Arkansas Statistics for Health Insurance and the Uninsured
According to the Employee Benefit Research Institute:

• Compared to a national rate of 18.3%, the percentage of Arkansas' nonelderly population (under age 65) without health insurance coverage in 1997 was 28.2%. This was the highest uninsured rate in the country. Arkansas' nonelderly also had a lower rate of private coverage, 57.2%, than the national rate of 70.9%. Arkansas had the lowest rate of private health insurance coverage in the country.
• Children living in Arkansas--infants through age 17--had a lower rate (and the third lowest) of employment-based health insurance coverage (47.7%), than the national rate of 59.7%. Arkansas had the highest (27.4%) uninsured rate for children, with a national rate of 15.0%.
• Children living in families with incomes below the federal poverty level were most likely to be uninsured (43.4%), and children in families with incomes at 200% to 399% of the federal poverty level were least likely to be uninsured (13.5%).
• Arkansas workers had a lower rate of employment-based health insurance coverage (62.9%), than the national rate of 72.2%. Also, 46.8% of Arkansas workers had employment-based health insurance coverage in their own name (meaning they were the primary beneficiaries) compared with 55.0% for the nation. Arkansas had the second-lowest rate of workers with employment-based health in their own name in the country.
• Larger firms were more likely than smaller firms to provide coverage: 62.8% of Arkansas workers in firms with 1,000 or more workers had coverage in their own name, compared with 15.6% of workers in firms with fewer than 10 employees.
• Among Arkansas workers, the most likely to have employment-based health insurance in their own name were those in transportation, communications, and utilities (74.9%), and in manufacturing (71.7%). Workers in government had the lowest uninsured rate in the state at 8.5%, followed by manufacturing workers at 14.5%. Workers in agriculture/mining and self-employed workers had the highest uninsured rates in the state (63.8% and 38.1%, respectively).
• Among individuals ages 18-64, full-time workers had a higher rate of employment-based coverage (71.3%) than part-time workers (51%). They had a lower uninsured rate (22.4%) than part-time workers (24.0%). Among nonworkers, 20.3% had employment-based coverage, and 35.6% were uninsured.

IRS' 990 Rules Now Effective
In 1996, Congress expanded the obligation of tax-exempt organizations to make their applications for tax exemption and their annual returns (Form 990) available to the public. Previously, the application and returns had to be available only for public inspection. With the changes in law, copies of the information must be provided on request. The Internal Revenue Service (IRS) has now issued the final regulations implementing the changes. The new rules were effective June 8. The key regulatory elements are:

• Upon request, whether in person or by mail, a copy of the organization's application for tax exemption, and its annual information returns (Form 990) for the most recent three years must be provided. Attachments that must be submitted for IRS inspection are clearly stipulated in the rules.
• Deadline for responding to requests is on the day of the request when it is made in person, or within 30 days when the request is made in writing.
• Fees may be charged and advance payment may be required (a fee for reproduction costs is permitted based on an IRS fee schedule for copying, and the actual postage costs may be recovered).
• As an alternative to responding to individual requests, an organization may make its application and returns "widely available," for example, using the Internet. In those situations, individual requests can be referred to the public source.
• The new rules protect organizations from those who continuously request copies of the same information to conduct what the regulations call a "harassment campaign." They state that harassment exists when a series of requests are part of a "single, coordinated effort to disrupt the operations" of an organization.

The American Hospital Association has recommended that hospitals take the following steps to ensure compliance with the IRS rules:

• Make sure the hospital's legal counsel and finance department are aware of the changes.
• Update internal policies on sharing tax information with the media and the public, setting clear procedures for staff that handles requests for this information. For example, will you make your tax return available on your Web site? Will you charge for copying and mailing of the tax return?
• Share information with hospital public relations staff and any key personnel who deal with consumer inquiries so everyone understands the new requirements.
• Be sure the board understands the change in IRS policy and the internal steps taken to comply with public requests.

PRO Sixth Scope Of Work
As of August 1, the Arkansas Foundation for Medical Care (AFMC), the state's Medicare Peer Review Organization (PRO), officially implemented activities under the Health Care Financing Administration's (HCFA) 6th Scope of Work. The work plan will continue to include National Health Quality Improvement Projects that have been a primary focus of the nation's PROs in recent years.

The Scope of Work calls for projects involving acute myocardial infarction, congestive heart failure, pneumonia, stroke/transient ischemic attack/atrial fibrillation, diabetes, and breast cancer.

The contract also includes a new initiative, HCFA's Payment Error Prevention Program (PEPP), which is designed to reduce payment errors for Medicare hospital inpatient claims. As part of its responsibilities, AFMC will be required to check inpatient hospital claims for correct coding and medical necessity, work with hospitals and physicians on criteria for identifying payment errors, and conduct educational programs to assist them in reducing billing errors.

Initial reviews are to target unnecessary admissions and miscoded diagnostic related groups, or DRGs. Later, HCFA intends that the PROs expand the PEPP over time to examine premature discharges and inappropriate transfers.

While the 6th Scope of Work gives the PROs added responsibilities for data collection and case review related to the PEPP, AFMC will still emphasize intervention, education, and technical assistance to hospitals on both coding and quality of care issues.

OIG Bulletin: Gainsharing Violates Law
The federal Department of Health and Human Services' Office of the Inspector General (OIG) issued a bulletin July 8 saying that contingency fee "gainsharing" programs between hospitals and physicians violate federal law. The OIG bulletin addresses programs that involve a contract between hospitals and their medical staffs designed to reward physicians for controlling the cost of treating Medicare and Medicaid patients, and improving quality of care.

According to the OIG, these contracts violate the Social Security Act (SSA) and are subject to monetary penalties. Hospitals that knowingly pay physicians, directly or indirectly, as an incentive for them to reduce or limit services could be fined up to $2,000 per Medicare or Medicaid patient under Section 1128 of the Social Security Act, which bars hospitals from establishing such gainsharing agreements, regardless of whether the physician is an employee.

The OIG bulletin appears to negate the effect of a recent Internal Revenue Service ruling that a particular type of gainsharing program would not threaten a hospital's tax exemption. The OIG indicated in the bulletin it will not prosecute any hospital that may have implemented the gainsharing programs in the past, provided the program doesn't violate any statute other than Section 1128 (A) (b) (1) of the SSA; it has not hurt patient care; and the hospital promptly terminates the impermissible programs.

The American Hospital Association strongly recommends that any hospital having a gainsharing program involving Medicare and Medicaid consult its attorney regarding what, if any, action it should take to minimize the risk of prosecution. Hospitals should also share the OIG opinion with their compliance officers and other key personnel so that all understand its requirements, and communicate with their boards the implications of the bulletin for these types of contingency fee-based arrangements.

The advisory is posted on the Health and Human Services Web site at www.hhs.gov/progorg/oig/frdalrt/gainsh.htm.

Arkansas FY 2000 PPS Rates Final
The July 30, 1999, Federal Register includes the Health Care Financing Administration's (HCFA) final rule to revise the Medicare prospective payment system (PPS) rates for inpatient hospital services for fiscal year 2000. It contains changes in the amounts and factors necessary to determine rates that, according to HCFA, are necessary to cover operating and capital-related costs for hospitals. The changes will be applicable to hospital inpatient discharges on and after October 1, 1999.

Under the rule, Arkansas hospitals will be affected differently, depending on where in the state they are located. Hospitals located in rural areas of the state should see a $20.68 per discharge increase in their base PPS rate, while those located in five of the seven metropolitan statistical areas (MSAs) that incorporate Arkansas areas will have a decrease in their base rate from the amounts being paid during fiscal year 1999. One area where the decreases will be felt most is the Fayetteville/Springdale MSA, where the base rate will tumble $189, from $3,478 to $3,272. The primary reason for the decline is a 10% drop in the area wage index from 0.8632 to 0.7773.

OIG Wants Improved Hospital Oversight
A two-year study by the federal Department of Health and Human Services' Office of Inspector General (OIG) cited major deficiencies in the external oversight system intended to make sure the nation's hospitals are safe. The study indicates the oversight is shifting from a "regulatory" relationship to a more "collegial" one, and recommends how the Health Care Financing Administration (HCFA), the agency responsible for hospital oversight, can help improve the situation by making its external review organizations more accountable for their performance.

Currently, HCFA relies primarily on two types of external review to ensure hospitals meet the minimum requirements for participation in the Medicare and Medicaid programs. Accreditation by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) qualifies hospitals to be "deemed" to meet Medicare/Medicaid requirements.

About 80% of all Medicare-certified hospitals (50% in Arkansas) participate under the "deemed status" provision. The remaining 20% of hospitals receive Medicare/Medicaid certification through inspections by state government agencies. In Arkansas, the Health Department performs the certification surveys.

The OIG recommends that HCFA negotiate with the Joint Commission to conduct more unannounced surveys, include more random selection of records in its survey process, conduct a more rigorous review of hospitals' continuous quality improvement efforts, make the "accreditation with commendation" category more meaningful or abolish it, and enhance surveyors' ability to respond to complaints during surveys.

The report says HCFA should hold the JCAHO and state agencies more fully accountable by gathering more timely and useful performance data; increase its own public disclosure of performance by hospitals, the JCAHO and state certification agencies; post more information on the Internet; and determine an appropriate minimum cycle for surveying non-accredited hospitals.

HCFA administrator Nancy-Ann DeParle has offered a detailed hospital quality oversight plan incorporating many of the OIG's recommendations. The four-part OIG report is available online at www.os.dhhs.gov/oig under "What's New."

AHA Opposes "Unannounced Survey" Revision
At press time, the American Hospital Association (AHA) opposed a July 30-31 decision by the Joint Commission on Accreditation of Healthcare Organization's (JCAHO) Board of Commissioners to revise its Random Unannounced Survey Policy. The AHA decided to oppose the action because the JCAHO didn't include input by a special advisory group appointed for that purpose by the JCAHO. The commission also chose not to pilot-test the new policy, and based the policy on anecdotal vs. empirical data.

The AHA believes the JCAHO's decision moves the accreditation survey process to a more regulatory format, which is not constructive or conducive to ongoing quality improvement.

The new policy states that effective January 1, 2000, all JCAHO random unannounced surveys will be conducted with no prior notification to accredited facilities. Under current practice, the JCAHO conducts the random unannounced surveys, but gives a minimal advance warning--about 10 hours--that the survey will occur. In addition, the scheduling window for the surveys has increased from nine to thirty months following an organization's triennial survey, while the annual sample size for random unannounced surveys remains at 5%.

The policy revision is a result of recommendations included in the recent report of the Office of Inspector General (OIG), "The External Review of Hospital Quality." JCAHO president Dr. Dennis O'Leary said that the JCAHO, like HCFA, had agreed to follow through on all of the OIG recommendations.

Family and Friends Make a Difference
According to the Institute for Family Centered Care, patients prefer family involvement in their healthcare more often than what occurs in practice. With busy schedules, clinicians may forget that families have the same need for respect, information, and understanding as patients do.

Who is the family? It is much more than next of kin. It is whoever the patient recognizes to be significant in their life. Family and friends help decide when to seek care, provide emotional support and help the patients remember all the information given. They also interact with healthcare professionals on a patient's behalf, give ongoing care in the community, and influence a person's overall habits, behavior, and lifestyle.

Some suggestions for involving family and friends in the care of a patient are:

• Institute 24-hour visiting hours.
• Train volunteers to serve as liaisons between staff and families in waiting rooms and ER, surgery, and ICU.
• Develop patient and family advisory boards.
• Provide "family comment" cards at the bedside for families to record questions and comments for possible inclusion in the patient's care plans.
• Give families of surgery or critically ill patients a beeper so they can eat, sleep and take walks.
• Allow and encourage families, whenever possible, to participate in care.

New Threat to Care
According to researchers, the hassle factor between doctors, nurses and insurers is threatening patient care and fueling the push for more regulation. The survey by the Kaiser Family Foundation and the Harvard School of Public Health indicates the biggest areas of conflict are denials of care by health plans, burdensome paperwork and nurse staffing levels.

The survey, to which 601 doctors and 365 nurses responded, found that:

• Two-thirds of doctors said insurers' denials for mental health treatment had resulted in adverse consequences for their patients. Half said denials in specialist referrals had similar effects.
• Two-thirds of doctors said they often or sometimes call insurers on behalf of patients. In their most recent dispute, doctors said 42% of cases were resolved in the patient's favor; a compromise was reached in 21% of cases.
• Almost half of the doctors and nurses said they exaggerated a patient's condition to get insurers to provide coverage.
• 61% of doctors said denials by insurers for prescription drugs occur weekly or monthly, and 42% said similar denials for tests or procedures occur weekly or monthly.
• Only 10% of doctors and 12% of nurses said managed care has improved the quality of healthcare for the ill.
• But 45% of doctors and 42% of nurses said managed care has increased preventive services that patients receive.

The Health Insurance Association of America responded to the survey results by saying the survey did not explore the overuse and misuse of medical services. "Denial rates are in fact only about 1% to 2%, and that has to be examined in context of repeated studies showing a 20% to 30% overuse or inappropriate use of services," says Don Young, medical director for HIAA.

Emergency Room On-Call Specialists Scarce
A report in a recent issue of USA Today focused on a growing concern about emergency room (ER) care in the nation's hospitals--a shortage of on-call specialists. The article indicates there is a growing reluctance among doctors throughout the country to accept on-call duty to cover ER cases because, more and more, they aren't paid for their services.

The federal Emergency Medical Treatment and Active Labor Act (EMTALA) guarantees appropriate healthcare services for all hospital ER patients, but doesn't address who pays for them.

As the number of uninsured Americans grows about 1,000 people per month, leaving more people without a payment source, the problem is getting worse. While the lack of pay for being called-in to handle potentially litigious situations deters many specialists from taking on-call responsibilities, others cite the inconvenience. They want a life after work free of unexpected interruptions, according to the article.

The federal law requires hospitals to maintain lists of on-call specialists who can be summoned when needed. However, individual hospitals set their own rules about physician responsibilities while on-call. With more specialists balking at the on-call duties, hospitals requiring on-call service as a condition of medical staff privilege risk losing specialty physicians to other facilities where the duty isn't required.

USA Today says all hospitals are faced with the problem, but those in rural areas may have the most trouble. In addition to the fact that specialists are generally less available in many rural areas, rural facilities may find it more difficult to give incentives such as on-call stipends now being used by some larger hospitals to compensate specialists for the time and inconvenience associated with their on-call duty.

Leading Causes of Death
Based on an annual review of death certificates, the following is a list of the leading causes of death in 1997 and the number of Americans who died from each, according to the National Center for Health Statistics.

1. Heart disease (725,790)
2. Cancer (537,390)
3. Stroke (159,877)
4. Lung disease (110,637)
5. Accidents (92,191)
6. Pneumonia and influenza (88,383)
7. Diabetes (62,332)
8. Suicide (29,725)
9. Kidney disease (25,570)
10. Liver disease (24,765)
11. Blood poisoning (22,604)
12. Alzheimer's disease (22,527)
13. Homicide (18,774)
14. HIV and AIDS (16,685)
15. Hardening of the arteries (15,884)
All other causes (361,635)