In this issue
issues long-stalled financial assistance and debt collection rules
In late December the Internal Revenue Service issued final regulations implementing several
Affordable Care Act requirements for non-profit hospitals and certain
government hospitals. The final rule contains detailed requirements on
financial assistance policies, billing the uninsured, and limits on
“extraordinary collection actions” by hospitals and are commonly referred to as
the “501(r) rules” for the section of the Internal Revenue Code. The requirements
are similar, but not identical, to the requirements contained in the Minnesota
Attorney General (AG) Agreement. The IRS initially published proposed rules in
summer 2012 and followed up with additional guidance in 2013.
The effective date of the new regulations will vary from hospital to hospital.
The effective date is the first day of the hospital’s taxable year beginning
after Dec. 29, 2015. For hospitals with calendar year tax years, the rules will
become effective Jan. 1, 2016.
The most significant variance of the final rules from the attorney general
requirements is related to calculating rates for the uninsured: 1) how such
rates apply; and 2) how a comparative rate is to be established. Under the AG
agreement any patient with annual income of less than $125,000 is entitled to
pay a rate identical to the hospital’s largest commercial payer. Under the new
IRS rules, the mandatory discount rate will only be applicable to people
covered by the hospital’s Financial Assistance Policy but the payment rate must
be an average of all commercial payers and Medicare or only the Medicare
In the near future, MHA will provide additional guidance to Minnesota hospitals
on maintaining compliance with both the AG agreement and these new ACA
For questions or additional information, contact Ben Peltier,
MHA vice president legal services, 651-603-3513. return to top
Supreme Court issues Avera Marshall medical staff litigation opinion
Holds medical staff
bylaws are a contract; medical staff has capacity to sue and be sued
The Minnesota Supreme Court issued an opinion in the case of Medical Staff of Avera Marshall Regional
Medical Center vs. Avera Marshall Regional Medical Center. The
Supreme Court opinion is the latest step in on-going litigation between Avera
Marshall and individual members of the medical staff. Avera Marshall amended
its medical staff bylaws in 2012 to clarify the authority of the medical staff
with respect to the hospital’s Board of Directors.
Under the amended Bylaws,
the Board of Directors of the hospital is ultimately responsible for the
operations of the hospital and the Medical Staff serves in an advisory capacity
to the Board of Directors. Some members of the medical staff argued that the
modifications of the bylaws were inconsistent with the terms of the previous
bylaws. MHA and the American Hospital Association submitted a joint brief to
the Supreme Court in support of the Avera Marshall position.
The Supreme Court issued a 5-2 decision that did not directly address the
validity of the updated bylaws. Instead the Court addressed two procedural
matters and returned the case to the District Court for additional proceedings.
In its decision, the Supreme Court held that: (1) the medical staff falls under
the statutory definition of an “unincorporated association” and thus has the
capacity to sue and be sued under Minnesota law and (2) that Avera Marshall’s
medical staff bylaws constituted an enforceable contract between the hospital
and the individual members of the medical staff.
The Supreme Court opinion raises several potential issues affecting the
relationship between hospitals and their medicals staff and the relationship
between individual members of the medical staff. The decision may require some
hospitals to modify their bylaws to clarify the medical staff’s role in
hospital management. It is also possible that the physicians may need to
establish new processes for handling litigation against the medical staff
which, prior to the Supreme Court’s decision, had not been considered a
separate legal entity subject to litigation.
The opinion and dissent are available here. For additional information or guidance,
contact Ben Peltier, MHA vice president legal services, 651-603-3513. return to top
to join MHA leadership team
Rahul Koranne, MD, MBA, FACP, will join the Minnesota Hospital
Association as senior vice president for clinical affairs and chief medical
officer at the end of the month. Dr. Koranne is board certified in Internal
Medicine and Geriatrics. He most recently served as vice president and
executive medical director at HealthEast Care System, with responsibilities for
Bethesda Hospital and Community Services. Prior to joining HealthEast, he
practiced medicine in Starbuck, MN, providing primary care in a rural critical
access hospital for five years.
In addition to his clinical work and physician executive experience, Dr.
Koranne has been very active in health policy circles in Minnesota, serving on
a wide variety of state work groups, boards and commissions.
“His experience and passion for transforming care delivery to meet the Triple
Aim throughout Minnesota make him a great fit for our new position,” said
Lawrence Massa, MHA president and CEO.
“After being involved with the AHA Regional Policy Board and MHA Physician
Leadership Council for the past many years, it is an honor and a privilege for
me to join MHA in this new capacity and work with our member hospitals and
health systems to discover new models of health for communities across MN,”
said Koranne. “Minnesota hospitals and health systems have consistently been at
the cutting edge of innovation and have helped set the national standard for
how health care should be delivered to our communities — relying upon
multidisciplinary teamwork, community engagement and a spirit of authentic
partnering between various organizations across industries and sectors. As
health care reform continues to unfold, there will be challenges ahead which
are sure to lead us to opportunities to collectively redefine the system of
health and create positive change for those whom we are privileged to serve —
our patients, their families, communities and health care staff.”
The senior vice president for clinical affairs position was created to bring
greater value to MHA members by helping members develop stronger physician
leadership, achieve higher levels of integration of care, clinical performance,
operational efficiency, patient safety, patient satisfaction and population
health. return to top
warns health care professionals not to inject patients with IV solutions from
The U.S. Food and Drug Administration (FDA) is alerting health
care professionals not to use Wallcur, LLC, simulated intravenous (IV) products
in human or animal patients. These products are for training purposes only.
Before administering IV solutions to patients, health care providers should
carefully check the labels to ensure that the products are not training
products, such as Practi IV Solution Bags marketed by Wallcur. Wallcur’s
training products, which may bear the words “for clinical simulation,” are not
to be administered to patients.
The FDA has become aware that some Wallcur training IV products have been
distributed to health care facilities and administered to patients. There have
been reports of serious adverse events associated with the use of certain of
these products – i.e., Practi IV Solution Bags.
If you suspect that any Wallcur training IV products may have been administered
to a patient, whether or not the incident has resulted in an adverse event,
please report the incident to FDA’s MedWatch Adverse Event Reporting program by:
FDA will continue to investigate and monitor this issue. The
agency is also working with the Centers for Disease Control and Prevention to
inform health care professionals and state health departments. return to top
Health IT training program taking applications
The Modeling Effective Network Training Opportunities for Rural
(MENTOR) Health IT training program is now taking applications for courses
beginning Jan. 19, 2015. There are two focus areas to choose from: an
Informatics track and an IT Support track and all courses are fully online.
This training is funded through a federal grant awarded to the Lac qui Parle
Health Network in Dawson, MN to upskill the rural workforce with the health IT
knowledge and skills which will help rural facilities stay solvent and thrive
in today’s health care environment. People living/working in the rural
community are eligible to apply for this unique opportunity.
To apply for the program, click here. To learn more, watch this informational video. return to top
Brill releases book about health care costs, hospital billing and price
Author Steven Brill today released “America’s
Bitter Pill,” a book prompted by his 2013 TIME Magazine piece, “Bitter Pill,”
which examined health care costs, hospital billing and price transparency.
According to its listing on Amazon.com, the book’s focus has expanded to
include a “sweeping narrative of how the Affordable Care Act, or Obamacare, was
written, how it is being implemented, and, most important, how it is changing –
and failing to change – the rampant abuses in the healthcare industry.”
MHA and its members want consumers to have helpful information on which to make
decisions about health care. As part of its proactive approach to demonstrate
hospitals' commitment to transparency, MHA formed a Price Transparency
Workgroup to consider longer term solutions that would provide greater pricing
transparency to consumers and policy makers. In addition, since 2007, MHA has
made public the charges for the top 50 inpatient Diagnosis Related Groups
(DRGs) and the top 25 outpatient surgical procedures on its Hospital Price Check website.
Additional resources for members on price transparency are available on the Member Center. AHA has also developed a
special website www.aha.org/understandingtheissues that
provides AHA’s position and patient resources. return to top