernmental transfers (IGTs) of local funds in place of state funds to draw down the supplemental federal Medicaid dollars. Specifically, the agency has questioned the qualification of hospitals that are governmentowned, but operated under a contractual lease agreement by a not-for-profit 501(C)(3) organization, to be identified as non-state public facilities. After reviewing its questions about Arkansas UPL program for the past nine months, CMS notified the Arkansas Department of Human Services (DHS) last month that it continues to question the status of more than 25 Arkansas facilities currently identified as non-state public hospitals. To resolve the issue, CMS has tendered a settlement agreement to the state s Medicaid program. In brief, the proposed settlement calls for DHS to agree to change its State Medicaid Plan to effectively move those hospitals into the category of private facilities. In doing so, the hospitals would continue to receive limited UPL funds, but would no longer be able to provide IGTs to maximize their UPL payments. Hospitals that are clearly non-state public facilities in CMS eyes will be allowed to retain that status. In return, CMS would agree to withdraw its current deferral, repaying the state general revenue funds that were used in place of federal dollars during the deferral period; to allow the state to continue the current UPL program as is until June 30, 2005; and to forfeit the recovery of millions of federal dollars drawn down through use of IGTs from the hospitals in question over the duration of the Arkansas UPL program. This agreement would not end the UPL program in Arkansas. It would dramatically alter the number of hospitals now sharing the limited pool of UPL payments designated for private hospitals. Currently, those funds amount to approximately $12 million annually. Flu Vaccine Shortage Creating Anxiety The recently announced loss of half of the nation s expected flu vaccine supply for this year is leading to growing anxiety throughout Arkansas among patients and healthcare providers about the shortage, which leaves only 22.4 million doses of unshipped vaccine available for people in greatest need in Arkansas and throughout the United States. Many hospitals, clinics, and physician offices have received no vaccine, yet. However, the federal Centers for Disease Control and Prevention (CDC) and Aventis Pasteur, the only company now manufacturing the vaccine, have announced the first phase of a plan to allocate vaccine in response to the recently announced loss of vaccine supply. Under the plan, the CDC will work with Aventis Pasteur, to distribute about 14.2 million doses of its flu vaccine to hospitals, nursing homes, pediatricians and other high-priority vaccine providers over the next 6-8 weeks for use in patients with the greatest risk of death

AHA Notebook 2 October 19, 2004 or hospitalization from influenza. The two groups then will work in conjunction with state and local health departments to target the remaining 8.2 million doses of the U.S. flu vaccine supply to regions with the greatest need. The Arkansas Department of Health (ADH) estimates that about 300,000 people in the state fit into the high risk category of those who should have priority in getting a flu shot. Usually, only about 50% of these high-risk individuals elect to receive the vaccine, which leaves Arkansas with about 150,000 high-risk individuals who will seek immunization. The major at risk groups include children between 6 and 23 months, seniors 65 and older, pregnant women, healthcare workers with direct patient contact, and people with chronic health conditions. The Arkansas Hospital Association has posted on its Web site, http://www.arkhospitals.org, information for hospitals, physician offices, and other providers about the CDC guidelines for vaccine, along with several commonly-asked questions (and answers) that are arising in light of the vaccine shortage. Survey Seeks Flu Vaccine Information On October 15, Dr. Sandra Snow, medical director for communicable diseases/immunization at the Arkansas Department of Health (ADH), asked for assistance from the Arkansas Hospital Association in conducting an urgent survey of hospital influenza vaccine supply. The survey was distributed via email to all state hospital CEOs that afternoon. Essentially, Dr. Snow and the ADH were seeking information about whether hospitals have ordered the flu vaccine, whether or not the vaccine had been received, or if the hospital s order was canceled. The purpose for these questions was to determine the number of doses that would be required to immunize hospital employees who provide hands-on patient care and whether or not there are extra doses that could be shared with other hospitals. The ADH also needed to know the number of doses of antiviral medication hospitals have on hand. The Department has a task force working now to develop prioritization policies for flu vaccinations in Arkansas. It is recommended that hospitals wait for guidance from the ADH while a plan is developed to get the vaccine to those most at risk, which includes those providing hands-on patient care. It is very important that hospitals follow the same guidelines since the supply of vaccine is so limited. Mansfield, Craft Receive ACHE Awards Steve Mansfield, president and CEO of St. Vincent Health System (SVHS) in Little Rock, and Karen Craft, administrator of Stone County Medical Center (SCMC) in Mountain View, were recipients of awards presented by the Arkansas Chapter of the American College of Healthcare Executives (ACHE) during the Arkansas Hospital Association s 74 th Annual Meeting at The Peabody Little Rock October 6-8. The awards were presented in recognition of their accomplishments as healthcare executives. Mansfield, who joined SVHS in May 2000, received the 2004 ACHE Regent s Award for Senior Career Healthcare Executive. The award honors his four years of service to the organization, during which time he has achieved a successful turnaround in hospital operations, from community perception and patient satisfaction to employee morale and the bottom line. Before joining SVHS, Mansfield was administrator and CEO of Baptist Memorial Hospital East in Memphis. Baptist Memorial is a division of Baptist Memorial Health Care Corporation, which he joined in 1977. A Fellow in the American College of

AHA Notebook 3 October 19, 2004 Healthcare Executives, Mansfield is a member of the Little Rock Rotary Club, a board member of the Greater Little Rock Chamber of Commerce, and past corporate chairman for the National Conference for Community and Justice Arkansas Region s Walk as One campaign. Craft was presented the Regent s Award for Early Career Healthcare Executive. Since being named to lead SCMC in November 2002, she has succeeded in gaining many significant improvements at the facility, particularly in the areas of employee and physician satisfaction. Also under her guidance, the hospital broke ground in June 2004 for a $6 million construction project, which includes new surgical suites and an outpatient area, expansion and renovation of the hospital emergency department, and a lobby area that will be more customer friendly. Prior to being named SCMC administrator, Craft served as the laboratory director at White River Medical Center in Batesville, which purchased the Mountain View hospital in 1999. While there, she was successful in implementing the WRMC Reference Lab program and led that laboratory through the implementation of a lab information system. Craft is also involved with community activities in Mountain View, where she organized the community s first Kiwanis Club and now serves as its chairman. She is active with hospital members of the Arkansas Hospital Association s North Central District, is a member of the Arkansas Health Executives Forum and is preparing to advance to Diplomate status with the ACHE. Clarification About RT Situation An article in the September 8 issue of The Notebook concerning Arkansas licensure requirements for respiratory therapists was the reason behind several calls to the Arkansas State Medical Board. Mikki Hughes, OT & RT licensing coordinator with the Medical Board, asked that the article be clarified with the following information. Act 1049 of 2001 sets the respiratory therapy licensure requirement. Under 17-99-302(f) (1), the Act applies to Any person, whether or not he or she has passed the examination provided for in this chapter, who, through a notarized affidavit, submitted to the board by January 1, 2002, demonstrates that he or she has been engaged in the practice of respiratory care for at least two (2) years during the three (3) consecutive years prior to September 1, 2001 and who submits an application and a fee not to exceed one hundred fifty dollars ($150.00). Any person licensed under this provision must complete the entry level requirements for certification in respiratory care and must, no later than January 1, 2005, pass the examination provided for in this chapter. According to Hughes, the Arkansas State Medical Board issued a total of twenty-seven (27) licenses in 2002 to individuals affected under Act 1049 of 2001. However, there are 1,632 licensed respiratory therapists in the state. If you or your facility has any concerns regarding this provision of the law please contact the Medical Board at (501) 296-1802 or (501) 296-1978. Quality Data Available The federal Centers for Medicare & Medicaid Services (CMS) is preparing to make public hospital quality data from the first quarter, 2004. Hospitals that have reported their data as part of the Hospital Quality Alliance, formerly known as the Quality Initiative, have until November 6 to preview their quality data before it is posted for public access. The data is now available for review at http://www.qnetexchange.org. Arkansas hospitals that have

AHA Notebook 4 October 19, 2004 difficulty accessing their data or those facilities finding significant errors in their data are urged to contact the Arkansas Foundation for Medical Care, the state s Medicare Quality Improvement Organization (QIO). Hospitals receiving a full market basket payment update in fiscal year 2005 (which began October 1) for participating in the initiative will not have the option of withholding their data from public display, but every effort will be made to correct substantive errors, according to CMS. The agency said it will assume a hospital s data is correct and approved if the hospital fails to contact its QIO by the November 6 deadline. CMS Won t Require Citizenship Questions Centers for Medicare & Medicaid Services (CMS) Administrator Mark McClellan has decided that providers will not be asked and should not ask about a patient s citizenship status in order to receive payment under Section 1011 of the Medicare Modernization Act (MMA). The MMA includes $250 million per year for the next four years to help hospitals offset the cost of emergency room (ER) care for undocumented immigrants as required under the Emergency Medical Treatment and Active Labor Act. Under CMS implementation plan as first proposed, hospitals would have been required to ask the immigration status of patients seeking care in the ER. The American Hospital Association and state hospital associations lobbied CMS during the public comment period that hospital employees were caregivers and not border patrol agents, and that patients who needed care might not seek it if they knew they would have to divulge their immigration status. Letter Urges Niche Hospital Action Three of Arkansas four congressmen have signed a letter to House Republican and Democratic leaders regarding concerns about the growth of limited-service providers. Congressmen Vic Snyder, Mike Ross and John Boozman are among a total of 48 representatives who have attached their names to the letter, which notes that the current moratorium on additional niche facilities imposed by the Medicare Modernization Act expires in June 2005. The letter says it s imperative that Congress be poised to address the issue early next year. It also said Congress must act swiftly to address physician ownership arrangements that present conflicts of interest. Reps. Shelley Moore Capito (R-WV), Zach Wamp (R-TN), Joe Wilson (R-SC), William Jefferson (D-LA), Henry Brown (R-SC), Harold Ford Jr. (D-TN), and John Tanner (D-TN) sponsored the American Hospital Association-supported letter. See the full text at http://www.aha.org/aha/key_issues/niche/content/041007congressltr.pdf. JCAHO Alert Concerns Anesthesia Awareness The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has issued an alert urging healthcare professionals to take steps to reduce the risk of anesthesia awareness and the impact on patients when it occurs. Anesthesia awareness happens when a patient under general anesthesia becomes cognizant of some or all events during a surgical procedure, especially during a cardiac, obstetric or major trauma surgery where general anesthetics are provided in smaller doses to avoid significant side effects. Certain medications used during general anesthesia can make it difficult to detect the patient s awareness. To help prevent such occurrences and their impact on patients, the JCAHO recommends healthcare professionals educate clinical staff about anesthesia awareness and

AHA Notebook 5 October 19, 2004 how to manage patients who have experienced it. They are advised to inform patients at higher risk of anesthesia awareness prior to surgery of the risk of occurrence; use effective anesthesia monitoring techniques; conduct post-operative follow-up of all general anesthesia patients; and provide access to counseling and other supports for patients who experience awareness. AHA Comments On Proposed OPPS Rule In written comments submitted to the Centers for Medicare & Medicaid Services (CMS), the American Hospital Association (AHA) expressed support for several proposed revisions to Medicare s hospital outpatient prospective payment system (OPPS). Specifically, AHA commended CMS for establishing a fixed-dollar threshold designed to better target outlier payments to truly high-cost services, for simplifying the requirements for observation services and for improving the coding for drug administration. AHA also commented on the overall payment inadequacy of the OPPS, noting that payments cover only 87 cents for every dollar of hospital outpatient care provided to Medicare beneficiaries. Further, AHA expressed a need to address the more than 60 broken ambulatory payment classification rates that resulted in hospital losses of more than $1.4 billion in Medicare payments in 2003. To see AHA s comments, go to http://www.aha.org/aha/advocacy-grassroots/advocacy/comment/2004/cl041007_opps2005.html. Bush Extends Mental Health Parity The limited protections offered by the Mental Health Parity Act of 1996 have been extended until December 31, 2005, through tax legislation signed into law by President Bush on October 11. The 1996 law, which was slated to sunset at the close of 2004, established parity between mental health and medical health insurance coverage with respect to annual and lifetime dollar limits. The American Hospital Association, through its work with the Coalition for Fairness in Mental Illness Coverage, advocated to both extend and expand the law to include parity for hospital days, outpatient visits, co-pays, deductibles and maximum out-of-pocket costs for in-network services. AHA Board Highlights At its October 6, 2004 meeting, the Arkansas Hospital Association board of directors: Learned that state Medicaid director Roy Jeffus had requested a meeting with the AHA executive staff to discuss issues about the Arkansas UPL program that continue to trouble CMS. That agency had communicated with the Arkansas Department of Human Services that it wants to narrow the list of non-state public hospitals that are allowed to provide intergovernmental transfers (IGT) of local funds to draw down federal Medicaid dollars. Specifically, the agency questions the qualification of some hospitals that are government-owned, but operated under a contractual lease agreement by a not-forprofit, 501(C)(3) organization, to be identified as non-state public facilities, which have the ability to provide IGT funds. Heard that the AHA presented the results of its study on Medicaid hospital losses during the September 16 meeting of the Legislature s Joint Public Health, Welfare and Labor Committee and that it is essential for hospitals to tell their legislators about the urgency of the need for more Medicaid funding, as most legislators have not heard from hospitals in their districts about this matter.

AHA Notebook 6 October 19, 2004 Learned that changes in the Medicare conditions of participation (COP) are now effective and that hospitals should have someone in their organizations download and review the COP to ensure compliance with those rules. Discussed a 2001 law requiring licensure of respiratory therapists and the problems it is creating, especially for small hospitals that are having difficulties hiring needed RTs. Endorsed draft legislation that would prohibit smoking in hospitals statewide and on their grounds. Received a report on information concerning the AHA s policies concerning member dues and the investment of AHA reserve funds. The report showed that AHA member hospitals paid average dues of $14,471. The average dues amount for member organizations of state hospital associations in Alabama, Mississippi, Oklahoma and West Virginia is $20,013. In the comparison, the AHA was shown to have a lower dues amount for hospitals in lower expense levels and a higher dues amount for the top expense level. Voted to defer action on the AHA membership application from the Arkansas Surgical Hospital until such time that the hospital is licensed by the Arkansas Department of Health. The AHA Calendar October 2004 22 ASWHC (Social Workers) Fall Conference, Baptist Health Medical Center-North Little Rock November 2004 5 AHHRA (Human Resources) Fall Conference, Holiday Inn Select, Little Rock 10-12 HFMA (Financial Management), Holiday Inn Presidential Conference Center, Little Rock 11 AHAA (Auxiliary) Board of Directors, AHA Headquarters, Little Rock 12 AHA Board of Directors, AHA Headquarters, Little Rock 12 ASHMPR (Marketing/Public Relations) Fall Conference, Baptist Health Medical Center-North Little Rock 30 Patient and Family Relationships, Medical Center of South Arkansas, El Dorado Newsnotes About Arkansas Folks Richard Goddard, CEO of Drew Memorial Hospital in Monticello, was named Administrator of the Year for hospitals under 100 beds by the Arkansas Hospital Auxiliary Association during the AHAA annual meeting October 8. Randall J. Fale, president and CEO of St. Joseph s Mercy Health Center in Hot Springs, received the Administrator of the Year award for hospitals over 100 beds. Lee Gentry, vice president for operations at St. Joseph s Mercy Health Center in Hot Springs, was named president of the Arkansas Health Executives Forum at the organization s annual meeting October 7. Other officers are vice president - Connie Melton, former vice president, Saline Memorial Hospital in Benton; and secretary-treasurer - Nancy Fodi, CEO of Southwest Regional Medical Center in Little Rock.