ORH Newsletter-2008, Ed. 2 Share This OHSU Content

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The 25th Annual Oregon Rural Health Conference is just around the corner!

September 25-27, 2008
Bend, OR
The Riverhouse Hotel Resort, Hotel & Conference Center
Mark your Calendars!

Registration begins July 1, 2008

What is the Oregon Rural Health Conference? The ORHC is the largest gathering in Oregon dedicated to the important issues of rural health care. Bringing together providers, administrators, patients, activists, policy makers and others who are concerned about health care in rural Oregon, it is an opportunity to help set the agenda. In collaboration with the Oregon Rural Health Association (ORHA), Oregon Area Health Education Centers (AHEC) and the Oregon Rural Practice-based Research Network (ORPRN), the Oregon Office of Rural Health (ORH) strives to bring you the most innovative approaches to addressing today's needs.

Think First-Preventing Injury Among Children

Did you know the leading cause of death and disability among children and young adults is not cancer, AIDS or heart disease? The number one killer of young people is traumatic injury caused by vehicle crashes, violence, falls, sports and other causes. ThinkFirst can help prevent these injuries in your community.


Oregon trauma system turns 20

More than 25 years ago, a landmark study showed trauma patients in the Portland area who had been taken to the nearest hospital had inappropriate outcomes based on the severity of their injuries. This proved a rallying cry to the Oregon legislature, which called for the institution of a statewide trauma system.

It was a simple enough idea: hospitals that treat the most trauma patients will have better outcomes. And those hospitals should have specialists, life saving equipment, and ancillary services immediately available to patients in need.

May marks the 20th anniversary of the Oregon trauma system. Oregon was one of the first states to develop a statewide trauma system, and is unique in its inclusion of smaller, rural hospitals as Level III and IV trauma centers. Today, Oregon’s system stands as a model for other states, and OHSU remains dedicated to serving as one of the state’s two Level I trauma centers.

OHSU cared for more than 17,000 trauma patients between 1995 and 2004; more than 4,000 of those patients were transferred from hospitals around the state. OHSU is the state’s medical resource hospital, answering about 3,000 calls annually from paramedics and EMT’s. Data from these calls are used for research to determine when changes in emergency medical response protocols are needed. The emergency communications center based at OHSU ensures Portland area patients are taken to a hospital that has space to care for them, and ensures no hospital is overwhelmed during incidents with more than 10 patients.

The National Highway Traffic Safety Administration (NHTSA) Office of Emergency Medical Services (OEMS) has released a new document: EMS Workforce for the 21st Century: A National Assessment

NHTSA, in partnership with the Health Resources and Services Administration’s (HRSA’s) Emergency Medical Services for Children program, entered into an agreement with the University of California at San Francisco (UCSF) to undertake this first step in addressing the nation’s EMS workforce issues. UCSF, which has considerable experience with allied health workforce studies, conducted a systematic assessment of the national prehospital EMS workforce. This assessment, guided by a steering committee and by EMS stakeholder organizations, involved interviews, key stakeholder meetings and a rigorous assessment of existing data and research.

The assessment describes the national EMS workforce, while also elucidating the absence of consistent, nation-wide EMS workforce data. It will be paramount in guiding future strategies aimed at assuring the stability of the EMS workforce and in designing national EMS workforce data system improvements. Currently, the assessment is being used to guide development of the EMS Workforce Agenda for the Future, a document that will establish a vision for the future of the nation’s EMS workforce. Information on this ongoing project is available at www.emsworkforce.com. For any questions about this project or other initiatives, you may contact Gam Wijetunge via e-mail () or phone (202-493-2793).

Health insurers limit advanced scans

Insurance companies are taking a harder look at advanced medical scans like CT scans, citing spiraling costs and safety concerns. And some doctors agree there's emerging evidence that these scans are being over-prescribed.

"Costs are soaring in this area, quality concerns are mounting and safety concerns are mounting," said Karen Ignagni, chief executive officer of the trade group America's Health Insurance Plan.

Health insurers are requiring more pre-authorizations before patients can receive these scans, and setting other restrictions including mandating that the imaging equipment and medical staff operating it be credentialed in advance.

Insurers fear some patients are being exposed to dangerous radiation levels from having repeated CT and PET scans, which use many times the radiation of a regular chest X-ray. Sometimes scans are repeated because the first ones were not done properly, using outdated equipment or by poorly trained technicians.

Doctors, too, are concerned about patients getting excessive radiation exposure when they receive scans that aren't needed or are ordered as "defensive medicine" to protect against possible lawsuits. There also is concern that a small number of unscrupulous doctors without adequate expertise are referring patients for tests in their own offices or imaging facilities in which they have a financial interest.

"There is a definite concern that in-office imaging could lead to scanning for dollars," said Dr. Robert Hendel, a heart specialist who sits on American College of Cardiology panels focused on quality and appropriateness of imaging.

But doctor experts say the bigger problem with medical imaging tests is the insurance red tape needed to get them.

"Is this a preauthorization process or are these (insurance) companies practicing medicine?" asks Dr. Arl Van Moore, board chairman at the American College of Radiology, the specialists in medical imaging.

Moore cited another reason for increasing costs: Doctors sometimes order a diagnostic test that doesn't need preauthorization — even if it provides less-helpful information than the one they prefer — then seek approval for a more advanced test if the first one shows it's needed.

Worse yet, sometimes patients end up getting a riskier, more invasive test than what they really need, said Hendel. For example, cardiologists wanting to assess blood flow and blockages inside a patient's heart arteries would prefer a nuclear cardiology test. With that, a small amount of a radioactive substance is injected in the blood and tracked using a camera.

Some doctors will instead order a cardiac catheterization, which doesn't require advance authorization, Hendel said. But that involves threading a catheter through a blood vessel up into the patient's heart — and carries a 10-times higher risk of complications such as a heart attack or stroke, he said.

The two doctor specialist groups are fighting improper use of scans by supporting accreditation of the machines and doctors using them and by publicizing criteria for quality and appropriateness of various imaging tests.

"There is substantial evidence that these types of techniques, when used appropriately — and I want to emphasize the word 'appropriately' — can keep the lid on expenses and improve outcomes," such as by catching cardiac problems early enough to prevent a heart attack, Hendel said.

Patients who are inconvenienced tend to blame the doctor and office staff, Hendel noted.

"They (patients) show up expecting a test to be performed. We've booked a slot," and then discover the problem, Hendel said. "We have no choice but to reschedule. Are they upset? Yes!

"He said use of strategies to hold down imaging costs was fairly limited until last year, when it really ramped up, triggering the growth of a new industry of insurance consultants called radiology benefit managers.

A recent study by the Center for Studying Health System Change, which is funded by the Robert Wood Johnson Foundation of Plainsboro, N.J., the nation's biggest health care charity, also found that limitations on use of MRIs, CT scans, PET scans and nuclear cardiology imaging became widespread last year. The report was based on visits and interviews in 2007 with officials of health plans, hospitals, doctors' practices, major employers and others in 12 metropolitan areas.

The report noted use of CT scans in the U.S. nearly doubled between 2000 and 2005, from 12 scans per 100 people to 22 per 100. That's partly because improved technology has made the imaging machines, which can cost $1 million to $2 million each, useful for diagnosing more problems.

"The hospitals and physicians purchase it, and then there's a strong incentive to use the equipment," said Ignani, the insurance trade group CEO, adding that manufacturers aggressively market the machines.

Revenues from the tests, which can run $500 to $1,000 or more apiece, can be tempting to financially struggling hospitals and doctors squeezed by shrinking reimbursements from government health programs and commercial insurers. At least one medical education firm is pitching a training conference titled: "Practice Expansion for Primary Care Physicians: How to Grow Your Income by Adding In-Office Imaging!"

The insurer restrictions seem to be working: After one health plan that was seeing 20 percent annual jumps in advanced imaging use began requiring preauthorization, its growth rate plunged. Yet the insurer said only 1.5 percent of requests were being denied, indicating doctors were ordering fewer tests, according to the report.

"Most health plans believe it's been successful," said Ann Tynan, the study's lead author.

Insurers are looking at ways to put similar restrictions on other high-cost areas, and some already are doing so for stomach-reduction surgery and very expensive medications, she said.

Doctors see some hopeful signs, though, after passionate arguments by physician groups reversed changes they were fighting.

The Medicare program is trying to find ways to hold down its spending on imaging services after the annual cost jumped from $6 billion in 2000 to $12 billion in 2005. It had proposed no longer paying for cardiac CT scans unless patients were enrolled in a study of their effectiveness. In mid-March, it said it would continue to cover the scans.

And Horizon Blue Cross Blue Shield of New Jersey, the state's biggest insurer, recently halted a plan to require preauthorization for relatively inexpensive EKGs, or echocardiograms, even though it is starting to require advance approval for expensive cardiac imaging.

By Linda A. Johson, AP Business Writer

The Executive's Guide to Value-Based Purchasing

One of your hospital's most significant payors has just notified you that, starting next year, it plans to withhold $1 million annually in reimbursement. The hospital may have a chance to regain some of that money, but only if you hit certain quality benchmarks and can demonstrate performance that exceeds that of your competition.

This isn't a pie-in-the-sky scheme concocted by the insurance industry to boost revenue and please Wall Street. Welcome to the reality of the federal government's proposed Value-Based Purchasing (VBP) program.

In this election year, much uncertainty surrounds the future of U.S. healthcare. But one thing is clear: Any and all health reforms, no matter the political party behind them, are certain to underscore quality and efficiency, rewarding top performers and potentially punishing poor ones.

In this environment of change, it is imperative that hospital leaders begin now to prepare for the changing reimbursement landscape ahead. Value-based purchasing (VBP) demonstrates just how high the stakes can be.

The proposed changes

Under the VBP proposal currently being considered by CMS and Congress, "a percentage of the hospital's base operating payment for each discharge or DRG payment would be contingent on the hospital's actual performance on a specific set of measures."

The idea is to try to move away from a hospital payment system based primarily on volume of procedures and instead reward hospitals for delivering on evidence-based quality measures and improved patient outcomes. The new program would move hospitals to a system "that rewards the best performers."

One possible implementation of the new program envisions taking a withheld amount from all hospitals and returning some or all of that money only to the top performers, effectively "grading on the curve" and guaranteeing that some percentage of hospitals will not get all or perhaps any of their withheld money back.

However, CMS also included provisions to pay hospitals not only for meeting or exceeding certain quality benchmarks, which would favor top-performing hospitals, but bonus payments to hospitals that show substantial improvement. The intention was to ensure funding for poorer-performing programs that are striving to make progress.

Needless to say, this amorphous formula could pose substantial challenges for hospital leaders laying out strategies for maximizing reimbursement under VBP.

For forward-thinking executives who want to maximize financial success under quality-based reimbursement systems, the time for action is now. Quality should be a top strategic focus for hospital boards and administrators as 2008 begins and resources need to be appropriately allocated. If there was any doubt that quality performance was going to drive payment, this should be settled now.

Anticipating VBP

To get and stay ahead of the VBP curve, it is vital for hospital leaders to understand that this isn't simply about how you are doing on processes (like Core Measures), but also about how CMS sees your mortality rates and how your scores compare to other hospitals nationwide.

According to a study of nearly 5,000 non-federal hospitals released in January by HealthGrades, the nation's best hospitals not only had mortality rates 27 percent lower across the board than all other hospitals, but they also improved at a faster rate, reducing mortality by an average of 15 percent from 2004 to 2006 compared to 11.4 percent for all others.

Hospital executives anticipating VBP should ensure that they are measuring and then monitoring the most effective clinical quality measures. After all, the whole intent of transparency is to help consumers make value-based decisions and purchases.

The first step is to identify and understand what CMS has proposed be reported in its VBP. Assess which of those quality metrics are already being measured, tracked and reported and how does your organization stack up? How do you think you will stack up against all other hospitals?

Some of the quality measures being considered won't be new to most hospitals. At least half are essentially "Core Measures" or "SCIP" measures (Surgical Care Improvement). However, even the hospitals that are doing satisfactorily on these measures may not know how they stack up in other areas such as mortality and complications related to Acute MI and Congestive Heart Failure.

Second, it is important to identify what part of VBP is currently not being measured, tracked and reported by your hospital. If these metrics are important enough to be in the VBP, they should also be evaluated by your organization.

Third, discuss the findings with your board's quality committee and review how decisions are made on which metrics to incorporate into quality reporting.

Fourth, make it a point to drop the same number of metrics that you add, eliminating measures that don't have the same impact.

The challenge for senior leaders is that the best hospitals are running faster and faster and, as a result, everyone else must work harder to catch up. But the good news is that the consistent clinical performance and rate of improvement HealthGrades research has identified among top-performing hospitals demonstrates that better is possible for all hospitals and many are working successfully to achieve this.

About Samantha Collier, MD, MBA

Dr. Collier's role as a senior vice president and HealthGrades' chief medical officer has allowed her the opportunity to lead consulting teams that have helped more than 100 hospital organizations throughout the country develop and implement quality improvement initiatives that have improved their quality of care and public profiling positions. Dr. Collier, who continues to practice part time as a hospitalist, is frequently called to speak about quality improvement, the important impact of consumerism and healthcare ratings, public profiling and patient safety to the news media and at major conferences that have included the Harvard Quality Colloquium, CMS National Customer Service conference, the American College of Healthcare Executives and the National Association for Healthcare Quality.

Failure to Prepare for the Boomers is Risky

What Can We Expect as the U.S. Population Ages?

The oldest of the 80+ million “baby boomers” (more than 25 percent of the entire U.S. population) turn 65 years old and become Medicare eligible in 2011. Medicare enrollment will reach nearly 80 million, or about 22 percent of the U.S. population, by 2030. That’s nearly double the enrollment in 2006.

What actions will be required to sustain the Medicare program? Raise taxes, reduce benefits, prolong eligibility, increase contributions, change behavior, reduce the cost of care, or all of the above?

What Will the Aging of the Population Mean to Providers?

Industry leaders are increasingly uneasy about potential responses to this challenge. Many expect the ratcheting down of payment levels as a likely element of any plan for paying for the care of the increasing Medicare population. Boomers are heavy users of hospital and healthcare services. What would happen in your local market if your Medicare population were to double in 2020 or 2030? How would you respond?

How will you prepare your organization for the likely increased demand particularly in light of the recent under-investment in plant and equipment and expected shortages of beds, physicians and nursing and support staff? Will you have enough beds, physicians, staff and ambulatory facilities? Will you respond to all demands for service or offer only a select portfolio of clinical services? Will you have created plans and relationships that permit you to respond in an orderly fashion while ensuring that the healthcare need of the communities you serve are met?

How Can Providers Prepare?

A current “working” understanding of the implication of the aging of the boomer generation is critical to setting strategic direction particularly given the time and expense required to adjust clinical portfolios, design, build or remodel facilities and recruit and train clinicians and other workers.

Many hospital organizations focus their attention primarily on 3-year time horizons avoiding the time and expense associated with longer term planning. These plans resemble 3-year capital budgets with limited attention to how these investments will help prepare for the longer term.

How do you provide a framework that puts short-term planning and investments decision-making in the context of potential market changing events? The same question pertains to other potential longer-term market-changing events other than the aging of the boomers. The implementation of a universal healthcare program, a major breakthrough in biotechnology or the coming of age of the generation following the boomers comes to mind.

Here is a straightforward approach that might help:

  1. Create a High-Level Understanding of the Potential Demand for Services for 2020 and 2030. Get beyond the “policy” discussions. Don’t get trapped by debates over methodology. Do not seek a level of precision that is not available.
    • Review age- and gender-adjusted demographic data. Look for an “order of magnitude” understanding.
    • Review use-rate trend data. Look for likely changes that could have a significant impact.
    • Define the assumptions you are using and the “unknowns” that will need clarification over time.
    • Create 2-3 plausible demand scenarios including a simple forecast of current use rates moving forward, a high demand and a low demand alternative.
    • Identify the impact of future demand on your organization, your physicians, your competitors including potential new entrants and your community.
  2. Create a High-Level Vision for 2020 and 2030 for Your Service Area and Your Organization. A doubling of the Medicare population in your service area will likely produce additional demand for beds, emergency departments, ambulatory facilities, and physicians. How much of this demand would you plan to meet? Would your plan change your current facility plans? Will your plan require a shift in physician recruitment and alignment strategies? How will you recruit sufficient nursing and other staff? What investments must you make now to meet your longer-term requirements? What are your lead times for these initiatives?
    • Clearly define the assumptions that are driving your vision.
    • Define the clinical portfolio you’d like to offer to match the needs and demands of your community and your organization’s vision and capabilities.
    • Identify the performance requirements, level, and kinds of facilities, technology, physician, staff resources and organizational relationships that will be required to implement your vision.
    • Complete a high-level financial plan to test your ideas particularly about investment and financial performance requirements.
    • Make adjustments as necessary.

    Be as clear and specific as possible. Consider this kind of vision statement to be a blueprint for the future not a paragraph to put in the annual report.

  3. Build a high level “Roadmap” to 2020 and 2030. Pharma and Biotech companies make big bets on offerings likely to come to market in 20 or 30 years. While hospitals and health systems do not operate under the same business model, we must create the roadmaps and bridges that more effectively link the longer-term vision or model with a shorter-term investment strategy. Being able to respond flexibly for demand that will take years to mature requires careful ongoing monitoring and investment management. Healthcare related investments in facilities and clinical programs also require years to complete.
    • Determine how you will change your clinical portfolio over time to achieve your intended results.
    • Determine how you would change your current facility plans, and physician recruitment and alignment strategies.
    • Consider how you will recruit sufficient nursing and other staff, a special problem given the aging nursing workforce.
    • Determine how you will work with or compete against other providers in your market.
    • Create links between your long and short-term investments strategies.

    Consider lead times for these initiatives and what investments you must make now to meet you longer-term requirements. Build in monitoring mechanisms to make certain that adequate attention is paid to the longer-term vision.

  4. Review 3-Year Strategic Plans and Prepare 1-Year Action Plans Annually. Kick off your 3-year planning cycle with a review of the vision for 2020 and 2030. Complete this work at the beginning of your traditional planning cycle. Be disciplined so that this effort informs your shorter-term planning. Make adjustments as necessary as more information becomes available or you change your view of the market and vision. Draw implications for the short term clearly and factor them into the 3-year and 1-year plans.
    • Critically review progress against strategies and actions contemplated in the prior year’s plan. Acknowledge what worked and what did not.
    • Complete the necessary updates with careful attention to the longer-term vision.
    • Define a limited number of actions and investments required for success.
    • Monitor execution carefully.
    • Be prepared to make adjustments to prepare for the longer term.

    Make the development of this longer-term working vision an opportunity to explore possibilities with important stakeholders including community leaders, physicians and staff. Be prepared to iterate or create alternative scenarios. Review your thinking on a quarterly basis while you review your annual and 3-year plans. Regular reviews, updates and accountability assessments will help focus your organization.


How Private Health Coverage Works: A Primer – 2008 Update

Ever want to know how private health coverage really works? This primer explains the role and operations of private health coverage in the United States. Private health coverage is provided under a variety of different arrangements, including health insuring organizations regulated under state law and health plans sponsored by employers and employee organizations that operate under the federal Employee Retirement Income Security Act (ERISA).

The primer discusses the fundamental aims of private health coverage and sorts out the complicated web of state and federal regulations that govern it.

Returning Veterans to help paramedic shortage

U.S. Senator Amy Klobuchar, D- Minn, announced that she is introducing federal legislation designed to relieve the shortage of emergency medical personnel, especially in rural areas, by streamlining civilian paramedic training for returning veterans who already have emergency medical experience from the military. Senators Mike Enzi (R-WY) and Tom Harkin (D-IA) joined Klobuchar in introducing the bill known as S 2993. Representatives Stephanie Herseth Sandlin (D-SD) and Jerry Moran (R-KS) introduced Klobuchar’s the House version, HR 6011.

"On the one hand, we have a severe shortage of emergency medical personnel in rural communities," said Klobuchar. "On the other hand, we have an abundance of returning veterans who have significant training and experience. They're an ideal talent pool to relieve the shortage."

S 2993, called the "Veterans-to-Paramedics Transition Act," would accelerate and streamline the transition to civilian employment for returning veterans who already have emergency medical training.

Klobuchar went on to say, "When we have soldiers who are trained to save lives on the front lines of combat, they should also have the opportunity save lives on the front lines right here at home."

Specifically, S 2993 would provide federal grants for universities, colleges and technical schools to develop an appropriate curriculum to train these veterans and fast-track their eligibility for paramedic certification. A standard paramedic training program can take one to two years to complete.

The Veterans-to-Paramedic Transition Act has been endorsed by the National Rural Health Association.

Rural communities have long faced critical shortages in emergency medical personnel. A Minnesota Department of Health study several years ago described it as a "quiet crisis." In that study, 75 percent of rural emergency medical service providers said they needed to add more staff, and 67 percent reported having difficult covering their shifts.

Meanwhile, thousands of men and women in the military receive emergency medical training as part of their duties. For example, 80 percent of all Army combat medics are currently certified as Emergency Medical Technicians (EMTs) at the basic level.

When these veterans return to civilian life, however, their military-based medical training is not counted toward training and certification as civilian paramedics. Existing programs require all students to begin with an entry-level curriculum. For veterans, this means spending extra time and money for training that, in effect, they have already received.

“Rural areas are in constant need of trained EMTs. We have a great resource returning to our communities with these returning servicemen and women,” said Scott Ekblad, Director of the Oregon Office of Rural Health. “Our rural communities have said time and again they want help recruiting folks. This legislation will help get us one step closer.”

"We cannot afford to squander this wealth of skill and experience, especially when rural communities have such a shortage of emergency medical personnel," said Klobuchar. "Our nation has invested in developing the skills of our servicemen and women. We need to make the most of this investment when they return to civilian life."

House Passes Legislation Preventing Large Cuts to Medicaid

States Poised to Lose Billions in Medicaid Dollars - Pressure is on Senate to Pass Legislation by Veto Proof Majority

On April 23rd, the House of Representatives passed, by a veto proof majority of 349 to 62, legislation that prevent states from losing billions in federal dollars by placing a one-year moratorium on seven new Medicaid regulations. Earlier the Bush Administration issued a formal veto threat against the legislation. The legislation moved to the Senate where its fate has been less certain.

Under the regulations, proposed by the Bush Administration, states could not use federal Medicaid funds to help pay for physician training. The regulations also would place new limits on Medicaid reimbursements to hospitals and nursing homes operated by state and local governments and limit coverage of rehabilitation services for individuals with disabilities and mental illnesses. If the regulations go into effect, states are projected to lose $50 billion in federal funds over the next five years.

Medicaid is a joint federal-state health insurance program for the poor. Currently, the federal government pays 57 percent of the program's costs - an estimated $204 billion in fiscal year 2008. There has long been tension between states and the federal government over who should bear more of the burden.

The Administration argues that states are unfairly gaming the system to wring extra dollars out of the federal government and, in some cases, using the money for non-Medicaid purposes. The Bush administration cited reports from the HHS Office of Inspector General and the Government Accountability Office that found states had been inappropriately increasing Medicaid spending to draw down more federal matching funds.

House Democrats and state governors say that the states have addressed those problems and that the new rules would unfairly deprive the states of funds. To address charges of gaming the system, the bill would provide $25 million annually for efforts to fight Medicaid fraud. The Congressional Budget Office estimates that the bill passed by the House delaying the regulations for one year would cost about $1.8 billion over five years.

The legislation would delay implementation of the regulations until April 1, 2009, at which point a new Administration would decide whether to implement the rules. The expectation of Congressional Democrats is that a Democratic President would not implement the seven regulations and that no further action would be needed. They would also hope that a new Republican Administration would at least give it a second look before Congress would need to take additional action.

Children in rural areas depend on Medicaid or SCHIP for health insurance more than children in urban areas. Additionally, rural populations tend to be poorer than their urban counterparts and illnesses associated with poverty, including infant mortality, are more pronounced in rural areas.

According to a 2007 study by the Carsey Institute, 32 percent of children in rural areas rely on SCHIP or Medicaid compared to 26 percent of children in cities. A majority of uninsured, rural children (54 percent) live in families where the head of the household works full-time year-round. Additionally, private-sector insurance coverage in rural areas fell from 45 percent to 37 percent, leaving rural families even more dependent on Medicaid and SCHIP.

It takes a two-thirds vote in both the House and Senate to achieve an override of a Presidential veto. This has happened only once to a Bush veto, in 2007 on a water resources bill. While it is clear that support for an override is available in the House, it is unclear in the Senate. The pressure and bill now moves to the Senate, where certain key Republican leaders are less interested in the legislation then their House Republican counterparts.

The ORHA and the NRHA have worked this year to assure that these Medicaid cuts do not take effect. In addition to this legislation, they have worked with partners to try and halt the regulations from taking effect. Your help could be vital in the Senate on this legislation.

Senate Democrats Will Move Their Own Medicare Payment Bill in June<p>

Senate Finance Chairman Max Baucus, unable to nail down a bipartisan bill to block a scheduled reduction in Medicare payments to physicians, has decided to proceed without GOP support.

Baucus, D-Mont., said Wednesday that he will move forward after the Memorial Day recess with a Democrat-supported Medicare bill that Republicans almost certainly will block, forcing an eventual compromise ahead of the June 30 deadline.

"It seems clear to me that we're not going to get an agreement in time to meet the deadlines, so I'm going to move forward with a bill that I think has the right policies and priorities for the Medicare program, to include the doctor fix for 18 months," Baucus said Wednesday, following a meeting with committee members from both sides.

Members of both parties want to halt a 10.6 percent cut in Medicare payment rates for doctors that is scheduled to take effect July 1. But they have been at loggerheads over how to offset the cost of an 18-month fix, which is estimated at $14 billion to $18 billion.

Some Democrats are not optimistic about the chances for getting their bill enacted by the deadline, but see a chance to take a philosophical stand, at least.

"It's going to get vetoed anyways. But we still need to say what we stand for," Sen. John D. Rockefeller IV, D-W.Va., said on Tuesday, following a meeting with committee Democrats. "Our guy's going to be president, so we'll be able to do more next year," Rockefeller predicted.

Republicans insist a bill can be cleared this year.

"Before this process is over, I'm confident that we're going to have a bipartisan package that passes the Senate," said ranking Finance Republican Charles E. Grassley of Iowa. "There are differences, but there aren't big differences," he said.

The largest disagreement has been over how to pay for the package. According to Sen. Kent Conrad, D-N.D., the Democrats' plan would cost $18.2 billion over five years, while the GOP counter-offer would cost $14.9 billion.

Baucus is hoping to add some extras to the package, such as a small increase to physician payment rates, electronic prescribing incentives for doctors, and funding for preventive care programs.

The bulk of either plan is likely to be paid for with cuts to Medicare Advantage, a private-sector version of Medicare subsidized by the government. There is general agreement to cut "Indirect Medical Education" payments to hospitals funneled through Medicare Advantage plans.

But that is where the consensus ends. Baucus and other Democrats want to put a cap on the subsidy that some of the private plans receive, noting that they cost taxpayers more than the traditional Medicare program. "We simply, as a country, cannot afford to continue. There has to be some reasonable limitation" on the amount paid to the private plans, Conrad said.

Republicans and the White House do not want to alter the subsidies for the private insurance plans.

By Drew Armstrong, CQ Staff

Critical Rural Health Dollars Set to Expire

Rural Medicare Provisions will Expire June 30th without your Support

Critical provisions that protect the fragile rural health safety net are set to expire June 30th. Contact your elected representatives now to remind them to support rural Medicare providers as they craft a new Medicare reform package. Your action can protect these and other provisions.

  • Work GPCI 1.0 Floor for Rural Physician Payments
    Rural will lose on average 15% - 20% in Medicare reimbursements if this provision (and SGR) is not extended.
  • Outpatient Hold Harmless
    Small rural hospitals (100 beds or fewer) would be devastated by the OPPS without this due to their small volumes.
  • Two Percent Bonus Payment for Ambulance Trips in Rural Areas
    Rural ambulance providers receive inadequate Medicare payments for the distances they must cover.
  • Incentive Payment for Physicians in Physician Scarcity Areas
    Helps recruit qualifying physicians to practice in counties ranked in the lowest 20 percent based on their physician to Medicare beneficiary ratio.
  • Five Percent Add-On Payment for Home Health Services
    Home health visits in rural areas have an added cost of providing home health in rural areas due to distances.
  • Pay for Technical Component (TC) Physician Pathology Service
    Eliminates administrative burden by allowing direct billing for the TC for small independent laboratories.
  • Reasonable Lab Costs
    Reasonable payment for small rural hospitals (under 50 beds) in low density population rural areas for outpatient lab services

Find out more by going to the NRHA website.

Congress works to delay implementation of new Medicaid regulations

On May 22, the Senate passed a supplemental spending bill for the wars in Iraq and Afghanistan with provisions to delay the implementation of Medicaid regulations that would cost the states billions of dollars. President Bush has threatened to veto this legislation, but, despite some earlier concern, the bill passed the Senate with a veto-proof majority. The House, which previously passed a similar bill on the delay with a veto-proof margin, must take up the bill again.

The vote in the House is scheduled for next week. It is now unclear if they will have votes to override the veto due to changes in war spending. If the bill passes with a veto-proof margin, the regulations will be delayed until April 2009, at which point a new administration may choose not to implement them at all.

George Miller appointed MedPAC commissioner

NRHA Past President George Miller , M.H.S.A., senior vice president of Catholic Health Partners and president and chief executive officer of Community Mercy Health Partners in Springfield, Ohio, has been appointed to the Medicare Payment Advisory Commission. Miller brings many years of experience as a hospital administrator to his appointment, and is a strong advocate for rural Medicare beneficiaries.

MedPAC advises Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program. MedPAC is also tasked with analyzing access to care, quality of care and other issues affecting Medicare. Miller will serve a three year term and joins Dr. Tom Dean as one of two members with solid rural credentials on the 17-member commission.

Though Miller’s appointment is a great success for rural health, the NRHA and other rural advocates remain concerned that rural interests on MedPAC are underrepresented. Advocates will continue to push for rural representation that is proportional to the 27% of Medicare beneficiaries who live in rural America. Dr. Nick Wolter, whose MedPAC term ended this past April, has for his many years served as a rural voice on the commission.

The newly appointed members, in addition to George Miller, whose terms will expire in 2011, are Peter W. Butler, M.H.S.A., executive vice president and chief operating officer of Rush University Medical Center in Chicago, Illinois; Michael Chernew, Ph.D., professor of health care policy at Harvard Medical School in Boston, Massachusetts.

The reappointed members, whose terms will also expire in 2011, are Jennie Chin Hansen, R.N., M.S.N., member of the Board of Directors of AARP, and Nancy M. Kane, D.B.A., professor of management at the Harvard School of Public Health. Also, in anticipation of his departure next year, Robert Reischauer has asked to relinquish his role as vice chair. Jack Ebeler will serve in that role.

Commissioners, whose terms will expire in 2010, are John M. Bertko, F.S.A., M.A.A.A., adjunct staff member at RAND and a visiting scholar at the Brookings Institution; Francis J. Crosson, M.D., senior medical director at the Permanente Federation, LLC; Thomas M. Dean, M.D., a family physician in Wessington Springs, South Dakota; Jack C. Ebeler , M.P.A., (vice-chair), a consultant in health care policy; Arnold Milstein, M.D., M.P.H., medical director at the Pacific Business Group on Health, and William J. Scanlon, Ph.D., a health policy consultant.

Commissioners whose terms will expire in April 2009 are Mitra Behroozi, J.D., executive director of 1199 SEIU Benefit and Pension Funds; Karen R. Borman, M.D., professor of surgery and vice-chair for surgical education at the University of Mississippi Medical Center; Ronald D. Castellanos, M.D., a urologist at Southwest Florida Urologic Associates; Glenn M. Hackbarth, J.D. (chair), an independent consultant; Robert Reischauer, Ph.D., president of the Urban Institute; and Bruce Stuart, Ph.D. a professor and executive director of the Peter Lamy Center on Drug Therapy and Aging at the University of Maryland Baltimore.

About the Medicare Payment Advisory Commission (MedPAC)

The Medicare Payment Advisory Commission (MedPAC) is an independent federal body established by the Balanced Budget Act of 1997 to advise the U.S. Congress on issues affecting the Medicare program. With a broad mandate, everything from advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program to analyzing access to care, quality of care, and other issues affecting Medicare, MedPAC has the ability to make sweeping changes to the Medicare system. Due to the influence of the Commission and the 17 commissioners, NRHA and other advocates closely monitor MedPAC and nominates strong rural candidates for the Commission.

Rural Representation

Federal law requires that MedPAC representation include "a balance between urban and rural representatives." Unfortunately, only two of the current seventeen commissioners have solid rural credentials. Clearly this is not balance.

The NRHA has worked with the Government Accountability Office to identify rural candidates for MedPAC and has attempted to explain why rural representation is so vital to rural Medicare beneficiaries (over 27% of the Medicare population). They are now working with Congressional champions to mandate that the number of rural MedPAC Commissioners be proportional to the population of rural Medicare beneficiaries. Please tell your member of Congress to support these efforts:

  • S. 498 - Rural Medicare Equity Act (Senators Feingold and Collins)
  • H.R. 1730- MedPAC Rural Representation Act (Reps. Walden and Pomeroy)

IRS Requires New Reports from Small Charitable Organizations

2008 will bring big changes for small charitable organizations. If your nonprofit has obtained 501(c)(3) status from the IRS but has not been filing the annual Form 990, get ready!

Starting in 2008, virtually all 501(c)(3) organizations will be required to file annual reports with the IRS. Up until now, organizations with annual gross receipts less than $25,000 have not had to file the Form 990 or its simpler version the 990EZ.

This new requirement has some big teeth! Any charitable organization which fails to meet its annual reporting requirement for three consecutive years will automatically lose its tax exempt status. And if your nonprofit loses its tax exempt status for failing to meet its reporting requirement, you'll have to reapply to have your tax exempt status determined again.

This big news for small nonprofits was made possible when Congress passed the Pension Protection Act of 2006. The goal of the change is to be sure IRS records are up to date and to make it much easier for donors to tell which organizations currently have tax exempt status. Tax payers can currently search on the IRS website to see a list of organizations which the IRS has granted tax exempt status. Right now, the list is incomplete because it does not include all the organizations that haven't had to file an annual report. With the new reports from smaller organizations, the list will be complete.

Short, Easy, Free and Electronic!

That's the IRS goal and rallying cry to encourage small organizations covered by the new rules. The IRS is designing an e-Postcard that requires:

  • Your organization's legal name (the one that appears on your Articles of Incorporation and your IRS letter granting tax exempt status);
  • The Organization's mailing address;
  • Name and address of a principal officer;
  • A statement confirming that the organization's gross receipts are normally $25,000 or less

U.S. ads push patients to shop for hospitals

The Bush administration today launches a $1.9 million advertising campaign touting its effort to rate hospitals and urging patients to check a government website before choosing one.

The ad campaign in 58 regional newspapers lists hospitals and their scores on two of more than 30 measures available on the website: the percentage of patients getting antibiotics before surgery to prevent infection and whether patients "always" got help when they asked for it.

The government's campaign promoting the website by the Centers for Medicare & Medicaid Services (CMS) comes amid a flurry of efforts by states and the private sector to rate medical providers. The movement is fueled by demands from employers and consumer groups, including AARP and the Consumers Union, for more information about cost and quality.

Zagat Survey, the restaurant guide publisher, and Angie's List, which allows consumers to critique neighborhood services, also have begun rating doctors.

The movement has attracted both praise and criticism.

In October, New York Attorney General Andrew Cuomo won agreement from several major health insurers to disclose how they rank doctors — and a promise not to rate physicians on cost alone.

Last month, the Consumer-Purchaser Disclosure Project, a coalition of groups representing consumers, employers and unions, agreed to develop a national set of standards to measure doctor performance.

While ratings efforts can be useful, they also can be confusing and limited in scope, says Robert Berenson, a senior fellow with the Urban Institute, a Washington, D.C., think tank that studies policy issues.

"If I were a consumer looking at these reports, I would be bewildered by the variations that show up across different rating systems," says Berenson, who says there is not enough information available to shop for health care the way people shop for cars or televisions.

The government's Hospital Compare website (www.hospitalcompare.hhs.gov), which launched in 2005 and expanded in March, has information on how well hospitals follow recommended care for heart attacks, pneumonia and surgery, and how satisfied patients are with their treatment.

Patients can enter ZIP codes or names of hospitals and can compare up to three hospitals at a time.

The site does not list hospital infection rates, although such information may one day be included, says Kerry Weems, CMS' acting administrator.

Weems says hospitals can use their rankings to spur improvements. "We hope these ads drive that conversation, not just in households, but also in communities and hospitals. There are some institutions that could improve," Weems says.

The Maryland ad, for example, lists 20 hospitals. Scores on patients receiving antibiotics before surgery range from 78% to 95%. Scores on the percentage of people who always received requested help range from 47% to 63%.

American Hospital Association President Rich Umbdenstock says he wants consumers to understand that the ads show just two of the measures included on the website. "I hope they see it as encouragement to go to the website," Umbdenstock says.

By Julie Appleby, The USA TODAY