Arkansas Hospital Openings and Closings

• St. Vincent Health System officially added its newest healthcare facility October 7 when St. Vincent Medical Center/Sherwood began accepting patients. The new 69-bed, acute-care hospital joins St. Vincent Rehabilitation Hospital, an ambulatory care center, a medical office building, and an outpatient surgery center as part of the system's Sherwood campus. The four-story, 93,000 square-foot hospital features a 12,000 square-foot emergency room, an 8-bed ICU, a cardiac center, and a floor devoted to women's services. System officials said that completion of the hospital is the final stage of a 10-year plan for its Sherwood campus.
• Baptist Health Baptist Memorial Medical Center officially opened its new facility in North Little Rock with patient services beginning November 6. The 325,000 square-foot facility focuses on wellness, preventive and health education; increased outpatient services; greater access to facilities and services; and an emphasis on patient-centered services.
• Charter Behavioral Health System of Little Rock closed its Maumelle campus October 31. The freestanding psychiatric hospital, owned by Charter Behavioral Health System LLC of Atlanta, was one of nine hospitals shut down by the parent organization, and the 17th Arkansas hospital to close since 1984.

Key Changes for JCAHO Surveys in 2000
The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has announced a revamped survey process for 2000. At the organization's August 13 Executive Briefings seminar, the following changes were announced:

• Deeper review of open medical records with staff
• Less time on closed medical records
• More interviews with patients
• More observation of patient care
• A focus on hospital staffing issues
• Eight scoring cap changes
• Revamped random unannounced survey process (i.e., no warning)
• New pain management standards
• Clinical practice guidelines
• New resuscitation standards

Arkansas AG Drops Escheat Appeal
The Arkansas Attorney General's (AG) office has agreed to drop the state's appeal of a 1998 Pulaski County Chancery Court decision favoring hospitals in a dispute over the state's escheat law concerning the holding and disposition of unclaimed personal property.

In his ruling on a lawsuit brought by Baptist Health and the Arkansas Hospital Association, Chancery Judge W.H. Dillahunty said a hospital is not to be included within the scope of the Arkansas Unclaimed Personal Property Act. The State Auditor chose to appeal the decision to the Arkansas Supreme Court, turning the case over to the AG.

Prior to the 1999 session of the Arkansas General Assembly, the Arkansas Bar Association worked to develop legislative language that would establish provisions for the Act that all businesses, including hospitals, must follow. The resulting bill was passed as Arkansas Act 850 of 1999. With its passage, the Auditor asked permission of the AG to drop the pending appeal of Judge Dillahunty's ruling. After studying the case thoroughly over the past few months and conferring with State Auditor Gus Wingfield, the AG's office has now agreed to file a motion to dismiss the appeal.

AHA legal counsel Diane Mackey said the decision to drop the appeal should be seen as a major victory for Arkansas hospitals. Had the state decided to proceed with the case and won, all hospitals would have been subject to previous provisions of the unclaimed property act, making them liable for repaying the state millions of dollars in unclaimed property held over the years as determined by the Auditor.

Arkansas Hospital Association Resolution:
Disposition of State Tobacco Settlement Funds

WHEREAS, the State of Arkansas is ranked as the least healthy of all states in the United States due to life-style behaviors common among its residents; and

WHEREAS, Arkansas has a higher percentage of uninsured population, who lack access to healthcare services, than all states except Texas and Arizona; and

WHEREAS, Arkansas hospitals are committed to improving the health of the residents of the state and dedicated to providing vital services that are essential for the development of healthier communities; and

WHEREAS, Arkansas hospitals work diligently to care for the sick and injured and to promote good health and healthy behaviors among those living in the communities they serve; and

WHEREAS, the State of Arkansas will receive approximately $1.6 billion over a 25-year period through the national tobacco settlement fund to compensate for past services for Medicaid patients with smoking related diseases;

BE IT THEREFORE RESOLVED that the Arkansas Hospital Association Board of Directors does hereby proclaim its intent to support the use of those funds in the following manner:

• THAT 100% OF THE FUNDS COMING TO ARKANSAS AS A RESULT OF THE TOBACCO SETTLEMENT BE DEDICATED TO PUBLIC HEALTHCARE INITIATIVES.
• THAT A SUBSTANTIAL PORTION OF THE TOBACCO SETTLEMENT FUNDS BE USED TO HELP UNINSURED ADULTS IN ARKANSAS OBTAIN HEALTH INSURANCE COVERAGE.
• THAT THERE BE AN EQUITABLE DISTRIBUTION AMONG HOSPITALS AND OTHER HEALTHCARE PROVIDERS, WHETHER RURAL OR URBAN, OF ANY SETTLEMENT DOLLARS SPENT FOR HEALTHCARE SERVICES FOR INDIGENT ARKANSANS.
• THAT, ALONG WITH THE STATE'S INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS AND OTHER HEALTHCARE PROVIDERS SHARE IN ANY PORTION OF THE SETTLEMENT FUNDS DIRECTED TOWARD COMMUNITY HEALTH EDUCATION PROGRAMS.

So declared by the board of directors of the Arkansas Hospital Association, and in witness whereof, I attest this resolve on this 17th day of May, 1999.

James R. Teeter, President

Arkansas Hospital DEA Reporting Requirements
The Arkansas Hospital Association (AHA) has been informed by a local agent of the federal Drug Enforcement Administration (DEA) that some hospitals in the state are being lax in complying with the agency's rules concerning notification of drug thefts and losses. According to federal regulations, when a hospital discovers the theft or significant loss of a controlled substance, that facility is required to notify the DEA immediately and submit a DEA Form 106 Theft and Loss Report.

This applies to all cases of theft, regardless of the amount of stolen drugs, and whenever a hospital incurs a "significant" loss of drugs by accident or in other ways not related to theft. Questions as to the determination of what is significant should be referred to the local DEA office.

DEA Diversion Program Manager Terrence P. Boyle asked the AHA to remind hospitals that the notification is to be made upon discovery of the loss or theft. This initial notice should be given via telephone as soon as possible after the discovery. The notice should be followed by submission of the Form 106.

Boyle said that the quick notification makes it much easier for the DEA to conduct its investigation into cases of theft and also allows the agency a better chance of helping hospitals identify gaps in procedures and processes aimed at eliminating the accidental loss of narcotics and controlled substances. To report thefts or losses, or for more information, call the Little Rock DEA office at (501) 324-6900.

Hospital Officials Urge Congress to Fix BBA
Throughout the summer and fall of 1999, Arkansas hospitals joined others across the nation in the fight to "fix" mistakes caused by the Balanced Budget Act of 1999. Changes in how Medicare pays for home health services, physical therapy and hospital care ended up cutting twice as much, or more, money as Congress intended from the Medicare program. As a result of the BBA, hospital officials report drastic service cuts, employee lay-offs, and forced clinic and hospital closures across the country.

Over the past six months, Arkansas hospitals have deluged Congress and the White House with letters, visits, phone calls, and faxes providing detailed accounts of what the BBA has done to their hospital and community. The "Hospital Caregivers for BBA Relief" postcard campaign started by the American Hospital Association and state hospital associations resulted in almost two million postcards mailed to Congress and the White House, twice the initial goal of dropping 1 million postcards. This outstanding grass-roots advocacy effort is directly attributed to hospitals' energizing employees, staff, trustees, volunteers and communities.

It appears hospitals have now won a significant victory in the fight for BBA relief. The White House and Congress have agreed on a $17 billion relief package that would impact Medicare payments for outpatient services, rural hospitals, teaching hospitals, skilled nursing facilities and home health agencies.

OIG Work Plan
The fiscal year 2000 work plan for the federal Department of Health and Human Services' Office of Inspector General (OIG) is now available on the agency's Internet web site. The plan, which is revised and released annually, serves as an early warning system for healthcare organizations that work to keep their compliance plans up-to-date.

According to the plan, the OIG will revisit the PATH (Physicians at Teaching Hospitals) initiative to see if physician claims "accurately reflect the level of service provided to patients;" and look at length of stay issues (one-day stays, same-day discharges and readmission to the same hospital, and payments for related hospital and skilled nursing facility stays. The plan details well over 100 initiatives and projects that will be undertaken by the OIG during 2000. To review it, go to www.dhhs.gov/oig and click on the "What's New" page.

In addition to the 2000 work plan, the OIG Web site contains a list of providers who have been excluded from participation in federal healthcare programs. In his presentation during the AHA annual meeting, Jim Kopf, programs director for the Office of Inspector General, encouraged hospital CEOs and management team members to check the web site weekly for important updates. Mr. Kopf said that if his office finds a sanctioned individual billing Medicare, action will be taken against the physician and the organization. The action can amount to $10,000 in civil monetary penalties, plus additional fines for each item or service furnished by an excluded individual. The OIG's list of excluded individuals and entities can be accessed at www.dhhs.gov/oig/cumsan/index.htm.

Booklet Helps Staff with JCAHO Survey
The Midwestern Regional Medical Center in Zion, Illinois, seems to have discovered a helpful tool in achieving top scores on JCAHO surveys. Called the Employee Guide: A Pocket Guide of Important Information, this two-by-three, pocket-sized booklet hits on practically every area covered during a JCAHO survey in a precise, informative format.

The booklet, written by Midwestern Regional staff, covers topics such as how to handle patient complaints and how to practice infection control to using fire extinguishers and assessing employee competency. The book opens with the vision and mission statement of the hospital, then follows with a brief "questions to ask yourself" section, description of core values, patient rights, patient complaints, ethics, performance improvement, human resources, and so on. A self-assessment is included at the end of each section.

The hospital staff doesn't claim credit for the idea, having borrowed it from another facility, which in turn borrowed it from another hospital. But staff members agree the booklet works.

AHA, HCFA Reps Meet
Members of the Arkansas Hospital Association (AHA) executive team met recently with officials of the Health Care Financing Administration's (HCFA) regional office in Dallas to get the agency's input on a variety of hospital concerns.

The AHA had asked the HCFA staff to research three issues that hospitals in the state or the association's board had raised prior to the meeting. They included questions about Community Mental Health Centers (CMHCs), the new Medicare Condition of Participation (COP) on patient restraints, and problems stemming from recent survey and certification inspections in some hospitals.

AHA president Jim Teeter, executive vice president Phil Matthews, and senior vice president Paul Cunningham discussed those questions and others originating from hospital association executives from Louisiana, Oklahoma, Texas, and New Mexico during the October 12 meeting. Among their responses, the HCFA representatives said:

• Community Mental Health Centers are required to provide several services to their clients including 24-hour emergency screening evaluations. Any time a CMHC fails to respond to a hospital request for such an evaluation, on weekends or any other occasion, HCFA should be informed.
• The issue of Medicare's new Condition of Participation for patient restraint and seclusion is still being studied. HCFA's interim final rule on the COP generated thousands of comments, which means the final rule could yet be changed. HCFA is also in the process of developing interpretive guidelines for the rule. Another factor that could affect the rule is continued litigation being pursued by the American Hospital Association and others.
• Reports by some Arkansas hospitals about recent and disturbing changes in attitude by certain state Health Department surveyors apparently don't relate to any action by HCFA. Agency officials said state surveyors are now being evaluated by HCFA, but those evaluations are being focused on surveys of long-term care facilities rather than hospital surveyors. HCFA also addressed the impending Medicare outpatient prospective payment system, plans to preclude payment disruptions if Y2K problems occur, and rules for new Critical Access Hospitals.

"Prudent Layperson" Billing Provision
The National Uniform Billing Committee (NUBC) has agreed to add a "Patient's Reason for Visit" data element to the admitting diagnosis field of the UB-92 claim form. This decision comes as a result of the Balanced Budget Act's (BBA) "Prudent Layperson Protection" provision and numerous requests for ways to capture the reason for a patient's unscheduled outpatient visits.

This change will require hospitals to report the patient's presenting symptoms or complaint as the admitting diagnosis for outpatient unscheduled visits. Also, the field will now read, "The ICD-9-CM diagnosis code describing the patient's diagnosis or reason for visit at the time of admission or outpatient registration."

Further, a note referenced for this section will be added which will explain that, for outpatient claims, the ICD-9-CM code describing the patient's stated reason for seeking care would be reported.

For instance, when there is an unscheduled outpatient visit to a hospital's emergency room or urgent care center, the diagnosis code describing the patient's reason for the visit would be reported in the admitting diagnosis field of the UB-92 form.

If the encounter results in an inpatient admission, the diagnosis code requiring admission would be reported rather than the patient's reason for the visit. This change becomes effective for services furnished on or after April 1, 2000, and applies to all payer group types. More information about the change will be distributed later from the NUBC.

Arkansas Ranks Highest for Uninsured
The Employee Benefit Research Institute, a nonprofit research "think tank" that focuses on employee benefits and related matters of economic security, issued a revised report about uninsured Americans last fall.

According to the report, 28.2% of the non-elderly population in Arkansas had no health insurance coverage in 1997. Arkansas' uninsured rate was the highest in the country and was 54% more than the national rate (18.3%). Also, while 71% of the non-elderly U.S. population held private insurance coverage, only 57% of the state's non-elderly population had coverage. Other facts about insurance coverage in Arkansas in the report included:

• Arkansas had the third lowest rate of employment-based health insurance for children--47.7% compared to a national rate of 59.7%. Only New Mexico and the District of Columbia had lower rates of employment-based insurance.
• The state's 27.4% uninsured rate for children was the highest in the country.
• Sixty-three percent of Arkansas workers are covered by group health coverage through their employers, compared to 72.2% of workers nationally.
• Workers employed in government jobs in Arkansas had the lowest uninsured rate, 8.5%, while 64% of those in agriculture and mining jobs were uninsured.
• Thirty-eight percent of the state's self-employed persons were uninsured.

Committee Discusses APC Billing Requirements
Beginning July 2000, Medicare payments for outpatient hospital services will be made under a prospective payment system called the Ambulatory Patient Classification (APC) program. As planned, 347 APC categories will capture the resources provided during a single outpatient episode. Assignment to one of the 347 categories is to be determined from the billing codes and modifiers reported.

The categories fall into three major subdivisions: surgical, medical, and ancillary services. Payment for services such as therapies (physical, occupational, and speech), laboratory, ambulance, partial hospitalization, end-stage renal dialysis, and DME will be according to a fee schedule.

The new system will cause a major change in outpatient billing. Previously, providers could bundle unrelated outpatient services onto one bill. Consequently, unrelated outpatient care provided on the same day should be billed separately. Providers will have to rethink how they handle outpatient registration as well as how outpatient services are ordered.