Arkansas Hospital Auxilians' Contributions

Hospital auxilians and teen volunteers throughout the state have proved again that the power of collective volunteerism is invaluable to Arkansas' hospitals. Last year the 8,300 members of the 65 chapters of the Arkansas Hospital Auxiliary Association provided about one million volunteer hours of service to their hospitals, and donated more than $2.3 million that helped those hospitals operate programs, buy equipment, fund scholarships, and support community benefit initiatives. In addition, the auxilians served as a valuable resource for the Arkansas Hospital Association during the 1997 session of the Arkansas General Assembly, making contacts with individual legislators on issues important to hospitals. The Arkansas Hospital Association and its member hospitals salute all the state's hospital auxilians for their contributions and continuous support over the years.

From the Chaplain
Jack Pollard, Chaplain, Sparks Regional Medical Center, Fort Smith

My wife and I bought a new TV last year, January 6th, to be exact. It was fine until January 8th of this year when, two days after the warranty expired, the picture suddenly resembled a snowstorm accompanied by sounds like a passing freight train.

We called the authorized repairman, who performed major surgery and handed us a bill that looked like a bill for major surgery.

I spent the evening mentally composing my speech for the manufacturer's customer service department. Having turned down their extended warranty and two days past the basic one, I readied myself to do battle the next day. My opening argument took awhile, and when I finally paused to catch my breath the nice lady said, "that shouldn't have happened, we'll take care of it, parts and labor."

With that happy ending to my TV dilemma, I was left with yet another.

I'm thinking of all the times I've reacted to other people who somehow failed to meet my standards to the letter. The service representative could have held me to the terms of the warranty, she certainly had that right. Instead, she cut me some slack. In religious terminology, she responded with grace rather than judgment.

Whether it's a friend who fails me in some way or a careless driver who cuts me off in traffic, grace is always an option. Each time I experience receiving it, I'm prompted to remember how often I fail to extend it. Surely I can do as well as the customer service department of a TV manufacturer.

Satisfaction Results

According to a recent survey by the National Quality Research Center, patients were much less happy with hospitals in 1997 than in 1996. More than 50,000 consumers were asked to rate their satisfaction with various industries on a 100-point scale. The average customer satisfaction score for hospitals fell 5.6% between 1996 and 1997; only the U.S. Postal Service, fast food, and national news broadcasting suffered a bigger decline. Overall, consumers gave hospitals a satisfaction score of 67; only fast-food chains, broadcasters, the police, and the IRS fared worse.

Arkansas Execs, HCFA Meet

Arkansas Hospital Association executive team members Jim Teeter, Phil Matthews, and Paul Cunningham met in Dallas recently with officials from HCFA's Dallas regional office to discuss several issues, including critical access hospitals, HCFA's recent interpretation on Medicare bad debts related to Medicaid copay amounts for Qualified Medicare Beneficiaries (QMBs), and other topics. The session was a continuation of a long-running series of meetings held periodically between HCFA representatives and hospital association officials from states in the Dallas region, which include Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.

The Arkansas delegation questioned HCFA primarily about matters related to the new critical access hospitals (CAHs) allowed under the Balanced Budget Act. In response to one question, HCFA said those facilities designated as CAHs would not be relieved of any COBRA or EMTALA responsibilities. HCFA said a patient requiring admission from the hospital emergency room must be admitted, if facilities allow, even if the CAH already has 15 inpatients, the CAH bed-size limit under the law. In those cases where a CAH might occasionally be forced to exceed the 15-patient limit, HCFA will work with the hospital to avoid payment or CAH-designation problems. The HCFA staff also confirmed that larger hospitals receiving transfers from a CAH should receive the full DRG payment for the patient. Another matter discussed related to payments by managed care organizations to CAHs that may be in an MCO network. Under the Balanced Budget Act, CAHs are to be reimbursed based on their costs. However, MCOs will be allowed to negotiate lower rates with CAHs participating in their networks, just as they negotiate with their other network hospitals.

Arkansas Getting Tobacco Money

Arkansas will receive $1 million and a percentage of profits under a legal settlement reached in March between 14 states and Brooke Group Ltd., the parent of the tobacco companies Liggett Group Inc. and Liggett & Myers Inc. The state will also receive cooperation from Brooke Group and its tobacco subsidiaries in Arkansas' ongoing lawsuit against larger tobacco firms.

Liggett, the nation's smallest major tobacco company, pledged to pay each of the 14 states included in the settlement $100,000 this year, and the balance of their $1 million amounts over the next eight years. The company will also pay each state a percentage of its pretax income, if any is available, over a 25-year period. Arkansas Attorney General Winston Bryant said Liggett is not in good financial shape, and the availability of future income is questionable.

The Liggett agreement is the first tobacco settlement money involving Arkansas. The state is also a plaintiff, along with 36 other states, in lawsuits against five of the largest U.S. tobacco companies. The states claim that tobacco-related illnesses have cost their Medicaid programs billions of dollars in healthcare costs. While the companies agreed in June to settle those suits for $368 billion, and curb their advertising and marketing efforts, Congress must approve the agreement before it becomes effective. If Congress fails to approve the settlement, the states' lawsuits will proceed.

Bryant said he would consult with Governor Huckabee and key legislators to decide where the Liggett tobacco money would go, but expects it will be placed into the state's general revenue fund.

Medical School Enrollments Down

For the first time in almost a decade, applications to U.S. medical schools have headed south. According to the Association of American Medical Colleges, 43,000 people applied for admission to medical schools in 1997. That's an 8.4% drop from 1996, when schools heard from a record 47,000 applicants. The association expects the applicant pool to dip even further this year--to about 41,000.

Several factors account for the likely decline: the high cost of education, the fear that managed care might rein in both salaries and decision-making freedom, and affirmative action rollbacks, which partly explain an 11% drop in minority applications.

ACH Receives $4 Million Grant

Arkansas Children's Hospital (ACH) has received a $4 million grant from the national Center for Disease Control and Prevention (CDC) to study birth defects and the way to treat them. ACH is one of eight U.S. hospitals chosen for the grants, which will be funded over a five-year period at $800,000 per year. The Arkansas program will be called the Arkansas Center for Birth Defects Research and Prevention. Other hospitals chosen to receive grants are located in California, Massachusetts, Iowa, New York, New Jersey, Texas, and Georgia.

Under the program, researchers in Arkansas will share data with the other centers, creating a national database of birth defects. The database will allow researchers to link the birth defects to potential risk factors. Resulting information will give policymakers a tool for directing funds toward methods of preventing and treating birth defects.

As a part of its work, the Arkansas Center will perform annual interviews with 300 mothers of children born with birth defects and 100 mothers of normal children. It will also design studies in cooperation with the Arkansas Department of Health and the University of Arkansas at Little Rock.

AHA Workers' Comp Dividend

The Arkansas Hospital Association Workers' Compensation Self-Insured Trust (AHAWCSIT) has received notification of approval from the Arkansas Workers' Compensation Commission to distribute up to $1,154,541 in dividends to its members. Dividends would be for the 1996 fund year covering the period July 1, 1996 to December 31, 1996. The Trust changed its fiscal year from a July to June period to concur with the calendar year in 1997, thus the six-month dividend period. Last January, the AHAWCSIT distributed more than $1.2 million in dividends to the 36 hospitals that purchase their workers' compensation coverage through the Trust. Total dividend distributions for participating hospitals this year will amount to $2.3 million.

According to the auditor for AHA Services, the Arkansas Hospital Association subsidiary which operates the AHAWCSIT, the dividends must be distributed to current members by September 15, 1998. They will be mailed to current Trust members shortly before that date. Including these recently approved dividends, a total of $6,261,776 has been returned to members of the Trust since 1995!

PROs May Join Fraud Fighters

According to a report in Modern Healthcare, the Health Care Financing Administration (HCFA) is considering whether the nation's peer review organizations (PROs) should go back into the business of reviewing Medicare claims for medically unnecessary services. Henry Koehler, director of PRO programs in HCFA's office of clinical standards and quality, acknowledged that the detection of fraud, abuse, and waste is included on a list of possible PRO responsibilities to be included in the next "scope of work" contracts.

Although the PROs were originally created to detect overutilization and control quality --allocating up to 45% of their resources to reviewing medical records--the most recent round of their three-year contracts contained a major emphasis on continuous quality improvement and provider education. Under their current contracts, the PROs have begun examining patterns of care to pinpoint areas where quality can be improved. Even if HCFA decides to redeploy the PROs back to searching out medically unnecessary care and other types of fraud, PRO representatives believe their organizations wouldn't rely as much on case review as in the past. They say the PROs' improved data systems and better analytical staffs would allow them to hone in on specific problems with less record review.

The sixth "scope of work" contracts for the PROs are scheduled to begin in 1999. Actual implementation dates for different groups of PROs will be staggered throughout the year, with some beginning in April, July, and October.

Final Organ Allocation Rules

The Health Care Financing Administration (HCFA) has issued a final rule governing the operation of the Organ Procurement and Transplantation Network (OPTN). The rule is intended to improve the effectiveness and equity of the nation's transplantation system by encouraging organ donation; developing an organ allocation system that functions on a nationwide basis; providing the basis for effective federal oversight of the OPTN; and distributing better information about transplantation to patients, families, and healthcare providers. These new rules will be effective July 1, 1998. Hospitals that perform transplants and participate in Medicare and Medicaid are required to be members of the OPTN and abide by its requirements. The rule was published in the April 2 Federal Register.

In order to improve allocation of organs for transplantation, the final rule establishes performance goals to be achieved by the OPTN. The rule does not establish specific allocation policies, but instead looks to the organ transplant community to take action to meet the performance goals. By requiring common criteria for listing eligibility and medical status, the rule will provide patients awaiting transplants with equal access to organs and will provide organs to the patients with the greatest medical need for transplant.

While current OPTN policies give weight to medical need, the "local first" practice thwarts organ allocation over a broad area and thus prevents medical need from being the dominant factor in allocation decisions. Under the provisions of the final rule, the area where a person lives or the transplant center where he or she is listed will not be primary factors in determining how quickly he or she receives a transplant. Instead, organs will be allocated according to objective standards of medical status and need. In this way, suitable organs will reach patients with the greatest medical need, both when they are procured locally and when they are procured outside the listed patients' areas.