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AHA Area Wage Index Advisory Review Committee July 2013

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AHA Area Wage Index Advisory Review Committee July 2013 AHA Area Wage Index Advisory Review Committee July 2013 AHA Area Wage Index Advisory Review Committee (AARC) Agenda Book Table of Contents 1. Agenda for AARC Open Forum Page 2 2. Roster of AARC Members Page 6 3. AARC Charge Page 7 4. Area Wage Index Task Force Report Page 8 5. Educational Call Slides Page 44 6. State-level Impact Data on Task Force Recommendations Page 72 7. Reports from External Reviewers 7a. Side-by-Side of Task Force Report Reviewer Comments Page 75 7b. Reports from Task Force Report Reviewers Page 77 (Al Dobson, Bruce Steinwald, and Jeff Stensland) 7c. Report from Impact Analysis External Reviewer (Lane Koenig) Page 97 8. Information on Circularity and Bureau of Labor Statistics (BLS) Data 8a. Overview of Circularity and BLS Data Page 98 8b. Benefits and Contract Labor Percentages by Page 106 type of hospital and state 8c. Introduction to BLS Data (presentation given by BLS to Page 110 AWI Task Force) 9. Written Statements Submitted to AHA on the AWI Appendix A (separate attachment) 10. Optional Information: AHA Wage Index Chartpack Page 145 1 Agenda Area Wage Index Advisory Review Committee (AARC) Open Forum July 11-12, 2013 Hilton Chicago O’Hare Airport Thursday July 11 Open Forum International 10:00 a.m. AARC Preparation Meeting (Closed Session: AARC Members Only) Overview of Open Forum Logistics and Agenda Materials Report from Impact Analysis External Page 97 Reviewer – Dr. Lane Koenig, President, KNG Health Consulting 11:00 a.m. Open Forum Opening Remarks from Dr. Ben Chu Chairman, AARC and AHA Board of Trustees Expected Wage Index Changes Due to Updating of Census CBSAs (Handout to be provided at meeting) 2 11:30 a.m. Stakeholder Remarks: Panel 1 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) Craig Becker, Tennessee Hospital Association, Nashville, Tennessee Duane Dauner, California Hospital Association, Sacramento, California Stephen Frayne, Connecticut Hospital Association, Wallingford, Connecticut Mike Horsley, Alabama Hospital Association, Montgomery, Alabama Anthony Spezia, Covenant Health, Knoxville, Tennessee 12:20 p.m. Lunch for All Attendees International 1:00 p.m. Stakeholder Remarks: Panel 2 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) John Brennan, Newark Beth Israel Medical Center/Barnabas Health, Newark, New Jersey Joseph Coyle, Southern Ocean Medical Center, Meridian Health, Manahawkin, New Jersey Raymond Fredericks, JFK Health System, Inc., Edison, New Jersey Alexander Hatala, Lourdes Health System, Camden, New Jersey Elizabeth Ryan, New Jersey Hospital Association, Princeton, New Jersey 1:50 p.m. Stakeholder Remarks: Panel 3 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) Stephen Jones, Robert Wood Johnson University Hospital, New Brunswick, New Jersey Peter Kaprielyan, Inspira Health Network, Mullica Hill, New Jersey Patricia Ostaszewski, HealthSouth Rehabilitation Hospital of Toms River, Toms River, New Jersey Douglas Struyk, Christian Health Care Center, Wyckoff, New Jersey 2:30 p.m. Break 3 2:45 p.m. Stakeholder Remarks: Panel 4 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) Stephen Canessa, Southcoast Health System, New Bedford, Massachusetts Patrick Muldoon, HealthAlliance Hospitals, Inc., Leominster, Massachusetts Lynn Nicholas, Massachusetts Hospital Association, Burlington, Massachusetts Erik Wexler, Vanguard Health Systems, Worcester, Massachusetts 3:25 p.m. Stakeholder Remarks: Panel 5 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) Kevin Dahill, Suburban Hospital Alliance, Hauppauge, New York David Ping, Health Quest, LaGrangeville, New York Kenneth Raske, Greater New York Hospital Association, New York, New York 3:55 p.m. Stakeholder Remarks: Panel 6 (Members will have 6 minutes each for remarks, plus additional time for questions from the AARC) Scott Becker, Conemaugh Health System, Johnstown, Pennsylvania Phillip Good, Great River Medical Center, West Burlington, Iowa Henry Lipman, LRGHEALTHCARE, Laconia, New Hampshire Denis Lukes, Hospital Council of Western Pennsylvania, Warrendale, Pennsylvania Tonya Wells, CHE Trinity Health, Livonia, Michigan 4:45 p.m. Closing Remarks Dr. Ben Chu 5:00 p.m. Break 4 6:00 p.m. Reception Athens/Berlin (AARC Members Only) 6:30 p.m. Working Dinner Athens/Berlin (AARC Members Only) Update on Hill Activity Review of Committee Charge Page 7 Reaction to Stakeholder Remarks Appendix A Potential Recommendations or Options for AHA Board of Trustees’ Action Friday July 12 Closed AARC Session Breakfast available at 7:30 a.m. Meeting convenes at 8 a.m. International West 8:00 a.m. Closed Discussion (AARC Members Only) Continued Discussion of Recommendations or Options Based on Input from Stakeholders 10:45 a.m. Closing Remarks Dr. Ben Chu 11:00 a.m. Adjourn 5 AHA Area Wage Index Advisory Review Committee ________________________________________________________________________________ Chairman: Daniel L. Gross, RN, DNSc Ben Chu, M.D. Executive Vice President Regional President, Southern California Sharp HealthCare Kaiser Foundation Hospitals San Diego, CA Pasadena, CA Craig W. Jones Craig C. Armin President Vice President, Government Programs Oklahoma Hospital Association Tenet Healthcare Corporation Oklahoma City, OK Los Angeles, CA Tom Priselac Bruce P. Bailey President and CEO President and CEO Cedars-Sinai Health System Georgetown Hospital System Los Angeles, CA Georgetown, SC Roger J. Reamer William (Bud) F. Barrow, II CEO President and CEO Memorial Health Care Systems Our Lady of Lourdes Regional Medical Seward, NE Center Lafayette, LA 70508 Steven Rose, RN, MN CEO Joanne Carrocino, FACHE Nanticoke Memorial Hospital President and CEO Seaford, DE Cape Regional Medical Center Cape May Court House, NJ 08210-9990 Mary Starmann-Harrison President and CEO Christopher M. Dadlez Hospital Sisters Health System President and CEO Springfield, IL Saint Francis Care Hartford, CT Gerald D. Wages Executive Vice President for External Affairs Vickie L. Diamond, RN, MS North Mississippi Medical Center President and CEO Tupelo, MS Wyoming Medical Center Casper, WY M. Beatrice Grause President Vermont Association of Hospitals and Health Systems Montpelier, VT 6 AHA Area Wage Index Advisory Review Committee Charge ______________________________________________________________________________ Hospitals repeatedly have expressed concern that the Medicare Area Wage Index (AWI) is greatly flawed in many respects. Members of Congress, Medicare officials and other policymakers also have voiced concerns with the present system. In July 2011, the AHA Board of Trustees created the Medicare Area Wage Index Task Force to identify and evaluate the strengths and weaknesses of the current AWI; develop a set of principles by which to evaluate various proposals to modify the AWI, including review of AHA’s existing principles; evaluate proposals and studies to change the AWI; and make recommendations to improve the accuracy, fairness and effectiveness of the AWI. The Task Force’s report and recommendations were shared with the AHA’s Regional Policy Boards and Governing Councils on multiple occasions. At its most recent meeting, the AHA Board of Trustees determined that more feedback from the membership would be beneficial. Accordingly, the Board authorized the creation of an AWI Advisory Review Committee (AARC) composed of members of both the Board and Task Force and charged them with: Conducting an open session for interested hospital and health system members and state, regional and metropolitan hospital associations to comment on the task force’s recommendations and their projected impact; and Based on the open session, and feedback received throughout the review process, formulating and making recommendations to the Board for the disposition of the report. 7 DRAFT– NOT FOR DISTRIBUTION AHA Medicare Area Wage Index Task Force 2011-2012 Executive Summary The Medicare hospital inpatient prospective payment system (PPS) is designed to pay hospitals for services provided to Medicare beneficiaries based on a national average payment amount, adjusted for two factors that affect hospitals' costs: the patient's condition and related treatment strategy and market conditions in the hospital's location. One of the significant adjustments in the inpatient PPS is an adjustment for market conditions, or the area wage index (AWI). The AWI is intended to measure differences in hospital wage rates among labor markets; it compares the average hourly wage for hospital workers in each metropolitan statistical area (MSA) or statewide rural area to the nationwide average. In 2011, the AHA Board of Trustees created a Medicare AWI Task Force to identify and evaluate the strengths and weaknesses of the current hospital AWI; develop a set of principles by which to evaluate various proposals to modify the hospital AWI, including review of AHA's existing principles; evaluate proposals and studies to change the hospital AWI; and make recommendations to improve the accuracy, fairness and effectiveness of the hospital AWI. Since that time, the Task Force has engaged in an extraordinary amount of education, analysis, and discussion about the AWI system. The Task Force members overwhelmingly agree that the current system is greatly flawed in many respects and that its fundamental problems warrant a full and comprehensive re-evaluation.
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