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A Note from the Chairman
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David Tesmer
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Health care – and hospitals in particular – took a major hit during the legislative session. The current political climate makes it critical that hospitals get involved in the 2012 elections and support lawmakers and candidates who will put a priority on health care. Hospitals must hold legislators accountable for the decisions they have made, and that’s why HOSPAC – the political voice for Texas hospitals – must have the financial resources to make a difference.
If you haven’t already done so, please make your HOSPAC contribution today. You’ll be helping yourself, your hospital and the community you serve! As you’ll see below, 19 hospitals already have reached or exceeded their HOSPAC goals. Hats off to all of them!
I look forward to seeing many of you later this month at the Texas Healthcare Trustees Annual Conference in Fort Worth. HOSPAC will host a reception and honor a hospital governing board member with the Star Trustee Award. Until then, stay cool! David Tesmer
Chairman, HOSPAC Board of Directors
Leaders Emerging in HOSPAC Fundraising Campaign
Each Texas Hospital Association-member hospital/health system has a HOSPAC goal based on $2 per FTE, with a minimum goal of $500. Check out your hospital’s goal and learn which hospitals are leading the way. As of press time, 19 hospitals already had met or exceeded their goals!
- Huntsville Memorial Hospital (250%)
- Palo Pinto General Hospital, Mineral Wells (203%)
- Chambers County Hospital District, Anahuac (200%)
- Otto Kaiser Memorial Hospital, Kenedy (200%)
- Texas Scottish Rite Hospital for Children, Dallas (175%)
- Knapp Medical Center, Weslaco (164%)
- Hendrick Health System, Abilene (161%)
- Goodall-Witcher Healthcare Foundation, Clifton (154%)
- East Texas Medical Center Athens (149%)
- Community Hospital Corporation, Plano (144%)
- East Texas Medical Center Rehabilitation Hospital, Tyler (128%)
- East Texas Medical Center Jacksonville (120%)
- Seton Medical Center Harker Heights (120%)
- Baptist Hospitals of Southeast Texas, Beaumont (108%)
- Bellville General Hospital (100%)
- Big Bend Regional Medical Center, Alpine (100%)
- Brownfield Regional Medical Center (100%)
- East Texas Medical Center Specialty Hospital, Tyler (100%)
- Electra Memorial Hospital (100%)
Help your hospital achieve success by making your 2011 HOSPAC contribution as soon as possible. Visit www.HOSPAC.org to learn more or make a contribution online.
The 2011 Legislative Session – An Overview
The special legislative session adjourned on June 29 with lawmakers finally passing Senate Bill 7, an omnibus health care bill that included many provisions that died during the regular session, which ended May 31.
A summary of major health care-related actions from both the regular and special sessions – including the state budget as it relates to hospitals – appears below. The Texas Hospital Association published a special edition of the Health Care Advocate that recaps specific health care legislation in greater detail. A PDF of the report is available online at www.tha.org/2011specialedition. In addition, THA will publish New Health Care Laws: A Report on the 82nd Texas Legislature in early August. This popular manual will feature detailed analyses of new laws affecting hospitals.
State Budget
Lawmakers approved a $172 billion (all funds) budget, which represents an 8.1 percent decrease – or a $15.2 billion cut – in current spending. Although every sector of the economy took a hit, health and human services were hardest hit, with a 17.2 percent decrease in funding. Of the $11.3 billion cut, the biggest loss is federal funds due to the expiration of federal stimulus dollars and the associated 10-point decline in the federal Medicaid matching rate.
Texas Medicaid
The Legislature ignored the realities of growth in Medicaid caseload and costs and decided to address shortfalls in a supplemental appropriation when the 2013 session convenes. Despite the original 10 percent across-the-board reduction in Medicaid rates for all providers, in the end only hospitals were cut. Physicians, nursing homes and mental health services were held to their 2010-11 funding levels. For hospitals, legislators counted the 2 percent reduction already in place and added 8 percent to it for the next biennium. However, the hit to hospital reimbursement will go much deeper.
Legislators expanded Medicaid managed care statewide, and health plans will be incentivized to reduce hospital expenditures. Lawmakers also directed the Texas Health and Human Services Commission to identify some $450 million in Medicaid “cost containment” initiatives, many of these directed at hospitals, such as reducing emergency department rates for non-emergency visits, reducing neonatal care unit admissions, and implementing penalties for certain preventable readmissions, hospital-acquired infections and adverse events.
Fundamental changes in hospital payment methodologies – including the transition to a statewide Standard Dollar Amount – will produce cost savings for the state and redistribute money among hospitals. On average, hospitals will be paid about 53 percent of allowable Medicaid costs. Hospitals potentially face additional rate reductions to achieve budgeted savings if managed care expansion is delayed or underperforms.
Lawmakers also approved joining an interstate compact so that Texas can manage its own government health care programs, though congressional approval will be required.
Trauma Funding
Numerous attempts to repeal the Driver Responsibility Program, which is the major source of funding for designated trauma hospitals, failed. However, the budget cut trauma funding by 23 percent to $57.5 million for each year of the biennium.
Health Professions Education
The budget includes $30 million for the biennium to fund the Professional Nursing Shortage Reduction Program, which has increased nursing school enrollment over the past two years. Proposed cuts in funding for medical education were reduced, but Texas still will have an inadequate number of medical residencies and fail to meet the growing need for physicians. The physician education loan repayment program, which encourages doctors to practice in underserved communities, lost 76 percent of its funding.
Physician Employment
The one bright spot in health care legislation was the approval of measures allowing rural hospitals, certain hospital districts and the Texas Scottish Rite Hospital in Dallas to employ physicians directly. One bill applies specifically to hospitals in counties with a population less than 50,000 and to sole community and critical access hospitals. Specific bills give hospital districts in Bexar, El Paso, Harris and Tarrant counties the authority to employ physicians. All of the bills require hospital policies to protect employed physicians’ independent medical judgment.
Nursing Issues
Legislators approved a bill to extend current law that protects a nurse or his advisor from retaliation for engaging in patient advocacy activities, creates immunity protections from criminal liability, and increases the administrative penalty against a facility that retaliates against a nurse to an amount not to exceed $25,000. The bill was passed in response to the case of two Winkler County nurses who were criminally indicted for reporting a physician to the Texas Medical Board.
Advance Directives
Despite several bills being filed and House floor amendments being offered to “must pass” legislation, no significant changes were made to the Texas Advance Directives Act. Legislation was approved that clarifies that EMS personnel are required to honor only Out-of-Hospital Do-Not-Resuscitate orders.
Tort Reform
The Legislature held the line on previous tort reform efforts and actually strengthened the legal climate by passing “loser pay” legislation.
Operational Issues
Several bills passed that will require changes to hospital operations. Changes were made to requirements for privacy of electronic health records, notification of filing of hospital liens, mandatory newborn screenings and disposal of medical records. In addition, hospitals will be required to develop policies requiring immunizations for staff and contractors who have contact with patients.
HOSPAC Photos
Are Online!
Photos from recent HOSPAC Leadership Receptions and other events may be viewed online in HOSPAC's Photo Gallery. | Join HOSPAC July 28 in Fort Worth
Attend a special Leadership Reception for HOSPAC members being held in conjunction with the Texas Healthcare Trustees Annual Conference at The Worthington Renaissance Fort Worth Hotel. The reception will be from 5:30-7 p.m. on July 28, and state Rep. Diane Patrick (R-Arlington) will be the guest speaker. RSVP today for this special event!
Mark Your Calendar
HOSPAC will host a Leadership Reception Sept. 14 at the Omni San Antonio Colonnade in conjunction with the Texas Rural Health Forum. To RSVP, call 512/465-1507 or send an email to Jennifer O’Neil at joneil@tha.org. Be sure to make your Leadership Level contribution for 2011 so you can attend this and other HOSPAC events throughout the year! To learn more about HOSPAC or upcoming activities, visit www.HOSPAC.org. Contact Jennifer O'Neil with questions or for more information.
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