380th MEETING OF THE HEALTH SERVICES COST REVIEW COMMISSION
December 4, 2002
Vice Chairman Farley called the meeting to order at 9:39 a.m. Commissioners Philip B. Down and Dale O. Troll were also present. Chairman Hillier and Commissioner Grosser participated by telephone.
ITEM I
REPORT OF THE MINUTES OF THE PUBLIC AND EXECUTIVE SESSIONS OF NOVEMBER 6, 2002
The minutes of the November 6, 2002 Public and Executive Sessions were approved.
ITEM II
RECOMMENDED FINES FOR DELINQUENT REPORTING
There were no fines.
ITEM III
DOCKET STATUS - CASES CLOSED
1790A - Johns Hopkins Health System 1795A - Johns Hopkins Health System
1791A - Western Maryland Health System 1796N - Union Hospital of Cecil County
1792N - Greater Baltimore Medical Center 1797N - Sheppard Pratt Hospital
1793A - MedStar Health 1798R - Montgomery General Hospital
17994N - Mt. Washington Pediatric Hospital
ITEM IV
DOCKET STATUS - OPEN
Johns Hopkins Health System - 1799A
On November 14, 2002, Johns Hopkins Health System filed an application on behalf of its member hospitals, Johns Hopkins Hospital, Johns Hopkins Bayview Medical Center, and Howard County General Hospital seeking approval to participate in a global price arrangement for transplant services with the Construction Workers Trust Fund for a period of three years beginning December 1, 2002.
The staff recommended approval of the application for one year beginning December 1, 2002 with approval for two additional years contingent on favorable performance in the first year. In addition, the staff recommended that the approval be contingent upon the execution of the standard Memorandum of Understanding.
The Commission voted to approve the staff recommendation. Commissioner Troll recused himself from the vote. Chairman Hillier cast the fourth concurring vote.
ITEM V
MONITORING MARYLAND PERFORMANCE
Andy Udom, Associate Director - Methodology, summarized Maryland hospitals’ trends in charge per case performance for the 12-month period ended September 2002. The report indicates that the September 2002 charge per case increased 5.60% over the charge per case for the 12-month period ended September 2001. Mr. Udom reported that the charge per case for the month of September 2002, when compared with that of the month of September 2001, increased by 6.03%.
ITEM VI
DRAFT RATE REDESIGN REVIEW RECOMMENDATIONS
The staff summarized the draft recommendations for technical revisions to the original rate redesign arrangement. Robert Murray, Executive Director, reported that the Policy Work Group had decided that it should await additional performance data and model proposed policy changes before preparing draft recommendations, but that hospital and payer representatives would present their views on policy issues at today’s meeting. It is anticipated that the staff will present all draft recommendations at the February 5, 2003 public meeting.
Paul Sokolowski, vice-president of the Maryland Hospital Association, and Harold Cohen, PhD. representing the payers, commented on the Labor Market Adjustor issue. Mr. Sokolowski reported that the hospital industry was in the process of developing and modeling a new labor market adjustor methodology utilizing hospital employee zip code information. Dr. Cohen suggested that MHA be informed that its proposed methodology: a) be revenue neutral, i.e., the weighted labor market adjustor for all the hospitals in the State should equal the statewide average labor rate; and b) produce hospital wage rates that reflect the markets in which the hospital operates.
Commissioner Grosser noted that it was very important the Commission adhere to its schedule on the Labor Market Adjustor issue - - i.e., that recommendations be presented and discussed at the February 2003 public meeting; that proposed changes be voted on at the March 2003 public meeting; and that the approved methodology be implemented in April 2003.
Chairman Hillier noted that the proposed Labor Market Adjustor methodologies should recognize that the labor markets are different for hospital specific and non-hospital specific jobs. He also supported Dr. Cohen’s suggestion that the proposed Labor Market Adjustor be revenue neutral.
Commissioner Farley observed that Commissioner Grosser had made an important point because the Labor Market Adjustor is such a vital part of the rate setting system. He also noted that it will be important, at a minimum, to have an understanding of, if not the final recommendation on, a limited number of options early on in the process. Without being able to establish those parameters, it will be difficult to model out the implications of the other decisions that are going to be made.
Hospital Industry Recommendations on Proposed Changes to the Maryland Payment System
Thomas Mullen, President & CEO of Mercy Hospital, Cal Pierson, President of the Maryland Hospital Association, Kevin Sexton, President & CEO of Holy Cross Health, and Jim Xinis, President & CEO of Calvert Memorial Hospital, made a presentation to the Commission outlining the hospital industry’s view of the issues which they felt needed to be addressed in the redesign process.
They concluded that since the system’s progress has exceeded expectations, it should be modified to address its deficiencies without endangering the waiver. They recommended that hospital margins be increased by having the system match National Net Patient Revenue, and that the strict zero sum principle of the system be rescinded because it has resulted in unfair and imbalanced treatment of hospitals.
ITEM VII
OUTPATIENT PAYMENT SYSTEM UPDATE
A hospital industry group consisting of: Mark Higdon, KPMG, Joseph Smith, CFO - Union Memorial Hospital, and Robert Vovak, Vice President - MHA made a presentation. The principal points of their presentation were that: Maryland outpatient revenue growth compares favorably with the U.S.; the current Maryland outpatient system works; and the proposed prospective outpatient payment system has no cost benefit. They concluded that instead of working to develop an outpatient payment system, the Commission should refocus its efforts on improving outpatient data.
Graham Atkinson, Ph.D., Commission consultant, reported that progress on the outpatient payment system was slower than anticipated. The use of Ambulatory Payment Classifications (APCs) grouper has been difficult because many outpatient procedures have no assigned APCs. The Ambulatory Payment Group (APGs) grouper appears to be a more viable alternative.
Dr. Atkinson noted that he would continue to develop a reasonableness of charges (ROC) using APGs first for ambulatory surgery cases and then for the Emergency Department. The first ROCs for ambulatory surgery are expected to be completed in April 2003.
Dr. Cohen, representing CareFirst, and Barry Rosen, representing MAMSI, spoke in support of the development of an outpatient prospective payment system. They also suggested that the update factor applied to outpatient rates should only include factor inflation.
ITEM VIII
NURSE SUPPORT PROGRAM RECOMMENDATIONS
Brian Jacque, Chief- Information Management and Program Administration, presented the recommendations of the Nurse Support Program evaluation committee for the proposals submitted on or before September 30, 2002.
The Commission voted unanimously to approve the committee’s recommendations.
ITEM IX
LEGAL REPORT
There was no Legal Report.
ITEM IX
HEARING AND MEETING SCHEDULE
Public Sessions
January 8, 2003 9:30 a.m., 4160 Patterson Avenue - HSCRC Meeting Room February 5, 2003 9:30 a.m., 4160 Patterson Avenue - HSCRC Meeting Room
STAFF PERSONNEL NEWS
The Chairman welcomed Brian Morton back to the staff. Mr. Morton had been a Rate Analyst for eight years until leaving for a position with the Office of Budget and Planning for the District of Columbia in December of 2000.
The Chairman also announced the promotion of Andy Udom to Associate Director of Methodology.
There being no further business, the meeting adjourned at 12:12 p.m.