1. Western Michigan HFMA MHA Finance & Legislative Update March 23, 2016
Vickie R. Kunz, senior director, Health Finance
Paige Fults, director, Advocacy 1

2. About MHA Established in 1919; Nonprofit (501c 6)
Approximately 100 employees
Locations: Okemos (HQ and MHASC); Downtown Lansing (CAC)
Primary Membership: hospitals / health systems
Governance: 23-member Board; CCTF structure

3. MHA Advocacy: What We Stand For
Fair and adequate Medicaid and Medicare funding
Health coverage for all, paid for by all
Voluntary Improvements in patient safety and quality
A strong Certificate of Need (CON) program
Preservation of Michigan’s Medical Liability reforms

4. Mandatory Bundled Payments (CJR) Model
Comprehensive Joint Replacement (CJR) model finalized by CMS in November – implements the first mandatory bundled payments model in US.
Applies to all acute care hospitals located in 67 Metropolitan Statistical Areas of the US – including Flint and Saginaw.
Takes effect April 1, 2016, runs for almost 5 years.
Applies to Major Joint Replacements – discharges assigned to MS-DRGs 469 or 470.
Includes all Medicare Part A and B services, including post-acute care, with limited exclusions for 90 days.
Hospital-specific reports distributed Jan. 6.

5. Mandatory Bundled Payments Model
CMS will likely expand to other MSAs and other MS-DRGs in the future.
Additional analytics available for purchase through DataGen.
Webinar demo available via Feb. 15 MHA Monday Report.
Several options available for analytic purchase including MS-DRGs 469 & 470 and all MS-DRGs.
Will identify resource utilization for patients.

6. Medicare Spending Per Beneficiary Reports
MSPB developed by CMS and used for the efficiency measure in the Medicare VBP program for FY
March 16 MHA distributed 2014 MSPB reports to CEO/COO/CFO/Directors of Patient Safety/Quality Improvement/Reimbursement/Medical Directors.
Reflects Medicare spending by category for three time periods:
One to three days prior to admission
During the index admission
One through 30 days after discharge from index hospital

7. Medicare Value Based Purchasing (VBP) Program
Updated measure trends and VBP program estimates distributed March 1.
Reflects actual hospital performance for FY 2015 and 2016 and estimates for FY 2017, based on Hospital Compare data from December 2015.
Updated estimates will be provided following quarterly data releases.

8. Medicare Uncompensated Care Pool
Hospital-specific analysis distributed March 21, to CFOs/RDs.
Compares DSH payments using S-10 data to those using current CMS proxy methodology.
CMS has indicated their intent to use S-10 at some undetermined point in the future.
Provide line-by-line comparison of S-10 data, highlighting year-to-year changes and potential errors.

9. Medicare Advantage Plans
As of January 2016, 35 plans operating in Michigan, with 645,000 or approximately 34% of Michigan’s 1.9 million Medicare beneficiaries enrolled.
Enrollment up 3,000 since October.
Up to 23 plans in some counties.
Review MA payment rate for all plans.
CAH entitled to Medicare cost reimbursement.
Each MA plan may determine own utilization model and is not required to maintain electronic transactions.
Many MA plans have instituted “RAC-like” utilization programs.
Matrix of MA plans by county available at MHA website – updated quarterly, with MHA Monday Report article.
Jan. 25 MHA Monday Report.

10. Timing of Medicare FY 2017 Rules
CMS expected to release proposed rules to update Medicare IPPS, LTCH, SNF, IRF, and IPF payment systems in mid-April, with final rules by Aug. 1, for Oct. 1, 2016 effective date.
CMS expected to released proposed rules to update OPPS, HHA, Physician Fee Schedule payment systems by Aug. 1, with final rules by Nov. 1, for Jan. 1, 2017 effective date.

11. FY 2017 Medicaid Budget – MHA Board Priorities
Protect existing funding
No cuts to Medicaid rates
GME, OB stabilization fund, small/rural pool ($93m GF)
Protect against excessive retention as state obligation for HMP increases ($12m increase from last year)
Renew Healthy Michigan Plan funding
- including required match = $109m

12. Three-Year HICA Extension
Health insurance claims assessment was due to sunset Dec. 31, 2017, creating a significant shortfall.
Extension until July 1, 2020.
HICA tax rate will increase from 0.75% to 1% when the state can no longer receive federal matching funds from the HMO use tax, providing additional funds to support Medicaid.

13. MHA hosted DSH education session March 15.
Medicaid DSH Payments
FY 2013 DSH audits underway with requested data due to Myers and Stauffer LC March 25.
MHA hosted DSH education session March 15.
Recording available via March 21 Monday Report
Draft report due to MSA by Sept. 30, with final report due to the CMS by Dec. 31.

14. Continued, Medicaid DSH Payments
MSA implemented multi-step process October 2012.
FY 2013 Step 2 delayed due to federal litigation.
MSA intends to distribute FY 2013 Step 2 DSH payment data to hospitals within the next few weeks.
Payment amount will change from initial amount.
Hospitals have opportunity to reduce their DSH limit or decline DSH payments.
Hospitals that receive DSH payments in excess of calculated DSH limit (based on audit) will be subject to DSH payment recovery.

15. Blueprint for Health Innovations (BHI)
MDHHS announced five pilot regions for the Blueprint for Health Innovations.
Genesee County Muskegon County
Jackson County Northern Region
Livingston and Washtenaw Counties
Michigan will receive $70M in federal funds over four years to support the BHI goals which are:
Better care coordination
Improved health outcomes and
Lower healthcare costs

16. Continued, Blueprint for Health Innovations (BHI)
Funding will support multi-payer reimbursement and healthcare delivery transformation by focusing on:
Patient-centered medical homes;
Coordination and accountability;
A bridge to behavioral health and long-term care; and
Integration of health care and community resources.
Additional information regarding this initiative including timing and phase-in will be available over the next several months.

17. Medicaid OPPS Payment Factor
Updated effective Jan. 1, 2016, for payment of Medicaid fee-for-service (FFS) OPPS and ASC services.
Payment factor changed from 52.3 % of Medicare base payment rates to 52.6%.
Excluding an area wage adjustor
MSA will adjust claims paid for dates of service on/after Jan. 1.
Final policy released March 1.
See MHA Monday Report article March 7.

18. Newborn Edits/Payment Recoveries
Informational edit implemented for claims adjudicated on/after Dec. 11, 2015.
Will change to denial edit at a future date
Billing to Medicaid HMO will avoid FFS payment takebacks in the future.
Hospitals may experience delays in newborn being added to HMO coverage.
Hospitals should notify Provider Support if they experience issues with HMO adding baby and processing claim.

19. Other comparisons to results for the Great Lakes States
2014 AHA Survey Results
Annually, the MHA provides comparisons of Michigan and US utilization and financial statistics based on annual survey results.
Other comparisons to results for the Great Lakes States
(IL, IN, OH, PA, WI)
See MHA Advisory Bulletin # 1378 included in March 14 weekly mailing.
Includes PPT for ready-to-go presentations and Excel template which allows hospital to input its data for a comparisons to Michigan and US.

20. Healthy Michigan Plan Renewal
Immediate – Demonstrate the Healthy Michigan Plan has reduced uncompensated care (charity care and bad debts) at Michigan hospitals
Sen. Mike Shirkey, a key MHA and Healthy Michigan Plan supporter, has requested more current information than is publicly available through cost reports
Annual appropriation

21. Medicare Payment Cuts 2010 – 2015 $ 6.6 billion 2016 – 2024
Total
$14.0 billion
Reduced hospital market basket updates
2% sequestration
Medicare DSH
Coding reductions

22. Uncompensated Care Impact
From 29 hospitals reporting for
April Sept. 2015
Hospitals
Uncompensated Care Change
Percentage
Change
Number
Revenue Category 8
< $25 m
($4 m)
(45%) 9
$25 m - $100 m
($31 m)
(30%) 12
> $100 m
($202 m)
(69%)

23. MHA Monthly Financial Survey
Provides free benchmarking of hospital financial and utilization results.
Some Michigan hospitals have participated since 1999.
Approximately 500 hospitals in 14 states participate nationally.
Full participation endorsed by MHA board at its February 2016 meeting.
MHA is hosting a webinar at 10 am on March 31.
Registration is available via the Feb. 29 MHA Monday Report.

24. MHA Monthly Financial Survey, continued
Benefits of hospital use:
Timely data for Michigan and national benchmarking of hospital financial and utilization results.
Useful to hospital administration for budgeting, marketing, and internal management.
Hospitals can obtain reports for any time period for which they’ve submitted data.
Ability to review volume and other trends at other hospitals in Michigan and US.
Peer group benchmarking to specific hospitals
Requires minimum of five hospitals

26. Michigan Legislative Big Picture
Flint water crisis
Detroit Public Schools
Positive year-end balance for FY ‘15
Healthy Michigan Plan waiver approved
Specialty drugs = $140m GF
Election year for Michigan House

27. Flint Water Background Funds Federal loan opportunity = ?
Bottle water donations
State ($37 mil)
Education: School nurses, nutrition, special education services
DEQ: Corrosion control, lab testing
DHHS: Filters, food banks, community education, counseling
The Switch – March 2013 city council vote and EM signed April (expected to save city $19mil) to leave Detroit water, once signed with KWA Detroit stops selling water but KWA pipeline won’t be done for 3 years
Complaints – GM stops Oct. 2014, Feb 2014 city of flint says no to Detroit connection offer

28. Flint Water: Long Term Infrastructure damage Lead Exposure
Children under 6
Leaves bloodstream after 28 days but long term effects
Families move; how to assist children who were exposed in Flint but live elsewhere
800 mil to fix all pipes

29. Flint Waiver Approved
Approved March 3 by U.S. Department of Health and Human Services 
Expand Medicaid coverage to certain populations in Flint who used water system starting April 2014
Cover an additional 15,000 children and pregnant women (Annual income of 400% FPL)
30,000 current Medicaid beneficiaries would be eligible for expanded services
Annual income of $97,200 for family of four for FPL

30. Flint Water Update Gov. Snyder testified in US House March 17
Asked Congress to be a partner to “fix” Flint
Admitted Emergency Manger law failed
Asked to resign along with Gina McMarthy, EPA Administrator
Failure of government of all levels
Legal defense team
Gina McCarthy – EPA Administrator testified as well
Legal team – state $ is transparent, State rules allow for the state to bear the defense costs of employees to ensure that public servants can do their jobs with limited risk

31. Flint Water: How to Help
Community Foundation Greater Flint

32. Detroit Public Schools (DPS)
DPS could not make payroll starting April 8
Teacher sick-outs
Deplorable conditions
Health of youth
Teaching recruitment and retention
Mold, mushrooms, dead mice, bugs, freezing classrooms, bullet holes
Unsafe conditions for teaching and learning
Health, not just mold - Breakfast and lunch at school
he school system, which has been under state control since 2009, has $515 million operating debt and total debt over $3 billion, and cannot afford to take on additional loans.

33. Detroit Public School Update
A $48.7mil supplemental appropriations
Keep Detroit Public Schools open for the remainder of the school year provide
Financial Review Commission to oversee DPS’ finances, as it was created to do for the city government
66% of MI residents support funding
Money is from left over tobacco settlement revenue
FRC - currently oversees the city's finances after its bankruptcy
bankruptcy of DPS leaves taxpayers liable for $1.5 billion in school district debt

34. U.S. House = 247 Republicans/188 Democrats
2016 Elections - Nov. 8
U.S. President
U.S. Congress – 14 seats (9 R, 5 D)
MI House of Representatives – 110 seats (63 R, 46 D)
MI Supreme Court – 2 seats (Justice Viviano, Justice Larsen)
Election
Primary: Aug. 2, 2016
General: Nov. 8, 2016
U.S. House = 247 Republicans/188 Democrats
Michigan House = 63 Republicans/46 Democrats currently

35. Michigan Overall Election Turnout
General Election
Turnout
November, 2014
42.7%
November, 2012
64.7%
November, 2010
44.5%
November, 2008
69.2%
November, 2006
52.1%
November, 2004
66.6%
November, 2002
November, 2000
59.9%
*Gray marks presidential election years

36. Michigan Presidential Voting Pattern By Party
Michigan Vote Percentages
Election Year
Democrats
Republicans
2012
54.2%
44.7%
2008
57.4%
41.0%
2004
51.2%
47.8%
2000
51.3%
46.1%
U.S. vote percentages
2012: 51.1% Democratic / 47.2% Republican
2008: 52.9% Democratic / 45.7% Republican
2004: 48.3% Democratic / 50.7% Republican
2000: 48.4% Democratic / 47.9% Republican

37. 2016 Elections - President (Dems)
Hillary Clinton
Former U.S. Secretary of State
Bernie Sanders
U.S. Senator-VT
Current
Clinton — 1, Sanders — 856
*2,383 Delegates need
Convention Date: July 25 (Philadelphia, PA)

38. 2016 Elections - President (GOP)
John Kasich
Governor of Ohio
Donald Trump
CEO of Trump Organization
Ted Cruz
U.S. Senator - TX
Current
Trump — Cruz — Kasich—143
*1,237 Delegates need
Convention Date: July, 18 (Cleveland, OH)
Delegate binding: Delegates are bound to their Presidential preference through the first ballot at the Republican National Convention. Delegates may not amend their Preference unless released from that commitment. Delegates become officially uncommitted if their Presidential candidate withdraws from contention as a Republican candidate for President of the United States, suspends his or her campaign, endorses another candidate for President of the United States, seeks the nomination of a political party other than the Republican Party for any political office.

39. Anyone surprised Michigan didn’t vote for the “establishment?”
Shaping the Election
Scandals
Reps. Todd Courser & Cindy Gamrat
Sen. Virgil Smith
Ingham County Prosecutor Stuart Dunnings
Crisis
Flint Water
Detroit Public Schools
Elimination of Straight ticket voting
Anyone surprised Michigan didn’t vote for the “establishment?”

40. Michigan Specific Data
Michigan's primary turnout: 2.38 million
breaking a previous high of 1.9 million in 1972
Sanders – Won 73 of 83 counties
Trump - Won 71 of 83 counties
Last Republican to Win MI’s Electoral College was Reagan in 1988.
Sanders benefited from large scores of college students, senior citizens and first-time voters who are not part of the traditional Democratic establishment.
Clinton doesn’t connect with young voters, seen as dishonest, has work to do
Trump – 36%
U.S. Sen. Ted Cruz - 25% (west side of MI)
Ohio Gov. John Kasich - 24%
MI currently has 16 EC (lost population in 2010 census) 4th time in a row for MI to lose 1 EC vote
Donald Trump
Bernie Sanders

41. Michigan Specific Data
Michigan Republican Delegates* 59
Trump (25)
Cruz (17)
Kasich (17)
Michigan Democratic Delegates
147
Sanders (67)
Clinton (60)
* 15% Threshold
Sanders benefited from large scores of college students, senior citizens and first-time voters who are not part of the traditional Democratic establishment.
Clinton doesn’t connect with young voters, seen as dishonest, has work to do
Trump – 36%
U.S. Sen. Ted Cruz - 25% (west side of MI)
Ohio Gov. John Kasich - 24%
MI currently has 16 EC (lost population in 2010 census) 4th time in a row for MI to lose 1 EC vote
GOP – at large (chair of MI republican party, state nation cmteman and national cmtewomen plus 10, 42 congressional district (14*3, Seats in House), 3 automatic)
DEMS (28 at-large, PLEO 17 pledged party leaders and elected officials, 85 district delegates, 17 super delegates, unpledged)

42. The Success of Trump “Somewhat conservatives”
Pick up voters from all parts of the GOP electorate
Simple, relatable answers
Confidence
Popular among people who have been left behind by economic progress
Sick of establishment
Achieved “standing out”
Blunt
“Somewhat conservative” – Largest in GOP, Romney and McCain won GOP nominee with this group, up 9% since 2012
Older and younger, Tea Party and traditional, secular and Evangelical
Decisive air, charisma
No college degrees, downscale Americans
Blunt/Not PC– says what he feels in the moment

43. GOP Concerns
Trump does not poll well against Clinton and all other GOP candidates show a competitive race
Contested GOP convention
Fractioned party
“Down ballot sweep” by Democrats
 Trump’s unpredictability 
What about the Michigan polls that said Sanders would lose MI?

44. Health Care Stances of Two Front Runners
Trump
Repeal Affordable Care Act
Smaller “quantities” of vaccines
Allow purchase of health care plans across state lines
Clinton
Supports Affordable Care Act (repeal Cadillac Tax)
Control pharmaceutical pricing
Supports Vaccines
World is interconnected (Ebola)
Women’s Rights
Trump - Interstate commerce would drive down the cost of health care because it would increase competition
Clinton - Require pharmaceutical companies to invest in research of generic drugs
Big Picture – GOP helpful with regulations, keeping medical liability at bay, doesn’t want unnecessary burdens
DEMS – Better with healthcare funding
Move away from politics – State and Federal level, agree or don’t agree with ACA and HC Ex? You can’t take away coverage without something in place.

45. U.S. House = 247 Republicans/188 Democrats
2016 Election: Federal
U.S. House of Representatives (2 open)
District 1 (Benishek)
District 10 (Miller)
District 7 (Walberg)
53.6% GOP
Driskell
District 8 (Bishop)
54.6% GOP
Gilbert
U.S. House = 247 Republicans/188 Democrats

46. 2016 Election: Preparation
Launch 2016 MHA election Web page
critical dates, races and resources
MIRS 2016 Election Guide distributed
Election resources mailed to member hospitals
talking points, advocacy positions, brochure, poster, table tent, candidate listing
Ongoing updates to the election website
Social media postings
#YourVoteIsVital
#Election2016

47. Objective & Useful Information
Non-partisan guide to candidates and issues
Secretary of State- michigan.gov/vote
Elections in Michigan website
Non-partisan website providing analyses of campaign ads and literature from candidates for Gov., state Legislature and Congress
(click on election logo)
MHA election web page containing candidate information and election information pertinent to hospital community
Objective & Useful Election Information
a non-partisan video guide to the candidates and issues
michigan.gov/vote, the Michigan Secretary of State Elections in Michigan website
a non-partisan website providing analyses of campaign ads, website claims and other public communications from the candidates for governor, state Legislature and Congress.

48. ???Questions??? Vickie Kunz Phone: (517) 703-8608
Paige Fults
Phone: (517)

49. MHA Resources
Monday Report is available FREE to anyone and is distributed via each Monday morning.
Go to website and select “Newsroom”, then Monday Report
MHA Monday Report – electronic publication issued weekly
Request password if you don’t have one.
Donna Conklin at to obtain MHA member ID number
Advisory Bulletins – Extensive communications available only to MHA members, as needed. (Require password to obtain from website).
Hospital specific mailings as needed for various impact analyses, etc.
Periodic member forums
See mha.org for other resources.
Monthly Financial Survey (MFS) provides free benchmarking of financial and utilization statistics.