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Teaching Hospital Update - May 4–8, 2009


Email Alert

By Jennifer Viegas*

May 8, 2009

CMS PPS Rule Would Revise Quality Measures, Documentation, EMTALA

Under a proposed ruled recently issued by the Centers for Medicare & Medicaid Services (CMS), Medicare payments to acute care hospitals participating in the program's inpatient prospective payment system (IPPS) would decrease by about $979 million in fiscal year (FY) 2010.

The payment rule also includes provisions that address documentation and coding adjustments, four new quality-of-care measures, and changes to implementation regulations for the Emergency Medical Treatment and Labor Act (EMTALA).

CMS said in the proposal that the FY 2010 update to the IPPS market basket (price inflation index) will be 2.1%, lower than the updates applied in recent years and reflecting the slowing rate of inflation in the economy. However, CMS proposes to adjust the 2.1% amount downward by 1.9% to remove the effect of increases in aggregate payments because of changes in hospital coding practices that do not reflect increases in patient's severity of illness.

The market basket update to the IPPS rates, in conjunction with other proposed payment changes in the proposed rule, would result in an estimated $586 million decrease in FY 2010 operating payments (0.5% decrease) and $393 million decrease in FY 2010 capital payments (4.8% decrease) for a total $979 million decrease in FY 2010 operating and capital payments to acute care hospitals.

Payments to long term care hospitals, however, are expected to increase by 2.4% to $135 million. The increase would affect 400 long term care hospitals. The changes would apply to services provided to beneficiaries beginning October 1, 2009.

In addition to decreasing hospitals' Medicare reimbursement, the proposed rule adds four new measures for which hospitals must submit data under the Reporting Hospital Quality Data for Annual Payment Update program to receive the full market basket update. Two of these measures are additions to the existing Surgical Care Improvement Project measure set, and CMS believes that the other two measures will promote hospital participation in nursing-sensitive care and stroke-care registries.

Under current law, hospitals reporting the quality measures receive a full market basket increase. Those that do not report such information receive an increase that is 2% less than the market basket. According to CMS, 97% of participating hospitals received the full update last year.

CMS also proposes documentation and coding adjustments to ensure that Medicare spending for inpatient stays does not increase or decrease as a result of changes in hospitals' coding practices following adoption of a new inpatient hospital patient classification system in FY 2008.

Regarding EMTALA, the proposed rule would provide that a waiver of EMTALA sanctions only applies if the transfer arises out of the circumstances of the emergency.

In addition, the agency is proposing that the sanctions waived for an inappropriate transfer or for the relocation or redirection of an individual to receive a medical screening examination at an alternate location only are in effect if the hospital to which the waiver applies does not discriminate on the source of an individual's payment or ability to pay, according to a summary of the proposal.

CMS also proposes to revise the rules to state that the Health and Human Services (HHS) Secretary has the authority to apply the waiver of EMTALA sanctions to one or more hospitals in a portion of an emergency area or a portion of an emergency period.

Furthermore, CMS proposes changes to regulations affecting payment adjustments to teaching hospitals and to disproportionate-share hospitals providing care to a high portion of low-income patients. The proposed rule also describes five applications for new technology add-on payments and CMS' preliminary findings about those technologies.

CMS PPS Rule Would Revise Quality Measures, Documentation, EMTALA, BNA'S HEALTH L. REP. (May 7, 2009) (note: registration is required to view this content).

Medicare Will Not Pay for Genetic Tests to Determine Best Warfarin Dosage

In a proposed decision posted on May 4, 2009, CMS will not provide Medicare coverage for a genetic test that physicians can use to determine the proper dosage of the blood thinner drug warfarin. CMS explained that there is not enough evidence to indicate that such a test offers a better outcome for patients compared to the existing method. As many as one million or more Medicare beneficiaries annually take warfarin.

Physicians currently base the dosage on several factors including age and weight, and then every few days test whether a patient's blood is clotting properly and adjust the dosage accordingly. Finding the best dose of warfarin, known under the brandname Coumadin, is notoriously tricky. A dosage that is too small could be ineffective at preventing blood clots, while a dosage that is too large could cause internal bleeding. Tens of thousands of patients visit hospitals each year because of complications from warfarin.

Some studies have found that the genetic test, known as a warfarin response test, can help physicians discover the proper dosage more quickly. However, CMS said that there was no evidence that the test would reduce the risk of blood clots or hemorrhages. CMS believes conclusions about the benefits to patients appear premature, even though they are intuitively appealing. However, the agency said that it will cover the costs for the tests—typically between $50 and $500—as part of clinical trials to determine the test's efficacy.

Reactions from medical societies were divided on the proposed decision. The U.S. Food and Drug Administration recommends but does not require the genetic test to be conducted before a patient takes warfarin. A month-long public comment period is currently open on CMS' proposed decision.

Kaiser Daily Health Policy Report, Medicare Will Not Pay for Genetic Tests to Determine Best Warfarin Dosages, According to Proposed Decision, Henry J. Kaiser Fam. Fdn. (May 5, 2009).

Sebelius Challenges Hospitals to Reduce Infection

HHS Secretary Kathleen Sebelius announced the availability of $50 million in stimulus resources to fight healthcare-associated infections and improve patient safety, issuing a specific challenge to hospitals to take action to reduce Hospital Acquired Infections.

Sebelius, who spoke at the United Nurses of America's 12th National Nurses Congress and later testified before the House Ways and Means Committee, called on hospitals to reduce central-line associated blood stream infections in intensive-care units by 75% over the next three years.

Reports have concluded that patient-safety measures have worsened by nearly 1% each year for the past six years, and 40% of Americans still do not receive recommended care.

On the larger issue of healthcare reform, Sebelius fielded a number of questions from Ways and Means members concerned that the Obama Administration's interest in a public coverage option would crowd out private insurance. Sebelius believes competition is a healthy component of any market situation. It promotes innovation and best practices and helps to lower costs.

Jennifer Lubell, Sebelius Challenges Hospitals to Reduce Infection, Modern Healthcare's Daily Dose (May. 6, 2009) (note: registration is required to view this content).

ALJ Finds Hospital Violated NLRA, Must Recognize Nurses Union, Bargain

On April 28, 2009, a federal administrative law judge ruled that Fremont-Rideout Health Group improperly withdrew recognition of the California Nurses Association (CNA) as the representative of 450 nurses at two hospitals in November 2008 and must return to the bargaining table, making it the second ruling in a month that the hospital violated the National Labor Relations Act (NLRA) in its dispute with the union. (Fremont-Rideout Health Group and California Nurses Association AFL-CIO, NLRB, Nos. 20-CA-34194, 20-CA-34227, 4/28/09).

William N. Cates, an administrative law judge for the National Labor Relations Board (NLRB), said in a ruling released May 1, 2009, that the hospital group did not successfully show that CNA lost support from a majority of nurses at the hospitals on Nov. 17, 2008, when it withdrew recognition of the union based on an anti-union petition signed by 51.6% of the nurses. Cates found that eighteen of the 234 nurses who signed the anti-union petition later signed valid cards revoking their signatures on the petition in the two months before the employer used it to withdraw union recognition. Thus, without those eighteen signatures, the anti-union petition had support from only 47.8% of bargaining unit employees.

The ALJ's findings were similar to those of U.S. District Court for the Eastern District of California Judge Frank C. Damrell, who recently ruled in a petition from NLRB under section 10(j) of NLRA that the hospitals engaged in unfair labor practices when they withdrew CNA recognition. Damrell granted an injunction ordering that Fremont-Rideout recognize CNA and bargain with the union for a first contract.

Cates also found that Fremont-Rideout, with hospitals in Yuba City, CA, and Marysville, CA, violated the NLRA by refusing to bargain with CNA, prohibiting CNA representatives from accessing hospital property and facilities, and unilaterally changing wages and benefits for nurses immediately after withdrawing CNA recognition. Fremont-Rideout must post a notice for hospital employees notifying nurses that the NLRB has found the employer violated federal law and has been ordered to recognize and bargain in good faith with CNA.

Fremont-Rideout already has decided to appeal the ruling to the U.S. Court of Appeals for the Ninth Circuit. The appeal will be based on the same argument that the hospitals used previously: that the eighteen revocation cards were not valid because the nurses who signed them did not inform their employer or those who were circulating the anti-union petition.

ALJ Finds Hospital Violated NLRA, Must Recognize Nurses Union, Bargain, BNA'S HEALTH L. REP. (May 7, 2009) (note: registration is required to view this content).

Long Odds for Universal Flu Vaccine

According to researchers, a universal influenza vaccine that protects against multiple viruses, including unexpected strains like the 2009 H1N1 (swine) virus, is not likely to emerge soon—if at all.

Such a vaccine would eliminate the need to select different viruses each year for inclusion in the trivalent seasonal vaccine and would ideally protect against potential pandemic strains. However, the long-standing problem in dealing with influenza is that the virus is constantly mutating. The Centers for Disease Control and Prevention has noted that an influenza virus may swap genes with other strains that turn up in the same host, or with strains from birds and pigs.

Many researchers remain skeptical of such vaccination. Despite the odds, several studies presented at the conference showed that investigators are working on a universal flu vaccine. But, they are still in the early stages.

Dynavax Technologies in Berkeley, CA, has reported promising results from animal studies. The company expects to begin a phase I trial of its universal vaccine early next year.

The goal is to "cut down on transmission of divergent strains and potentially create background immunity against strains that might emerge unexpectedly."

Other researchers believe that such a product would eliminate the annual guessing game officials play when they decide what strains to include in the next year's seasonal flu vaccine—a decision complicated this spring by the unexpected emergence of a H1N1 strain that has infected almost 3,200 people worldwide.

Todd Neale, IVW: Long Odds for a Universal Flu Vaccine, MedPage Today (May 4, 2009).

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

*AHLA would like to thank Jennifer Viegas, Esquire (Hall Render Killian Health & Lyman PC, Troy, MI) for writing this alert.

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