!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!

778
Michigan legislators are working through
revisions to the states Medicaid nancing plan
that would effectively transfer the burden of
the state matching funds from Medicaid
HMOs to the broader insured population.
The Health Insurance Claims Assessment
Act was proposed by Gov. Rick Snyder, a
Republican, and its passage was assumed in
his budget proposal that
passed the legislature earlier
this year. The tax passed the
Senate June 30 and awaits
action in the House.
But the bill is under erce
opposition from the Michigan
Manufacturers Association.
This powerful group
represents the core employers
of the wounded state
economy: the automakers,
parts suppliers, and other
goods producers of the
formerly high-wage
industrial heartland.
The new tax will
fall disproportionately
on manufacturers and
self-insured companies, said Delaney
Newberry, director of human resource policy
for the association. She noted that 91% of
manufacturers offer healthcare benets to their
employees, compared to 71% of other
industries, 68% of service-providing
industries, and 38% in the leisure and
hospitality sector. Newberry added that the
new HICA tax is levied directly on self-insured
companies, which account for two-thirds of
the private insurance market.
The association fears that the law allows
the state to collect more than the Medicaid
match and includes automatic upward
adjustments that will result in
over-collections that will not be
returned to payers of the tax.
The manufacturers oppose it
because theyve been
freeloading on the system, said
David Waymire, spokesman for
the Michigan Association of
Health Plans. Dont forget, their
insureds have beneted from a
robust healthcare and hospital
system. That system is in some
degree of jeopardy.
They have been able
to get by by not paying
anything into this so far.
This is what the federal
government is saying wont
go any more.
The new tax regimen comes after the
federal government let it be known that
certain strategies of raising Medicaid matching
funds on the state level would soon be
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September 14-16
August 23-25
Calendar
19 July 2011
July 20
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
www.lakesidecommunityhealthcare.com
Midwest Edition
Michigan Debates Medicaid Tax
State Would Tax Commercial Plans to Fund Match
Continued on Next Page
Delaney Newberry
Michigan Manufacturers
Association
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Payers & Providers Page 2
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In Brief
Michigan Blues Raises
Renewal Rates on Small
Business by 7.4%
Blue Cross Blue Shield of Michigan
announced it will raise small business
rates by an average of 7.4% in the fall,
the lowest increase in six years, the
insurer said. Last year it raised rates on
this segment employers with 49 or
fewer workers by 13.1%.
The Blues plan has the dominant
market share in the state and is
required to take all applicants. The
small business segment covers around
230,000 people in Michigan. About
10% to 15% of those, in roughly 4,400
businesses, will be up for renewal in
the fourth quarter.
John Dunn, the companys vice
president of middle and small group
sales, said he was very pleased to see
these moderate rate increases. By
introducing new products, improving
cost controls through our innovative
partnerships with doctors and hospitals
to improve quality and efciency, and
driving administrative savings, we were
able to effectively lower our rate
increases.
The Blue Care Network, an HMO
product, will have an increase of
8.7%, less than in 2010 but higher
than any other year since 2004.
Aurora Health Pulls
Back Nurses from
Milwaukee Schools
Ten Milwaukee public schools will
lose their nurses this fall as part of a
pullback by Aurora Health Care. The
Milwaukee-based hospital system will
continue to sponsor a fulltime
registered nurse at one school.
Aurora Health Care reviews its
array of services on an ongoing basis
to better align services with patient
needs and best practices, spokesman
Mike Brophy told the Journal-Sentinel
Continued on Page 3
NEWS
Medicaid Tax (Continued from Page One)
declared invalid. Currently, Michigan raises
$400 million a year by levying a 6% use tax
on Medicaid HMOs. That money is used to
leverage about $800 million in federal
matching funds for Medicaid.
The federal government is concerned that
that use tax is not broad-based enough, said
David Finkbeiner, senior vice president for
advocacy at the Michigan Health and Hospital
Association. Ofcials at the Centers for
Medicare and Medicaid Services had
informed the governors ofce that this form of
taxation to support Medicaid would probably
be disallowed in the near future.
Instead of a tax on just the Medicaid plans
themselves, CMS wants to see a more
redistributive kind of tax, Finkbeiner said. The
governor of Michigan has been told, Make
your move now, or time will run out.
As a consequence, Snyder
recommended in his budget
that the old tax be replaced by
the new claims tax. Instead of
targeting the Medicaid
population, it now will be
levied against all insurance
claims.
This problem affects a
number of states, which will all
have to change their tax policies
to continue to receive the
federal matching funds.
The tax is levied on claims
paid, not premiums. When a
provider sends in a payment,
a 1% tax will be incurred on
the insurer. The tax applies to
all insurance companies and
self-funded employer plans,
but does not apply to
Medicare or federal employee plans. They
may pass it through, they may eat it, said
Waymire. They will have to decide.
The Michigan State Medical Society also
supports the new tax.
Our view is its really more of an updating
of our state statute to comply with the pending
changes at the federal level on the rules
related to assessments on different provider
classes, said Colin Ford, director of state and
federal government relations for the physicians
group. It raises roughly the same amount of
money as before. We support it. Its passed the
Senate. Im optimistic.
The matching ratio from the federal
government is very favorable, Ford added. If
the tax was not passed, the state would be
foregoing $1.2 billion in Medicaid funding,
which from the physician standpoint and
hospital and nursing home standpoint, youre
looking at at least a 20% cut in
reimbursement rates.
In Michigan Medicaid payments are
already substantially below most practices
costs, he said. Such a funding cut might push
many doctors away from serving Medicaid
patients.
Michigan Blue Cross and Blue Shield, the
dominant insurance carrier in the state, was
more circumspect in its approach.
We are reviewing the Senate bill and
estimate it would cost our customers in excess
of $100 million, said Helen Stojic, Blue Cross
spokesman. The insurer has not endorsed the
bill, opposed it, or taken a position at all.
Were just monitoring it at this point,
Stojic said, and havent said
anything about how it will be
applied.
The Michigan Blues are the
largest third-party administrator in
the state, handling claims for
many employers such as those in
the manufacturers association.
They also wants to maintain good
relations with hospitals and
physicians across the state.
Michigan has been in an
economic recession for a decade,
Finkbeiner said.
As a result, We have
expanded our Medicaid rolls
from 900,000 people to nearly
2 million people in the last 10
years. We are very dependent
on federal funds to support our
Medicaid program. The state
does not have $1.2 billion lying around to be
spent on Medicaid.
Michigans scal year begins Oct. 1, so
Snyder asked the legislature early in the
session to adopt the tax changes. While the
House has adjourned for the summer, there is
still time for it to pass the bill before the states
budgetary year begins.
We believe at the end of the day the
House will pass it, Waymire said. This is the
same House that voted to spend the money.
Why wouldnt they vote to fund the tax?
Everybody will benet from this, including
the manufacturers, because it maintains a
robust health system in our state, one that is
nancially fragile right now, he said.
David Finkbeiner
Michigan Healthcare
and Hospital Association
!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
Page 3
Payers & Providers
Longer ALOS!*
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*For our ads, not your hospital
NEWS
In Brief
newspaper. Aurora decided not to
renew its commitment to the 10
schools after spending money on the
program for more than 10 years.
Childrens Hospital of Wisconsin is
looking at stepping up the nursing
coverage it offers the public schools.
Were working with Milwaukee
Public Schools to determine which
schools we will have a presence in,
said Bridget Clementi, a director for
Childrens.
Public school nurses in Milwaukee
work with a low-income student body
that has above-average rates of
asthma, diabetes, and other health
problems.
Schools with more than 250
students will probably have some
daily nursing coverage, the school
system said.
Illinois Reduces Rolls
of Low-Income Seniors
Getting PrescriptionAid
In a further sign of the scal pressures
that state ofcials are working under,
Illinois is reducing the income
eligibility requirements for low-
income seniors and people with
disabilities who receive nancial
assistance to buy prescription drugs.
About 43,000 people will lose
their state aid because lawmakers
reduced funding for the program, to
$53.7 million from $107 million in
prior years. About 211,000 people are
now signed up for the Illinois Cares Rx
Program.
To stretch the available funds, the
Department of Healthcare and
Human Services raised co-pays and
lowered income requirements. A
single individual now must earn less
than $21,780 to qualify, down from
$27,610. A family of three must make
less than $37,060, compared to
$45,657 earlier. Copayments for
generics will go from $2.50 to $5.
Brand-name prescriptions will cost a
$15 copay, up from $6.30.
The state of Illinois is grappling
with a severe scal emergency that
led the legislature to raise the income
tax from 3% to 5% in January.
Starting Aug. 28, theres a new sheriff in town
for Missouri physicians. The Missouri Board of
Registration for the Healing Arts will have
enhanced tools for investigating and regulating
doctors.
A new law, House Bill 265, signed by Gov.
Jay Nixon last week, lets the board conduct a
hearing if it has evidence or suspicion that a
doctor is incompetent, under the inuence of
substances, or mentally ill. It can require
competency tests and then discipline him or
her.
The law was drafted after the St. Louis Post-
Dispatch newspaper last year published a
series of articles under the theme of Who
Protects the Patients? documenting the
failures of the states regulatory framework
around physician care. The board already had
authority to suspend physicians who were a
danger to patients, but it hadnt done so in
decades. The present law required that cases
against doctors be rst heard by an
administrative hearing commission, which
often took several years.
The new law will make a doctors
education, specialty certications, and
disciplinary record in other states subject to
public information. Until now, most of that
information has been kept private.
The new law enjoyed the support of patient
advocacy groups, such as Consumers Unions
Safe Patient Project.
The shutdown of state government operations
that has hobbled Minnesota since July 1 has
largely spared hospitals and healthcare
organizations.
State payments to Medicaid providers,
nursing homes, and mental health providers
were allowed to continue by the judge
overseeing state operations during the
prolonged budget impasse.
The shutdown went into effect after
Republican leaders of the state legislature and
Democratic Gov. Mark Dayton could not reach
agreement on a new budget. The legislature
refused to accept Daytons proposal of spending
cuts plus a tax increase on the top 2% of
Minnesota income earners.
The shutdown affected healthcare providers
in uneven and surprising ways, however.
Providers asked special master Kathleen Blatz
to get background checks for new employees
deemed an essential service, so that they
could continue to staff patient care units, said
Jan Hennings, director of communications for
the Minnesota Hospital Association. Blatz and
the judge overseeing the shutdown, Kathleen
Gearin, agreed.
But the judge did not allow state licensing
boards to continue operating, so no new
physicians or nurses could begin practicing,
and incumbent practitioners could not obtain
license renewals.
Now thats all moot, Hennings said,
because on July 14, the governor and
legislators reached a preliminary agreement to
halt the impasse and pass a budget.
Ofcials expected the state to reopen for
business in stages over the next week.
Minn. Medicaid Spared in Shutdown
State Pays Bills but Wont Relicense Doctors, Nurses
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Missouri Strengthens Doctor Regs
Medical Board Receives New Disciplinary Powers
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Payers & Providers Page 4
The accountable care organization (ACO)
model is sparking the imagination of leaders
across the U.S. health system. Most healthcare
entities interested in this model already have a
professional resource in place that could be
pivotal: registered nurses.
ACOs focus on the need for proactive and
effective coordination across all levels and
types of healthcare services,
extending roles and
responsibilities beyond
traditional care delivery.
Nurses are well suited for
expanded roles, which can
include:

Care coordinator/manager

Disease manager

Resource coordinator

Support for psycho-social

needs

Health coach

Community outreach

Information analyst

Process manager

Discharge/transition planner

Data analyst
Nurses work in a variety
of organizations involved with
ACOs: practitioner ofces and
clinics, hospitals, insurers, and
community health organizations. As a result,
they are often in positions to address improving
care delivery and coordination across many
settings and types of care.
From concept to accountable care
management
ACOs tailor programs to enhance efciency
and quality. Well-designed analytics are critical
to setting goals, improving outcomes, and
assessing downstream measures of progress.
ACOs must audit the resources of all
participating entities and develop an
understanding of specic resources.
Nurses can use population analysis to play a
role in identifying members who will be well
served by ACO programs. As new clinical
workows and business processes are designed,
nurses can identify gaps that patients might fall
through. And nurses are particularly well suited
in reaching out to members who would benet
from new ACO programs.
Improving efciency through quality
ACOs seek to incentivize appropriate
behavior and more efcient use of resources,
such as preventive care. Nurses are positioned
well to take an active role, for instance as case
managers, where they can bring together a range
of disciplines and resources across a number of
entities.
Community Care of North Carolina is a
public-private partnership between the state and
14 local nonprot networks encompassing 3,500
physicians and 750,000
Medicaid and Childrens
Health Insurance Program
recipients. Its information
systems enable case
managers to track healthcare
utilization, document care,
and communicate with other
case managers, saving North
Carolina an estimated $160
million annually.
The Boeing Company
created the Intensive
Outpatient Care Program, a
pilot program in Seattle that
employs predictive modeling
to help the program focus on
the highest-risk patients. The
role of nurses was key to its
success. The program has now
been adopted by Regence Blue
Shield in Seattle and is in planning
stages to be expanded to other states.
Taking nursing professionals to a new level
As the ACO model appears to be gaining
traction, the evolving roles of nurses are synching
up well with the skills that ACOs demand. Many
nurses are moving into roles that focus on:

Health and wellness

Coaching and behavior modication

Coordinating psycho-social needs

Business and nancial management

Population analysis and management strategies

Because this coordinated approach to care
often demands new skill sets and a willingness to
adapt to new challenges, we may begin to see an
evolution of development opportunities within the
nursing community. Professional schools may
incorporate training such as care coordination
and data analysis in their nursing curricula to
better prepare students for more strategic roles in
ACOs.
OPINION
Nurses Have a Role in ACO Plans
New Model of Care Delivery is Tailored to Their Skills
Patty Jones, R.N., is a management consultant
with Milliman in Seattle.
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!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
MARKETPLACE/EMPLOYMENT
Payers & Providers Page 5
EXECUTIVE DIRECTOR, CARE DELIVERY INNOVATION
The Blue Cross Blue Shield Association (BCBSA) is seeking an Executive Director, Care Delivery Innovation.
Located in the heart of downtown Chicago, BCBSA is the national federation of the 39 independent
community based Blue Cross and Blue Shield (BCBS) companies serving 100 million people.
The Executive Director, Care Delivery Innovation is a newly created position housed within the Strategic
Services Division of BCBSA. Strategic Business Services works with Member Blue Plans to develop business
solutions through strategic business relationships that strengthen the competitive position of the Blues. For
additional information on BCBSA, please visit their website at www.bcbs.com.
Reporting directly to the Vice President, Strategic Business Services, the Executive Director, is responsible for
providing leadership, strategic direction and actionable solutions in support of the imperative to transform
care delivery in the United States to ensure a long term sustainable/viable health care system. The Executive
Director manages ongoing market assessments, integration and synthesis of care delivery activities to
supplement Plan thinking and evolution of their alternative approaches. The Executive Director has three
direct reports and a total staff of seven.
The successful candidate must have a Masters degree. A minimum of 15 years of broad-based care delivery
experience at the executive level in a large, sophisticated integrated delivery system, health plan, or health
system with a strong provider orientation is required. He/she must possess high standards of excellence and a
proven track record of driving innovation in a mature market. Excellent compensation, benets and
relocation assistance are offered. Interested candidates or condential recommendations should be sent to
the Witt/Kieffer consultants, Stephen J. Kratz and Shirley Cox Harty at CareDelivery_BCBSA@wittkieffer.com.
6
!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778


luyors & lrovdors und MCCL prosont koundtubo lntoructvo. lt dobuts Murch 20|| n tho luyors & lrovdors Nutonu odton.
Cur roudors uvuys vunt to knov vhut s on tho mnds ol houthcuro's c-suto oxocutvos. Conloroncos und trudo ovonts olton
ony uov lor crucu momonts to ntoruct vth thoso thought oudors. \th koundtubo lntoructvo, you' cut through tho
promnuros und mmodutoy knov vhut's on thor mnd.
Lvory koundtubo lntoructvo v louturo u C&A sosson conductod by luyors & lrovdors lubshor kon Shnkmun. Hs
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1opcs lor upcomng koundtubo lntoructvos ncudo:
!! lntogrutod Systoms vs. lrvuto lructco: 1o vhut dogroo v physcuns not uroudy n urgor modcu groups or ntogrutod
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mpcutons n toduy's onvronmont:
!! Modcud luns und Dovory Systoms: Hov much s thor cout grovng us Modcud onromont s prooctod to sour us
purt ol rolorm: \ Modcud ncrousngy bo usod us u vohco lor sottng houthcuro pocy: 1o vhut dogroo v muor
houth puns und systoms try to ncrouso shuro und concontruton n ths murkot:
!! Accountubo Curo Crgunzutons: Aro thoy ovorhypod: \hut typo ol houth curo systoms shoud bo pursung ACCs, und
vhut systoms shoud bo sttng on tho sdonos lor nov: Hov tod s tho ACC movomont to tho succoss or luuro ol
Modcuro ACC pots: Doos tho dolnton ol ACCs nood moro spoclcty, or s t prolorubo to huvo u bg tont ol
ncuson:
Do you vunt to proposo or purtcputo n u luturo koundtubo lntoructvo: lurtcputon s ontroy onno, vth u commtmont ol
no moro thun ono hour. Cu kon Shnkmun ut 877-248-2360, oxt. |, or o-mu hm ut odtorpuyorsundprovdors.com.
MARKETPLACE/EMPLOYMENT
Payers & Providers Page 6
It costs up to $27,000 to fill a healthcare job*
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*New England Journal of Medicine, 2004.
!!!"#$$!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!778
Page 6
MARKETPLACE/EMPLOYMENT
Payers & Providers
SEEKING A NEW POSITION?
CAN HELP.
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