Fiscal Bureau Staff Reviews Medicaid, State Budget Process for WHA...

November 7, 2014
Volume 58, Issue 45
Fiscal Bureau Staff Reviews Medicaid, State Budget Process for WHA Council
The Wisconsin Legislative Fiscal Bureau (LFB) is held
in high regard for the quality of the work products
it produces for the Governor and state legislators.
Considered by many to the “gold standard” when they
are released, the LFB researches and releases summary
documents and budget papers that provide detailed
descriptions and background on bills, proposals and
issues for legislators.
The LFB staff, including Program Supervisor Charlie
Morgan and Fiscal Analysts Sam Austin, Stephanie
Mabrey, and Jon Dyck, were guests at the
November 6 WHA Public Policy Council meeting in Madison, chaired by Mike Wallace, president/CEO,
Fort HealthCare. The LFB provides research and analytical services to the State Legislature and the
Governor on the state budget, bills, proposals and programs.
Jon Dyck, Sam Austin, Stephanie Mabrey, Charlie Morgan
Austin explained the LFB’s role in the state budget process and presented an overview of the Medicaid
budget. Enrollment in the Medicaid program has steadily increased over the past decade, from 741,000
average enrollees per month in 2004-05, to over a million average enrollees each month in 2013-14.
(continued on page 7)
California Voters Overwhelmingly Reject Effort to Increase Medical Liability Cap
Missed in many post-election headlines this week was an important vote in California. By a 2-1 margin,
California voters rejected an attempt to increase that state’s cap on noneconomic damages, or pain and
suffering, in medical liability cases. The initiative, Proposition 46, would have increased California’s cap
from $250,000 to $1.1 million. Like in the 35 other states that have caps on noneconomic damages,
California voters understood the caps help stabilize their medical liability system. The proponents of
California’s current cap explained that an unstable medical liability environment increases costs for
all health care consumers and can cause patients to lose their trusted doctors—especially in high risk
specialties and in underserved areas—to states with a stable system.
WHA Executive Vice President Eric Borgerding noted Wisconsin is fortunate to be one of the states
with a stable medical liability environment, which attracts quality physicians even in the highest risk
specialties.
“A stinging defeat for trial lawyers, no question about it—and in all places California,” said Borgerding.
“Here in Wisconsin, our balanced system is carefully designed to provide fair compensation to patients
injured by medical negligence while maintaining a stable medical liability environment that helps our
hospitals retain and attract the best and brightest physicians and other health care practitioners.”
In Wisconsin, because of its strong Injured Patients and Families Compensation Fund, and unlike many
other states, patients injured by medical negligence receive all of their economic damages, including lost
(continued on page 2)
Board Chair: Ed Harding, president/CEO, Bay Area Medical Center, Marinette
Editor: Mary Kay Grasmick, VP Communications - mgrasmick@wha.org
5510 Research Park Drive P.O. Box 259038 Madison, WI 53725-9038 P (608.274.1820) F (608.274.8554) www.wha.org
Continued from page 1 . . . California Voters Reject Effort to Increase Medical Liability Cap
wages and medical bills. Non-economic damages are capped at $750,000, one of the highest caps in the
country.
“Despite efforts by the trial lawyer lobby to demonize Wisconsin’s balanced system, the truth is it is
one of the fairest, most balanced in the country, and it is working as intended. It must be protected, not
assailed,” Borgerding emphasized.
WHA’s Chief Medical Officer Charles Shabino, MD, stressed the significance of the issue to the efforts
to increase the number of physicians in Wisconsin, saying, “In its report 100 New Physicians a Year: An
Imperative for Wisconsin, WHA identified an impending shortage of physicians in this state. We have
been working with our coalition partners on a number of strategies to address the need. Maintaining
Wisconsin’s stable medical liability environment is a crucial piece of the puzzle.”
Borgerding agreed, “I am confident the Wisconsin Legislature understands the importance of our wellbalanced system.”
Walker, Schimel and Legislative Republicans Win in 2014
In what appeared to be a tight battle leading up to Election Day, Gov. Scott Walker won his third election
in four years to continue serving as Governor of Wisconsin. He defeated former Trek Bicycle Executive
Mary Burke, with a margin of 5.7 percent. The Governor won in 56 counties and received 52.3 percent
of the vote statewide.
In the race to replace retiring Attorney General J.B. Van Hollen, both the Republican and Democratic
candidates remained relatively unknown to voters. In the end, Waukesha County District Attorney Brad
Schimel, the Republican, defeated Jefferson County District Attorney Susan Happ, the Democrat, in a
race that very closely mirrored the gubernatorial election results. Schimel received 51.7 percent of the
vote while Happ received 45.4 percent of the vote.
Both Walker and Schimel have been elected to four-year terms and will need to seek re-election in 2018
to keep their posts.
Republicans Strengthen Majorities in State Assembly and Senate
Legislative Republicans dominated the November 4 election results, winning with large margins of
victory in key battleground districts. The Senate will come back with a stronger Republican majority
than last session, gaining one seat to put their chamber at 19 Republicans and 14 Democrats. Assembly
Republicans also gained more control, with likely 63 Republicans and 36 Democrats. According to
WisPolitics, this could be the largest Republican majority in the state Assembly since 1957.
In the Senate, there were three races that both Republicans and Democrats focused on: the 17th Senate
District in southwestern Wisconsin (formerly Sen. Dale Schultz’s seat), the 19th Senate District in the
Appleton/Fox Valley area (formerly Sen. Mike Ellis’ seat) and the 9th Senate District in the Sheboygan
and Manitowoc area (formerly Sen. Joe Leibham’s seat).
In the 9th Senate District, Republican Devin Lemahieu beat his Democratic opponent by a margin of
nearly 20 percent. The closest race was between sitting State Rep. Howard Marklein and Democrat
Pat Bomhack in the 17th Senate District, but Marklein garnered 55 percent of the vote in a district that
typically leans Democratic. Republican Roger Roth, a former State Representative and small business
owner, beat sitting Rep. Penny Bernard Schaber in the 19th Senate District with 57.2 percent of the
vote.
In the Assembly, Republicans protected vulnerable incumbents, specifically in the Eau Claire/Chippewa
Falls and Wisconsin Rapids areas. Both Rep. Kathy Bernier (R-Chippewa Falls) and Rep. Scott Krug
(R-Wisconsin Rapids) won reelection by six percent and 12 percent, respectively. (continued on page 3)
The Valued Voice -- Page 2 -- 11/7/14
Continued from page 2 . . . Walker, Schimel and Legislative Republicans Win in 2014
Assembly Republicans also defeated several Democratic incumbents. In Wisconsin’s 75th Assembly
District, Republican candidate Romaine Robert Quinn of Rice Lake defeated sitting State Rep. Stephen
Smith (D-Shell Lake). Second-time Republican candidate Nancy Vandermeer of Tomah defeated sitting
State Rep. Amy Sue Vruwink (D-Milladore) in the 70th Assembly District.
Dave Heaton, a Republican candidate in Wausau is leading sitting State Rep. Mandy Wright (D-Wausau)
in the 85th Assembly District. With 100 percent of precincts reporting, Heaton is up by 86 votes but the
press still counts this race as too close to call. This race could result in a recount.
The same situation exists for an open seat in Wisconsin’s 51st Assembly District, where Republican
Todd Novak leads Democratic candidate Dick Cates by 59 votes.
What does the 2014 election mean for health care policy in the next legislative session?
Medicaid Reimbursement - Cutting Wisconsin’s Hidden Health Care Tax
WHA’s key agenda item in 2015-2016 will be increasing Medicaid reimbursement for Wisconsin
hospitals. Chronic underpayment in Wisconsin’s Medicaid program is exacerbating a hidden health care
tax on Wisconsin employers. In 2013, this has amounted to $960 million in unpaid hospital costs from
Wisconsin’s Medicaid program that must be cost-shifted to employers that pay for health insurance
premiums.
Over the last several months, WHA’s government relations team has been on the road meeting with
nearly 70 candidates one-on-one and talking about this issue. There will be increased competition for
state tax resources between investments in infrastructure (health care, education, and transportation)
and potential income and property tax cuts.
Health Care Workforce
Governor Walker continues to focus on growing Wisconsin’s workforce. His prevalent campaign message
was, “We won’t stop until everyone who wants a job, can find a job.” That’s why WHA continues to
move forward with a proactive health care workforce agenda that can meet the evolving health care
demands of today and the future. WHA staff, along with the Wisconsin Council on Medical Education
and Workforce, has worked side-by-side with the Walker Administration to invest in Wisconsin’s health
care workforce and identify areas of need. Last session, based on recommendations outlined in WHA’s
report, “100 Physicians a Year: An Imperative for Wisconsin,” the Governor provided an unprecedented
$5 million investment in graduate medical education. The Legislature adopted this recommendation and,
today, millions of dollars have already been awarded to residency programs statewide.
WHA plans to continue this successful partnership with the Walker Administration and the Legislature
to meet WHA members’ workforce needs in all areas of practice. This next session, WHA will pursue
gathering additional licensure survey data from key health care professionals, strengthen partnerships
between hospital/health system employers and higher education and look to make additional investments
for health care workforce training.
Behavioral Health
Coming off the heels of a package of mental health legislation last session (a cornerstone of which was
the HIPAA Harmonization/Mental Health Care Coordination legislation championed by WHA), lawmakers
are expected to continue their focus on supporting mental health care delivery and treatment. The
Assembly Republicans have already issued an agenda for next session called Forward for Wisconsin’s
Future that includes a section stating they will “continue to promote understanding and provide resources
for those affected by mental illness” stating that it “is vital for policymakers to continue moving forward
on this issue.”
WHA will continue to be a key resource for Wisconsin lawmakers in this area of health care policy,
including ways that the state can help support innovative care delivery models such as telemedicine.
The Valued Voice -- Page 3 -- 11/7/14
Nearly 200 Members Attend WHA Leadership Conference Featuring Jamie Orlikoff
Not everyone agreed with everything Jamie Orlikoff said on November 5,
but there was no arguing with his basic premise that consumers will have a
profound impact on health care as they assume a larger share of the cost.
That fact, more so than the passage of the Affordable Care Act (ACA), is
quickly reshaping the health care landscape, according to Orlikoff, who is
considered one of the foremost thought leaders in the country.
“Change is not being driven by the Affordable Care Act. Health care will not
return to ‘normal’ because it never has been normal,” according to Orlikoff.
“The bubble around health care is bursting because of trends that were in
motion prior to its passage. The ACA is a symptom of change in health care,
not the driver.”
Nearly 200 WHA members gathered in Wisconsin Dells for the first of what
will be a series of seminars aimed at developing skills of emerging health
care leaders, presented by WHA, the Wisconsin Forum for Healthcare
Jamie Orlikoff
Strategy (WFHS) and the WHA Foundation. In the opening presentation,
WHA Executive Vice President Eric Borgerding listed the five biggest challenges to Wisconsin hospitals
and health systems as: Medicare; ObamaCare; physician supply; doing more with fewer resources; and,
the move from volume to value.
“Our state is well-positioned to thrive amidst these challenges. We have a
highly-integrated system of care, and a healthy, pluralistic insurance market,”
Borgerding said. “We are well prepared for where we are today, but we know
we have to be even better prepared for tomorrow.”
Eric Borgerding
If it is going to be competitive with other states, Wisconsin must have a healthy,
thriving economy and attract and retain employers. Borgerding emphasized
the role health systems and hospitals have in maintaining that environment by
continuing to provide high-quality, accessible and affordable health care.
“As an organization, WHA recognizes the dynamics that are in play in our
communities,” said Borgerding. “In addition to the tens of thousands of jobs they provide, equally
or more important is the commitment by Wisconsin’s hospitals and health systems to increase our
efficiency, raise quality and deliver high-value care so local employers can grow and prosper.”
(continued on page 5)
The Valued Voice -- Page 4 -- 11/7/14
Continued from page 4 . . . Nearly 200 Members Attend WHA Conference Featuring Orlikoff
The day’s agenda included a panel discussion
moderated by Orlikoff that featured three Wisconsin
health care leaders. They included: Nicole Clapp,
president/CEO of Grant Regional Health Center in
Lancaster; Dan Neufelder, senior vice president and
COO for Ministry Health Care; and Mike Wallace,
president/CEO, Fort HealthCare in Fort Atkinson.
The panelists shared their experiences in addressing
challenges they have faced during their career and
how they are preparing their organizations to stay
ahead of the curve in a fast-changing environment. All
three said collaboration among hospitals and health
systems is a strength in Wisconsin.
Mike Wallace, Dan Neufelder, Nicole Clapp, Jamie Orlikoff
“The spirit of collaboration in Wisconsin is outstanding. If someone here is doing something you need
to know about, WHA as well as Wisconsin HFMA and other organizations, promote communication and
collaboration,” according to Neufelder. “As a leader, you need to master the art of collaboration, not just
competition.”
WHA, in partnership with WFHS and the WHA Foundation, is working on the next seminar in the
leadership development series. Watch for details early next year.
WCMEW Explores Graduate Medical Education in Northwest Wisconsin
The Wisconsin Council on Medical Education and Workforce (WCMEW) and the Wisconsin Department
of Health Services (DHS) held a meeting in Chippewa Falls October 29 to explore interest in establishing
a graduate medical education (GME) presence in Northwest Wisconsin, an area with little current GME
activity, and one with an acute shortage of physicians. Representatives of health systems in Northwest
Wisconsin and Eastern Minnesota, GME program directors, the Medical College of Wisconsin, and the
University of Wisconsin School of Medicine and Public Health attended the meeting.
During the meeting, attendees heard from DHS, the Rural Wisconsin Health Cooperative and the Wisconsin
Rural Physician Residency Assistance Program about available funding opportunities in Wisconsin, and
examples of how GME programs have taken advantage of the funding to create or expand their programs.
Attendees discussed existing barriers to expanding GME in Northwest Wisconsin, and suggested possible
solutions, including the creation of a GME consortium and a faculty development program for teaching
physicians. WCMEW and DHS staffs were tasked with researching and “fleshing out” the suggestions,
which will be discussed at a follow-up meeting to be held in the spring of 2015.
“It was exciting to see the interest and creative thoughts expressed by everyone,” said George Quinn,
executive director of WCMEW. “This is the kind of initiative where WCMEW can be the catalyst in
bringing together the various stakeholders in GME. We will continue to work to pursue an expansion of
GME in this needed area of the state.”
WHA Partnering with WI Psychiatric Association on Education Program
WHA has partnered with the Wisconsin Psychiatric Association (WPA) to extend an invitation to WHA
members to attend the WPA Fall Conference December 5 at the American Club in Kohler.
The full-day educational program will focus on behavioral health care developments and strategies, with
an emphasis on emerging integrated behavioral health models underway with the Mayo Clinic Health
System, UW Health and Vanderbilt Behavioral Health. Other topics will include the role of physician
extenders in psychiatric teams, electronic health records and quality improvement measures in psychiatry.
(continued on page 6)
The Valued Voice -- Page 5 -- 11/7/14
Continued from page 5 . . . WHA Partnering with WI Psychiatric Association on Education
WHA members are eligible for reduced rates to attend the program. For information and to register for
the program, go to: www.thewpa.org/events/event_details.asp?id=454736&group. For WHA members
to receive the reduced registration rate, members should register as a non-member and then enter the
promo code WHA (all caps).
CMS Releases the 2015 Final Outpatient PPS Rule
CMS has released the display version of the 2015 final OPPS rule which can be found online at:
https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-26146.pdf. The rule will be
published in the Federal Register November 10.
Most of the changes announced in the 2015 proposed outpatient PPS rule were adopted as final. The
major components of the final rule are as follows:
• The final CY 2015 OPPS market basket and ACA offsets are 2.9 percent and -0.7 percent
respectively, for a net update factor of 2.2 percent
• The final CY 2015 OPPS national conversion factor is $74.144 — a 2.0 percent increase over the
final CY 2014 rate. (This is 0.1 percent lower than the amount published in the proposed rule
and is due to budget neutrality adjustments.)
• The final CY 2015 OPPS wage indexes will be exactly the same as for the final FFY 2015
inpatient PPS.
• The final CY 2015 OPPS outlier threshold is $2,775, which is lower than the 2014 threshold and
lower than the proposed threshold.
• The rural SCH and EACH add-on is retained at 7.1 percent
• CMS has made some modest revisions to the Comprehensive APCs (C-APCs), eliminating three of
the proposed 28 C-APCs (now 25) and modifying the complexity adjustment criteria.
• CMS has made some revisions to the OQR program measures for CYs 2016, 2017 and 2018
• There are no changes to the ED or critical care APCs
WHA is working on a more detailed analysis of the rule which will be coming out in the near future.
All completed PPS rule summaries can be found on the WHA website at www.wha.org/medicare.aspx.
WHA will also be preparing hospital specific analysis on the fiscal impact of the 2015 Outpatient PPS
final rule in the next couple of weeks. As a reminder, hospital-specific impact reports can be obtained on
the WHA member portal at http://members.wha.org/Home.aspx.
WHEPP Region 5 Hosts Ebola Symposium; Hospital Planning Efforts Continue
More than 200 representatives from Wisconsin hospitals and health systems in southern Wisconsin
participated in the Wisconsin Hospital Emergency Preparedness Program (WHEPP) Region 5 symposium
on Ebola held November 4 in Madison. Speakers representing EMS, health systems, the Department
of Health, the Division of Public Health and infectious disease specialists presented on and addressed
questions related to the processing and handling of patient samples, infection control measures and the
donning and doffing of personal protective equipment (PPE).
The Wisconsin Hospital Association is working closely with DHS and Public Health Officer Karen
McKeown to facilitate the communication of information that is critical to planning efforts and patient
and worker safety.
WHA updates its Ebola webpage continuously, including weekends and after hours. Check it frequently
for general information and guidance documents (www.wha.org/ebola.aspx) and webcasts (www.wha.
org/ebola-webcasts.aspx).
Any questions related to Ebola can be directed to Mary Kay Grasmick, WHA, 608-274-1820, 608-5757516 or mgrasmick@wha.org or to Andrew Brenton, WHA, at abrenton@wha.org or 608-274-1820.
The Valued Voice -- Page 6 -- 11/7/14
Continued from page 1 . . . Legislative Fiscal Bureau Staff Reviews Medicaid, State Budget
Process for WHA Council
Austin said growth in the Medicaid caseload, especially among
childless adults, is driving increases in the Medicaid budget
above expectations.
WHA Executive Vice President Eric Borgerding complimented
the LFB, saying their issue and background papers are
considered the “gold standard” based on the thoroughness,
credibility and unbiased nature of their work. Borgerding said
the LFB’s work is extremely important to the state budget,
a process that starts in February and doesn’t end until the
end of June in every odd-numbered year. The LFB provides
background research and discussion points for lawmakers
Eric Borgerding, Mike Wallace, Mark Hamilton,
Dan Meyer
to consider when deliberating the budget. The LFB said they
greatly appreciate their longstanding relationship with WHA’s
government relations and public policy teams.
When state budget discussions start after the first of the year in the Legislature, Borgerding said
advocating for Medicaid funding will be one of WHA’s top priorities. The Association will continue to
aggressively seek adequate payment in this historically underfunded program. Joanne Alig, WHA senior
vice president, policy & research, said WHA is developing a package of achievable policy initiatives aimed
at improving access to care for low income populations, both in urban areas and statewide, that can be
advanced in the state legislature during the 2015-16 legislative session.
The Council also discussed legislation being drafted by the Wisconsin Nurses Association that would
make changes to Wisconsin’s statutes regarding advance practice registered nurses, and explored how
changes to those statutes could impact organizations that employ or privilege advance practice registered
nurses.
Eric Templis, director of government relations, Gundersen Health System, and Matthew Stanford, WHA
vice president, policy and regulatory affairs, and associate counsel, briefed the Council on issues related
to interstate medical licensure. Changes in the delivery and organization of health care, as well as
workforce needs and the growing use of telemedicine, are driving new discussions of ways to streamline
the medical licensing process for physicians who practice across state lines. The Council reviewed
and provided feedback on the establishment of an Interstate Medical Licensure Compact that would
allow physicians to choose a process for obtaining an expedited medical license in states that join the
Compact.
WHA will now turn its attention to the state budget process, according to Kyle O’Brien, WHA vice
president, government relations. The summary O’Brien presented is on page 2 in this issue of The Valued
Voice.
As the meeting closed, Borgerding acknowledged Chair Mike Wallace’s service to the Public Policy
Council and announced that Wallace has been elected to serve as WHA Chair Elect in 2015. Borgerding
said Wallace’s leadership on the PPC and his keen understanding of the important role of advocacy to the
Association will be an asset to WHA’s members in the years ahead.
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